Filed under: Major Movement , Competitive Strategy , Barrick Gold (ABX) , Commodities , Federal Reserve Back in the late 1970s, the Hunt brothers from Texas tried to corner the silver market . That drove prices to $48 an ounce. Now, 31 years later, silver is shooting higher again. The March silver futures contract closed at $32.296 per ounce , up 72 cents. Since gold is expensive, investors are turning to silver to hedge against inflation. Many fear that the Federal Reserve will not be able to control the spike in commodity prices. The Fed is buying $600 billion of treasuries and keeping interest rates near zero. Continue reading Silver Near a 31-Year High Silver Near a 31-Year High originally appeared on BloggingStocks on Sat, 19 Feb 2011 12:50:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
commodities
TAL International (TAL): Shipping Income
Filed under: Newsletters , Commodities , Oil , Agriculture , Stocks to Buy “TAL International ( TAL ) is one of the worlds largest lessor of containers; its annual dividend of $1.60 provides a current yield of 5.3%,” says income specialist Amy Calistri . The editor of The Daily Paycheck explains, “In today’s global economy, roughly 90% of non-bulk cargo is transported by container ships. Interestingly enough, most shipping lines don’t own the actual containers; they lease them. “This wasn’t necessarily the type of stock you wanted to be in when the global economy ground to a halt. But as the world’s economies and trade improve, this is one company that benefits first. Continue reading TAL International (TAL): Shipping Income TAL International (TAL): Shipping Income originally appeared on BloggingStocks on Thu, 20 Jan 2011 13:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
Natural Gas Service (NGS): Gas Field Gains
Filed under: Newsletters , Commodities , Oil , Stocks to Buy “I am getting more interested in natural gas; we all realize that crude oil production is peaking and that new discoveries are deep, dangerous to exploit, and bottom line expensive,” says resource expert Curtis Hesler . The editor of Professional Timing Service explains, “Investors can consider Natural Gas Service Group ( NGS ), a natural gas field equipment provider that I am adding to our recommended list. “While technology is improving in wind and hydroelectric generation, perhaps the greatest technical strides are being seen in natural gas production. Continue reading Natural Gas Service (NGS): Gas Field Gains Natural Gas Service (NGS): Gas Field Gains originally appeared on BloggingStocks on Wed, 19 Jan 2011 13:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
The Day They Burned the Price Chopper
There are food riots going on around the world. People are burning stores in India, Chili, China, Egypt, and Algeria. One man was forced to stop selling fruit along a Tunisian roadside because he didn’t have a permit. When he lit himself on fire, the ensuing riots ended a multi-decade-long dictatorship. People will put up with a lot — corruption, nepotism, cruel laws, and barbaric prisons — but they tend to lose it when they can’t afford food. This is especially true when they blame the ruling class for their misery… Food riots have ended reigns in France, Russia, and British India. Today the Egyptian stock market sold off on fears the riots might spread. Food prices hit fresh highs According to the UN’s Food and Agricultural Organization (FAO), its food price index hit a new high above the previous record in 2008. Soaring sugar, cereal, and oil seed prices were the main drivers. In one month — from November to December — sugar was up 6.7%, cereals were up 6.4%, and oils were up 8%. This is on top of a relentless 80% climb in prices over the past ten years. Wheat, in particular, has been hit hard. Wildfires in Russia shut down 11% of global exports from the country. Add to this the recent floods in Australia, which also makes up 11% of global exports, and you start to have a real problem… In the United States, the limit for corn-based ethanol has been raised, which drove up the price of cereal. There were also La Nińa-driven droughts in Argentina, the second biggest exporter of corn after the U.S. If we get one more natural disaster — say, the Mississippi River has another hundred-year flood — the world would be in serious trouble. Food inflation: Wheat 10-year chart The forecast for 2011 is too early to tell with any clarity, but most of what I’ve been reading is that the world’s supply and demand balance for cereals is expected to tighten, with total consumption eclipsing world production for 2010/2011. This will require a six percent dip into stockpiles. ~~SIGNUP_WD~~ Hoarding The real worry is hoarding. When countries start to shut down exports — like Russia did after its historic fires, or India, Bangladesh, and others did in 2008 — those who need to buy agricultural commodities will chase the price higher. You will see the results on your store shelves. Here is a chart that shows U.S. food stamp participation: As you can tell, it’s been a hard…
Don Coxe webcast – updated (January 14, 2011)
Don Coxe has updated his popular webcast on Friday, January 14, 2011. Click through for the recording …
Vincent McCrudden: Threatens to Kill 47 Regulators
A New York money manager with a long history of legal battles with the government has been charged with threatening to kill 47 U.S. officials, including the nation’s top securities and commodities regulators. Vincent McCrudden, 49, last month allegedly…
ExxonMobil (XOM): The Best Way to Play Oil
Filed under: International Markets , Exxon Mobil (XOM) , Newsletters , Commodities , Oil , DJIA , Stocks to Buy “Nowhere is the supply and demand balance as tight as it is with oil; with the somewhat stronger economy here and abroad, the oil gap is closing again,” says Jim Powell . The editor of Global Changes & Opportunities explains, “I think the best way to benefit from rising oil prices is to buy Exxon Mobil ( XOM ), the world’s largest, and one of its most reliable, energy investments. “I think the price will reach the psychologically important $100 mark by this summer, and maybe a lot sooner. Continue reading ExxonMobil (XOM): The Best Way to Play Oil ExxonMobil (XOM): The Best Way to Play Oil originally appeared on BloggingStocks on Fri, 14 Jan 2011 13:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
The Fed Blows a Cupcake Bubble
The number one cupcake play in America is going public. Crumbs Bake Shop operates 34 cupcake stores from New York to California, humorously billing itself as “creator of the gourmet cupcake.” Owners stand to make up to $100m from the IPO, and the deal could price higher, with cupcake-mania hitting a fever pitch. At $100m, investors would be paying about $3 million per cupcake store. Management is betting on aggressive expansion to fuel growth, and plan to open hundreds of new stores. Naturally, growing a chain of stores from 34 to 300 is no easy task. Recall the great donut bubble of 2003… Krispy Kreme (NYSE: KKD) was the darling of Wall Street. Its shares peaked at near $50 from a split-adjusted IPO price of $3.50, giving the donut maker a sky-high valuation of $3b (pdf). Shares trade around $7 today, up from a low of around $1. KKD expanded too fast, took on too much debt, and nearly went bankrupt. They also had some accounting issues, but those likely were probably just a side effect of a business-plan gone bad. Today Krispy Kreme is still muddling along, closing stores opened just a few years back. Expansion is always risky — especially when financed with debt and equity offerings. Hopefully Crumbs can avoid a similar fate, and follow the glorious path of Chipotle instead, which is up 436% since its IPO in 2006. In any case, I wish them well; I’ve heard their cupcakes are delicious. The larger point here is about what this cupcake IPO says about the state of markets. After all, it almost certainly wouldn’t be happening without all that Fed-injected liquidity sloshing around. Back in July 2008, The Onion published a prescient piece titled, “Recession-Plagued Nation Demands New Bubble to Invest In”: What America needs right now is not more talk and long-term strategy, but a concrete way to create more imaginary wealth in the very immediate future. Congress is currently considering an emergency economic-stimulus measure, tentatively called the Bubble Act, which would order the Federal Reserve to begin encouraging massive private investment in some fantastical financial scheme in order to get the nation’s false economy back on track . Even Jonathan Swift would have to appreciate satire so pointed. Unfortunately, the bit reads a lot like a Fed policy statement. Change the title to “Encouraging Risk Investment During Recession,” and any good Fed economist would nod along in agreement. The sentiment is identical. Bernanke has often stated that he wants to create a “wealth effect.” Push stocks higher, the theory goes, and people will spend more because they feel richer. Long-term thinking, truly… It’s been two and a half years since the Onion piece was written. Not only did we get one bubble; we got a handful of them. Notably in commodities, metals, food prices, and treasury bonds. Malinvestment and moral hazard ride on in 2011 One of the nastier side effects of “easy money” policies is known as malinvestment . It almost sounds harmless… mal- investment ( mal = bad). After all, everybody has a loser every now and then, right? The problem with easy money is that it inevitably spurs not just bad, but dangerous investments. During the tech bubble, it was countless doomed tech IPOs. In…
Rate Hike Boosts Southern Company (SO)
Filed under: Newsletters , Commodities , Oil , Stocks to Buy , Southern Company (SO) “Over the past decade, Southern Company ( SO ) has generated a compound annual return of nearly 12 percent,” says utility sector expert Roger Conrad . The editor of The Utility Forecaster explains, “The recent approval of the company’s three-year rate hike in Georgia — source of nearly half its revenue — is the best possible assurance of a similarly enriching performance for the next 10 years. “The Georgia Public Service Commission approved 70, 93 and 87 percent of the requested increases for 2011, 2012 and 2013, respectively, as well as a superior 11.15 percent target return on equity. Continue reading Rate Hike Boosts Southern Company (SO) Rate Hike Boosts Southern Company (SO) originally appeared on BloggingStocks on Wed, 12 Jan 2011 13:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
Canadian Resource Trio: Ben Graham Value Buys?
Filed under: Newsletters , Barrick Gold (ABX) , Canada , Commodities , Stocks to Buy “The Canadian economy performed much better than the U.S. economy during the past two and a half years,” says J. Royden Ward . The editor of Cabot Benjamin Graham Value Letter explains, “We believe many outstanding buying opportunities still exist and investors should continue to buy undervalued Canadian stocks.” Here, he looks at a trio of Canadian-based resource plays: Barrick Resources ( ABX ), Pan American Silver ( PAAS ), and Teck Resources ‘B’ ( TCK ). Continue reading Canadian Resource Trio: Ben Graham Value Buys? Canadian Resource Trio: Ben Graham Value Buys? originally appeared on BloggingStocks on Wed, 12 Jan 2011 10:30:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
Six Stocks for the Next Ten Years
It was a cold and blustery winter day when I met my father for lunch last week. This is one of the few unexpectedly pleasant things I discovered in my middle age… I can now sit with my father, digest dragon rolls and a bit of wisdom obscured by banter and watch the world march by a plate glass window. At one point between the miso soup and the spicy tuna, Dad told me that he had been putting $1,000 a year into a mutual fund for each of his grandchildren on their birthday. And due to a happenstance of luck, one particular granddaughter who was born in April was up more than 20% over the other ten grandkids. He had chosen a mutual fund that would gradually switch from equities to bonds the closer it came to the tuition due date. Well, I thought, that’s nice of him. A bad gold call But for the record, this is the same man who put money in a gold fund for my college expenses during the seventies and early eighties. From the time he started investing until I needed the money in 1988, gold only went down — falling from $10,00 an ounce to $250 or so at the bottom. It was a spectacularly poor investment, and when it was sold, it was worth half as much as he put in. Not that I wasn’t grateful, as it bought many a Natty Boh; I only wish he had chosen Apple, Microsoft, or Wal-Mart. Now I don’t think the run in gold and silver is over — not by a long shot. Back in 1980, my grandparents would greet us with pre-1965 silver dollars. My Aunt would give us coin sets for birthdays and for Christmas. And these people made their living from farming, ranching, and selling insurance — not what you’d call Wall Street insiders. As far as I can tell this isn’t happening yet. The blow-off top in the metals market is still down the road… Buy low, sell high This led me to think about the big picture. Where would you put money today in order to reap the large returns in fifteen years? The Sam Walton biography tells the story of a truck driver who worked for Wal-Mart and retired a millionaire on WMT stock alone… Or John Templeton, who bought Freddie Mac in 1980 for his wife’s retirement fund and turned $3,000 into a million as interest rates fell from 21% to 8% and housing took off. The trick isn’t to buy high and sell higher ; it’s to buy low in a company that will likely be around and thriving in 15 years. The lost decade There is one sector that is cheap, solid, pays dividends, and is expanding: the old school tech plays that no one wants to talk about. Let’s take a step back and look at why these stocks are so cheap. The first reason is that they got ramped up in the 1999 dot-com bubble. All of these stocks like Oracle (ORCL), Microsoft (MSFT), Intel (INTC), Qualcomm (QCOM), Cisco (CSCO), and Corning (GLW) were trading at price-to-earnings ratios over 100. They split their stocks again and again so that Oracle has 3.8 billion in their float. Microsoft has 7.5 billion. There are so many shares out there that Wall Street …
Top Picks 2011: Canadian Oil Sands (COSWF)
Filed under: International Markets , Newsletters , Canada , Commodities , Oil , Stocks to Buy , Green Stocks , Best Stocks for 2011 This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011 . This special report is courtesy of TheStockAdvisors.com . “Canadian Oil Sands Trust ( COSWF ) has clearly lagged broad-based and energy-sector benchmarks alike over the trailing 12 months,” says David Dittman . The contributing editor to Canadian Edge explains, “A series of unplanned turnarounds at the Syncrude operation, of which Canadian Oil Sands owns 36.7 percent, have analysts questioning whether rising costs will ever allow Canadian Oil Sands to really benefit from elevated oil prices. Continue reading Top Picks 2011: Canadian Oil Sands (COSWF) Top Picks 2011: Canadian Oil Sands (COSWF) originally appeared on BloggingStocks on Sat, 08 Jan 2011 11:30:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments
