Best Investments For 2012

Term Life Insurance Declines as Hybrid Policies Gain Ground

2012-01-29T09:19:00.000-08:00

When it comes to life insurance, it seems that more folks are passing up plain vanilla term life for flashy hybrids.

In the past several years, the number of new term life policies in the U.S. has continued to fall, dipping to 41.1% of the life insurance market in 2009 from 44.6% in 2007, according to the American Council of Life Insurance. And last year, the slide continued. The number of new term life insurance policies sold in the U.S. dropped by 16% in the fourth quarter, compared with the same period in the previous year, according to insurance researcher and consultant LIMRA.

That's surprising, considering that a number of personal financial advisers and consumer experts still point to plain old term life insurance as the best choice when selecting a financial umbrella for your loved ones, especially before the kids are out of college.

"Term is still 99% the right thing to get, if you need insurance, and have a baby, and want to make sure they are fed and educated if you die," says Bob Hunter, director of insurance for the Consumer Federation of America. "But if you're looking for a tax break, then whole insurance makes sense."

"There's still too much non-term insurance being sold," he adds, "because agents make more money when selling things that are hooked onto it, or have premiums that go up. They have an incentive to sell you the wrong thing."

Nonetheless, consumers increasingly are purchasing life insurance policies that are other than straight term. For example, the number of new whole life insurance policies in the U.S. gained 6% in the fourth quarter over the previous year, while universal life insurance polices rose a whopping 20%.

Universal Policies Gain by Mimicking Term Life

I! ronicall y, the driver of this double-digit gain for universal life insurance policies in 2010 was the addition in 2009 of term life features to these hybrid policies, says Elaine Tumicki, vice president of product research for LIMRA.

"Some companies introduced a combination of permanent universal life and term life insurance products in 2009, and that's why we've seen some term life insurance policies decline, while universal life and whole life increased in 2010," Tumicki says.

Term life insurance is considered attractive because of its low premiums which are set for a given number of years -- a 10-year, 20-year or 30-year period, for example. Universal insurance generally costs more and allows policyholders to have flexibility in determining when and how much to apply to their premium payments. Whole life insurance is a permanent insurance that is available until the policyholder dies, and it can accumulate a cash value.

Under hybrid universal-term life insurance policies, like those of term universal life pioneer Genworth Financial Companies (GNW), the policy starts like a term insurance plan, with a set number of years at a level premium that's designed to be comparable to traditional term policies. However, Genworth's Colony Term UL, introduced in 2009, allows policyholders to extend their coverage, after the initial term is set to expire, at a new, higher premium that's good until the policyholder is 95.

Genworth created the term-universal life insurance product as a means to compete with term products, while giving consumers a permanent and flexible universal life product, says Janet Deskins, senior vice president of Life Products for Genworth, in an email interview.

Consumers who aren't sure if they want permanent insurance or term insurance are best suited for this type of universal term life insurance, says Scott Witt of Witt Actuarial Services, a scheduled panelist at this we! ek's Nat ional Association of Personal Financial Advisors (NAPFA) annual conference in Utah.

"The disadvantage with term universal life is there's no cash value like a permanent one," Witt says. "Cash values are useful if they lower your premiums later on or you can take a loan out against it. Then there is a living value to it."

Buy Long-Term Care Separately

In addition to this tweak to term and universal life insurance, other changes have been afoot in the life insurance industry.

John Ryan, a strategy consultant with Ryan Insurance and another panelists scheduled to appear on NAPFA's "Changing Face of Life Insurance" session, noted an increasing number of companies are offering long-term care insurance riders on universal or whole life insurance policies.

"They're becoming popular to where about 10% of policies are sold with this, versus 2% to 3% a couple years ago," says Ryan.

Witt is not a fan of these type of long-term care riders.

"If you need long-term care insurance, then you should buy long-term care," Witt says. "If you need life insurance, you should get life insurance. If you put the two together, you can erode your death benefits if your long-term care is paid out of that."

Long-term care riders are just part of a mix that's been introduced since the insurance industry was socked by the recession. And the wave of riders that's emerged is far different from the innovative products that came on the scene after the recession of the early 1970s, says Jim Mitchel, LIMRA vice president of developmental research.

In the six years that followed the dour early 1970s, those products included universal life insurance and stock-based variable life insurance. But since the current economic malaise hit, the insurance industry has largely pumped out new types of riders, says Mitchel.

He points to the example of a critical-illness rider, which allows policyholders to cash in a portion! of thei r life insurance as a lump sum if they have a stroke. Then there are income-replacement riders, which allow policyholders to get an amount equivalent to their paycheck, that's paid out on a regular schedule rather than a lump sum.

In summing up the type of products introduced since the nation was hit with a recession a couple of years back, Mitchel says: "There may be some innovative products in the pipeline now, but I haven't seen a lot of innovation this year. A lot of people are introducing extensions of their existing product line."

2 Bold Predictions for 2012

2012-01-27T21:03:00.000-08:00

Around this time of the year, predictions are a dime a dozen. Everyone has their best stock pick of the year lined up and thinks they have uncovered the next get-rich-quick scheme that will lead them to the promised land.
Fortunately for you, I've never been good at taking the easy route. Instead, I'm going to look at two completely outside-the-box predictions that I feel very confident about heading into 2012. I'm fully ready to accept my lashings on Dec. 31 if these turn out to be wrong, but let's just say that the odds aren't in my favor from the start.
Prediction 1: Large-cap stocks will outperform small-cap stocks
You might be thinking, "So what, this isn't exactly what I'd call a bold prediction!" I assure you, given that small caps have outperformed large-cap stocks in nine of the past 11 years, this is a prediction in which the odds are clearly not in my favor.
Small-cap companies hold an edge over their larger counterparts because they often boast much faster growth rates and can double their revenue a whole lot easier than a large-cap company can. They also act as a psychological lure to investors since many are drawn to the trend of past returns -- and in this case it's a rich history of small caps outperforming large caps. But that trend looks to change in 2012 by my estimation.
For starters, large-cap companies are significantly cheaper on an earnings basis than their usually faster-growing small-cap counterparts. Normally, pundits would compare the S&P 500 to the Russell 2000 to get a gauge of price-to-earnings ratios. As for me, I prefer to use the Vanguard Large-Cap ETF (NYSE: VV ) , which attempts to mirror the MSCI U.S. Prime Market 750 Index of primarily large-cap companies, and the Vanguard Small-Cap ETF, which attempts to track the returns of the MSCI U.S. Small-Cap 1750 Index. On a trailing-12-month basis, the large-cap ETF boasts a P/E of 12 versus the small-! cap ETF at 14.
An even bigger difference from a percentage basis is seen when comparing the yields of these two ETFs. As should be no surprise, small-cap companies have less capital to work with since they're constantly reinvesting their capital into their business. Less cash on hand often means little chance for a dividend. Large caps, on the other hand, have well-established businesses and often lure investors into purchasing their stock by sporting stable, yet high-powered, dividends. Once again, using our Vanguard example, the large-cap ETF boasts a 1.90% to 1.20% yield edge over the small-cap ETF.
With many expecting volatility to continue in 2012, low-beta, high-yielding large caps are likely going to be where investors park their money.
Prediction 2: U.S. money center banks will be the best performing sector in 2012
Yes, even with Europe near a complete debt meltdown, China's growth showing visible signs of slowing, and the U.S. economy sputtering in neutral, I'm choosing financials -- predominantly U.S. money center banks -- as the best performing sector in 2012.
This time I will beat the dead horse and point out that relative to book value, U.S. money center banks Bank of America (NYSE: BAC ) , Wells Fargo (NYSE: WFC ) , JPMorgan Chase (NYSE: JPM ) , and Citigroup (NYSE: C ) are trading at their lowest valuations in a decade.

Source: Morningstar.

Not even during the heights of the credit crisis did banking stocks see their valuations dip as much as they have in recent years -- yet oddly enough, bank liquidity is at its highest levels in near-term memory. Bank of America sold off much of its stake in Chi! na Const ruction Bank in order to boost its tier-1 common equity ratio to 8.65%. Its peers boast even higher tier-1 common ratios. JPMorgan Chase at 9.9% and Wells Fargo at 9.35% are so well-capitalized that both boosted their dividends earlier in the year. Citigroup is actually the best capitalized of the bunch with a tier-1 common equity ratio of 11.7%.
Another common misconception is that U.S. banks wouldn't be able to stand up to the shock of a European meltdown. Bank of America withstood a huge $8.8 billion loss in 2011 related to legal settlements in its mortgage division -- chances are it would survive the $1.5 billion it currently has in exposure to Italy. JPMorgan Chase is in considerably better financial shape than Bank of America and even it, on a comparative basis, is only claiming $6.3 billion in exposure to Italy.
Fear-mongering can be a scary thing, and it ran full force throughout the banking sector in 2011. With these four banks now trading at minuscule forward P/E ratios ranging from six to nine, there is very little worry left to squeeze out of this sector. You know the old phrase "You can't get blood from a turnip"? Well this is it in action. Mark my words, U.S. money center banks will be the best performing sector come year end.
Foolish roundup
There you have it, folks -- two calls that will either make me look like a prince or a pauper. The odds are already stacked against me, so I'm going to need calmer heads to prevail and a little bit of luck to be correct.
What's your take on my two predictions? Share your thoughts in the comments section below.
Also, if you're looking for one more great prediction heading into 2012, consider downloading your copy of our latest special report, "The Motley Fool's Top Stocks for 2012," in which our chief investment officer reveals his top play which has been dubbed the "Costco of Latin America."

Do Weak PC Sales Now Mean Better Ones Later?

2012-01-27T18:36:00.000-08:00

Microsoft (NASDAQ: MSFT) management says that PC sales may have fallen slightly in the fourth quarter of last year. The Thailand floods that interrupted supply chains are to blame. What Microsoft did not say is whether pent-up demand will offset the drop as 2012 wears on. That is, logically, what should happen.
Tami Reller, chief financial officer of Microsoft's Windows unit, predicted that figures will show PC sales fell 1% or more last quarter, according to a Bloomberg report. Disk drive parts made in Thailand were in short supply. Smartphone sales also may have undermined demand.
The economy?is good enough, and the number of new PC products is large enough, that when manufacturing returns to normal levels, there should be?a large uptick in sales. At least there should be one in the short term.
The usual cycle of PC replacement among consumers and companies will be one reason for robust sales as the year goes on. Products reach the market with new software and faster chips. Competition among the largest manufacturers keeps prices low. Entirely new segments of the market, in the current case tablets, drive customer sales. And there are the introductions of unexpected products like the new ultrabooks, which are light but have powerful processors.
It is convenient to say that smartphone adoption will hurt PC sales substantially. That may be true, but it also may not be. The PC can still do many things smartphones cannot because of their processors, screen size and storage capacity. Consumers and business users often have both PCs and smartphones. None of the large research firms, such as IDC, have changed their overall?global 2012?forecasts since the Thailand floods.
PC sales may have been partially?interrupted recently, but when that interruption has ended, demand will push sales higher.
Douglas A. McIntyre

GOP 2012: What they (wouldn't) cut

2012-01-27T05:09:00.000-08:00

NEW YORK (CNNMoney) -- For all their differences, the 2012 Republican contenders have at least one thing in common: They all want to cut spending.
Rick Santorum wants to cut $5 trillion over 5 years, immediately return non-defense discretionary spending to 2008 levels, pass a balanced budget amendment and cap federal spending at 18% of Gross Domestic Product.
Mitt Romney would cap spending at 20% of GDP, immediately reduce non-security discretionary accounts by 5% and pursue a balanced budget amendment.
Newt Gingrich, Rick Perry and Jon Huntsman have designs of their own.
Problem is, the candidates lack a set of realistic, specific proposals that stand even a small chance of becoming law.
"If you look at most politicians talking about cuts, they are very, very, very short on specifics with a few exceptions," said Tad DeHaven, a budget analyst at the CATO Institute, a libertarian think tank that advocates for smaller government.
On the hunt for specific budget cuts, DeHaven combed through the economic plans listed on each candidate's campaign website.
He came away disappointed -- with one exception.
"From a spending standpoint, there is Ron Paul and then everybody else," DeHaven said. "You have a complete budget from Paul, and not much from anybody else."
Paul's plan doesn't lack ambition. He wants to eliminate the Departments of Energy, Housing and Urban Development, Commerce, Interior and Education.
And on his website, Paul lays out a four-year plan with budget lines for federal agencies and programs that he wants to eliminate with a high degree of specificity.
By way of contrast, Romney and Santorum list only a few programs they want to axe, despite their big promises.
Romney wants to cut funding for relatively small programs like Amtrak, the National Endowment for the Arts, foreign aid, the Corporation for Public Broadcasting and Title X family planning.
He does detail a few bigger ticket! items, like a reduction in the size of the federal workforce and a modification to Medicaid that would turn it into a block grant program -- but not much else.
Overall, DeHaven said Romney's specific cuts are "tiny" and "the typical small stuff."

America's Choice 2012

Santorum doesn't fare much better, focusing on red-meat Republican priorities like funding cuts for the National Labor Relations Board, USAID, Planned Parenthood and the Environmental Protection Agency.
The mix of politics and budgeting isn't too surprising, especially given that the candidates are still battling the Republican nomination, a process that requires capturing the attention of the conservative party base.
DeHaven said another factor is contributing to the lack of details: candidates from both parties often shy away from discussing budget cuts for fear of a backlash from interest groups and advocates.
"When you call for specific cuts, every program has a constituency, and that's when they come alive," DeHaven said.
For that reason, GOP candidates are returning to an old standby this cycle: The balanced budget amendment, a proposal that -- barring a GOP landslide in congressional races -- stands little chance of becoming law.

2012 candidates slip on Econ 101

"Most candidates embrace a [balanced budget amendment] because they don't have the desire or ability to formulate a concrete proposal," DeHaven said.
Should one of the Republican candidates defeat President Obama in November, they will run up against another budget plan buzzsaw: Congress.
House Republicans, including an enthusiastic set of freshmen, devoted much of the 2011 legislative session to initiatives that would have reduced spending.
The House passed an ambitious budget that was never enacted, and funding for the federal government almost lapsed on a few occasions while lawmakers squabbled over relatively small budget cuts.
And in perhaps the best exa! mple of how difficult it can be to cut spending, the country was brought to the brink of default after negotiations over the debt ceiling dragged until the last minute.
At the termination of that debate, a large number of spending cuts were left to the super committee to identify. Why? Because lawmakers couldn't agree on specific programs to cut.
And of course, the super committee then failed at the same task, despite overwhelming pressure and an extended deadline.

Consumer Business Roundup: Retailers Same Store Sales, Starbucks Expansion

2012-01-27T00:58:00.000-08:00

Gap (NYSE:GPS)?reported?November net sales fell off 3% Y/Y, led down by a 7% at its Old Navy chain of stores and a 9% decline of international sales. YTD comparable sales are down 3% Y/Y.
Starbucks (NASDAQ:SBUX) awakens the economy of U.K. by saying it plans to create 5,000 new positions in their job sector over the next five years with the opening of?200 new drive-thru stores, adding to the nine it already has.
Though Target (NYSE:TGT) CEO Gregg Steinhafel says Nov. sales came in on the low end of expectations. He says the firm is keeping its view for December the same. The retailer survived Black Friday without any reported issues after an?online petition?and?misbehaving website caught media attention.
Coach’s (NYSE:COH) trading debut in Hong Kong got off to a rocky start, up 1.8% with little volume vs. a 5.6% jump for the Hang Seng in heavy trading. The company believes however, that its brand recognition will help in the long run. The handbag maker listed in Hong Kong without raising new capital.
Kohl’s (NYSE:KSS) is dropping, and J.C. Penney (NYSE:JCP) is as well, after reporting?weak November same-store sales. While calling its November results a disappointment, Kohl’s says it was excited by its Thanksgiving weekend performance.
Lululemon (NASDAQ:LULU) plunges premarket as it beats earnings. A?revenue miss?combined with weaker-than-expected sales?guidance?of $327-$332M for Q4 suggests the company will have to take a hit on margins to keep growth going.
American Eagle Outfitters (NYSE:AEO) expects to benefit from lower cotton costs beginning in the second half of 2012. Weighing in on the effect of cotton prices CEO James O’Donnell weighs in on his firm in an earnings CC says this: “Cotton prices will continue to affect merchandise profit in the fourth quarter, and it will be well into the spring season before we st! art to s ee a correction.
Krispy Kreme (NYSE:KKD) is selling off post-earnings and suggests?price hikes enacted in response to rising commodity costs may be hurting sales. Investors are paying more attention to its?FQ3 revenue miss?than its solid EPS guidance. BGB Securities?(Hold) is optimistic regarding the uptake for Krispy Kreme’s new coffee products, but thinks they’ll have a limited impact on results.
Walt Disney’s (NYSE:DIS)?50% dividend hike?is a vote of confidence in the company��s future according to Mark Hulbert view, and a ��very bullish development” for the broader economy: “Disney is in the entertainment business. Its profitability would suffer if the economy were about to go into a sustained downturn… to that extent, management��s vote of confidence extends to the economy as a whole.”
Wal-Mart (NYSE:WMT) says TVs are among the top gifts people are putting on layaway. The Westinghouse 46-inch LCD HDTV on sale for 50% at Target (NYSE:TGT) last weekend was a top seller. Big discounts are a huge draw. Prices overall have dropped 7% to an average $597.
Investing Insights: Are Shareholders Benefiting From the Health Conscience Consumer?

Gold Price: Beware! Government Spooks Infest Gold Market

2012-01-26T23:39:00.000-08:00

Today’s revelation of China’s surge in gold imports in the month of November from its principal gold dealer, Hong Kong, exposes Western financial media for the umpteenth time for its blatant propaganda (at the behest of central bankers) against one of the only assets that will protect wealth during these most turbulent times.? Sign-up for my 100% FREE Alerts
"Mainland China’s imports from Hong Kong surged to 102,779kg/oz from 86,299kg/oz in October," stated bullion advisory group, GoldCore.? "This is a 20% increase from the already high number seen in October and a 483% y/y increase."
See zerohedge.com for the full article from GoldCore.
Note: see the staggering trend of Beijing gold purchases in the Reuter’s chart, below, halfway through the article.
While a media blitz campaign waged against the gold market kicks into full gear, the Chinese buy tons.
And let’s not forget India, the country that, last year, bought more gold than Switzerland claims it stores with the SNB, which is approximately 1,000 tons.
"Gold traders in India, the world’s biggest buyer of bullion, stepped up buying for the upcoming wedding season, as gold prices stayed near the week’s trough, giving silver a boost," India’s Economic Times stated on Jan. 11.
The two largest bulk buyers of gold are stepping up with increasingly larger orders as the spot price retreats, but the U.S. and UK media tell readers the gold bull market is over��or that gold should be seriously questioned as to its validity for wealth protection during the biggest financial crisis since the 1930s.
Goldmoney’s James Turk, who told King World News on Jan. 9 that he sees the propaganda machine blitz at full throttle throughout the pullback in the gold price from its incredible rise to $1,920.
Whatever happened to the "buy on the dips" mantra from ‘traditional’ media?
"There is a war going on with regard t! o gold a nd people are lined up on both sides," Turk told KWN’s Eric King.? "The central planners want gold to disappear, but gold is not going to disappear because it's been money for 5,000 years.? What the central planners and the manipulators and government agents and everybody else are doing is they are putting out a lot of anti-gold propaganda." [emphasis added]
For those not familiar with James Turk, it was he who broke the story about the UK-based financial magazine The Economist for its peculiar track record for publishing significantly bearish articles at, or near, gold price bottoms.? In two articles, Gold’s Infallible Indicator and Gold’s Infallible Indicator��Six Months Later, Turk demonstrates why gold bugs should watch for that out-of-the-blue gold article from The Economist.
And the Fed’s co-conspirators extend beyond The Economist, the Wall Street Journal, Financial Times (FT) of London, Bloomberg and CNBC serve as propaganda tools (at critical moments) for central bankers as well, according to several reliable sources, one of which is the UK-based Guardian in an article penned by journalist David Miller in Feb. 2006.
"A succession of scandals in the U.S. has revealed widespread government funding of PR agencies to produce ‘fake news’," Miller stated.
"World Television produces the fake news, but its efforts are entirely funded by the Foreign Office, which spent ��340m on propaganda activities in the UK alone in 2001."
And in the U.S., it’s no surprise that the feds fund propaganda budgets of its own, but presumably much larger than those of the UK.? From ComputerWorld, written by Darlene Storm in February 2011.
It’s recently been revealed that the U.S. government contracted HBGary Federal for the development of software which could create multiple fake social media profiles to manipulate and sway public opinion on controve! rsial is sues by promoting propaganda. It could also be used as surveillance to find public opinions with points of view the powers-that-be didn’t like. It could then potentially have their ‘fake’ people run smear campaigns against those ‘real’ people. As disturbing as this is, it’s not really new for U.S. intelligence or private intelligence firms to do the dirty work behind closed doors.?
It can be assumed a lot of UK and U.S. propaganda focus primarily on foreign policy issues.? Wars are tough sell, and a lot of propaganda must be bought in the same way commercial enterprises utilize ‘advertising’ of its products.? Makes?sense.
However, instead of outside foes endangering the sovereignty of nations (again, propaganda has us believe otherwise), the 16 intelligence agencies, which make up the NSA, stated in a 2009 report to Congress, that the economy has become an immediate national security concern.
Reuters, February 2009:
"The financial crisis and global recession are likely to produce a wave of economic crises in emerging market nations over the next year," said the report. A wave of "destructive protectionism" was possible as countries find they cannot export their way out of the slump.
"Time is our greatest threat. The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests," the report said.
According to The New American in an article in September 2011, titled, Fed Plotting to Monitor Critics, Tailor Propaganda, in response to the 2009 NSA report, the Federal Reserve issued a "Request for Proposal" to "monitor billions of conversations" and to "reach out to key bloggers and influencers [sic]" in an effort to massage opinion.
Apparently, CNBC’s Steven Liesman can’t do all the spin work and propaganda for the Fed, himself.
The Fed's "Request for Proposal" explains that the institution needs a platfo! rm to "m onitor billions of conversations" and "identify and reach out to key bloggers and influencers." Information collected will be used to measure the effectiveness of the central bank's "public relations" and "communication strategies" �� known in laymen's terms as propaganda operations.
"There is need for the Communications Group to be timely and proactively aware of the reactions and opinions expressed by the general public as it relates to the Federal Reserve and its actions on a variety of subjects," the document states. News outlets, Facebook, Twitter, forums, blogs, YouTube, and other social media platforms will all be targeted.
Government, media and central bankers want the public out of gold and work full time to make it happen.? ‘Analysts’, too, are deployed to spew misinformation about the economy and gold.? No surprise there.? Though, no one has publicly proved that any one particular analyst is involved in the anti-gold propaganda campaigns, but three men have been labeled the worst gold analysts since the gold bull market began in 2001.
Those three, or the "Three Stooges", gold analyst Peter Grandich had called them recently, Jon Nadler, Dennis Gartman and Jeff Christian, sport truly horrendous records, similarly to The Economist dismal calls, as James Turk had pointed out.
In December 2010, Richard Russell of the famed Dow Theory Letters attacked on both fronts against the these three Lord Haw-Haws, one, the traditional media and, two, Nadler, in particular��though Gartman and Christian could easily have been interposed instead.
"I listened to Kitco's Nadler on the Bloomberg channel this morning," Russell stated. "He's been bearish on gold for months, and I thought he sounded like a know-nothing fool today. Why didn't Bloomberg interview someone who's been bullish and right about gold?"
"What's with the Wall Street Journal and gold?" Russell asked rhetorically. "In the Dec. 6 pape! r, the f ront page blares, ��ETFs and Gold.' So I turned to the gold article, which included a rare error in its headline, ��Resisting Gold's Glister.' I assumed they meant gold's ��glitter.' The article was written by a Tim Medley, a random guy I had never heard of. Mr. Medley's main half-assed complaint about gold is that it is too expensive today and therefore dangerous in that it may correct. Worse, claims Medley, there is a current ��euphoria' regarding gold. Too many people are bullish on gold. Therefore, gold is about to lose its ��glister.'"
Gold investors, beware of what you read and who you follow for advice.? As a general rule, stick with analysts interviewed on King World News and not from infrequent or other Wall Street analysts on traditional news outlets.? Sign-up for my 100% FREE Alerts
Also read BER articles on this subject,
Gold Market hit by Chinese Bailout PSYOP; $2,000 Gold "in 45 days," says James Turk
Gold Price: Lord Haw-Haw Dennis Gartman announces "Death of a Bull"
Richard Russell Doesn't Trust the Media to Cover the Gold Market
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Irish Banks, No Efficient Market Theory Applies (IRE, AIB)

2012-01-26T15:47:00.000-08:00

The Bank of Ireland (NYSE: IRE) and Allied Irish Banks plc (NYSE: AIB) are back out of favor.? After huge gains off their recent lows, the Irish banks are lower again this morning following the European Central Bank’s efforts on Friday where the central bank was reportedly buying short-term Irish government debt.
Last week was when Ireland received approval from the European Commission for additional capital of 10 billion Euros for the state-owned Anglo Irish Bank, and that is on top of the 14.3 billion that the government has already put into it.
The latest earnings reports at the Irish banks were poor, something which the market should have taken into consideration.? It seems that those stress tests that we all agreed were watered down had no real meat to them after all.
European banks have been weak in general, but for now the pain continues. The Bank of Ireland is indicated down over 4% around $3.90 per ADR while Allied Irish Banks plc is indicated down less than 2% around $2.14.? The 52-week low in AIB is down at $2.06, which means one more day of bad headlines and the bank is trading at fresh 52-week lows all over again.
Some day the markets may learn to adequately price in the headlines.? So much for the efficient market theory.
JON C. OGG
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What a Key Indicator Says About the Direction of U.S. Stocks

2012-01-26T14:29:00.000-08:00

According to Reuters, retailers offering the sharpest discounts got the lion’s share of this year’s holiday customers. CostCo (COST) and Wal-Mart (WMT) made the list.
The Wall Street Journal writes that a final push by retailers may bring a reasonable end to the holiday sales season.
The Wall Street Journal writes that there is a strong new interest in "blank check" IPOs.
The New York Times writes that Target (TGT) is having an especially rough holiday season.
The FT writes that Cisco (CSCO) has begun the work of wiring entire cities.
The FT writes that heavy use of hte internet on the Apple (AAPL) iPhone has raised hope that carriers can begng to being in billions for non-voice services.
Bloomberg writes that holiday e-commerce spending its trailing forecasts.
CNN Money writes that News Corp (NWS) will sell eight TV stations for $1.1 billion.

With Oil, Uranium and Gold, There¡¯s Nothing Crazy About This Canadian Loonie Tune

2012-01-24T06:09:00.000-08:00

One company Cramer talked about last week is RPM International (RPM), and he interviewed the CEO. The name RPM is one he likes that has 100 brands, and Rustoleum is 15% of the business. The CEO said that when they make acquisitions of brands they keep the name and they keep the management teams in place that built them up. Cramer said RPM doesn’t leave investors out in the wind and they don’t miss earnings when others in their field do. RPM closed flat on the day and traded up 1.75% to $23.15 in after-hours. The 52-week range for RPM is $17.40 to $22.94.

NYSE-Deutsche Boerse Appeal Direct to Barroso in Deal Fight

2012-01-22T04:00:00.000-08:00

NYSE Euronext (NYSE) and Deutsche Boerse AG (DB1)appealed directly to European Commission President Jose Barrosoas they fought to salvage their merger, arguing that blocking itwould ��represent a serious missed opportunity at a criticaljuncture for Europe.��
The exchanges told Barroso that failure to approve thetakeover would place European exchanges at a competitivedisadvantage, according to a copy of a letter sent seen byBloomberg News. The decision would hurt the creation oftransparent European markets and drive business to more lightlyregulated regions, they said in the letter.
Should the combination be prohibited, ��the globalconsolidation of exchanges might very well shift the balancetowards countries favoring light-touch regulation, which wouldseverely endanger the European Commission��s agenda,�� theexchanges said. ��Approving the proposed combination of DeutscheBoerse and NYSE Euronext (NYX) would significantly increase thelikelihood that the European Union��s regulatory philosophy wouldbecome the global standard.��
Chief Executive Officers Duncan Niederauer and Reto Francioni are fighting antitrust concerns, appealing directly topoliticians and other European regulators as they seek tosalvage their plan to create the world��s largest exchangecompany. Two people familiar with the talks told Bloomberg lastmonth that concessions offered by the exchanges didn��t go farenough and negotiators for the European Commission planned toprohibit the deal.

��Bridgehead of Integrity��

The exchanges ��have shown themselves to be a bridgehead ofintegrity and transparency against a tidal wave of opacity andgreed that permeates the less-regulated segments of financialmarkets,�� the letter said. The combination will ��offer aunique opportunity to deepen regulatory cooperation and reducethe risk of regulatory arbitrage,�� it said.
NYSE and Deutsche Boerse still have room to maneuver.Before deciding whether to approve or block a deal, the EuropeanCommission must consult! competi tion agencies from the EuropeanUnion��s 27 member nations, who are scheduled to meet Jan. 17,according to a person familiar with the situation.

Commissioner Vote

Commissioners from each EU country must also vote on adecision and executives can appeal a merger ban at the EUcourts. Companies including Oracle Corp. have managed tocomplete deals to which the European Commission had initialobjections.
The European Commission will decide on the deal on Feb. 1,EU Competition Commissioner Joaquin Almunia, the EU��s antitrustchief, told France24 radio in an interview today.
��We��re going to decide on Feb. 1 here at the commission,��he said. ��We don��t think of the interests of the exchanges��shareholders, we think above all of the interest of citizens, wethink of the companies who need capital, of the countries, ofthe national economies of Europe who need capital markets whichwork well.��
The German government today indicated it wouldn��tintervene.
��The power to make a decision in this case liesexclusively with the European Union,�� Ann-Christin Wiegemann, aspokeswoman for the Economy Ministry, told reporters in Berlintoday, adding she has no information on whether the Germangovernment is in touch with the European Commission on the case.

Netflix: A Year in Review

2012-01-21T23:48:00.000-08:00

Sometimes you have bad years, and then you have a colossal implosion on the level that Netflix's (Nasdaq: NFLX  ) CEO Reed Hastings is now experiencing.
Even some of the video buffet operator's biggest critics had a hard time saying something bad about Hastings earlier this year. The bearish argument on Netflix revolved largely on valuation. Long-term concerns about the model's viability and the way that the company accounts for its content licensing liabilities were other naysayer knocks. But knocking Hastings? Never!
Well, with Hastings' name bubbling up near the top of most "Worst CEO of 2011" lists, it's time to break down the year that once began so promisingly for Netflix.
Things started out well for Netflix. The stock had nearly doubled in 2009, going on to more than triple in 2010. Netflix had proven its recession-resistant mettle by drawing a horde of new subscribers, kicking off 2011 by topping 20 million members.
The warning signs that investors missed
Even though Netflix's stock would go on to nearly double again by the summer of 2011, there were already signs that things were starting to come undone.
Amazon.com (Nasdaq: AMZN  ) began offering customers who were paying $79 a year for Amazon Prime memberships -- a program that features free two-day shipping on Amazon-warehoused goods -- unlimited access to a small yet growing digital catalog of streaming titles in February. In a sense, Netflix had its first true big-name competitor.
A month later, AT&T (NYSE: T  ) became the latest broadband provider to cap data usage on its DSL home service. As the country's biggest primetime data hog, Netflix is responsible for a growing chunk of the bandwidth that broadband customers go through in any given month. If more providers follow suit, Netflix's value proposition won't! truly b e unlimited.
March was also when CBS's (NYSE: CBS  ) Showtime decided to pull early seasons of Dexter and Californication from Netflix's digital catalog. Instead of hoping to hook subscribers to the premium movie channel by giving them a taste of its content -- and cashing in on juicy streaming revenue along the way -- Showtime apparently felt that it was more important to protect the priced prestige of its shows. It may not have seemed like a big deal at the time, but it should have alerted investors that licensing deals go in both directions long before Liberty Media's (Nasdaq: LMCA  ) Starz decided that it would not be renewing its meaty content deal that provides Netflix streaming with many of its first-run celluloids.
Look out below
In retrospect, the market misinterpreted Netflix's biggest blunder. The day after Netflix alienated its customer base by announcing that it would raise prices on some of its plans by as much as 60% -- essentially turning the streaming service that was available at no additional cost to customers on unlimited disc plans into a premium offering -- the stock went on to hit its all-time high of $304.79.
Yes, Hastings' biggest blunder is one that was initially applauded by many analysts and investors. Go figure.
International expansion plans became aggressive. Canada's launch in late 2010 inspired Netflix to establish a streaming-only service in 43 different countries through Latin America and the Caribbean this September. By the time that Netflix announced plans to enter Ireland and the U.K. in early 2012 -- and that the move would lead to an initial overall deficit -- investors began to realize that there was a price to pay for Netflix's globe-trotting ways.
Also lost in the excitement -- when Canada hit a million subs in its first year up north -- was the fact that net additions were decelerati! ng after its first complete quarter in Canada.
Subscribers were miffed. Expansion wasn't cheap. Starz was starting to pack up its copies of Toy Story 3 and Sling Blade for an early 2012 exit.
However, Hastings' biggest truly boneheaded move was yet to come.
Qwikster quandary
How could Netflix distance itself further from its already alienated user base? By telling its biggest customers -- the ones on dual plans who were the only ones hit with the summertime rate increase -- to take a hike.
The proposed plan to split Netflix into two distinct sites, forcing DVD and Blu-ray renters to manage independent queues at both Netflix.com and Qwikster, was a disaster. It was a call that Hastings thankfully reversed a few weeks later, but not before it was broadly lampooned.
Netflix's already tarnished reputation met a wrecking ball.
Could things get any worse? You know the answer. Customer defections proved to be worse than Netflix had originally feared in its latest quarter, and now Netflix sees red ink for all of 2012.
The moat that began the year as impenetrable finds a Netflix that is truly vulnerable. Coinstar's (Nasdaq: CSTR  ) Redbox and DISH Network's (Nasdaq: DISH  ) Blockbuster are hoping to swipe Netflix's DVD rental business, while Amazon and others waiting in the wings have their sights set on gobbling up market share in streaming.
If 2011 was a dream, then it surely was a bad one. The stock that seemed as if it would pull off another market-thumping performance this year has shed 60% of its value, and we still don't know when the situation will stabilize.
Good luck in 2012, Hastings. You're going to need it.

Fed Says Economy Expanding, Housing Market Still Dead

2012-01-20T19:39:00.000-08:00

The U.S. economic recovery marches on, the latest Fed Beige Book shows.? Covering the month of December, all twelve Fed districts noted some level of expansion in activity, as the economy rode the holiday wave and increased consumption trends vis-��-vis 2010.? Still, commercial and residential real estate remains weak, prompting a response by three Fed governors noting they were failing at pumping life into the beleaguered sector.
Stronger consumer spending was the biggest positive data point to come out of Wednesday��s report, ��reflecting significant gains in holiday retail sales compared with last year��s season.��? The Beige Book confirms other reports showing the U.S. economy is indeed expanding, namely the latest jobs report which registered a 200,000 increase in jobs in December.
Despite heavy criticism, Fed Chairman Ben Bernanke can once again point to concrete evidence that his attempts to support the economy have, to some extent, worked.? Inflation, one of the most important data points, continued to ease as ��prior increases in the costs of selected inputs have eased.��
While inflation proved to be transitory, the reading is ambiguous as it suggests disinflation which, in extreme cases, can become deflation.? Bernanke has managed to conduct market expectations at his will, engaging in Operation Twist and managing to keep his silver bullet, quantitative easing, still in the barrel.
But it��s not time to cork champagne bottles just yet.? Wednesday��s Beige Book clearly highlighted continued fragility in real estate markets, considered necessary for any sort of self-sustaining recovery.? ��Activity stayed sluggish in residential real estate markets, and conditions in commercial real estate markets remained somewhat soft overall,�� read the report, which saw slight improvements in commercial markets in some districts.
Housing remains in the gutter, as the latest Case-Shiller Home Price Indices suggest.? Prices have ba! rely mov ed off their crisis lows despite unprecedented support from the Federal Reserve.? On Wednesday, three separate Federal Reserve Governors noted their efforts hadn��t done enough to reactivate the economy.
Before the open, Richmond Fed��s Jeffrey Lacker, considered the sole hawk remaining on the FOMC, warned QE hadn��t done much to help the unemployment situation.? Lacker also expressed his reservations regarding the Fed��s policy proposals for the housing market, according to Trade the News.
Atlanta Fed President Dennis Lockhart echoed his colleague, noting the continued decline in housing prices indicated a bottom hadn��t been reached yet.? Finally, Chicago Fed president Charles Evans, the dovish dissenter spoke about how to revive housing markets, adding the Fed could offer as much as $600 billion in another round of asset purchases, or QE.
Markets were mixed on Wednesday with a few clear outliers.? Bank of America, one of 2011��s worst performers, traded up 3.5% to $6.87 in New York, while Citigroup gained 4.2% to $31.25.? Ford was another strong performer, up 2.3% to $12.07.? On the flipside were stocks like Netflix, down 3.8% to $92.15, and Chesapeake Energy, which slid 3% to $22.59.

After A Stellar Q3, Chevron Warns Of Weak Q4 On Falling Margins

2012-01-19T15:49:00.000-08:00

Chevron released aninterim update on its quarterly performance after the bell on Wednesday where it noted Q4 earnings were expected to come in substantially below its stellar third quarter earnings. ?The large oil and gas company posts earnings on January 27.
Its main problems stemmed from the company��s downstream operations, where lower margins and refinery input volumes hurt the bottom line. ?Refining margins averaged $14.45 through December, while marketing margins stood at $5.39.
Refinery volumes were weak as well, with U.S. refinery input reaching 717 million barrels per day (mbd). ?Internationally, refinery output hit 792 mbd.
Upstream business was relatively solid, with U.S. net oil-equivalent production during the first two months of the quarter coming in close to its Q3 numbers: the company produced 660 million barrels of oil equivalent (mboed) through November. ?International production during the same period actually exceeded its third quarter numbers, hitting 1,979 mboed.
Chevron, like rivals Exxon Mobil, had a really strong third quarter on rising energy prices.? The two large oil giants fared better than oil service companies like Halliburton and Schlumberger during the third quarter.? Chevron, though, has already warned investors its performance won��t blow anyone out of the water.
Shares in the company had fallen 1.2% during Wednesday��s trading session to $107.77.? In after hours trade, Chevron fell a further 2% to $105.67 by 5:12 PM.

Fed: Recession "Very Likely Over," but Threats Remain

2012-01-18T15:28:00.000-08:00

The Securities & Exchange Commission will no longer let companies caught in illegal activity have their cake and eat it, too. The commission��s is ceasing its much-criticized practice of allowing companies that have admitted to wrongdoing in criminal cases of securities fraud to cop a plea saying they ��neither admit nor deny�� those admitted wrongdoings in a separate SEC fraud case. The new approach applies as well to individuals who find themselves in that situation.

Said SEC Enforcement Director Robert Khuzami in a statement on Friday: ��The new policy does not require admissions or adjudications of fact beyond those already made in criminal cases, but eliminates language that may be construed as inconsistent with admissions or findings that have already been made in the criminal cases.��
As The New York Times pointed out, ��The commission has been sharply criticized, in federal court and on Capitol Hill, for allowing companies to repeatedly settle fraud cases without admitting or denying the charges. Until last week, that policy had been applied even when a company acknowledged the same conduct to another government agency, often the Justice Department..��
Lawyers interviewed by both NYT and The Wall Street Journal seem split on how significant the change is or whether it would have any bearing on SEC enforcement actions. But at least from the perspective of everyday common sense, it sure sounds like a step in the right direction.

Apple, semis decline as sector retreats

2012-01-17T11:19:00.000-08:00

The tech sector slipped into the red Friday, as shares of Apple Inc. dipped on reports that it has stopped selling the iPhone 4S in Beijing temporarily as the company was met with unruly customers.

Click to Play

iPhone 4S sales halted in Beijing

A brawl broke out outside the flagship Apple Store in Beijing, as hundreds lined up to buy the company's latest smartphone.

Semiconductor stocks also highlighted the retreat, as major chip shares posted losses ahead of a three-day weekend for financial markets.

Apple AAPL ?dipped 0.4% to close at $419.81, as the sector kept pace with a retreat in the broader market. Wall Street reacted to, among other bearish developments, J.P. Morgan Chase & Co. JPM ?lower fourth-quarter profit. The Dow Jones Industrial Average DJIA ?shed 49 points.

The Nasdaq Composite Index COMP ?moved down 0.5% to close at 2,711. However, the benchmark wrapped up the week with a 1.4% gain.

The Morgan Stanley High Tech 35 Index MSH ?was also lower, down 1%, while the Philadelphia Semiconductor Index SOX ?fell 2%.

The chip segment��s decl! ine feat ured slumping shares of Intel Corp.INTC , Advanced Micro Devices Inc. AMD ?and Nvidia Corp. NVDA ?

/quotes/zigman/123472 NDX 2,371.98, -10.01, -0.42%
/quotes/zigman/1468249 SOX 383.47, -8.28, -2.11%
/quotes/zigman/6015481 MSH 610.22, -6.18, -1.00%

The semiconductor group��s still outpacing the broader tech sector on optimism that the industry will see stronger demand in the next few quarters.

But Caris & Co. analyst Craig Ellis counseled caution, saying in a Friday note: ��Cyclically, numerous companies thought [the firs! t quarte r of 2012] would mark an order bottom, though tellingly no company had seen an order rebound yet, so the coast is not yet clear.��

Hardware makers such as Hewlett-Packard Co. HPQ ?and Dell Inc. DELL ?traded in the red as well.

However, software giants Oracle Corp ORCL ?and Microsoft Corp. MSFT ?rebounded to post fractional gains.

Also on the upside, shares of Netflix Inc NFLX ?added 2.4% to $94.38. U.S.-listed shares of SAP AG SAP ?moved up 2.5% to close at $54.56 after the company reported better-than-expected results for the fourth quarter and 2011.

Unfortunately, it means things are about to get very, very ugly

2012-01-16T20:59:00.000-08:00

Election Day 2011 is in the books. You may think it lacked fireworks, considering how big the prize will be in 2012, but here are some choice political headlines from yesterday��s votes across the U.S.:

Ohio voters repealed a controversial labor law limiting union rights.
Early results show a political newcomer ousted an entrenched and polarizing Republican in the Arizona state Senate, and Democrats in the swing state of Virginia saw their majority in the Commonwealth��s upper house erode.
Voters in Mississippi rejected a controversial ballot measure that would have defined human life as beginning at fertilization.

These are all weighty developments. Political junkies are probably already chewing on the juicy details, and a host of other outlets will be dissecting these and other specific issues at length over the next few days as results are finalized.

But the most important thing about Tuesday��s vote is, of course, what it means for the White House race in 2012.
And unfortunately, it means things are about to get very, very ugly.
Look Out Incumbents!
The Ohio vote is interesting not just because it’s the latest in a long line of collective bargaining measures, but because it’s the result of a popular vote to repeal legislation enacted by incumbents.
The whopping 62% to 38% margin reported late Tuesday night shows just how out of touch legislators are with their constituents. Of course, you can cite low turnout or tout the legislature��s obligation to do what��s right even if it��s unpopular, but you can��t deny the loud voice of protest heard in this vote.
The anti-incumbent backlash and quick change of sentiment seems to be a theme nationwide. Take the first-ever recall vote in the conservative border state of Arizona to replace a controversial anti-immigration legislator after 10 years as an incumbent. Even more interesting is that a GOP g! overnor initiated the recall against the sitting lawmaker.
Also of note is a very competitive race in the swing-state of Virginia to oust incumbent Democrats. Considering President Obama was the first Democratic presidential candidate in 44 years to win Virginia, this is certainly noteworthy.
And it goes without saying that since Obama is also an incumbent, he has a tough hill to climb a year from now.
It Will Only Get More Polarizing
The fierce debate over labor laws in Ohio — and in Wisconsin and elsewhere previously — pales compared to the divisiveness in Mississippi, where the hottest of hot-button issues was rolled out at the ballot box.
It��s hard to have a ��moderate�� conversation even among friends about abortion. Just imagine what the scene was for voters in Mississippi as pro-life and pro-choice forces turned the state into a battleground over their agendas.
For those of you who are sick of the polarizing political atmosphere, expect issues like this to pop up again in a year. And worse, with the Supreme Court having eased restrictions on corporate election spending and the prospect of a big voter turnout, you’ll be suffering the tug-of-war of hyperbolic campaign ads very, very soon.
Jobs Remain Elusive
Perhaps most disconcerting is that all of the candidates appearing on the ballot yesterday touted how important it is to jump-start the economy and put Americans back to work. But the sad reality is that legislation at the local, state and federal level remains either a misguided or ineffective way to stimulate growth.
Consider that, according to a Challenger, Gray & Christmas report, government layoffs were the primary source of job losses in the economy for the first six months of this year! How are our lawmakers part of the solution with a statistic like that?
Admittedly, it’s a tall order to dig out of this deep hole — and some free-market purists would argue that it��s no! t even t he government��s job to consider digging us out.
However, politicians across the nation ran on the notion of job creation. Voter polls continue to show that the economy is the top concern. Everyone is talking a great deal about government��s role in spurring economic growth.
But talk is cheap. Thus far, lawmakers on every level continue to fail their constituents and fail on their promises of meaningful changes that can draw down unemployment. Those failures led to the ousting of many incumbents, but voters may be disappointed if they expect the new names will mean better results.

How To Open A Restaurant – Avoid These Common and Simple Mistakes Made by Most New Restaurant Owners

2012-01-16T07:08:00.000-08:00

Do you know why most restaurants fail? The reason is that they believe if the food is good, success will just be a step away. This is a wrong concept and most people are misguided by thinking this way. You do have a good vision to succeed but do you have a clue about how to open a restaurant? No? You do need to have a correct understanding about the real business that gets into opening a restaurant. Now, you are a little excited about starting your own restaurant, but in all this excitement, do not forget to make a reality check on your complete project. This lack of understanding will make you a complete failure in your attempt; if you want to succeed then read on to avoid the common mistakes.
A particular saying in the business world is that you must have 3 important things for your business they are location, location and location. It is true that a good location is a great investment for any business, but that alone is not a guarantee of your success. Location is a big factor but it is not the only factor that you should consider while opening a restaurant. Do you know that there are a lot of restaurant in “not so great places” that are a huge success. The poor business practice can also lead to the downfall of a restaurant and I am sure you would want to avoid it.
Another common mistake that most people do when thinking about how to open a restaurant is that they fail to draw a fair cost for each recipe placed on menu. These people set the prices of the items on the gut feeling and what they believe that the customers would shell out. The problem here is that they do not draw a fair cost of every recipe and then chalk out the basic charges on the items. These kinds of restaurateurs do not know the actual cost of the items on their menu.
You have to first look at the budget of the restaurant; you will be amazed to see the amount spend on the food. If you want to be successful about how to open a restaurant then you will have to price your food items on the menu correc! tly. Thi s is what you will have to control and if you are unable to control this aspect of your business then your business is traveling down the wrong path. The pricing should be moderate and must also help you earn profits. The key here is to avoid setting high prices.
The last problem is customer service. Yes, this is also the biggest problem of the restaurant industry today. There will always be people who complain about a certain recipe, while others might tell you that this is the prize winning recipe of your restaurant. You must know that you will not be able to make everybody happy. Always remember that your customers are the breath of life of your restaurant. They are the reason why in the first place you are thinking about how to open a restaurant.
There are other factors that you need to be aware of. The best way to ensure you get to tackle major concerns is to get advice from an expert for starting your own restaurant. If you are keen to learn more about how to open a restaurant, please

Europe Markets 1/10/2008 BCS, BHP, BP

2012-01-16T04:46:00.000-08:00

Markets in Europe were mixed at 6.25 AM New York time.
The FTSE was off a fraction to 6,271. Barclays (BCS) was up 1.1% to 464. BHP Billiton (BHP) was up 1.5% to 1532. BP (BP) was off 1.1% to 604.
The DAXX was flat at 7,783. BASF was down 2,2% to 102.54. Merck was down 1.6% to 92.31.

New Yahoo CEO Welcomed with Mixed Reviews

2012-01-14T04:39:00.000-08:00

After a months-long search for a new CEO, Yahoo! Inc. (NASDAQ:YHOO) finally found their guy: Scott Thompson of PayPal (NASDAQ:EBAY).?The news came on Wednesday and it was welcomed by mixed reviews.
Yahoo! Stock Declined
The stock market responded to the Thompson hire by sending Yahoo’s stock down 2 percent in early morning trading. The stock was down, as of Wednesday, 14 percent from its 52-week high in May but it has recovered from its $11 per share August low, according to The Wall Street Journal.?By Friday, the stock had finished the week at $15.52.
Analysts Were Not So Kind
Wall Street’s analysts weren’t really showing their love toward the Thompson selection.
Gabelli wrote:

��We view this as a slight negative, as it likely rules out a?sale of the entire company,�� Gabelli said in a note before the official?announcement. Says one analyst on a conference call on the news: ��Scott, to a?large degree, is more of a technologist, not more of a media or turnaround?expert, which is what we thought Yahoo needed at this point.��

Stifel Nicolaus seemed positive:

Shares may fade a bit today if investors?believe that the hiring of Thompson may indicate that the evaluation of?strategic alternatives is not going forward. We believe that would be a?buying opportunity. We believe the process continues, now with?Thompson as a guiding force.
This hiring may be a signal that a private equity injection into Yahoo! is?less likely now �� we believe that with a solid CEO like Thompson, a?private-equity led investment is less necessary.

Piper Jaffray��s sees challenges ahead for Thompson:

We believe the hire is a slight positive to Yahoo!?as Thompson is likely to refocus employees who had lacked a permanent CEO for?months; however, we note that Yahoo! has deteriorated meaningfully during the?absence of a perman! ent CEO as evidenced by our daily ad checks (62% guaranteed in?December vs. 91% last December). We believe the appointment of a CEO suggests?that a private equity minority investment in YHOO is unlikely, but does not impact?the potential and timing of an Asian asset sale, echoed by Chairman Roy Bostock.
We remain Overweight due to the possible revaluation of shares through a potential?Alibaba/Yahoo! Japan deal as a deal could result in excess cash that Yahoo! could?use to buy back shares.

And Citi, coming in the middle, gave Yahoo’s stock a “Netural” rating:

We?believe Mr. Thompson has strong technical and organizational skills (like Carol Bartz)?and should bring that rigor to Yahoo!.? His track record at PayPal was excellent.?However, we are somewhat concerned that he does not have strong media/advertising?experience, which we believe Yahoo! needs, given the structural issues surrounding?the company��s Search and Display initiatives.? And by selecting Mr. Thompson, Yahoo!?is explicitly pursuing a Growth strategy, whereas we believe a Value strategy might be?more appropriate.

Exec Are Not So Impressed ?
Coming from the inside, an unnamed Yahoo executive had this to say about the Thompson selection, according to Business Insider:

“He sounds like a nice guy.?It’s so not what we need. We need a fucking animal to come in and change this company.

One former PayPal colleague of Thompson responded,

“He is from Visa. That is why PayPal stopped innovating. It?hired a bunch of bank execs.”

Now that a new CEO is in place, it may be a changing of the guard for Yahoo’s board of directors. On Friday, news come out that Yahoo is looking for new board candidates to replace potential outgoing ones, such as Chairman Roy Bostock, according to the Wall Street Journal.
To assist with the search, the company hired executive ! search f irm Heidrick & Struggles International Inc. to find a possible replacement for Bostock and directors who may hand in their resignation letters.

Credit Cards: Weighing Bad Debt Against Any Debt At All

2012-01-13T20:50:00.000-08:00

Bank uber-analyst Meredith Whitney wrote in The Wall Street Journal that the economy will have more problems as banks take credit cards away from people to prevent bad debt write-offs. She says “Just six months ago, I estimated that at least $2 trillion of available credit-card lines would be expunged from the system by the end of 2010. However, today, that estimate now looks optimistic, as available lines were reduced by nearly $500 billion in the fourth quarter of 2008 alone.”
That leaves a possible revival of consumer spending in a hell of a mess. Most consumers are having such a rough time with their current debt along with the?possibility of?unemployment that they are hardly spending any money at all. If the economy begins to get better, their credit cards may have been taken away by their banks. They may have a tiny big of money to spend, but no easy way to do so.?That should slow the recovery by a significant amount.
Then there are those few people who do have money now and might be enticed to spend it as deflation brings the prices for almost everything down. And there are people who will?have more money because of proposed tax cuts.?Without credit cards, will those people pay cash? Not likely.
Banks have already pulled massive amounts of credit out of the system by denying new loans to businesses and consumers. And extinction of the credit card will make that a lot worse. The only solution may be for the Treasury to issue plastic to consumers. Instead of the MasterCard (MA) or Visa (V) logo,?they can?carry a picture of President Obama.

POWRtec International Corp. (POWT) Signs Contract with DONG Energy for 50,000 Smart Read Meters

2012-01-12T16:39:00.000-08:00

California-based energy monitoring company, POWRtec International Corp. (OTCBB: POWT)?announced today that it has signed a contract with DONG Energy to secure the delivery of 50,000 of its Smart Read Meters. The Danish energy giant is one of the leading energy groups in Northern Europe and is known for its visionary approach to providing clean and reliable energy.
POWRtec's Smart Read meters allow for efficient and comprehensive analysis of energy usage. This benefits the utility provider, the end-user and ultimately the environment. To date, POWRtec has delivered 160,000 meters to DONG Energy; following this agreement, that total will raise to 210,000 meters over the next 12 months.
POWRtec's Smart Read Meters align perfectly with DONG Energy's clean energy mission; users have noticed a more efficient use of resources, smaller energy bills and enormous benefits to the environment. POWRtec designed their products to directly reduce the amount of energy waste and make a meaningful difference to the environment. The innovative and intelligent meters are network-enabled and can utilize virtually any communications protocol, empowering the intelligent smart meters to directly control network enabled, power-draining devices by switching them on and off in accordance with the desired energy output.
Grant Jasmin, CEO of POWRtec, remarked, "We are very pleased to continue our successful collaboration with DONG Energy and assist them in reaching their goals for more sustainable and responsible energy consumption. This contract has further solidified our strong position in Northern Europe."

Goldman Sachs Dumps Wal-Mart From Conviction Buy List (WMT)

2012-01-12T13:28:00.000-08:00

Wal-Mart Stores (NYSE: WMT) is indicated lower after Goldman Sachs? removed the world’s largest retailer from the Conviction Buy List.? Goldman still has a “Buy” rating on the stock.? The concern that the firm may need to raise guidance after its latest sales data was an issue Goldman noted.? The target in the note is $55.00.? It is still way too early to have an accurate read on where Wal-Mart will open, but shares look down close to 2% at $48.10 in very early indications.? Its 52-week range is $46.25 to $63.85.

Robust Black Friday Sales Stimulate Hopes Of Stronger Holiday Season Sales

2012-01-11T18:53:00.000-08:00

The retailers smiled their way during the just concluded weekend as Black Friday sales figures set the tone for a solid holiday season sales to come in. All eyes are on the results of weekend sales to gauge the impact of the various economic indicators that have been flooding the largest economy of the world that was threatening to play a spoilsport in the busy holiday season.
Thanks to the consumer confidence level, Black Friday started hitting the news even before the sales commenced, though for a different reason. The eagerness with which shoppers lined from midnight to take a slice of their share was obvious and much to the dislike of the retailers shopping began violently at least in the initial hours of shopping.
The Black Friday sales numbers echoed in the Asian and European markets too on Monday. For more than a week, one or the other negative news battered the markets badly. It was but natural that market men are pining for favorable news that could lift the sentiments. Strong Black Friday sales was the much-needed vitamin for the market to come from the slumber. True to the expectations, Black Friday sales continued its top-shopping day consecutively for the seventh year till 2010. The current year position will be known only after the seasonal sales are over.
The sales figures assumed significance in the wake of the U.S.'s second estimate of third quarter GDP recording 2 % rise at an annual rate, lower than its advance estimate of 2.5%. This has obviously ringed alarm bells of a possible recession looming large. But the latest consumer spending halted any such opinion at least for the short term.

NRF Take

The National Retail Federation's (NRF) survey of Black Friday sales touched a record $52.4 billion, representing 16% increase over the previous year Black Friday sales. The traffic too witnessed a 6.6% upside to 226 million shoppers and websites from 212 million in the year-ago period. Significantly, the average spent of shopper also grew 9% to $398.62 from ! $365.34, while average spending through the web increased 37.8% to $150.53 over last year. Online shoppers numbered 28.7 million, significantly higher than 22.2 million in the previous year.
As much as 86.3 million people thronged the shops and online stores to shop their favorites.
Commenting on the Black Friday sales, NRF President and CEO Matthew Shay said, "Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers' Black Friday promotions, a promising sign for the economic recovery." Though the holiday season is far from over, the turnout and value growth motivate the retailers to build on the momentum seen so far.
Clothing and clothing accessories dominated the buyers wish list with 51.4% preferring them followed by electronics and computer-related accessories that recorded 39.4% of shoppers fancying them.

Cyber Monday Outlook

The sales trend over the years has always been on the upside only. Even during the worst year of 2008 too, Cyber Monday shoppers witnessed a consistent rise. As much as 106.9 million visitors were recorded in 2010 for Cyber Monday sales. In 2011, about 122 million people are expected to shop on Cyber Monday going by the survey of Shop.org. The survey also points out that eight out of ten retailers are likely to have unique promotional schemes to attract online shoppers.

Historically Speaking

The retail companies generate 25% - 40% of their annual sales from holiday season sales. However, the last fifteen years witnessed a continuous fall in share of yearly sales. NRF discloses that this is partly due to consumers preferring their holiday shopping in October itself or redeem their gift cards in January or later. Therefore, holiday season sales are viewed closely to gauge the consumers pulse.
Except for two years, i.e. in 2008 and 2009, the retails sales have been registering a growth. These two years saw retail sales nose-diving 4.4% and 0.4% respectively following the financial turmoil! inflict ed recession.
Currently, NRF is estimating holiday sales to witness 2.8% growth to $465.5 billion for 2011 holiday season sales from 2010's 5.2% upside. Last year results were significant as it came on the back of 0.4% downside recorded in 2009. The last ten years witnessed an average holiday sales of 2.6% per year.

iStock Punch

Black Friday sales numbers provide the much-needed relief for the investors. The fears of dull holiday season on the back of recession fear seem to have vanished at least for the holiday season shopping. While there is a concern as to how much special discounts have been offered by the retailers to increase their sale, the increase in average spent of shopper assumes significance. The 2.8% projection of holiday season sales by NRF is above the 10-year average sales of 2.6% indicting the consumer confidence level. The catch seems to be on the amount spent on promotional activities to lift sales numbers. None-the-less, this is a period where retailers have to pull all their resources to make a killing and they seemed to be doing what is expected of them only.{

Oracle Corp. Second Quarter Earnings Sneak Peek

2012-01-10T17:39:00.000-08:00

S&P 500 (NYSE:SPY) component Oracle Corp. (NASDAQ:ORCL) will unveil its latest earnings on Tuesday, December 20, 2011. Oracle develops, manufactures, markets, distributes, and services software designed to help its customers manage and grow their businesses.
Oracle Corp. Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of 55 cents per share, a rise of 12.2% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 54 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 55 cents during the last month. For the year, analysts are projecting profit of $2.33 per share, a rise of 9.4% from last year.
Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by one cent, reporting net income of 45 cents per share against a mean estimate of profit of 44 cents per share.
Wall St. Revenue Expectations: Analysts are projecting a rise of 6.7% in revenue from the year-earlier quarter to $9.23 billion.
Analyst Ratings: Analysts are bullish on this stock with 31 analysts rating it as a buy, none rating it as a sell and six rating it as a hold.
A Look Back: In the first quarter, profit rose 36.1% to $1.84 billion (36 cents a share) from $1.35 billion (27 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 11.6% to $8.37 billion from $7.5 billion.
Key Stats:
The company has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters. Over that span, the company has averaged growth of 27.1%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 46.5% from the year earlier qua! rter.
The company has seen net income rise in three straight quarters. Net income rose 35.8% in the fourth quarter of the last fiscal year and 78% in the third quarter of the last fiscal year.
Competitors to Watch: Intl. Business Machines Corp. (NYSE:IBM), Hewlett-Packard Company (NYSE:HPQ), Microsoft Corporation (NASDAQ:MSFT), SAP AG (NYSE:SAP), Intel Corporation (NASDAQ:INTC), Apple Inc. (NASDAQ:AAPL), Red Hat, Inc. (NYSE:RHT), EMC Corporation (NYSE:EMC), CA, Inc. (NASDAQ:CA), and Adobe Systems Incorporated (NASDAQ:ADBE).
Stock Price Performance: During November 15, 2011 to December 14, 2011, the stock price had dropped $3.09 (-9.4%) from $32.96 to $29.87. The stock price saw one of its best stretches over the last year between April 18, 2011 and May 2, 2011 when shares rose for 10-straight days, rising 8.1% (+$2.73) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight-straight days, falling 12.8% (-$4.22) over that span. Shares are down $1.21 (-3.9%) year to date.

Deals with carmakers should speed its reach into traditional radio

2012-01-09T19:55:00.000-08:00

For this week, Pandora��s (NYSE:P) shares have been rockin�� a sweet tune. They are up over 22%.
Why the excitement? First, Pandora got a?nice boost on Monday when analysts at Needham & Company put a ��buy�� recommendation on the stock, with a price target of $13. Keep in mind that it’s already at $12.20.

Next, Pandora put out a glowing press release at the 2012 Consumer Electronics Show in Las Vegas announcing that the company now has 125 million registered users and controls about 68% of the market for Internet radio.
But perhaps the most notable development is Pandora’s traction with automakers. It currently has 23 partnerships with companies such as Ford (NYSE:F), Toyota (NYSE:TM), Acura and Kia.
This is important since Pandora is really focused on disrupting the traditional radio market, which is a $13+ billion opportunity. There’s no doubt that mobile devices from?Apple?(NASDAQ:AAPL) and Google?(NASDAQ:GOOG) are key drivers.
So far, Pandora has about 4% of the traditional radio market. But with its aggressive partnership strategy, that share is likely to expand quickly.
Despite all this, investors need to be cautious. Pandora��s stock could quickly go from hot to cold.
Tom Taulli runs the InvestorPlace blog?IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of?��All About Short Selling��?and?��All About Commodities.��?Follow him on Twitter at?@ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.

Buy And Hold Isn’t Dead, Just Misunderstood

2011-11-08T02:31:00.000-08:00

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Buy And Hold Isn’t Dead, Just Misunderstood
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Every once in a while, a bunch of doomsayers pop up proclaiming the demise of buy and hold. This tends to happen more often during times of heavy volatility and uncertainty in the market, such as over the past few months. Some of these folks like to follow up with testaments to the superiority of whizbang new investment strategies, with names like “buy and watch” or “buy and monitor.” The problem isn’t that they’re wrong – on the contrary, they’re absolutely right. The problem is that the concept of “buy and hold” that they’re attacking is nothing more than a strawman. It’s easy to win when you’re dueling a scarecrow, because straw doesn’t fight back.

Let’s look at some articles here on SA that have been published recently: Investors Should Not Be Complacent About Dividend Champions, by James Kostohryz, and Why Picking A Stock To Hold Forever Is Folly: The Apple/Cisco Case, by Roger Nusbaum. First, let me say that Mr. Kostohryz and Mr. Nusbaum are both excellent writers who provide many articles of value to the investment community. I read both of them regularly and will continue to do so. However, both of the articles cited above pick on a premise that was never true to begin with: that the buy-and-hold investment style encourages investors to hang on to their stocks ad infinitum after they’ve bought them, without paying any attention to how the underlying businesses are doing.

The first and most important rule of buy-and-hold is to know your investments. That includes knowing when to get out. It’s very possible for traditional buy-and-hold investors who follow the school of long-term value investing to dump a stock one quarter after they purchased it. Their investment thesis may have been wrong. The fundamentals of the company may have changed. Unforeseen challenges to the business may have materialized. Such an action doesn’t diminish the validity of their strategy.

The “hold” of buy-and-hold refers to intent, not a guaranteed outcome. In this way, buy-and-hold investing is kind of like marriage. When we marry, most of us intend and hope to stay hitched for good. When long term investors buy a stock, we hope that the company will continue to grow and remain competitive forever. We select the partner/companies that have the best chance of making that hope a reality.

Of course, a lot of the time it doesn’t turn out that way. When you find out that the person you married is not who you thought they were, sometimes the best thing to do is to walk away. When you find out that the business you bought is no longer as strong a competitor as it once was, it may be time to cash in your chips and move to another table.

A character in a great movie once said, “On a long enough timeline, the life expectancy of everyone drops to zero.” The same is true of businesses. Of the original Dow stocks, only General Electric (GE) remains, and the financial crisis was a pretty close call for GE. Competitive destruction is one of the ugliest, but most fundamental forces of free market capitalism. It doesn’t matter how good you are, eventually someone better is going to come along to pick a fight with you, and then it’s game over. Nothing immunizes a company from the omnipresent threat of competitive destruction. Not a fat dividend, not a wide moat, not a fortress balance sheet. Eventually, all companies must die.

Buy-and-hold investors understand this, which is why the first principle of buy-and-hold is what it is. The more intimately familiar you are with a company’s operations, prospects, and financial health, the more likely it is that you’ll recognize when it’s time to take your money off the table. No one who actively practices buy-and-hold investing is under the delusion that they must hold on to their stocks forever no matter what happens. Some investors do a portfolio check-up more often than others, but the only investment vehicles that you can just dump money into and then forget about are index funds.

The only reason this is true is because index funds aren’t really completely passive. Every stock in an index was added there by a person, and stocks get removed when they no longer fit the profile of the index. When you buy an index ETF like the SPDR S&P 500 (SPY) or the iShares MSCI EAFE (EFA), you’re not holding on to your investments forever either, because the indexes get reshuffled every so often: new companies get added in, faltering companies get taken out. Index investors can afford to be less vigilant because they have the company behind the index acting as their portfolio manager. Investors who choose to pick their own stocks benefit from no such proxy.

If you’re not the kind of investor who has the time to stay on top of his portfolio 24/7, there are a lot of companies out there that operate under safeguards that make it less necessary to keep tabs on them all the time. Alcoa (AA) plies its trade in a capital intensive industry that poses formidable barriers to entry. Cisco (CSCO) has a huge war chest stuffed with cash, which helps to buffer against economic assault (though a technology stock is never really a safe investment no matter its balance sheet). Ford (F) benefits from great leadership that steered it through a market downturn that swallowed up most of its competitors. The more capable your managers are, the less risk you assume with a hands off approach to ownership. Finally, Intel (INTC) offers an unrivaled dividend yield compared to its industry peers that continues to grow, which means that by the time cracks begin to appear in the company’s foundation, investors may have already made their money back and more through dividends alone.

These companies may have an edge over their competitors in terms of stability, but there’s no such thing as a safe investment, only safer. You can call it buy-and-hold, buy-and-watch, buy-and-monitor, or whatever new catchphrase the news streams serve up, but in the end, it amounts to the same thing: buying great companies at a reasonable price, and letting them go when they’re no longer great companies at a reasonable price.

Times may change, but the fundamental ideas of value investing, of buy-and-hold investing will continue to remain relevant so long as people in society continue to make money by selling their stuff to other people.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in F over the 2next 72 hours.

Top Oil Stocks 2011/2012 – Top Oil Stocks to Buy 2011/2012

2011-11-05T03:28:00.000-07:00

Oil Stocks to Buy 2011/2012- 2011/2012 Oil Stocks

Below is a list of my latest oil stock picks for 2011/2012. These 2011/2012 Oil Stock Picks are my favor stocks to buy and some of the stocks I will be trading personally. Last year, one of my top oil stock picks was Brigham Exploration (BEXP). BEXP stock went from $15 to $27 from July to December of 2010 and was one of my biggest stock gainers of the year. I feel 2011 will be a good year for stocks and the overall stock market. Oil in 2011 should hit $110-$120 which would make the oil stocks rally even higher.

Key Areas of Oil Exploration in 2011 – Eagle Ford Shale – Niobrara Shale – Bakken Shale – Permian Basin – Oil Discoveries are still going on in these fields and in 2011, more Oil Discoveries will be made. Keep an eye on the Chainman Shale – Cabot Oil & Gas (COG) mentioned in late 2010 that they are drilling for oil in the Chainman Shale. We also have Venoco (VQ) drilling the Monterey Shale in California. With that, here is a list of my best oil stock picks for 2011

#1 Top Oil Stock Pick 2011/2012 – Oil Stocks – Hyperdynamics Corporation (HDY) – While Hyperdynamics (HDY) is my top stock pick of 2010, it is a risky one. The company has no revenues and does not make any money but could be sitting on a very large pool of oil off the coast of Africa. Drilling for oil is expected to begin in December 2011. Hyperdynamics was headed into a downward spiral over the past couple years but changed the management team in 2010 who vowed to take the company in a new direction. Hyperdynamics has a very large prospective leased area off the coast of the Republic of Guinea. In November 2010, Hyperdynamics raised $30 million in a private placement from financial giant Blackrock (BLK) which will help in preperation costs to drill for oil in late 2011. Hyperdynamics did a few surveys and believe they could be sitting on billions of barrels of oil.

As for HDY stock in 2011, It is my top stock to buy and my best trading idea. I have been trading HDY since the stock was $1.60 in August 2010 and gave it a price target of $4 – $6 for 2011. HDY hit a high of $3.63 in October 2010 and continues to trade around $3.00 as we head into 2011. If everything goes as planned and the company does infact sit on top of a large oil pool, we could be looking at a $8-$10 stock by year end 2011 in my opinion. I gave it a target of $4 – $6 when the stock was hitting $2.60 just to be on the conservative side. Of coarse, if Hyperdynamics announces any delays or lesser oil reserves, all bets are off. Pullbacks below $2.50 should be a great buy if you are looking for an entry point. I currently own HDY stock for the long term and will buy more stock on pullbacks. If you have any questions or feel like discussing HDY stock, visit my HDY message forum thread.

#2 Top Oil Stock Pick for 2011 - Kodiak Oil & Gas (KOG) – Kodiak Oil & Gas was another huge stock gainer for me at the end of 2010. I bought KOG stock at $4.30 in mid November 2010 and sold between $5.00-$5.70 a month later. KOG went on to hit $6.69 a few weeks later. Kodiak Oil in Gas recently aquired additional acreage in the Bakken Shale. This acreage is in some of the best zones in the Bakken which includes the Three Forks Oil zone. When I originally bought KOG at $4.30, I placed a personal target of $8-$10 on it for 2011. I am sticking with this and feel the stock could even hit $12. A lot will depend on what oil does but ultimately the stock is going a lot higher. While I don’t own KOG right now, I plan to buy the stock on any major correction.

FIFO LIFO Inventory Valuation Methods

2011-06-23T07:19:00.001-07:00

March 27th, 2011 by Jae Jun

Print PDF Aggressive and Conservative Accounting SeriesFor previous articles in the series, click on the links below.

Aggressive and Conservative Accounting PoliciesHow to Detect Aggressive Revenue Recognition PolicyInventory Valuation Methods in AccountingInventory can make up a large amount of the assets on the balance sheet and so knowing how to analyze the inventory, and the method used by management is crucial.

To put it in the most basic form, inventory is what you have in stock. If you expand on this definition to look at what is involved on the other side of the scale to get the ending inventory amount, the equation for inventory is

Beginning Inventory + Net Purchases – Cost of Goods Sold = Ending Inventory

In words, your beginning inventory along with your purchases and then subtracting what you have sold, results in ending inventory.

But this is where it gets tricky with GAAP rules. Depending on the inventory valuation method used by the company, the COGS can vary considerably which ultimately affects the ending inventory.

Sadly, it is not as easy as counting what is left on the shelf at the end of the day to get the ending inventory value.

Three inventory valuation methods are used in the US.

1. Average cost method

2. First In First Out (FIFO) method

3. Last in First Out (LIFO) method

Average Cost MethodTo put it real bluntly, the average cost method is rarely used. This method does not offer any real convenience or added accuracy.

The equation for average cost method is as follows.

Average Cost = (Total Quantity of Inventory Units) / (Total Quantity of Units)

where

Cost of Goods Sold = (Average Unit Cost) x (Number of Units Sold)

For example if 1,000 toys are produced on Monday at a cost of $1 and then on Tuesday another 1,000 toys are manufactured at a price of $1.05, the average cost method would value the inventory at $1.025 a piece.

FIFO MethodAs mentioned previously on aggressive and conservative accounting policies, the FIFO method of valuing inventory is considered to be the aggressive method.

FIFO works like how you maintain your fridge at home. After you have bought some groceries, you tend to place what you just bought at the back of the fridge in order to finish off the older food before it spoils.

In other words, under FIFO, the oldest goods are sold first and the newest goods are sold last.

As a formula it would look like this

Unit Cost per batch = (Cost/Quantity) for each batch

where

Cost of Goods Sold = (Unit Cost x Quantity) for each batch

Using the toy example above, if 1,000 toys were then sold on Wednesday, the COGS would be $1 per unit. The remaining inventory on the balance sheet would then be worth $1.05 each.

LIFO MethodLIFO is the opposite of FIFO. Instead of the oldest inventory being considered as sold first, the newest product is sold first. While the factory analogy works for the FIFO, consider a bakery. By lunch or evening, the bread baked from the morning will not sell as well as the fresh ones from the afternoon batch.

This means that cost of the latest inventory now becomes the COGS with the cost of the oldest inventory being assigned to the inventory value on the balance sheet.

The equation is essentially the same as FIFO since both are calculated based on batches of unit sold.

Unit Cost per batch = (Cost/Quantity) for each batch

where

Cost of Goods Sold = (Unit Cost x Quantity) for each batch

Using the toy example, the 1,000 units sold on Wednesday would have a COGS of $1.05 per unit, with the remaining 1,000 toys being valued at $1 each.

How Inventory Valuation Affects Profits and AssetsAs you can see from above, despite ending with the same 1,000 toys, FIFO assigns the inventory value to be $1,050 compared to the LIFO $1,000.

But another point is that the method of inventory valuation does not just affect the balance sheet. Gross profit also varies considerably. How?

Gross Profit = Sales – COGS

COGS differ under FIFO and LIFO, and if your COGS is low, then that means gross profit will increase.

The table below sums up how each of the three inventory valuations vary.

Things to Think About Regarding InventoryAssuming that the world is in a vacuum, the table above illustrates that FIFO results in the biggest gross profit as well as the highest ending inventory value. This is a reason why FIFO is the method of choice for most companies.

Should a company change its accounting policies to switch from LIFO to FIFO, watch out, as management is more focused on trying to increase earnings instead of improving their operations.

If the toy manufacturer above was using the LIFO method and reported $350 in gross profit but then decided to change to FIFO resulting in a restated $500 gross profit, the accounting change alone has increased gross profit by 42.8%!

Also consider this. FIFO increases net income which would in turn increase taxes, but as I stated previously, most public companies are more concerned with showing an increase in earnings.

On the other hand, LIFO is not a good indicator of ending inventory as the remaining inventory could be extremely old and is likely to understate the inventory at today’s prices.

In the end, valuation is more art than science and you can probably see that after following this.

The best way to decide whether a company is being aggressive with inventory valuation is to use common sense and to check out the competitors in the industry. If everyone else is using the LIFO method and company X is the only one using FIFO, then you know you have found a red flag.

For such a simple component of the financial statement, there is quite a lot to think about.

You can also learn more about inventory analysis for investors by following the link.

Aggressive Growth Stock: Caliper Life Sciences

2011-05-18T04:41:00.000-07:00

Caliper Life Sciences (CALP: 6.36 0.00 0.00%) recently announced preliminary financial results that breathed some life into the stock. Estimates are moving higher as a result.

CALP currently has a Zacks #1 Rank (Strong Buy) and continues to expand into new markets.

Company Description

Caliper Life Sciences develops advanced instruments and outsourcing services for pharmaceutical, biotech and other research institutions and companies.

Positive Announcement

On Jan 13 Caliper released preliminary fourth-quarter results that made investors quite happy. Revenue came in at $36 million, which brings the full-year mark to $124 million. That is a 10% organic growth rate.

Caliper's gross margin expanded by over 800 bps, allowing them to surpass goals for 2010. The company raised its 2011 guidance and is now expecting the top line to improve 12-20%.

Estimates Move Higher

Both analysts polled by Zacks raised their full-year estimates for this year on the news. Caliper is expected to break even this year; up from a 9-cent loss they were expecting 3 months ago.

Next year's forecasts are averaging 3 cents, up from a 2-cent loss. While the earnings figures are not impressive on the surface, the upward momentum is encouraging. In 2009 Caliper lose 12 cents.

M&A Activity

On Dec 21 Caliper said it completed a previously announce deal to acquire Cambridge Research & Instrumentation, Inc for $20 million in cash, assumed debt and common stock. The move will help Caliper break into the tissue imaging and digital pathology market.

The Chart

The recent news and raised guidance gave shares of CALP a jolt. There is a level of resistance here, but given the upward estimate revisions there is a good chance that we see a new high soon.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service

Japan is not a Bargain

2011-05-17T21:26:00.000-07:00

March 17th, 2011 by Jae Jun

Print PDF US Listed Japan ETF’s Not as Cheap as You ThinkInvesting in Japan has been on my mind the past week, but so has the crowd. What this means is that American investors have not been fleeing.

A quick way to judge this is to simply compare the drop of the Tokyo Stock Exchange (TSE) Index compared to the ETF’s that trade on the US exchange.

The first three days following the disaster, the TSE fell 22%. Compare this to the iShares MSCI Japan Index (EWJ) which fell around 12%. Small cap Japanese ETF’s JSC, SCJ and DFJ fell roughly 14% a piece.

This is a big disparity and shows that the crowd is very willing to pick up shares in Japan.

Despite the 14% fall, the current prices really only go back to Dec 2010 levels which is not cheap to begin with. Add the currency risk into current prices, and Japan is not the bargain you think.

Are Japanese Stocks Cheap for US Investors?As a quick example, assume that Panasonic (PC), at the 52 week high price of $16, is fairly valued. The point of this exercise will be to see whether current prices reflect value for US investors. I am not able to purchase stocks off the TSE and my assumption is that most people cannot as well.

Geoff Gannon made a great point about currency risk and how the overvalued Yen affects an investment.

How?

Currently, 1 USD will get you 80 Yen but by looking at the conversion rate over the past 2 years, it looks like the appropriate rate should be 1 USD for 95 Yen.

Geoff took the normal rate to be 1 USD : 109 Yen, so my value is even more conservative.

Using the 95 Yen value, the Yen at the moment is 19% overvalued. In other words, Japanese stocks could lose 15% of its value simply based on currency conversion alone.

Apply this 15% drop to Panasonic and the theoretical fair value comes out to $13.60. At the current price of $12, the potential upside for Panasonic is 13%. Not the best opportunity you may have been thinking about.

If you include a 25% margin of safety, since EVERY investment requires a margin of safety, then the buy price is $10 which Panasonic does not satisfy.

Japan has Historically been CheapYou could argue that the original fair value of $16 for Panasonic is much to low to begin with. If I perform the above calculation in reverse, the fair value of Panasonic would have to be $20 for the current price to offer value.

The problem however, is that Japan has always been cheap. If you believe that Japan is cheap now, then you should have believed that Japan was cheap before the earthquake.

If you did not have any positions in Japan before the disaster, it just means that you had better places to put your money. Put another way, it wasn’t that cheap.

Consider that when deciding whether your next Japanese stock is a value trap or opportunity of a lifetime.

Don’t let me discourage you though. I am looking through a list of Japanese ADR stocks hoping to find a no brainer.

Since I can not purchase stocks on the TSE, my best bet is to find an ADR. The universe is much smaller, but there are still plenty of ideas and you have a much better chance of finding a diamond with individual stocks rather than the Japanese ETF’s or closed end funds such as JOF.

Japanese ADR’s to StudyThis site provides an outdated list of Japanese ADR’s and I have removed the stocks that no longer trade in the US.

Download the Japanese ADR stocks for excel. It has over 70 stocks you can look through. Most of them have zero volume on the OTC but it will be a good exercise to go through them.

For more Japan investing thoughts, here are some additional links that may interest you.

Can Turtles Fly blog also has a post up on JapanBuy Japan / Investing in Japan Q&A by Geoff GannonDisclosure: None

Value Stock Screen Q1 2011 Performance

2011-05-17T14:11:00.000-07:00

April 9th, 2011 by Jae Jun

Print PDF Predefined Value Stock Screen Performances

I created these predefined value stock screens in order to keep a constant flow of ideas coming in and to somewhat automate my investment process. The best way to find truly original and off the wall ideas would be to go through every company starting from the A’s in the SEC database, but for most people, this is unrealistic.

Through these screens, based off my own research and study, I hope to produce ideas that are not producible with just a free standard screener.

The screens are essentially the same as last year, except some parameters have been tweaked and adjusted to account for more realistic trading. A lot of the OTC stocks have been filtered out and I would like to do the same with the Chinese stocks , but that is a hard ask at the moment.

The most obvious point jumping out at me is the negative results of the insider buys and share buyback screen. Something I’ll have to look at and see why.

On the other hand, the CROIC and NNWC increasing stock screener is continuing last year’s outstanding performance where CROIC returned 44.9% and NNWC increasing returned 43.8%.

You can read more about the details of each screen from last year’s performance discussion.

User Interface Changes to ScreenersIn case you have not checked out the new site design, the screener section has some changes.

The screens are now being displayed as an embedded spreadsheet so that you can easily copy and paste into your own spreadsheet.

Listen to The Intelligent Investor right Now

2011-05-17T06:56:00.000-07:00

April 25th, 2011 by Jae Jun

Print PDF

The Intelligent Investor has supposedly been read by every value investor, but I highly doubt it. If you haven’t read it or just were not able to make it all the way through, you are at the right place.

An audio version of The Intelligent Investor is available for you to download and take with you anywhere. Play it in your car, while working out, or on your favorite music player.

To be able to stream the files or download it, you have to use the widget below. If you are an email reader, come to the site to take advantage of it.

The Intelligent Investor Audio

Cellectis Bioresearch First To Launch Revolutionary Custom TAL Nuclease Service

2011-05-03T20:56:00.000-07:00

PARIS, Jan. 25, 2011 /PRNewswire/ — Cellectis bioresearch, a specialist in genome customization and a subsidiary of Cellectis (Alternext: ALCLS), has today announced that it will launch gene specific TAL(1) nucleases on February 28, 2011.

Taking advantage of an exclusive license agreement with the University of Minnesota, Cellectis has rapidly integrated TAL effector nucleases into its DNA nuclease production platform. TAL effector nucleases are sequence specific DNA scissors that can be custom engineered to target and modify any gene of interest, in any species. Cellectis is able to produce TAL nucleases in around one week, providing scientists with rapid access to custom-made products.

"This technology has a huge potential and could revolutionize the genome customization world. Being the first to launch TAL nuclease services puts us in an attractive position to gain significant share of the multimillion dollar market for custom DNA nucleases," explained Marc Le Bozec, CEO of Cellectis bioresearch.

"We add yet another asset to our portfolio of important genome customization tools, and invite you to visit our website on February 28, for the official launch of our custom TAL nuclease offer," added Luc Selig, VP Sales and Marketing of Cellectis bioresearch.

About Cellectis bioresearch

Cellectis bioresearch was incorporated as a subsidiary of Cellectis (Alternext: ALCLS) in June 2008. It provides life science researchers with ready- and easy-to-use tools for genome customization. These tools, based on sequence specific endonucleases, enable the engineering of cells with optimized features for drug discovery, protein production and gene function studies. The genome customization products and services can be purchased online from www.cellectis-bioresearch.com.

About Cellectis

Cellectis improves life by applying its genome engineering expertise to a broad range of applications, including agriculture, bioresearch and human therapeutics. Cellectis is listed on the NYSE-Euronext Alternext market (code: ALCLS) in Paris.

Disclaimer

This press release and the information contained herein do not constitute an offer to sell or subscribe, or a solicitation of an offer to buy or subscribe, for shares in Cellectis in any country. This press release contains forward-looking statements that relate to the Company's objectives based on the current expectations and assumptions of the Company's management only and involve unforeseeable risk and uncertainties that could cause the Company to fail to achieve the objectives expressed by the forward-looking statements above.

Portfolio Update Mar 2011

2011-05-03T13:41:00.000-07:00

April 4th, 2011 by Jae Jun

Print PDF 2011 1st Quarter Stock Portfolio Performance

Positive for the year, but lagging behind. Not concerned as my portfolio contains some clearly undervalued but illiquid stocks, making short term performance difficult to judge.

What’s with Mr Market?First quarter is out of the way, and with the events that have rolled out in just the first three months alone, I am left scratching my head at how the market is doing so well. While Mr Market obviously feels optimistic, I remain on the cautious side and hesitant in adding new or big positions.

Had you told me at the beginning of the year that three major international events (Egypt, Japan, Libya) would be taking place, I would have concluded that buckets of opportunities would exist. Looking at where we are now, Mr Market has recovered and moved on from all three major events.

As the market continues on up, it is times like these where sitting and waiting patiently is one of the hardest things to do.

Retail Holdings (RHDGF)Throughout the first quarter, I have mostly been monitoring positions and adding on drops.

One such addition in March was Retail Holdings (RHDGF). RHDGF announced that it had decided not to pursue the sale of its Bangladesh subsidiary citing “turbulent equity market conditions”.

This news brought the stock down 16% and goes to show how inefficient the market is when it comes to international micro cap stocks. Despite the cancellation of the sale, the value of the company remains the same yet it went on sale for a few days before returning to a somewhat more reasonable level.

Even at the current price at $15.70, RHDGF is undervalued by as much as 40%. With the CEO owning 20% of the company, special dividends distributed between 2007 to 2009 and management stating that they are looking to monetize assets and return it to shareholders, you have a very shareholder friendly management who understand the value of their business seeking to unlock the value.

(I mentioned this on the old school value facebook page by the way)

Here are two excellent analyses of RHDGF.

Sum Zero analysis of Retail HoldingsDollars for Thirty-Cents: Retail Holdings N.V.Meruelo Maddux Properties (MMPIQ)This bankruptcy special situation investment sure is taking many turns.

Greedy management is now sneakily requesting an amendment to the Plan or Reorganization in which they will be able to appoint all seven board members, effectively hoping to eliminate any non insider influence. Debtors are voting to accept the request as it will only benefit them if equity holders disappear.

I bought more MMPIQ when it dropped to 40c and will be sending a letter to the Judge ASAP objecting to such amendment requests.

If you are a shareholder of MMPIQ, send your letter to the judge ASAP and speak up. Here is a sample letter.

Books-A-Million (BAMM)BAMM is having an awful year so far with the falling out of the traditional book retailer sector. Borders group has filed bankruptcy and the perception for brick and mortar bookstores is not getting any better. But it leaves me to think that it has been overdone.

BAMM still remains profitable on a full year basis and consistent . Despite a slowdown in the fourth quarter, BAMM should be able to able to produce FCF above $15m when the annual report comes out. On this basis, BAMM would be trading at a P/FCF of 4. Flipping it over, the FCF yield is 25%.

At $4, the valuation is becoming ridiculously low. Even with zero growth, given the level of consistency and the health of the company, BAMM should be at a minimum of $6. That’s a potential 50% gain from current levels.

But with such negativity surrounding the entire sector, it will take a couple of years before the value becomes recognized or even accepted by the market.

Gravity Co (GRVY)The year end result shows that revenue and subscription revenue decreased primarily from Rganarok Online. But the decline has been expected for many years, which is why GRVY has been acquiring games in order to further diversify their income.

The effect of this can be seen if you compare the non consolidated financial statement with the consolidated. The addition of the new games is offsetting Ragnarok’s decreasing revenue and better still, GRVY remains in excellent financial health. However, with the acquisitions, the once clean financial statement has now become messier as extra entities make their way into the consolidated financial statement.

Cash has obviously gone down with the new game purchases but overall the balance sheet remains healthy with no long term debt.

Intangibles has increased 28% which is a large jump. Should any of the newly acquired games fail, expect intangibles to written down.

A cause for concern is that accounts receivables increased 32% and accounts payable jumping 70%. While it is too soon to be alarmed at such increases, it does require monitoring.

The other big news to anticipate in the second quarter is the long awaited launch of the sequel to Ragnarok Online. This is the big catalyst that I have been waiting for. Thankfully, the current price offers a solid downside protection with an even bigger upside.

Brief NotesBOLT: Additional information on their new acquisition is out. Seabotix looks like an interesting company but at the moment, it won’t add too much to BOLT’s operation. Now that i have the new details, I’ll be looking to unload BOLT at the right price.

YNGFF: Dropped significantly lately and the company successfully converted existing warrants. The deal wasn’t the best for the company but it certainly is MUCH better then further diluting shareholders to raise capital. It looks like the company was in desperate need for cash but once they complete winterizing the mining facilities, production can go on all year round without any downtime during the winter season.

Gold is not likely to drop any time soon and at $1400/ounce, YNGFF will be a very profitable investment in the future. Will take at least 1 year before production can be achieved and to see the levels that I am expecting.

RDI: Land on the balance sheet remains hugely undervalued. A simple waiting game. Selling at book value but the land value understates current worth.

Disclosure: Long RHDGF, MMPIQ, BAMM, GRVY, BOLT, YNGFF, RDI

Old School Value: The past, present, and future.

2011-05-03T06:26:00.000-07:00

April 14th, 2011 by Jae Jun

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Along with the site design, I updated many of the pages and one of them was the about me page. After four years, it needed an update to better reflect what the site stands to achieve.

So let’s take a short break from the regular investment posts and read about the past, present and future of old school value.

Short Background

My dad started “investing” when I was in school but has since turned to day trading in order to pick up daily profits. A profit each day was not guaranteed but I clearly remember the range of emotions he displayed when making and losing money.

Like many people, he acted on stock tips from friends, bought into story stocks and hoped for the lotto stocks.

A lot of our savings was poured in to fund his trading and having witnessed this while growing up, it was no wonder that I grew an incredible negative bias towards stocks.

Stocks were a gamble.

How I got started

But one day, I became an adult and left home. I got a job and started to think about retirement. I got a retirement account through my employer and didn’t know what to do. So I stuck my money in a random mutual fund that had the highest return over the past 3 years.

Around the same time, I also ended up signing up for variable life insurance and realized my returns were 0% while the insurance sales agent collected all the fees and commissions.

I forfeited my $3,000 account and decided to manage my own money.

How Old School Value got started

Without having ever taken a finance, accounting or economics class, I didn’t know where to start, so I started by reading books. The Intelligent Investor was the first investment book I read, and to be honest, I found it to be the driest, most boring book I have ever read.

But I kept at it and read more books. Finally, it came to a point where I needed a way to record and apply everything I had read. That’s where Old School Value comes in. It started out as a journal to keep track and to share what I had learned.

Old School Value stands for the old school methodologies of value investing. I have no interest in over leveraging, using complicated option strategies or using margin.

Old School Value Today

Old School Value is now in its fourth year.

Over the years, this site has evolved into a value investing service by offering free and paid stock analysis tools, stock screens and a forum for people to share ideas.

However, Old School Value continues to offer timeless educational material in order to bring as many people into the world of value investing.

The focus here is to keep the quality as high as possible. Rather than publish several articles a week with little substance, I prefer to keep quiet if it is of little importance. This way, I won’t be overloading you with information and you can go through the articles at your own pace.

This is the same for the tools I offer. If something is not worth selling, then it is not worth giving away.

Keeping it Real

I am just a regular person. This site is not some second persona where I try to make myself look like a stock picking genius. I’m not.

What I hope people get out of this site is to become open to new ideas, learn new concepts and methods, and then to share it with others. At the same time, I hope people continue to challenge my very own views.

Too many investment sites lack honesty and candidness. If I make a mistake, I will own up to it before anyone else. You will hear about my successes as well as my failures.

My returns are not inflated or displayed in a way to make it seem better than it really is. Being independent, open, honest, transparent and approachable are vital keys for my own development as an investor.

Ethical Investing

Investing in stocks is investing in businesses, and there are certain types of businesses that I do not wish to support in real life which I apply to my investing. The temptation is always there to make money regardless of industry or company, but I believe investing requires social responsibility.

For this reason, I do not invest in any of the following:

Gambling stocksAlcohol stocksTobacco stocksAdult entertainment stocksMy Mission

In case you have not read the footer, my crazy goal one day is to help sponsor 1,000 children around the world. Currently I do this through a Christian organization called Compassion

The experience of having visited three of the children I sponsor in Colombia, really opened my eyes and heart to what is important. My goal could always be to make more money, but there is more to life than self satisfaction and living comfortably.

I’m not a philanthropist or somebody seeking to change the world. Nor am I am better person than anybody else. I just happen to be moved by helping less fortunate people, while other people are moved by different things.

Through Old School Value, I aim to offer quality tools, articles and information for the small investors. On a personal level, I hope to become independent so that I can focus on giving back as much as possible.

You’ve read my background, you’ve read the objective and you’ve read the mission. That’s what old school value is about and me.

Stock Market Summary

2011-04-30T17:41:00.000-07:00

Stocks finished higher today with the major indexes closing near session highs. In addition, the DJIA posted another new high. Investor participation was ok and market breadth was good. As a result, we are raising the support levels on the DJIA, S&P 500, and Nasdaq Composite (see below). Also, we are increasing the resistance level for the DJIA but leaving it the same for the S&P 500 and Nasdaq Composite (see below). Overall, we continue to believe the prudent approach is continue selling into strength and avoid becoming aggressive with opening new positions in stocks based on how far the stock market direction has run without a significant pullback. Don't let a position turn into a big loss if the market trend suddenly changes. If you need to own stocks, please see our open watch list below.

SUMMARY

DJIA: Up 0.9% to 11,981

S&P 500: Up 0.6% to 1,291

Nasdaq Composite: Up 1.0% to 2,718

BREADTH FOR NYSE

Advancing Issues: 2,143

Declining Issues: 904

Advance/Decline Ratio: 2.4 to 1

New Highs: 113

New Lows: 10

High/Low Ratio: 11 to 1

SUPPORT/RESISTANCE LEVELS

DJIA: 11,706/12,029

S&P 500: 1,274/1,295

Nasdaq Composite: 2,701/2,766

SECTOR ANALYSIS

Technology was the best performing sectors up 1.4% while Financials and Health Care were the worst performing sectors down 0.1%.

Other Sectors:

Consumer Discretionary Up 0.4%

Consumer Staples Up 0.2%

Energy Up 0.5%

Industrials Up 1.0%

Materials Up 1.1%

Utilities Up 0.6%

OPEN WATCH LIST SYMBOLS (Through Monday, January 22, 2011)

(SH: 42.6919 0.00 0.00%) added @ $46.03 on 11/12/10; current price @ $42.69; 7.3% loss

(PSQ: 33.40 0.00 0.00%) added @ $35.05 on 12/8/10; current price @ $33.40; 4.7% loss

(RWM: 32.30 0.00 0.00%) added @ $32.79 on 12/16/10; current price @ $32.30; 1.5% loss

(UUP: 22.44 0.00 0.00%) added @ $22.80 on 1/14/11; current price @ $22.44; 1.6% loss

(EUO: 19.40 0.00 0.00%) added @ $20.30 on 1/14/11; current price @ $19.40; 4.4% loss

(FDO: 43.44 0.00 0.00%) added @ $44.64 on 1/21/11; current price @ $43.44; 2.7% loss

CLOSED WATCH LIST SYMBOLS

(UUP: 22.44 0.00 0.00%) added @ $22.56 on 10/20/10; removed @ $23.51 on 11/30/10; 4.2% gain

(EUO: 19.40 0.00 0.00%) added @ $19.19 on 10/20/10; removed @ $21.65 on 11/30/10; 12.8% gain

(APOL: 41.87 0.00 0.00%) added @ $37.77 on 10/28/10; removed @ $39.97 on 12/31/10; 5.8% gain

(NUVA: 27.91 0.00 0.00%) added @ $25.11 on 11/12/10; removed @ $26.03 on 12/31/10; 3.7% gain

(DLR: 52.37 0.00 0.00%) added @ $52.22 on 11/26/10; removed @ $53.01 on 12/10/10; 1.5% gain

(CSCO: 21.17 0.00 0.00%) added @ $19.36 on 12/2/10; removed @ $20.91 on 1/6/11; 8.0% gain

(UUP: 22.44 0.00 0.00%) added @ $23.14 on 12/8/10; removed @ $23.37 on 1/10/11; 1.0% gain

(EUO: 19.40 0.00 0.00%) added @ $20.79 on 12/8/10; removed @ $21.73 on 1/10/11; 4.5% gain

Listen to The Intelligent Investor right Now

2011-04-30T10:26:00.000-07:00

April 25th, 2011 by Jae Jun

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An audio version of The Intelligent Investor is available for you to download and take with you anywhere. Play it in your car, while working out, or on your favorite music player.

To be able to stream the files or download it, you have to use the widget below. If you are an email reader, come to the site to take advantage of it.

The Intelligent Investor Audio

How to Calculate XIRR for Annualized Returns

2011-04-30T03:11:00.001-07:00

January 24th, 2011 by Jae Jun

Print PDF The current portfolio tracking spreadsheet has its shortcomings as it doesn’t include non invested cash when calculating returns.

The true returns of any portfolio will include all cash flows and I have found the XIRR function in excel to be the best to calculate annualized returns.

If calculating returns was as simple as taking the beginning balance and ending balance and then calculating the absolute return, tracking investment returns would be so much easier.

But there is time value in money and once you start depositing or withdrawing cash and receiving dividends, it makes calculating annualized returns that much more difficult.

Investing $1,000 in January certainly is much different to investing $1,000 in December, before the year end.

That’s where the XIRR feature in Excel comes in.

Using XIRR to Calculate Annualized ReturnsWith XIRR you can calculate annualized returns even when cash flow for your account is irregular.

As an example, the starting balance is $10,000 with regular deposits and some gains totaling a portfolio balance of $15,000 on Jun 27 2010.

At first glance, without taking into account the cash deposits, you could be fooled into thinking the return is 50%. However, if you use the XIRR function, the calculated annualized return is much less at 28.8%.

As you can see, if the cash flows become longer and irregular with different cash flows, the calculation by hand becomes virtually impossible.

Free Spreadsheet to Calculate Annualized and Cumulative ReturnsNow you can calculate your returns quickly and easily with this free spreadsheet to calculate your portfolio returns.

Enter your beginning balance at the very top with deposits as positive values and withdrawals as negative values.

Enter the date next to each corresponding cash flow and if you need to calculate the return for any particular date, enter it into the third column.

Just make sure the ending balance is negative with a date to prevent errors.

The results will then look like the image below.

Full credit goes to a site called Gummy Stuff that is unfortunately no longer online for giving me this idea.

Download Portfolio Return XIRR Spreadsheet

Excel 2007 and newer only.No special plug ins required.Just enable macros and run.

Top Stocks For 2011

2010-03-02T04:47:00.000-08:00

With 80 advisors participating in this year's survey, there's something for every type of investor, from high quality blue chips to speculative home runs.

While past performance is never a guarantee of future results, we would note that the stocks chosen by the 75 advisors participating in last year's report outperformed the general market by nearly 80%.

Specifically, the 75 stocks and funds selected for our 2009 Top Picks report recorded an average year-to-date gain of 34%, versus a 19% gain by the broad market over the same period.

Gainer's Today tracks stock picks and ranks the accuracy of 120 investment research firms. As of 12/23/09, our 2009 Top Picks report was ranked #1 for the past year. Kudos to all the participating advisors.

The stocks and funds chosen for this report are the best ideas of the nation's top advisors at this current time. However, company fundamentals and market conditions change, and a stock that is considered a strong buy today can become a sell based on future events.

As always, we caution all investors to only use these ideas as a starting place for your own research and only buy stocks that meet you personal investing criteria, risk parameters, and investment time horizon.

To keep updated on the ongoing favorite stocks of the leading advisors, please visit us daily at thestockadvisors.com, a free website that brings you the very best investment ideas of the nation's very best financial experts. You can also sign up for our Daily Digest and have each day's new stock ideas sent directly to your email.

We wish you the best of success for your investing in 2011!

Top Stocks For 2011 No.1 From Kelley Wright : (Altria )

"My definition of safe is to avoid cyclical companies that can be derailed by unexpected economic events or a sudden change in Fed policy," says dividend expert Kelley Wright.

In Investment Quality Trends, he suggests, "Additional requirements are a long history of increased earnings and dividends, broad institutional sponsorship, and ample outstanding shares for trading liquidity. One such company that fits that bill is Altria Group (NYSE: MO), my top pick for 2011.

"As attention turns toward 2011, the annual dilemma of 'what do I do now' moves front and center. With the Fed ostensibly sticking to its 'for an extended perio'" mantra, the conventional wisdom is that the recession is behind us and all will remain well as long as interest rates remain low and liquidity plentiful.

"While the recession may indeed be over, under the technical definition anyway, and it is investment suicide to try and fight the Fed, the ever-ubiquitous Wall of Worry is steep enough to approach the new investment year with caution. In that vein, my instincts and experience are to play it safe.

"My definition of safe is to avoid cyclical companies that can be derailed by unexpected economic events or a sudden change in Fed policy.

"Altria Group is a holding company whose operating companies include Philip Morris USA, U.S. Smokeless Tobacco Company, John Middleton and Ste. Michelle Wine Estates. The company's brand portfolio consists of successful and well-known brand names such as Marlboro, Copenhagen, and Skoal.

"Trailing twelve months earnings for MO are $1.53 per share, and, based on the recent price of $19.15 per share, the P/E is in the mid-12 range. The cash dividend of $1.36 per share provides an outstanding dividend-yield of 7.10%.

"With a payout ratio of about 88% ($1.36 of the $1.58 ttm earnings are paid out in dividends), some investors who have seen some dividends slashed or eliminated over the past year may balk at such a high dividend-yield.

"The key to a healthy dividend though is free cash flow and a high return-on-equity (ROE). Altria Group converts about 16% of its revenue into free cash and its ROE is well above average.

"The IQ Trends Profile of Value for Altria Group is dividend-yield extremes of 7.0% and 4.0% respectively. Accordingly, whenever the dividend-yield for Altria Group is within 10% of 7.0%, the stock represents good historic value and is appropriate to purchase.

"When the dividend-yield declines to 4.0% ($34 based on the current dividend), the top stock has reached its historically repetitive area of overvalue and profits should be harvested."

Top Stocks For 2011 No.2 From: Melvin Pasternak : Amdocs (NYSE: DOX)

"Fundamentally, Amdocs (NYSE: DOX) has a bargain basement valuation based on its price to growth," says Melvin Pasternak, in selected the stock as his top pick for 2011.

In his Trade of the Week, he adds, "Technically, on a two year weekly chart the stock has broken out to the upside. Amdocs is the talk of the town -- and well it should be. Amdocs keeps phone companies and their customers talking to each other in more than 60 countries around the world.

"Its software helps telecom giants like AT&T Mobility and Sprint-Nextel with customer relationship management (CRM), billing, and sales.

"A couple of months ago, DOX broke out of a major downtrend line drawn from mid-2007 at the $40 dollar level. When combined with an uptrend line constructed from the 2009 bottom near $15, it can be seen that DOX has broken out of a large ascending triangle.

"The upleg of the ascending triangle is the uptrend line drawn from the January 2009 low. DOX is now in a strong uptrend, well above the 30-week moving average which is sloping steadily higher.

"Even during the recent consolidation the shares have stayed mainly above the 10 week moving average, another sign of technical strength. The consolidation has also relieved the stock's short-term overbought condition in RSI.

"According to the 'measuring principle,' DOX should have a minimum price target of $33 -- more than 20% above current trading levels. Often top stocks in strong uptrends exceed their minimum targets.

"In 2009, DOX earned $1.57 a share. In 2011, the 15 analysts who follow the stock project eps. Of $2.20 a share, a 40% increase.

"The current trailing P/E of the stock is 17. The PEG ratio takes the Price Earnings Ratio and divides it by the earnings growth rate.

"If you calculate a one-year 'PEG' ratio, the shares are a great value--the PEG ratio is .425 (17/40). Anything below one typically represents good value and DOX is trading at less half that amount.

"Analysts who follow the stock have caught on. In December 4, Standpoint Research raised their price target from $30 to $34. A number of other analysts think DOX can trade back to the $40's by 2011. In the New Year, I believe DOX has a good chance to break above $28 resistance and move toward $34. My target is $33.95."

Top Stocks For 2011 No.3 From J. Royden Ward: Amedysis (AMED)

J. Royden Ward is the editor of Cabot Benjamin Graham Value Letter, a newsletter that -- as its name suggests -- focuses on stocks that meet the criteria of legendary value investor Ben Graham.

For his top pick for 2011, he the advisor looks to Amedisys (NASDAQ: AMED), a provider of home health care and hospice services.

"Despite government e?orts, health care costs continue to rise to unacceptable levels in the U.S. But there are alternatives that o?er dependable care at substantially less cost to patients and to taxpayers, and I believe one option, home health care, will become an important alternative to lengthy hospital and nursing home stays.

"My top stock for 2011 is the largest company in the home health care sector whose impeccable reputation for delivering reliable care is providing the company with exciting new opportunities for exceptional growth.

"Amedisys is a leading provider of home health care and hospice services. The company typically provides skilled nurses or nurse assistants who coordinate health care with the patient's family and physician.

"The company operates more than 500 Medicare-certified home health agencies and 50 hospice agencies in 37 U.S. states and Puerto Rico. "The company's home health care services provide assistance to patients recovering improving patients' quality of life through physical, speech or other therapy.

"For example, the company educates patients on how to avoid falls in the home, which are the leading causes of patients re-entering hospitals. Approximately 87% of Amedisys' home health care services are covered by Medicare.

"Amedisys also o?ers hospice home care services for terminally ill patients. Hospice services are designed to provide basic care and comfort to patients and support to family members.

"Compared to hospitals and nursing homes, Amedisys can save patients, families and the health care system huge amounts of money. Health care delivered in patients' homes is far less expensive than health services delivered in hospitals and nursing homes.

"The home health care industry is fragmented with 9,200 home health care agencies and 3,000 hospice agencies operating in the U.S. Amedisys is actively acquiring smaller home health care agencies that fit the company's acquisition plans, as well as opening their own new agencies at a rapid pace.

"The growth opportunities in the home health care industry are obvious. The growing numbers of elderly, and the need for less expensive health care including home health care, will likely create industry growth of 15 to 20% during the next several years and decades.

"Revenues climbed 39% and EPS soared 57% during the 12 months ended 9/30/09. Analysts are forecasting 14% sales growth and 11% EPS growth for the next 12 months, but we believe Amedisys will produce sales and earnings growth exceeding 20%.

"We base our growth projections on the company's aggressive acquisition program along with its ability to open new agencies e?ciently and profitably. AMED shares are clearly undervalued at 8.3 times our EPS estimate for the next 12-month period."

Top Stocks For 2011 No.4 From Vivian Lewis: BCE (BCE)

Given her concerns about overall market valuaton, global expert Vivian Lewis is selecting her top pick from among stocks she calls "dividend payers and fallen angels".

In her Global Investing newsletter, she explains, "I consider BCE (NYSE: BCE), with its 6% yield, a great buy." Here's her review of the Canada-based telecom company.

"I'm worried about the speculative coloration of the rise in stock prices globally since the bottom in March 2009. I do not think the markets will continue rising as they have since then, in a straight line to the upper right-hand corner of the page.

"I expect a serious correction because the global economy is still mired in di?culty. There will be more bad news taking share prices down in the coming year.

"To find stocks with ballast for the sell-o? I expect in 2011, I am focusing on dividend payers and fallen angels. Fallen angels have risen less sharply than companies without damaged reputations, and pay out more.

"A year after crash of BCE, the Canada telco supposed to have been taken private by Ontario Teachers Pension Plan and US partners, who pulled out, the former Bell Canada is a good buy.

"The deal collapsed in the financial crisis. BCE CEO George Cope valiantly then cut 2500 jobs; did a wireless deal with Telus and bought out the remaining half of Virgin Mobile Canada; bought electronics store chain The Source; and boosted BCE dividends.

"BCE stock has risen 30% this year in loonies (C$s) and nearly 50% in US dollars. (It trades as BCE both in Toronto and on the NYSE.) But it is still a third cheaper than the former deal price target. That reflects investors' bad memories. Most analysts rate it neutral despite their expecting it to rise to $29.50.

"Further hurting BCE was the decision on Dec. 11 by Canadian regulators to allow Globalive to o?er cellular phone service throughout Canada, reversing an earlier bar on the company part-owned by Orascom of Egypt.

"While the 2009 Xmas telephone market will not see many o?ers from Globalive, next year there will be cellphone price cuts. This could hurt BCE's gross margins, which are at an astonishing 74%.

"However, other telcos without BCE's land-line and multiple cellular options will be hurt more. I consider the stock a great buy yielding 6% with a probability the dividend will be raised."

Top Stocks For 2011 No.5 From Leo Fasciocco: Blue Coat (BCSI)

"My pick for 2011 is Blue Coat Systems (NASDAQ: BCSI), a company that provides web security," says Leo Fasciocco, a leading technical analyst known for his focus on stocks that are breaking out of basing patterns.

In his The Ticker Tape Digest, he explains, "We consider the stock an excellent intermediate-term play because of its strong profit outlook. Blue Coat, based in Sunnyvale, Ca., provides software and services for networking, with annual sales of $444 million.

"Its products enable its end user customers to secure their Internet gateways and remote computer systems by providing protection from malicious code, or malware and objectionable content.

""The company is benefiting from an expansion of its products. In 2008, BCSI acquired Packeteer, a provider of WAN tra?c prioritization technologies. It most recently came out with an expansion of its Webpulse cloud service for Arabic web content.

"Looking out to fiscal 2011 ending in April, the Street projects a 44% jump in net to $1.30 cents a share from the 90 cents anticipated for fiscal 2011.

"The top stock has been trending higher the past few months recovering from the bear market. The long-term chart for BCSI shows the stock with a cyclical tendency. It is now in the up trend part of its cycle. We see that as favorable for bulls at this time with the stock now trending higher.

"In our view, BCSI is an outstanding stock poised to breakout. It is holding in its base and poised to show massive earnings gains.We are targeting BCSI for a move to 36 after a breakout. A protective stop can be placed near 24 after a breakout."

Top Stocks For 2011 No.6 From Dow Theory: BMC Software (BMC)

Dow Theory Forecasts is one of the most respected and venerable players in the financial newsletter community; the service has been published continuously for well over 5 decades.

Editor Richard Moroney looks to BMC Software (NYSE: BMC) as his top pick for 2011. He explains, "BMC develops products that run corporate data centers, which house critical computer systems.

"BMC's long-term contracts sustained stable profits during the downturn. Over the next 12 months, results should benefit as clients resume spending on technology. "Consensus estimates project per-share profits will advance 15% in fiscal 2011 ending March - and grow 14% annually over the next five years.

"Recent acquisitions have bolstered BMC's promising segment for automating datacenter activities. Fortune 500 companies comprise more than 85% of BMC's client list, and such companies are unlikely to abandon cost-cutting initiatives once the environment improves.

"Reflecting this optimism and better-than-expected results for the September quarter, BMC in October raised profit guidance for fiscal 2011. With a trailing price/earnings ratio of 15, BMC trades at a discount to its three-year average P/E of 22 and five-year average of 27.

"If the P/E returned to the three-year average and BMC matched consensus profit estimates, the top stock would trade at $58 next year.

"While that target seems a stretch, BMC seems fully capable of reaching $45 to $50. BMC is a Focus List Buy and a Long-Term Buy."

Top Stocks For 2011 No.7 From Nicholas Vardy: Brazil Small Cap (BRF)

"The global bull market is back in Brazil," says international investing expert Nicholas Vardy.

In The Global Bull Market Alert, he explains, "Global markets recovered in the beginning of November; at that time, we looked to one of the hottest markets on the planet, Brazil, through the Market Vectors Brazil Small-Cap ETF (NYSE: BRF). The ETF remains our top pick for 2011.

"Brazil, as its place on the cover of Economist magazine recently confirmed, was the flavor of the month in emerging markets. Brazil had recently won the right to host the Olympics in 2016, raising its profile much like the Beijing Olympics did for China. Investors were pouring in.

"Its currency, the real, gained 50% against the U.S. dollar since the prior December, with the economy firing on all cylinders, posting an 8%-10% growth in Q3. My forecast has been that, overall, Brazil's economy will grow by 5% in 2011.

"In December, the Inter-American Development Bank approved a $3-billion conditional credit line with Brazilian small and mid-sized businesses on Thursday.

Around 75% of the new jobs created in Brazil this year were created by small and mid- sized businesses.

"With the market already up 76.9% in local currency terms at the time, betting on Brazil was clearly a momentum play. That's also why I recommended a small cap ETF, which had outperformed its large cap ETF counterpart this year.

"Looking ahead, Brazil's biggest enemy is likely to be its own hubris -- getting too cocky for its own good. But before it does, I'm betting the market has further to go. After all, it went up almost 6-fold in dollar terms during its last bull run starting in 2003.

"This is the reasoning behind my recommendation for Market Vectors Brazil Small- Cap ETF. For a potentially bigger upside, I recommended the April $45 call options. For full disclosure, this is a position that I hold on behalf of my clients at Global Guru Capital."

Top Stocks For 2011 No.8 From Karim Rahemtulla: Electronics Arts (ERTS)

"I've been tracking the companies I feel are best positioned to sustain the market's upward momentum into next year," says Karim Rahemtulla.

The options expert with Investment U suggests, "One such company is Electronic Arts (NASDAQ:ERTS) – a major player in the video game industry. ERTS is one of the largest creators and sellers of multi-platform content in the industry and it finally o?ered some guidance for the year ahead.

"Expectations for earnings for 2011 are 87 cents per share with revenues of $4.26 billion. EA came out and said that revenues should fall between 4.2 and $4.4 billion with earnings ranging from $0.70 to $1.

"That type of wide range never sits well with Wall Street, which likes much narrower ranges and more specific guidance.

"There are three reasons to buy EA now:

"First, share prices do not usually wait for numbers to come through before they move higher. They move higher in anticipation of better earnings ahead. This should happen after the company reports numbers for the first and second quarter of next year.

Second, if this economy and market are really recovering, one of the prime beneficiaries will be a company like EA, which is solidly in the consumer discretionary space.

"Third, EA has been the subject of many takeover rumors, specifically by the likes of Microsoft. Currently the shares are trading at $16.50 per share, down from highs of more than $50 just over a year ago. It is flush with cash, very little debt and a dominant market position.

"While a takeover would be the least likely outcome, there still is that chance and in the current climate of mergers and acquisitions, I wouldn't be surprised to see a bid made for EA.

"While shares themselves look to be a good buy, I prefer to play this one using the Electronic Arts January 2012 $20 LEAPs."

Top Stocks For 2011 No.9 From Martin Hutchinson: Eldorado Gold (EGO)

"While my primary focus is on the international financial markets, it's the glint of gold that has caught my eye for 2011," says Martin Hutchison.

The contributing editor to both Money Map Report and Money Morning, explains, "Gold – or mining companies like Eldorado Gold (NYSE: EGO) – an especially compelling investment for 2011.

"There hasn't really been a commodity bubble like the current one since the late 1970s. It will end, as these things always do – but only when the world's central banks decisively tighten monetary policy and turn o? the spigots flooding the system with cash.

"That's unlikely to happen until consumer inflation has shown itself rising sharply. In relative terms, gold's price is still far below its all-time highs – the 1980 top at $875 per ounce is equivalent to $2,400 today, roughly double the current price.

"Supply is also becoming an ever-larger factor – the total global supply of new gold in 2009 was valued at under $90 billion, with another $35 billion or so available from recycling.

"That first number is unlikely to change as mining output has been declining by about 1% per annum in volume terms, in spite of the recent surge in gold's price.

"This means that if the big boys – such as the hedge funds (global assets of $1.9 trillion) or China (o?cial reserves of $2.3 trillion) – get involved, demand is likely to quickly exceed supply by a huge margin.

"Even though all the gold ever mined is still with us, it has a value of only about $5 trillion – a lot of money, but not huge in light of global investment flows.

"So, if the money really pours into gold, the price could again take o?. After all, $2,400 an ounce is still some distance away, and there's a lot more speculative capital around today than there was in 1980.

"There's no money tightening in the works currently. The Fed has kept monetary policy extremely loose for a year now, and has said it has no intention of raising rates in the near term.

"The European Central Bank, the Bank of Japan and the Bank of England have also indicated they do not intend to tighten, while China's M2 money supply has risen by 29% in the past year.

"Given all this money supply sloshing around, it's not surprising that gold prices have zoomed upwards – and will continue doing so as long as the Fed and its central bank brothers maintain a loose-money policy.

Rather than gold itself, I'd recommend gold mining shares – first choice, Eldorado Gold – for two reasons:

1 * First, there's the leverage. A gold mining company with extraction costs of $600 per ounce doubles its profits when gold goes from $900 to $1200.

2 * Second, commodity speculation pushes up share valuations, so chances are you'll make even more money. After all, the earnings growth rate becomes pretty spectacular, which can make a very simple company look like a Google!

"As a bonus, Eldorado is not just in gold, it's in Chinese gold – both internally and through a takeover it recently executed.

"That means it benefits not only from any rise in gold prices, but directly from increases in Chinese wealth. Chinese investors, when they buy gold, will naturally turn first to domestic output.

"Eldorado plans to double current production by 2013 (even without its recent acquisition) – no decline here. What's more, it's reasonably valued – actually quite cheap – considering its earnings potential.

"The company was founded in 1992, and has come a long way in a relatively short time, building to a recent market capitalization of $5.15 billion.

"It owns the Kisladeg gold mine in Turkey, which produced 58,000 ounces of gold in the third quarter of 2009, and the Tanjanishan gold mine in western China, which produced 31,000 ounces.

"In addition, its Efemcukuru project, with projected reserves of 1.7 million ounces of gold in Turkey, is expected to begin production in the fourth quarter of 2011.

"Eldorado also has gold-development projects in Greece and Brazil and an iron-ore project in Brazil. Its current gold reserves, proved and probable, total 7.6 million ounces.

"In September 2009, Eldorado made an agreed-share-exchange o?er for Sino Gold, the largest international gold mine in China. The o?er values Sino Gold at approximately $2.2 billion and will give Sino shareholders approximately 25% of the combined group.

"Sino has two operating mines in China – Jinfeng, the country's second-largest mine with production of 151,000 ounces, and the White Mountain Gold Mine, which began production in January 2009. The Eastern Dragon project in Heilongjiang province will become Sino's third mine.

"The combined companies will have gold reserves of 12.7 million ounces, with annual production expected to reach 850,000 ounces in 2011. In the third quarter, Eldorado earned $30.2 million, or 8 cents a share – up from 5 cents a share in the third quarter of 2008.

"That's at an average gold price received of $957 per ounce, compared with a total production cost, including overhead, of $430 per ounce. Based on third-quarter earnings, EGO has a P/E ratio of about 35 times – steep, but not excessive given the growth potential.

"That should become obvious in the year-end figures, which will show the rise in gold prices we saw in recent months dropping straight to Eldorado's bottom line.

"Just estimating, if the gold price for the fourth quarter averages $1,100 an ounce, that will send an extra $150 per ounce or so in profits to shareholders, adding about 35% to EPS and reducing the P/E correspondingly.

"Yes, labor and energy costs could rise a bit, but not much – Eldorado's costs were only $402 per ounce in the third quarter of 2008, when oil was at $147 a barrel.

"Bottom line: Increasing gold production – check. Contained costs – check. In the middle of the world's fast-growing Chinese gold market – check. Decent balance sheet and profitability – check. What's not to like?"

Top Stocks For 2011 No.10 From Bill Matthews: Emerson Radio (MSN)

"Emerson Radio (NYSE: MSN) is an atttractive, low-priced stock," says Bill Matthews, a specialist in lower-priced issues.

The advisor, who has been publishing The Cheap Investor for nearly 3 decades, suggests, "The top stock has the potential for significant appreciation in 2011."

"In this market, we wanted to recommend a quality low priced stock that is relatively safe, has good increasing revenues and outstanding earnings. We are also looking for a stock that is selling at an attractive low price, and has the potential for significant growth and top stock appreciation in 2011. Emerson Radio fits these criteria.

"Emerson Radio is a household name. Together with its subsidiaries, it engages in designing, marketing, selling, and licensing various consumer appliance, electronic and house ware products.

"It products are sold in the United States and internationally. Emerson Radio Corp. markets its products under the Emerson and HH Scott brands.

"The company distributes its products primarily through mass merchandisers, discount retailers, toy retailers, and distributors and specialty catalogers in the United States.

"Emerson has an excellent balance sheet with $29 million or $1.06 per share in cash, a book value of $2.25 per share and less than $6 million in debt. Insiders own 65% of the 27 million total shares outstanding and 22 institutions own 17% of the float.

"Emerson has excellent financials for the six-month period ended September 30. Revenues are $107 million up from $97 million a year ago. Net income is $4.3 million or $0.16 a share up from a loss of ($242,000) or (.01) a share verses a year ago.

"If you look at Emerson's top stock chart between June 2002 and June 2003, you'll see that the price soared from $1.50 to $7.50 because of excellent revenue and earnings increases. We believe, that if Emerson continues its earnings growth, the price could skyrocket again."

Top Stocks For 2011 No.11 From Stephen Quickel: Equinix (EQIX)

"Equinix (NASDAQ: EQIX), the global data center operator, is one of the most tempting growth stock opportunities on the 2011 horizon," says Stephen Quickel.

The editor of US Investment Report explains, "Big banks, market data providers, telecoms and other technology-driven clients use the firm's data center platforms to reduce their own capital expenditures and operating costs.

"The Silicon Valley-based company, barely ten years from startup, has moved quickly to open 45 data full-service centers serving clients in 18 key regions of the U.S., Europe and Asia-Pacific areas.

"These centers provide data management services to global enterprises of all sorts, including content and financial companies and network service providers,. "With demand rising rapidly, Equinix, has been able to lift revenues from $118 million in 2003 to $705 million in 2008, and to an estimated $880 million in recessionary 2009. Analysts project $1.17 billion in 2011—a two-year rise of 67%.

"As for earnings, the rapidly expanding company showed deficits for its first eight years, but reduced them in all but one year. Now firmly in the black and established as a sector leader, its gains could be large over the next few years.

"Rapid expansion of its IBX centers (short for International Business Exchanges) has required considerable debt. The latest available debt/equity ratio is an elevated 1.27.

"But capital spending is leveling o?, and Smith and his managers have kept of tight rein on operating costs.

"Earnings have risen 26 quarters in a row. After tax margins are reportedly at a four-year high. Third quarter 2009 earnings jumped 213% year-over-year, beating analyst estimates by 57%.

"Zacks reports consensus five-year earnings growth projection of 18.4% a year going forward. First Call shows earnings up 26% in 2011 and more than 40% in 2012.

"Those eye-catching numbers have not gone unnoticed. EQIX is not cheap by conventional measures. At 105 in late December (up from 40 in March), it traded at 51 times FC's 2011 earnings projection and 34 times its 2011 estimate.

"But the top stock has impressive support. Among 26 brokers—a large following for a young $4-billion market cap stock—15 rated it a Strong Buy in December, 3 a Buy and 8 a Hold, with no Sells.

"Goldman Sachs, altogether, owns 12.5% of the outstanding shares, with Wellington Management and Shumway Capital Partners each holding 8%-plus. Wells Fargo, Barclays, Morgan Stanley and Vanguard also have large positions.

"Of course, the Big Boys bought in at lower levels and have added shares along the way—and will doubtless continue to do so.

"With its high debt and P/E, it's not the kind of play-it-safe stock that attracted investors in late 2009. But as we head into 2011, few mid-caps have emerged with more fascinating near- and long-term growth possibilities."

Top Stocks For 2011 No.12 From Paul McWillams: EZchip (EZCH)

"EZchip Semiconductor (NASDAQ: EZCH), a fabless semiconductor company that specializes in network processors," is my top pick for the coming year," says technology sector guru Paul McWilliams.

In his Next Inning newsletter, designed for sophisticated tech investors, he suggests, "I think the upside potential here in 2011 and beyond is significant.

"Its initial market target has been what's termed as CESR (Carrier Network Switching and Routing). EZCH has since expanded its focus to include products that are broadly grouped into what's called the 'Access' market.

"Between organic demand growth in the CESR market and EZCH's expansion into the Access markets, it is estimated the company will be addressing a total available market potential of about $1.5B by 2012.

"That implies substantial upside revenue potential for a company that will report somewhat less than $40M in revenue for calendar 2009.

"In 2011, EZCH will be shipping NP2 and NP3 / NP3C network processors in volume to its CESR customer base. In addition to this, we'll also see the initial revenue generated from its next generation CESR solution, the NP4 and its debut Access product, the NPAx.

"Notable production ramps for the NPA and NP4, which sells for roughly twice the price of a NP3, will begin in 2011. Revenue from its NP2 will likely peak in late 2011 or 2012 as Juniper winds down its demand and replaces the NP2 with an internally designed ASIC.

"However, I believe this will be much more than o?set with the ramp of the NP3 and NP3C, the latter of which is designed into various platforms at Cisco including its new ASR series edge router.

"I believe EZCH's lack of participation in the 2009 tech rally is attributable to two factors. The first is what I think will prove to be a misunderstanding as to when its business at Juniper will peak and the sharpness of the decline following the peak.

"In my view, this peak won't happen until late in 2011 at the earliest and by then it will be much more than o?set by growing business at Cisco; not to mention design wins at other leading networking companies that will ramp in 2011 and beyond.

"The second factor has been the selling of shares by some of EZCH's early venture capitalists (VC's). Due to the fact EZCH initiated a secondary o?ering to liquidate these VC shares in one fell swoop as well as complete the purchase of its a?liated EZchip Technologies operating unit, this selling pressure will soon be eliminated. In my view, with this gone and EZCH poised to post impressive growth in 2011."

Top Stocks For 2011 No.13 From Tracey Ryniec: Jinpan Int'l (JST)

"Jinpan International Limited (NYSE: JST), a manufacturer of transformers, is the top pick for 2011 from Tracey Ryniec.

The value stock strategist for Zacks.com explains, "The company is positioned to benefit from the trillions of dollars of government stimulus around the world, as much of it is going into infrastructure.

"China has been an investing hotspot for several years. Even the great recession of 2008 and 2009 did little to slow down investor interest as the Chinese government injected massive stimulus into its economy which has propelled growth.

"In 2009, the Shanghai Composite Index surged over 70%, far outperforming the stock markets of the United States and most of Europe.

"Questions abound about whether China is too hot to handle and is a bubble waiting to burst. But I believe investors should look at each company individually, whether it is in China or not.

"While macroeconomic and political issues shouldn't be ignored, some companies will be better suited to ride out any rough patches. One of those companies is Jinpan International, one of only two UL certified cast resin transformer manufacturers in the world.

"While it has its headquarters and manufacturing facilities in China and generates a majority of its business in China, Jinpan is actually an American company held by a British Virgin Islands holding company. It is also not a newbie on the Chinese stage. Jinpan has been in business since 1993.

"The company manufactures medium voltage transformers (10-25 kV.) That doesn't sound too glamorous, but the transformers are used in large infrastructure projects like factories and real estate developments as well as in municipal transportation projects like airports and subway systems.

"Jinpan is positioned to benefit from the trillions of dollars of government stimulus around the world, as much of it is going into infrastructure. International sales have been growing. In the third quarter, sales outside of China rose 40% to $8.1 million and accounted for 18.5% of net sales, up from 13% a year ago.

"International customers were ordering cast resin transformers for wind power applications, along with the more traditional orders for use in airports, subways, and data centers.

"Orders for wind applications were 18% of net sales in the third quarter. The company's recently opened Shanghai manufacturing facility now handles the growing wind energy products business.

"In October 2009, Jinpan expanded in the U.S. opening a New Jersey o?ce and warehouse. Clearly, international sales are key to Jinpan's growth in 2011 and beyond.

"Despite a big jump in the top stock in 2010 (what didn't rally in 2009?), Jinpan has attractive valuations. The company is trading at about 13 times forward earnings. It has a low PEG ratio of just 0.64. Analysts polled by Zacks project earnings growth of 42% in 2009 and, so far, just 3.19% in 2011.

"But the company has had two big earnings surprises in the second and third quarters of 2009 so there is reason to think that growth will be much hotter than current projections. Analysts are bullish on the long term outlook, expecting earnings growth to average 20% over the next 5 years.

"Jinpan has an excellent 1-year return on equity of 24.75%. The company also shows its support to shareholders by paying a dividend, unusual for a Chinese-based company, which is yielding about 0.50%."

Top Stocks For 2011 No.14 From Brien Lundin: Keegan Resources (KGN)

"Gold will be the primary beneficiary of the massive bailout and stimulus plans enacted by not only the United States, but every industrialized nation across the globe," forecasts Brien Lundin.

The mining stock specialist and editor of The Gold Newsletter looks to a small gold exploration and development company as his top pick for 2011: Keegan Resources (ASE: KGN).

"Because of the deflationary influences of higher productivity, moribund economic growth and cheap labor in developing nations, we won't see the kind of price inflation that characterized the 1970s.

"But we will see galloping monetary inflation — or much more currency in circulation — and the result will be higher prices for assets such as commodities and equities.

"So if gold is going to lead the pack, what's the best gold investment? In my opinion, smaller gold exploration and development companies will o?er valuable leverage to gold, and one of the best is Keegan Resources.

"Keegan controls the Esaase gold project, a major mine-in-the-making located in the investor-friendly nation of Ghana, in west Africa.

"The company has made quick work of the project, going from field exploration to drilling to resource definition and pre-feasibility studies in a span of just three years.

"Now, Keegan finds itself sitting on top of a near-surface, open-pittable deposit that contains 3.47 million ounces of gold according to the most recent resource estimate.

"As impressive as that total is, it has the potential to grow significantly larger. The outlined resource remains open both along trend and at depth, and it lies within a country that hosts some of the world's largest gold deposits.

"Whether Keegan can unearth a resource of similar size at Esaase remains to be seen, but most analysts feel the next resource estimate will show the total gold holdings to have increased to at least five million ounces.

"And with the company tying up new ground along trend, there's literally no telling how large this find could grow.

"Frankly, I don't expect Keegan to develop Esaase into a mine — that job will likely devolve to the major mining company that buys Esaase, or Keegan itself.

"The company's management team knows this as well, and they are guaranteeing the best price by advancing steadily toward production.

"Keegan was among the highest of the high flyers during gold's fall rally. Although the share price has therefore come back fairly hard during the subsequent correction, the closing of a recent financing essentially opened a door to potential take-out o?ers for the company.

"While I know of no indications that any o?ers are forthcoming, there is the possibility that a bid, or a bidding war, could emerge at any time. In light of this, and considering the dip in its share price, Keegan is one of my top gold stock recommendations."

Top Stocks For 2011 No.15 From Daily Paycheck: Kinder Morgan (KMP)

For her top pick for 2011, income specialist Amy Calistri looks to Kinder Morgan Energy Partners L.P. (NYSE: KMP).

The editor of The Daily Paycheck explains, "I always look for the gift that keeps on giving; that's how I view this master limited partnership, which produces a steady stream of income each and every quarter.

"Kinder Morgan Energy Partners is one of the largest owners and operators of energy- product pipelines and storage facilities in the United States.

"Formed in 1992, KMP is structured as a publicly-traded master limited partnership (MLP). MLPs are an important asset class for income investors because they are legally required to distribute most of their taxable income and cash flow to shareholders (known as 'unitholders').

"KMP's extensive pipeline systems carry products such as gasoline and heating oil from the Gulf Coast to the East and West Coasts.

"KMP also owns and operates a network of carbon-dioxide (CO2) pipelines, which are used in a process known as enhanced oil recovery. These pipes carry CO2 to old oil fields where it is injected into the fields to increase productivity. These enhanced recovery techniques become more popular as oil prices rise.

"And KMP is continuing to grow its pipeline revenues through expansion. This past November , the Rockies Express Pipeline became fully operational.

"KMP owns a 50% stake in the 1,679-mile project, which carries natural gas from the Rocky Mountains to the Pennsylvania/Ohio border.

"Although KMP is an energy-related company, its revenues are relatively insensitive to energy prices. The partnership earns fees based on the amount -- not the price -- of gas, oil or refined products it processes and transports.

"Many of its interstate pipelines charge rates that are regulated by the Federal Energy Regulatory Commission. These regulated rates are set to allow Kinder Morgan a steady, reliable return on invested capital.

"Further, the partnership has already locked in guaranteed capacity from a few shippers on its pipes. KMP appears to be on track to not only deliver, but also continue to grow, its distributions.

"And when it comes to distributions, KMP has a stellar track record, having made quarterly payments like clockwork since October 1992.

"KMP also has a very consistent record of dividend growth, boosting distributions nearly every year since its inception. The partnership has increased its distributions at an annualized rate of +7.5% in the last five years alone.

"KMP currently pays a quarterly dividend of $1.05 per unit, equivalent to $4.20 per year for a yield of approximately 7% at current prices. It should be noted that MLPs are best held in taxable accounts as most of their distributions are classified as 'return of capital'."

Top Stocks For 2011 No.16 From Mark Leibovit: Legend International (LGDI)

Mark Leibovit uses a proprietary technical trading system known as volume reversal analyst; over time his buy and sell signals for the market has led to one of the top rankings among market timers -- including being ranked timer of the year in 2006 by Timer Digest.

He also uses this system to highlight trades among individual top stocks to buy -- such as his top pick for 2011: Legend International Holdings (Other OTC: LGDI). Here's the latest from his VRTrader.

"Legend International Holdings, Inc. engages in the exploration and development of mineral properties. It principally focuses on the development of its phosphate deposits located in the Mt. Isa district, along the margin of the Georgina Basin of Queensland, Australia.

"The company also owns interests in diamond and base metal projects located in Northern Territory. Its exploration licenses cover 40,525 acres in Queensland and 4.7 million acres in the Northern Territory, Australia.

"Legend International Holdings has a strategic alliance agreement with Wengfu Group Co. Ltd. The company was formerly known as Sundew International, Inc. and changed its name to Legend International Holdings, Inc. in March 2003. Legend International Holdings was founded in 2001 and is based in Melbourne, Australia. "Our technical target for the shares is a move to $2.25-$2.50."

Top Stocks For 2011 No.17 From Gene Inger: Level 3 Communications (LVLT)

"Our bias has again shifted temporarily to the bearish side, which makes me cautious about picking stocks in early 2011," says Gene Inger. With that caveat in mind, the editor of The Inger Letter looks to the Level 3 Communications(NASDAQ: LVLT), s speculative, low-priced issue.

"We owned this top stock years ago and when Level 3 bought Broadwing we got stock and cash; thus solid profits years ago or zero-cost basis on Level 3 shares. "After pundits hyped it (at triple current prices) the top stock has dropped to an area of attractiveness. One caution: from sub-$1 levels during our forecast market panic a year ago, the shares have doubled; thus it's not impossible that 'capital gains taking' could suppress the top stock somewhat early-on in the new year.

"Thus our buy-zone will be particularly wide; such as between 90 cents and $1.30 or so. One may elect to pay more and scale-in; though we'd prefer to buy in on pullbacks.

"Meanwhile, we note that their ability to service their debt should not be an issue presently; so we are interested to see what they do over the next year or two; not past 2012.

"Our original interest in Broadwing -- now absorbed by Level 3 -- was the all-digital-optical as well as transcontinental (now to Europe as well) fiber system.

"This system has no latency as still is common with satellite and many other systems (including most fiber networks).

"On top of that mobile carriers are increasingly looking to 'backhaul alternatives' to meet their increasing bandwidth needs, which should increasingly result in o?oading to fiber backhaul systems.

"The low latency is a reason why most sports and news networks are using Level 3 (two-way conversation reveals latency, whereas one-way conventional transmission doesn't) for their HDTV broadcasts, and we believe that will increase in importance as 3D arrives eventually.

"Additional pluses in the fullness of time include bandwidth requirements in the Cloud Computing area; digitized medical record keeping; military uses (they have certain key Federal accounts) and certainly the growth of telecommunications in-lieu of physical travel.

"In the sense that reduced physical, and increased optical transport, is e?cient; that's actually a bit of a green' story as well."

Top Stocks For 2011 No.18 From Jim Stack: PepsiCo (PEP)

"PepsiCo (NYSE: PEP), my top pick for 2011, remains underrated by the market," says Jim Stack.

The money manager and editor of InvesTech Market Analyst suggests, "All too often, it's viewed as a stodgy soft drink company, fully reliant on its namesake soda line. That's a misconception." Here, the sets the record straight.

"In reality, PepsiCo owns some of the most sought after brands in the world, including Gatorade, Tropicana, Frito-Lay, and Doritos. It does business in more than 200 countries worldwide, including key emerging market economies like China and India.

"Perhaps most important of all, it's a growth company with analysts expecting long-term future earnings growth of 10-12% per year.

"In recent months, PepsiCo has taken another major step forward with the pending acquisition of its two primary bottlers – Pepsi Bottling Group and PepsiAmericas.

"The acquisition provides the potential to eliminate an estimated $500 million to $1 billion in redundant costs. If those cost savings are transferred directly to the bottom line, shareholders could see a significant increase in net income of 10% to 20%.

"Of perhaps even greater benefit, the purchase brings 80% of North American beverage distribution 'in-house.' This move will bring management one step closer to its final customers – injecting a level of flexibility into operations not often seen with a company of PepsiCo's size.

"The acquisition further ties together the Pepsi story – a well run company with market leading growth positions and an attractive valuation.

"The executive suite neatly combines the beverage 'megabrands' such as Pepsi, Gatorade, Tropicana, and Mountain Dew with the world's largest snack food company, Frito-Lay.

"Management then leverages these brands into international growth markets such as Latin America and Asia where sales volume increased more than 20% in 2008, and despite the most challenging world economy in decades, has seen high single-digit growth so far in 2009.

" On top of all this, Pepsi is currently trading at valuation levels not seen in 15 years. And although it's a growth company, Pepsi still o?ers the dividend yield (3.0%) of a stalwart.

"Bottom line, Pepsi remains underrated by the market in general, and the bottler acquisition only enhances the company's outlook."

Top Stocks For 2011 No.19 From Alex Kolb: Perfect World (PWRD)

"Perfect World Company Ltd. (NASDAQ: PWRD), an online game developer and operator, is my top investment idea for 2011," says Alex Kolb.

The growth & income analyst for Zacks.com explains, "Chinese stocks have been on fire lately and Perfect World Co., Ltd. is no exception. And the company's fundamentals point to even stronger momentum in 2011.

"The company develops online games based on its game engines and game development platforms. Perfect World's games include massively multiplayer online role playing games ('MMORPGs') such asPerfect World, Legend of Martial Arts, Perfect World II, Battle of the Immortals and Fantasy Zhu Xian to name a few.

"Perfect World says that a substantial portion of the revenues are generated in China. However, its games have been licensed to leading game operators in a number of countries and regions in Asia, Europe and South America.

"The company also generates revenues from game operation in North America and plans to continue to explore new and innovative business models.

"Competitors like Shanda are also performing extremely well, an indicator that online role playing games are very popular and should continue attracting more players in 2011.

"PWRD shares have soared by more than 120% so far in 2009, surpassing the major averages by more than 100%. Despite the significant surge, the top stock is attractively price with a forward P/E of 14.

"Perfect World's fundamentals point to even stronger momentum in 2011. Analysts polled by Zacks currently have 2011 earnings pegged at $3.66 per share. The forecast is up from $3.45 over the past 2 months and compares favorably to the current 2009 Zacks Consensus estimate of $2.90.

"If history is any indication, earnings will exceed forecasts. Since 2007, Perfect World has consistently topped earnings expectations. Earnings surpassed estimates by an average of 31% over the past 4 consecutive quarters.

"The company is expected to see 33% earnings growth over the next 3 – 5 years, well above the industry's expectation of 18% growth. Other strong industry comparisons include Perfect World's return on equity (ROE) of 55.5%, versus the industry average of 2.5%.

"The company boasts a net profit margin of 47%, while the industry average is in the negative. It is also worth noting that Perfect World sports a solid balance sheet, showing no debt.

"The company saw robust results in the third quarter. Earnings per share of 81 cents came in 8% ahead of the Zacks Consensus Estimate. Total revenues jumped 13% year-over-year.

"Management mentioned that third-quarter results exceeded the company's expectations, adding that Perfect World continues to strengthen its competitive advantages in the industry by strategically crafting a highly diversified portfolio of truly di?erentiated games.

"Recently, the company introduced a new 3D fantasy MMORPG, Forsaken World. Management explained that this game breaks new ground in terms of overall planning, programming and graphical designs."

Top Stocks For 2011 No.20 From Marcie Wilmot: PMC Sierra (PMCS)

"PMC Sierra (NASDAQ: PMCS), my top pick for 2011, was a high-flying star during the telecom boom of 1999-2000, but crashed as the bubble of demand burst in 2001," notes Marcie Wilmot.

The contributing editor to Next Inning, a tech-savvy newsletter, suggests, "While it was rough sailing for PMCS after this crash, the company recast its business and operating models and is now successfully focusing on high-growth markets where it could leverage its core di?erentiation.

"The net result has been very impressive revenue growth and strategic penetration into markets such as FTTx, Wireless back-haul, Networking, Storage and High-end Printing.

"While PMCS fell 6% short of reporting a post-crash revenue record for calendar Q3, it set a new post-crash non-GAAP operating profit margin record at 27.3%. This tells us that during the last year PMCS has taken steps to notably improve the leverage provided by its operating model.

"I believe it also supports my contention that PMCS is well poised to continue topping the earnings consensus of the covering analysts as it has during each of the last three quarters.

"In looking to 2011, I believe we'll continue to see strong growth from the market sectors noted above with very notable upsides generated by both PMCS' RISC processor business with Hewlett-Packard (high-end printers) as well as from its storage business where it sells products to virtually all the major tier one players.

"Based on this view, even in my most conservative model, this leads me to believe PMCS will report non-GAAP earnings in 2011 of $0.60, slightly above the current $0.57 consensus and aligned with the highest estimate provided by the 10 analysts covering the top stock.

"In my estimation, when coupled with the net cash value listed on PMCS' balance sheet of $0.94 per fully diluted share, this justifies a current fair value price in the range of $10.62 to $11.42.

"While that is only a modest upside from its current price in the mid-$8 range, a year from now when we're looking at what I believe will be a notably higher estimate for PMCS forward earnings in 2011, I think PMCS will merit a fair value price that is somewhere in the mid-teens."

Dear Wall Street: We're Sorry

2010-03-02T04:03:00.000-08:00

Sorry always seems the hardest thing to say.

But isn't a big apology exactly what we owe Wall Street today?

We've foolishly given the financial industry a trillion dollars in support of its balance sheets and markets. We did so even though the big banks and brokerages clearly didn't need or want our help. Things were just fine in September 2008, but then we had to go and stick our noses into the world of high finance.

Now, we're making matters worse by trying to tell them how much to pay their people, how much risk they can take and what businesses are kosher. Suddenly, we feel we're better bankers than the bankers. We know to whom they should be lending. We have strong opinions about what they do with our money.

We're sorry about that.

We're sorry that we want strong control of our money supply. We regret that we want to have government protection of our deposits, our checking accounts, mortgages and credit cards. Maybe it's our simpleton ways. We get nervous when we lose our jobs and have to sell our homes at a discount to eat.

That's our bad.

The fact is Wall Street has done as masterful job of handling these accounts. And we should acknowledge that the overdraft fees, escalating interest rates and calamity in the mortgage market are really our fault, not the banks'.

It's funny that Lloyd Blankfein, the chief executive of Goldman Sachs Group (GS) should have to keep apologizing for his firm's success. He said that given hindsight Goldman would have done things a lot differently. Goldman engaged in "improper" behavior, he said. But when he made those comments Jan. 14, he wasn't talking about the bets Goldman made against toxic mortgage securities it was selling clients. That's the lord's work after all.

I think I speak for everyone when I write, sorry Lloyd, I don't know how we got that one confused. I guess that's why they pay you the big bucks ($68.5 million in 2007).

But please understand, we only had the best of intentions with our meddling.

Taxpayer Help

When your balance sheets looked like they were in trouble we forced the $700 billion Troubled Asset Relief Program on you.

We only wanted to prop you up with the Term Asset-Backed Securities Loan Facility, a program designed to give the industry $200 billion in loans against "top-rated" credit-card, small business, student and auto loan debt.

The $30 billion Public-Private stock Investment Program was intended to only lighten the load of bad assets on your books. When that program didn't look promising we just tried to let you wipe it away yourselves by eliminating accounting rules that made you value the junk for what it's worth.

When you couldn't issue debt, we told the Federal Deposit Insurance Corp., the institution in charge of our nest eggs, to back your bonds. Reluctantly you took us up on it. Eighty-four bond issues for $309 billion were made under the program. Citigroup (C) issued $64 billion. Goldman issued $21 billion. Bank of America (BAC) issued $44 billion.

We know, you did it just to make us feel better.

And when all of that didn't work, we simply told the Federal Reserve to step up to buy an unlimited amount of mortgages and hand one of your trading partners, American International Group (AIG) a $182 billion lifeline.

How any of this stuff would be interpreted as backing banks while they continued to take bets "with their own money" on proprietary trading desks, hedge funds and private equity, is a mystery.

Bonus Bungle

Compared to our squeeze on your bonuses, this stuff was just kids' play. At Goldman, the average bonus worked out to just $460,000 per employee -- just a little more than nine-times the U.S. median income. Sorry, there's no way anyone can buy a Bugatti Veyron, even used, for those peanuts. So much for stimulating the auto industry.

In retrospect, all of that bailout money should have been earmarked for Wall Street bonuses. Without deep cash, your bankers are probably considering jumping to more lucrative jobs elsewhere, perhaps in Major League Baseball or playing the lottery. They're not focused on stabilizing the financial system, and the resulting problems are our fault for questioning you. Understand that we don't get paid the big bucks for a reason.

No, we just have our shrinking 401(k)s, our individual retirement accounts and maybe, if we're lucky, our homes. We're too dense to see how bulletproof the financial system is and really no amount of taxpayer support could ever pay you back for all of the good times we've had during the last two years.

So, Wall Street, forgive us for our meddlesome ways. Forgive us, and Paul Volcker, for wanting a return to boring old banking. Forgive us for the sarcasm.

Most of all, forgive us for ever trusting you in the first place.

Copyrighted, MarketWatch. All rights reserved. Republication or redistribution of MarketWatch content is expressly prohibited without the prior written consent of MarketWatch. MarketWatch shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Here's A Free Starter Play - Worth 50%

2010-03-01T21:21:00.000-08:00

A portfolio is a terrible thing to waste.

And yet that's exactly what millions of Americans are doing every day as they flush their money into typical buy-and-hold stock trading.

Don't get me wrong — you very well could make some money buying regular top stocks for 2011...

Just not over the last few years.

For instance, if you could've invested $5,000 in the S&P 500 on December 31, 2006 — and let it sit there for the next 4 years — you would have ended up with a whopping...

$4,250!

Yup, it's true. You would have actually LOST $750 of your money.

Pretty sad, right? These are supposed to be the cream of the crop Wall Street has to offer — the blue chip titans that have made Americans rich for decades.

And yet all they were able to do for you over the last ten years was lose 15% of your hard-earned nest egg.

Well, here's the even sadder part...

If you'd just used a slightly different approach, over the last 4 years you could have taken that same $5,000 and had scores of opportunities to transform it into $12,050, $14,400, $18,100, $19,550 even $21,500 or more...

And not in years, or even months. In some cases we're talking a matter of weeks, or just days...

All thanks to an investment that 9 out of 10 investors don't even have the guts to touch.

Why?

Because too many "experts" have told people they're not seasoned enough...

Because the talking heads of CNBC or Fox have labeled it a "fringe" investment...

Because scam artists try to charge thousands to "educate" investors on how to use this simple profit tool...

But this is all a bunch of bull. And I'm writing you today to set the record straight.

You CAN trade options.

" ... words like 'risky' or 'dangerous' have been incorrectly attached to options by the financial media and certain popular figures in the market."

- Investopedia

The truth is, you have just as great a shot at grabbing the options profits that are sitting on the table waiting for you as ANY other investor out there today.

All you need is a small amount of safe, simple, and above all PROVEN guidance.

And that's exactly what I'm writing to offer you today.

Before the next 10 minutes are up, you'll have the answers to most (if not all) of the pressing questions you might have about options trading...

100% FREE of charge or obligation.

You'll also have a FREE, no-strings-attached options "starter play" given to you in exact detail right here in this letter.

That "starter play" could easily produce up to a 50% gain within the next 8 weeks — a fantastic start to your options career.

And this isn't the kind of bait-and-switch tactic I'm sure you're used to seeing...

You'll receive the ticker symbol and all, right within this note, without having to buy a thing.

Above all that, you'll be offered the opportunity to be coached every step of the way on your path to becoming a seasoned options profiteer.

But before you decide anything, let me introduce myself and show you exactly why I know — beyond a shadow of a doubt — that I'm the man to set you off and running on your options trading joyride...

With confidence, clarity, and a wealth of great opportunities ready for the taking.

I'm Ready to Transform You Into an Options Trading Pro...

My name is Ian Cooper. For the better part of the last decade, I've been operating outside of Wall Street's reach, mastering the art of turbo-charged options trading.

When I say "turbo-charged" here's what I mean:

•    Fremont General September 2007 puts - 291% in 16 days
•    Lennar January 2008 puts - 279% in 40 days
•    Pulte January 2008 puts - 224% in 40 days
•    New Century January 2008 puts - 214% in 16 days
•    Centex January 2008 puts - 207% in 40 days
•    Countrywide January 2008 puts - 203% in 69 days
•    Thornburg October 20 2007 puts - 188% in 6 days
•    MGIC Investments December puts - 175% in 80 days
•    Capital One January 2008 puts - 160% in 59 days
•    Accredited Home September 2007 puts - 141% in 4 days
•    Hovnanian November 2007 puts - 136% in 13 days
•    Radian Group August 2007 puts - 122% in 19 days
•    Standard Pacific September 2007 puts - 111% in 2 days
•    Autonation January 2008 puts - 105% in 49 days
•    Coca Cola November 2008 puts – 262% in 39 days
•    JA Solar September 2008 calls – 113% in 7 days
•    Lehman Bros January 2009 puts – 208% in 4 days
•    Financial Select Sector January 2009 puts – 221% in 7 days
•    Dendreon Corporation August 2009 calls - an amazing 338% in just 6 days!

Now, as a newcomer to the options game, the first part of those bullet points might not mean a whole lot to you — words like "puts" and "calls" might be Greek to you at this point...

Don't worry — you'll know what those terms and more mean, shortly.

For now, just focus on the second half, the part I've bolded for you.

These are the kinds of gains that options traders have been making over the last few years, while the rest of the market went to hell in a hand basket.

It probably happened to a lot of investors you know...

Their portfolios filled with "safe" buy-and-hold top stocks top buy self-destructed, losing them untold amounts of money.

But that "1-out-of-10 investor" I mentioned earlier — who took the leap and started trading options — shrugged off the financial crisis and continued padding their bottom line with triple-digit win after triple-digit win.

I'm not trying to brag here, but every one of those potential gains you see above were plays that I recommended to my readers.

Those readers were all members of my top-of-the-line trading research service, Options Trading Pit. Now, I'm not going to sugarcoat this next part...

If you're new to options, then you're NOT ready to join that service yet.

I'm not trying to be harsh, but I'd hate to see people get in way over their heads before they knew what they were doing.
So that begs the question: How DO you get to know what you're doing?

That's why I decided to create Options Trading Coach, a unique beginners-level options service that teaches you everything you need to know to become an options trading pro...

Beginning a profits joyride of your own — just like the one I showed you above.

Options Trading Coach isn't just a teaching tool, either. If you decide to let me turn you into experienced options trader, you'll also be receiving real, live options trades every month for you to cut your teeth on...

And potentially bank some serious double- to triple-digit gains in the process.

In fact, I'm going to give you your very first trade, that "starter play" that could deliver 50% in just 8 weeks, right here today in this letter — FREE of charge.

PLUS... when you try Options Trading Coach you risk nothing at all — for a full 6 months.

I'll get into all of the specifics of everything I just told you in a moment, but first let me say this is a GREAT moment to start your options trading career.

BusinessWeek has said that "options trading is suddenly catching fire," and they couldn't be more right.

Every year, options trading gets bigger and bigger. In 2008, 3.6 billion options contracts were traded — a full 25% more than 2007, another record year.

And why is this? Three reasons:

1.    Options trades deliver far bigger gains than regular buy-and-sell stock trades.
2.    Your purchase cost is far less than buying a stock; bigger gains for less money: win/win!
3.    You can profit from options in ANY market.

Now, with those three reasons in mind, can you think of a single reason why you wouldn't start trading options?

Well, I can think of one: you simply don't know how.

So let's make today the LAST day you can say that.

Now I'd imagine your head might be swimming a little... Especially if you've never considered trading options before.

That's only natural. In fact, it's great. It means you're already on your way to learning how to use options to blast your portfolio into the profits stratosphere.

So with that being said...

You've Got Questions I'm Sure...

... and what kind of coach would I be if I didn't answer them?

Below are some of the most common questions I get from rookies to the options game. And this is really just the tip of the iceberg.

But with my help every step of the way, you really don't need to know much more than these basic fundamentals to become an options superstar...

Q: What are options?

A: Might as well start at the beginning right?

An option is a contract that gives you the right — but not the obligation — to buy or sell a stock at a specific price on or before an expiration date. It's that easy.

If you think that stock is going to go up, you'd purchase a "call option," which gives you the right to buy shares at a later date for today's lower price...

If you think that stock is going to go down, you'd purchase a "put option," which gives you the right to sell shares at a later date at today's higher price...

Either way, you keep the difference in the shares' value. It's easy money and a fraction of the outlay of actual shares for just as much in potential profits.

You can't do that with regular old buy and sell stock trading. It's also why options can make you money in ANY market!

Which leads us to our next question...

Q: How can options make me more money than regular stocks?

A: This is what makes it so crucial for you to get started with options if you want to be a successful investor.

The short answer is that options give you leverage.

Say you buy 100 shares of a $20 best stock for 2011 and the stock goes to $30. You've made 50%. A nice gain sure, but...

Let's say you bought an options contract on that $20 stock at around $3 a contract (which is good for 100 shares)... That $10 advancement could triple your investment in one contract. That's the leverage you want in today's market.

Here's a great example: Recently I made a trade on home foreclosures. The underlying stock for the company I bought the option on is only up maybe 5%...

... but the option is up 40%!

And with the worst of foreclosures still ahead of us, that means more buyers of this best stock for 2011.

That means more options contracts for the right to buy more shares — which gives me an even better shot of continuing to make as much as 8 TIMES the profits of investors who simply bought shares.

Of course, any time you're putting your hard-earned money on the line, you want know how safe it is. And that begs the question...

Q: Are options risky?

A: There's risk in any investment you make. Without risk, however, there's no gain.

Warren Buffett, the world's most famous and successful investor understands that... and he often uses options to reduce risk in top stocks for 2011 and profit from stock fluctuations at a reduced cost. He knows the power options can have when you make a sound decision based on sound analysis.

Just like I offer you as your Options Trading Coach.

But here's the long and short of it...

The biggest risk in options trading that doesn't exist with top stocks for 2011 is the limited lifetime. Options expire.

This means that your forecast for a stock movement has to happen within the time frame that you choose. This can range from one day to three years with LEAPS — as your coach, I'll explain this all to you in complete detail in just a minute.

So yes, options do present some risk; they shouldn't be approached with any more money than you can afford to lose. I often tell people not to risk the house. You aren't buying a company as a long-term investment. You're betting that a certain event will happen in the market within a specified time frame...

But remember, this is a calculated bet — not a shot in the dark. And as my track record can attest to, we'll win those bets FAR more than we lose them.

Q: In what kind of market do options perform best?

A: The beauty of trading options is that they can be used in any market.

In a down market, you can go on a "put option" shopping spree, making tons of money off the boatload of companies that are losing their shirts.

In a rip-roaring bull market, you'd switch up your strategy and start buying "call options" and watch your bottom line soar along with those top stocks for 2011.

Either way the market is moving, you can hedge your bets. So it wouldn't matter which way a stock or index was headed... You could profit regardless.

That's what makes options such a popular investment with savvy traders.

Better yet, options can be bought or sold at the fraction of the cost of an actual company's shares in ANY market.

Bottom line: options allow you to control and profit from the underlying stock in any market — without actually owning shares.

Sounding good so far? Well I'm sure you've got more questions...

Q: Are options hard to follow?

A: This is an easy one. Not at all. Options are as easy to follow as top stocks to buy.

Especially because with Options Trading Coach, we'll track your trades for you in our online portfolio.

Plus, I'll be in touch with you regularly to tell you exactly when I believe you should buy and sell your contracts. There's no sitting around biting your nails, watching CNBC or Bloomberg tickers like a hawk, trying to decide what to do.

You'll have me and my years of experience giving you precise instructions and education on the steps you need to take — not only to become a successful options trader in the future, but also make money off them RIGHT NOW.

But maybe you're skeptical about needing my guidance and you're wondering...

Q: Why do I need a coach to trade options? Can't I just start on my own?

A: Ask yourself this question first...

If you'd never played a hand of poker in your life, would you walk into a casino and throw down $5k on the table for a game — without knowing the rules, odds, or even what the cards themselves mean?

Of course not, because you're not stupid.

And you're not an Arab sheik, dot-com billionaire, or playing third base for the New York Yankees... more than likely, you can't afford to risk money on things you have no clue about.

Just as you would never ante up to a poker game you have no idea how to play, why would you try to teach yourself the ins and outs of an investment, while at the same time your money is at stake?

That's what Options Trading Coach is here for.

I'm not offering you some slapped-together DVD or 300-page manual that leaves you to figure out the Greek for yourself.

With Options Trading Coach, we'll hold your hand and walk you through what an option is, how it works, and how you can profit from it.

And the best part is you earn while you learn!

I'll issue you 1-2 real, potential triple-digit winning options plays each month. And as I mentioned earlier, you'll be instructed EXACTLY when to buy and sell these contracts.

Nothing is left to chance. So long as you're with us, we're with you.

If you want to make serious money as an investor, you must know options — and disregard the all-too-common belief that options trading is difficult, risky, speculative, and a complicated way to trade top stocks for 2011.

It's simply no longer the case.

These days, options trading is quickly becoming the preferred way among savvy investors to make serious gains while limiting risk.

But you can't do it without understanding the ins and outs. If you don't know what you're doing, you WILL get burned — this I guarantee you.

Sure, there's no shortage of options educational services out there...

But every one of them I've seen is part of some sort of "package deal" that costs hundreds (if not thousands) of dollars.

These packages include DVDs and printed fluff pieces that fail to deliver any gains — except to those who sell them...

Sure, you'll get the background information on options, trade terminology, and a few basic strategies to build your options IQ... but that's about it.

You'll probably receive a PDF of an options trading course that'll conclude with a further offer: "If you join us right now for just $995, we'll walk you through similar trades!"

So you just paid hundreds of dollars — but for what?

The chance to pay even more money to actually put your education to use?

That's not a resource. It's a scam. Plain and simple.

You're left wondering what to do next... and how to start making gains on your own.

And that's exactly why Options Trading Coach blows away these other options "education" products.

Every week, we'll alert you to new options trade set-ups and new ideas and strategies...

These are some of the same strategies and insights I recommend in my more advanced Options Trading Pit portfolio — which has returned 9,101% cumulative returns since January 2007.

In fact, I developed Options Trading Coach after many of my readers insisted on such a service.

We've even set up a message board — checked daily by yours truly — where you can dialogue with us directly.

But look, maybe you're still not convinced.

Maybe you're the kind of person who needs to see actual results in front of their eyes...

That's why right here in this letter today, I'm going to give you your first Options Trading Coach trade recommendation...

At no cost to you and with absolutely no strings attached.

The First Mile of Your Options Joyride

Now here's the point in most letters where you'd get the rug pulled out from under you.

The "guru" who's spent the last 10 minutes telling you how they're going to teach you how to get rich and promising to deliver the name of an ABSOLUTELY FREE pick...

All of a sudden asks you to hand over a few hundred bucks before he'll give it to you.

Well that's not the way Options Trading Coach operates.

Here is all the information you need to know to go ahead and purchase your first options contract:

If you're game, consider buying the Lexmark April 2010 30 put option (LXK100417P00030000) at or near 90 cents. We're looking to book at least a 50% gain on this position.

A word of warning: I believe this pick could return as much as 50% over the next 8 weeks. However, remember what I told you just a moment ago. Would you go and throw your money into a game you had no idea how to play?

You're more than free to take on this opportunity on your own. In fact it's a great opportunity.

Of course the only way you'll know how to pinpoint the PRECISE moment when to sell this contract and cash out that maximum gain...

The only way you won't be sweating bullets trying to follow the ticker each day...

The only way you can erase ALL the guesswork, confusion, and just plain fear you may have about purchasing the recommendation above...

Is to allow me to be your options coach.

Once you're a member of Options Trading Coach, I'll keep you updated on this Lexmark play — and all your plays following this one — constantly.

I won't leave you to the wolves to figure out what to do on your own, like a lot of other options services do.

So the choice is yours: Go it on your own... or let me do the heavy lifting for you.

And if you decide to do that, then here's the part I think you'll like best of all...

It's hardly going to cost you a thing.

The Cheapest (and Most Profitable) Education Out There...

First things first, as I mentioned before, when you sign on with Options Trading Coach, you'll have 6 FULL MONTHS to try the service at no risk whatsoever.

If after that 6 months you haven't made any money, still can't understand options, or just decide that it's not for you...
Then I'll refund every penny.

And you get to keep everything I've sent you and everything you've made off of it.

I'm essentially offering you a guarantee that you'll become 100% competent at options trading. If you don't, then you lose nothing on the deal.

Also, when you become a member of Options Trading Coach, in addition to teaching you the best options strategies being used today, I'll give you a new trade example every month that could easily lead to solid double- to triple-digit gains...

But that's not all you'll get.

As soon as you agree to try out Options Trading Coach, I'll send you access to my 9 easy-to-follow reports, which I'll tell you about in just a moment.

I suggest reading one per day. Each report takes roughly 15-20 minutes to read through — the same amount of time it takes you to wait in line for a morning to-go coffee.

Then, start following my weekly e-Letter reports so you can trade right alongside me.

I also personally maintain an online forum — available only to Options Trading Coach subscribers — to address all reader questions and concerns.

So by now, you're asking yourself, "How much will this set me back?"

Services like the one I'm offering you today usually cost anywhere between $500-$1,000 a year... and that's WITHOUT the regular recommendations — let alone the "starter play" I've given you today, completely free of charge...

Up until today Options Trading Coach has sold for only $195 a year.

Notice I said, "Up until today... "

My publishers and I have recently decided to really push the envelope to get as many "pupils" into my education service as possible... because we're so confident that once you've started working with us, you'll be hooked for life.

So in order to fill those spots as quickly as possible and get started on making some real options profits, I've decided to lower the annual price for Options Trading Coach to just $99.

That's it. No catches, no loopholes.

So here's the full tally of what you'll receive for $99:

•    Report # 1: Options 101: The Nuts and Bolts of Trading Options in Today's Markets
•    Report # 2: Selling Covered Call Options: Pocket A "Stealth Dividend" On Stocks You Own
•    Report # 3: Buying Call Options: How to Use the Power of Leverage to Control Shares for Less
•    Report # 4: Buying Put Options: A Better Way to Play the Downside
•    Report # 5: How to Invest in LEAPS Options: Long-Term Security and Ultra-Control
•    Report # 6: Options Glossary: A Handy Reference Guide to Every Option Term You'll Ever Need
•    Report # 7: Master the Straddle Strategy: How to Straddle Both Sides of the Fence Under Any Market Conditions
•    Report # 8: How to Control the Upside and Downside and "Strangle" Profits from Your Stocks
•    Report # 9: The Dynamic "2-In-1" Strategy: It Lowers Your Cost, Hedges Your Risk, and Boosts Your Win Potential

Plus — each week, I'll send you my latest report in which I detail new actionable ideas, strategies, and trades you can make work for you, right away.

In addition, you'll get full access to our members-only website, where you can "beta trade" my recommendations, catch up on our latest (and archived) reports, and dig into our members forum...

... All for less than what you might spend on dinner and a movie for you and a date.

And don't forget: ALL of this is covered by my full Options Trading Coach 6-month money-back guarantee.

So you risk nothing at all by giving me a chance to make you a confident, successful options trader.

Why not give it a try?

You've already got a potential 50% winner sitting right under your nose...

Pick up a few contracts and then follow my coverage of it right up until the precise moment when we cash out for maximum gains.

Options traders aren't made overnight... But you can start trading them for big profits a lot sooner than you think — with the right guidance.

Stop LOSING money and wasting your portfolio's potential by buying stocks, simply because you don't know a better way...

Picking A Strategy

2010-03-01T18:54:00.000-08:00

I recently wrote a little about picking a best stock for 2011 and mentioned a few of the myriad ways in which an investor or trader might go about selecting a candidate. In my own trading life, as I review stocks, I find that the process becomes much more one of elimination than selection. As I look at a chart, for example, I can see that good old XYZ may have just reached up to a resistance and is turning down. A quick fundamental review may show that earnings have dipped due to some new competition, debt is considerably higher than other stocks in the sector, and a potentially large lawsuit has just been commenced against the company. If all this is occurring in a bull market, XYZ is not a buy for me; it is eliminated as a potential bullish addition to my portfolio since I know there are other better candidates out there. Does that mean that as a trader I am not interested in the stock? Definitely not. Though I have quickly rejected it as a buy I may give further consideration to XYZ as a bearish candidate. I may look at a different strategy that looks like it might have a greater chance of success with XYZ. Does it fit my parameters to short the stock, or to buy puts, or maybe put on a bear put debit spread or a bear call credit spread? I can see how those strategies might be a better choice given the information I have about XYZ and its price performance.

A majority of investors and retail traders may pass right over XYZ since their bias is bullish and they are only looking for top stocks to buy. Those investors may only really consider one strategy; buy the stock first and sell it later. In so doing they easily may miss the apparent opportunity the XYZ scenario offers to an investor armed with more than one strategy. There are many ways to making money in the markets, and the utilization of various strategies can add income streams and profits to the trader or investor who gains understanding.

How we invest or trade is a personal decision. The decision is influenced by how much time we have, how much cash we have to invest, our age, our family situation, our risk tolerance, our interest and a variety of other factors. No matter who you may be, if you have the interest to read this article, there is almost certainly a strategy that will fit your situation and comfort level. I devoted my new book to this subject. "Smart Investors Money Machine" is designed for investors as well as traders. In "Smart Investors Money Machine," I have tried to consider a wide variety of investors and traders using examples of a young single person, a growing family, and a couple reaching retirement to show numerous ways each might select a strategy that fits them and their lifestyle and at the same time will provide them with more income. The book isn't limited to option strategies though it does discuss some. The scope of "Smart Investors Money Machine" encompasses a variety of strategies from buy and hold to dividend capture to writing covered calls, to specific sectors that offer exceptionally high yields and includes a basic primer on bond investing and annuities, and even explains a little about reverse mortgages. With each strategy, I not only describe the strategy but also show how people in differing times and stations of life might use it to bring in more income to lighten their daily load.

The point is there are lots of ways to create streams of income. Some of them require a lot of time and some very little time. Some are very risky and offer higher potential rewards while others are accompanied by a lesser risk but offer a lesser potential reward. There are plenty of ways to do it and some of those ways are likely to fit your specific circumstances. In my view, it is definitely worth the trouble to explore the possibilities and see what you like and what can work for you.

Almost assuredly there are strategies for you. What I often see is people trying to be traders rather than investors when they have neither the time, the knowledge, the capital, nor the risk tolerance to really be traders. My advice to them universally is it is great to be a trader, but first you need to acquire the knowledge. In the meantime, there is no reason why they shouldn't be generating additional income using other strategies that may be less complex, less time consuming, require less attention (in some cases even no attention), and still add a stream or streams of income.

The strategies we utilize are critically important to our success and choosing what strategy we will employ may be as important, and sometimes even more important than the specific XYZ we select.

Recommended Top Stocks To Buy:

FAS (Direxion Daily Financial Bull 3X Shares)
This past week, Option Trader closed a debit spread on FAS for a before commission gain of 76% in just under three months. Thereafter, a new debit spread was entered using slightly different strikes. For those with an interest in financials, FAS is an interesting vehicle.

UNG (United States Natural Gas Fund ETF)
Trend Trader opened and quickly closed a one day trade to grab a 2.4% return before the small commission. Since exiting, UNG has been drifting down toward an uptrend line. I'm continuing to watch to see how the share price behaves as it deals with the trend line.

The Smart Grid's Two-Fold Profits

2010-02-26T17:42:00.000-08:00

The smart grid is delivering two-fold profits. I know this because I've personally reaped dividends from both folds.

First, from what I call the non-sexy side of smart grid: efficiency. And secondly from the very sexy side of smart grid: investing.

Here's an account of each. . .

Smart Grid Savings

We've barely reached the first rung on the ladder of smart grid deployment, and it's benefits are already apparent.

When it comes to wealth, protecting it can be just as important as growing it. Limiting how much goes out is one way to protect it. And the smart grid can help you do that.

This past winter, months before air conditioning was on anyone's mind, I made a call to my local utility, Baltimore Gas & Electric (BGE). Through their Smart Energy Savers Program, they offer something called Peak Rewards.

In a small nutshell, Peak Rewards offers a discount electricity bill to anyone who signs up. I got a $36 credit last month. My bill was $130, so I had to pay $95-a 27% savings. I, and several thousand other customers, will enjoy that same discount throughout the summer.

Peak Rewards is a fancy way of saying the smart grid has arrived. Upon signing up, an appointment was made for a switch to be installed on my outside air conditioning unit. On days when electricity demand is excessively high, a radio frequency will be sent to my switch telling it to cycle my unit.

Cycling means my fan continues to run, but the unit doesn't cool the air, saving electricity that can then be used where needed. During a cycling event, which don't happen that often, the temperature in my home can be affected by a degree or so. And they usually happen during peak hours, when I'm at work anyway.

So the smart grid is already paying me $35 a month. But this is only the beginning. The very beginning.

Because over the next 20 years, over $2 trillion will be spent on revolutionizing our electricity infrastructure. When complete, my switch will seem archaic.

That's because the grid will finally be in the 21st century, instead of lumbering around like Edison was still here. You'll monitor your home's electricity use from a webpage, charging your car and turning off lights with a click of the mouse from your laptop. I'm serious.

You may even be able to choose which wind farm you want power from.

It'll help consumers save billions of dollars (and kilowatt-hours) by engaging them in electricity use, rather than alienating them from it with a complex monthly statement. But it's also a mega investment opportunity.

Smart Grid Investments

Somewhere down the line BGE partnered with a smart switch provider. A contract undoubtedly worth millions. In this case, Honeywell is the name stamped on the switch.

This process is being, and will be, repeated hundreds of times as utilities across the world adopt smart grid practices. As I said earlier, the total will top $2 trillion.

But it's not just switches.

It's smart meters. Software. Batteries. Transmission wire. LEDs. Substations. And more.

Hundreds of multi-million dollar contracts will drive related top stocks to buy higher. It's the second fold of smart grid profits. . . and they directly affect your portfolio.

So while you're knocking a third off your utility bill on the front side, you can be reaping double and triple digit winners on the back end. It's going on right now:

If you're not on board yet, don't worry. This is a decades-long process, and the benefits will only grow.

Call your local utility and see what kinds of new programs they're offering. Encourage them to adopt an efficiency or related rebate program if they don't have one already.

And by all means, start investing in the companies making the smart grid a reality. But don't do it on a whim.

It explains how the smart grid will come to be, what technologies it will encompass and, most importantly.

Stocks Market's Report: Oil's Violent Rally

2010-02-26T01:52:00.000-08:00

If you haven't noticed it yet, you will.

Oil prices are "mysteriously" catching fire.

In fact, within the past month, while everyone continued ripping their hair out over the Dow, oil jumped 26%.

And this rally's just getting started.

In fact, I recently uncovered shocking evidence that virtually guarantees prices will, very shortly, surge back into the $100 plus range.

It's an imminent jump that's sure to catch most Americans off guard -- but it could make you 500% richer as it happens.

In the free report below, attached for your convenience, I spill the beans on every last detail... what I found... how it started... and, most importantly, how you can take advantage of it and start collecting massive profits -- today.

In a market this gut-wrenching, you can't afford to pass up this virtually-guaranteed money-making opportunity.

It could be the easiest moneymaking opportunity of the year. And we found it burried inside the International Energy Agency's (IEA) World Energy Outlook report...

... The annual, 578-page document blueprints exactly where our future energy sources will come from and when - for leaders and elite investors around the world.

And they read it for good reason...

Since its inception, the findings within the pages have been so accurate that the annual report reigns as "the authority of energy analysis and projections."

In fact, many people today trust their report without question.

I recently finished pouring through my copy.

It was handed to me after a fellow geologist, with first-hand experience in the Canadian oil sands, pointed out a shocking error - one that guarantees an imminent spike in the price of oil.

In short, the report claims that:

"Thanks to ever-dwindling supplies in the Middle East, the world will rely on Canada as the largest oil producing country by 2010."

It's been their same projection since 2006.

But there's just one problem.

The World Energy Outlook forgot the other half of the story...

You see, what this acclaimed report omits are the blatant details surrounding an imminent supply and demand bottleneck - one that's guaranteed to launch the price of oil violently back to the $100 plus range.

And that's a conservative estimate.

The good news is that we also, very recently, uncovered a secret investment - which most Americans know nothing about - that could hand you 500% gains as this spike hits.

And the best part is that it's not related to risky exploration or production companies, either. Instead, it's directly - dollar for dollar - related to the price of oil. Only this gem pays you DOUBLE the gains!

In fact, investors using this blockbuster already pocketed 35% gains - in the last seven days as oil popped 17%!

I've written this letter to give you every last detail on exactly how it works and how it will happen. But time to catch the most profits is rapidly running out. So let me quickly share with you what it's all about.

Cashing In On A Much Needed Break

If you're like most of us, as oil continued to plummet from July's high of $147 down to $33 in December, you were sighing in relief.

After all, just imagine the shape we'd be in if everyone still had to shell out $4+ a gallon at your local Exxon during these times.

The fact is, that massive fallout in prices was just the break we needed.

But...

On the other hand, as oil started becoming "affordable" again - in the $30 range - it triggered an unstoppable chain of events that is guaranteed to drive the price of oil through the ceiling... and make investors like you filthy rich on the way.

You see, thanks to prices becoming too low, many of Canada's oil companies - resources that would supply crucially needed oil for the U.S. and rest of the world in a few months - couldn't stay in business.

And we need that oil, like a junkie needs his fix.

In fact, the U.S. depends on AND imports more oil from Canada than from Saudi Arabia, Kuwait, Libya, and Iraq - combined.

But one by one, we started finding major oil projects temporarily closing up shop. Drilling and refining stopped. Exploration and testing lost all capital. And their share prices ultimately plummeted.

Just to name a few examples:

StatoilHydro recently yanked the rug from under a $12 billion project in Canada's Peace River.

Both Nexen Inc and Opti Canada Inc were forced to halt advancement on major projects in Alberta.

Suncor, Canada's oldest oil sands operator, was forced to cut its spending by 33%, thanks to lack of profitablility with the current extremely low prices.

Oil giant Dutch Royal Shell's stopped work on several of their Canadian projects until prices regain strength.

The major partners in the proposed $24 billion Fort Hills oil-sands project in northern Alberta - Petro-Canada, Teck Cominco and UTS Energy - announced they may defer a decision to build an upgrading refinery northeast of Edmonton.

The list goes on.

As I mentioned earlier, within months, precious deposits of oil - even locations that were set to come online within weeks - are now months behind.

Some are trading now for a 90% discount.

But ironically, these outfits just created a powerful, self-fulfilling prophecy... an unstoppable bottleneck guaranteed to launch oil prices - very soon - through the roof.

And it's already started.

The Easy Way To Ride One Of The Most Profitable Bull Markets In History

Don't let oil's current low price fool you this time.

Thanks to an already guaranteed shortage -- just around the corner -- these low prices won't be around for long.

Here are just a few more of the critical points from their latest report:

Global oil demand is projected to expand 2.2% a year, on average, reaching 95.8 million barrels a day by 2012, up from 86.13 million barrels a day this year. The forecast is based on global economic growth of about 4.5% annually. Oil demand is expected to increase most rapidly in Asia and the Middle East.

OPEC, which supplies more than 40% of the world's daily oil needs, will have little spare capacity left by 2012.

Increases from non-OPEC oil producers and biofuel producers should start flagging after 2009.

Natural gas markets will also be tight because of inadequate supply increases, limiting the ability of consumers to switch between oil and natural gas.

And very soon, when word of the shortage hits, the exact same scenario that the hurricanes caused will already have started unfolding... only this time, the gains will hit much, much faster.

The smart money's already placing their bets.

They're already preparing to collect a fortune!

And if you're prepared, as I'll show you, step by step, in just one moment, you'll soon find that many of the very same companies that surged before will rapidly once again start compounding your wealth.

And here's the kicker:

This time, they won't need nearly as much capital to get started! Most of their infrastructure is already ready to go - and they're trading for just pennies on the dollar.

And if you think that's a juicy opportunity, let me show you how you could...

Collect Twice The Gains Of NYMEX Oil Traders... with One Simple, Yet Little-known Play

Listen...

We know oil prices are about to skyrocket. We know they're just around the corner. And we know that those slick traders playing NYMEX futures - guys who need hundreds of thousands of dollars just to get started - somehow always come out ahead.

But here's what you might not know...

Very recently, we've uncovered a rare investment that could pay you gains just as astonishing as any jackpot oil resource company out there - but without the risk!

Here's how it works.

You see, this special investment, which most investors know absolutely nothing about, doesn't even follow oil producers or risky exploration companies... it strictly follows the physical oil market.

And get this:

Thanks to the unique nature of this investment, you can actually get paid double the gains that oil makes!

In other words, a 10% gain pays you 20%... 20% gain pays you 40%... 100% rise in oil prices pays you 200%

That means, if oil shoots 50% this year, which is our gross-underestimate, you double your money!

If oil shoots up to the $70 range... every $5,000 invested suddenly turns into a $10,000 payday!

With oil trading in the upper $40-range, this unique opportunity doesn't get any easier.

Just imagine how much money you'll be sitting on when oil prices plow through the $100 a barrel mark!

I'm not talking about several years down the line either. We could realistically find ourselves staring right down the throat of $100 before January... $140 by next April... even $200 a barrel by the end of 2010!

Every last detail is spelled out for you in our latest report. It's called, Hotter Gains Than NYMEX Traders Could Ever Make. And I want you to have it for FREE.

All you have to do is test out our top-performing trading advisory, The Pure Energy Trader.

But before I divulge all the details about how to get started collecting a fortune in this Bottleneck Bull-Market, let me introduce myself and my team...

Introducing... The Pure Energy Trader

My name is Brian Hicks.

I'm the president of the investment research company Angel Publishing Investment Research. I've spent my entire investment career, going on two decades now, uncovering the market's best moneymaking trends and showing investors like you how to profit from the most undervalued opportunities in the world.

I've taken investment junkets all over the world... to historic oil boomtowns like Desdemona, Texas, to the Powder River Basin in Wyoming to Kiev, Ukraine. We've been to the heart of the oil sands industry, Fort McMurray in Alberta, Canada. I've been blown away by a wind park in Palm Springs, California. And I've seen first-hand the natural gas boom in the Barnett Shale.

My investment insights and ideas have landed me frequent spots on financial shows like CNBC, Bloomberg, Fox, CNN, Fox Business, and, most recently, C-SPAN... where I spoke on the energy markets and the U.S. dollar.

I'm not telling you this to be a showboat. But I want you to understand that it's this dedication and never-ending persistence that has allowed me to develop friendships and contacts with some of the best financial minds and industry insiders around the world.

And recently, it's allowed me to acquire a man who could easily be considered, with well over 1,153 successful trades under his belt, one of the best traders on the planet today.

His name is Ian Cooper.

And to get a better handle on why I cherry-picked Ian over any other research analyst out there, look no further than his track record...

120% on Royal Caribbean

194.12% on QQQ

269.52% on On2 Technologies

270% on ONT

268% on CYD

206.33% on VTSS

246% on IPIX

233% on TLTCJ

515.38% on MQJSB

225% on ETGP

302.15% on ASTM

And that's just to name a few. Had I shown you all of his winning trades just for the past 2 years, it would be five pages long.

His off-the-charts accuracy for reliably reading the markets, matched with his winner-after-winner track record, have plastered his sought-after advice on the pages of numerous publications. He's filled columns from Investor's Business Daily all the way to Forbes.

He's also frequently appeared on investment shows such as Money Matters with Barry Armstrong and On the Money with Mike Stein.

In other words, Ian is the real deal.

In the past few months, I'm willing to bet that you've gained valuable wisdom just from Ian's dead-on articles in Wealth Daily or Energy and Capital.

He's spotted scores of blockbuster buy and hold opportunities. But it's his knack for finding rapid, explosive trades - just like the one that could pay you double the gains oil makes - that brought him to the Pure Energy Trader team. After all, he's constantly...

Picking The Best Trades... Trade After Trade

Since starting our hottest trading advisory, The Pure Energy Trader we've already initiated and closed 91 trades.

85% of them closed for massive gains! In fact, each trade - winners and losers - is averaging +24%.

In other words, you're more than doubling your money every four trades!

Even more amazing is that his tight-knit group of investors (of which I'll show you how to become a part of) only holds each one of these trades for about 24 days.

Sometimes it's a matter of hours.

That means, on average, you're doubling your money every four months!

I can't think of a single other investment opportunity on the planet that could deliver those gains... especially in today's unpredictable market.

And according to Ian, with energy prices about to launch sky-high, he's lining up more and more knock-em down winners that he's already set to alert you to the moment the time's right.

Now, I could go on all day detailing the fast-moving trades Ian has been making and the ones he can't wait to share with you soon. But here's what I want you to walk away with...

All of our winners have a couple of very important things in common...

They're all energy top stocks for 2011 with enormous potential...

And they're all companies that our team of researchers closely follows on a daily basis.

And with a track record like that, even in today's market, investors are begging for more recommendations. Problem is for some investors, these recommendations, unlike the ones in many of our other services, aren't buy and holds, which may take up to three years to reach full value.

We're after the fast money. And with Ian following and executing the trades, the fast money is turning into the easy money.

And just to be clear...

No one is complaining at all about the track record for any of our buy and hold services. Nothing will ever change the fact that investors can make good, solid returns by maintaining a portfolio filled with top stocks to buy we like for the long term.

But... the reality is you could make a lot more.

In some cases, over 300% more!

By not having a pure trading service - where we can get in and out quickly with 25 to 50 percent profits in just a few days - we're missing out on some easy money.

Just take a look at this scenario:

How Loosely Following Ian's Trading Research Turned $5,000 Into $58,913.14... In 6 Months

This is why you also need to be trading stocks instead of strictly investing in "buy and holds." You see, with the right trades...

You don't need to start with a lot of money to make a fortune in the market... You don't need to have all your savings tied up in multiple investments for several years, either... You don't even need to find dozens of trades every year.

In fact, all you needed to make more than 10-times your initial investment was to loosely follow seven of them.

Take the following scenario, for example:

On November 30th, 2007, Ian alerted his investors to an amazing situation in the solar market. A leading company, LDK Solar, announced the ground-breaking of their latest polysilicon plant - news of which, he knew would soon cause the share price to surge.

Because of his timely alert, his traders secured an entry price of $29.55.

And just five days later, on December 5th, he recommended they sell half of their position for a 49% gain. Two days later, the other half sold for a 41% gain - turning an initial stake of $5,000 into $7,250.

Then, just 12 days later, on December 19th, he showed them another explosive opportunity: An options call on China Sunergy, after news of an amazing deal struck with a German manufacturing company.

Much like with LDK, readers took gains of 204% on the first half of their shares within six trading days. The second half claimed 141% after six more.

Suddenly, their $7,250 compounded into $19,756. It didn't end there, either.

On February 19th, 2008, he struck gold again. He alerted readers to what Ian called a "no brainer" with U.S. Natural Gas.

Like clockwork, two weeks later, his readers were sitting on an easy 80% gain as the first half sold... 140% gains on the second half, just a week later.

Within three weeks, your $19,759 turned into $41,488.13.

And then, on April 22nd, they were alerted to one of the many tiny oil and gas companies flocking to the riches within the Bakken oil formation.

Three weeks later, on May 15th, these hit-and-run traders sold their shares for an incredible 42% gain.

Today, that initial $5,000 investment - using just those seven alerts and reinvesting profits - is now worth $58,913.14! $10,000 would be $117,826.30 - all within six months!

That's the rapid-fire power trading offers you.

And I haven't even accounted for taking gains from the multiple other trades that Ian issued to his readers during that time... gains like 33% from Hoku Scientific in five days... 119% from Cree Inc. in six days... 118% from PetroQuest in 15 days... to name a few

Just imagine how quickly you can compound your wealth with gains that large - gains that fast - again and again.

That's the sort of hit-and-run excitement you should expect by joining Pure Energy Trader. You can make a fortune from several rapid trades.

You see, when you sign onto Pure Energy Trader, you're enrolling into...

An Exclusive Trader's Club Unlike Any Other

Unfortunately, the number of investors who can sign up for our Pure Energy Trader is strictly limited.

In order to make sure every one of our subscribers has the ability to get maximum value out of each recommendation, membership will be strictly limited to 2,000 seats.

... most of which are already spoken for.

The first time we opened this window, nearly half of those seats were gobbled up by our premium, profit-hungry readers in the span of a weekend.

So it's important that you act quickly if you'd like to get in.

You see, we don't want 5,000... 10,000 people buying the same top stock for 2011. If we allowed an unlimited number to join, we could easily push the stock up several hundred percent. That would be a disaster.

But if getting rich doesn't bother you, and you're ready to follow Ian as he shows you the secrets to landing dead-on hit and run trades in this market, I urge you to join right now.

http://www.angelnexus.com/o/op/11278

Get Ready

Another point I want to discuss is how the trades will be delivered to you. The trades will be sent via e-mail. No Faxes. That's because we want everybody to receive the trade at approximately the same time.

And just so that you don't have to recheck your email 10 times a day, we're also offering Pure Energy Trader updated VIA live RSS feeds - so you can get the alerts the split second they're available!

If you're comfortable with what I've said so far, I urge you to consider joining.

Again, I know this style of trading isn't for everybody. But by signing up for the Pure Energy Trader, you're elevating yourself into the top tier of the trading community. If you have second thoughts on the price or the frequency of recommendations, stop reading now... the service isn't for you.

If you're interested, welcome aboard. Let's get to work.

Now Listen Carefully

When you fill out the membership form (assuming there are remaining slots), you'll immediately receive a confirmation and a welcome letter, as well as a link to the Pure Energy Trader site where you'll be able to access every single one of the trades Ian issues 24 hours a day. We'll give you full instructions.

And that's not all!

You'll also learn about a secret investment that actually pays double the gains of any oil futures trader. All those details are in your free report, Hotter Gains Than NYMEX Traders Could Ever Make - just for trying us out.

Plus, by signing on today, I'll also rush you a free copy of my latest book, titled Profit From the Peak.

In short, Profit from the Peak is a roadmap that shows you how to profit from the rise of oil prices.

In the book, my colleague, Chris Nelder, and I go into full detail on tackling the world's energy problems... and how investors can maintain financial security in the process. I can say with confidence that Chris and I know a little more about today's energy markets than your average "oil expert."

You see, Chris is a well-regarded energy expert who has designed and built dozens of solar energy projects. This is a guy who understands the energy market inside and out... from energy's worst problems to its brightest solutions. And for the last decade, Chris and I have preached that investing is key to solving the world's energy challenges... Investments in a multitude of energy practices and technologies that will wean us away from our dependence on oil.

But we're also quick to point out that this blueprint for success also includes the economic harvesting of remaining and unconventional oil sources.

And again, in addition to full access to our web site, along with your free copy of Profit From the Peak, the moment a new trade is bought or sold you'll immediately be sent an email and, if you elect it, the RSS feed (We'll show you how to quickly and painlessly set up your RSS feed). The reason we're doing this is - we want everybody to be on equal footing. Our trades could arrive any time of the day, from 9am to 8pm.

So it's imperative you follow the instructions. This way you'll get the trade... and you'll have ample time to execute it.

By now, I'm sure you're wondering...

How Much Does Pure Energy Trader Cost?

Truth is, this level of service is highly specialized. And the countless hours it takes Ian to find, study, and recommend just one of the trades he uncovers - as you can imagine - takes a lot of time, expertise, and resources.

He doesn't draw stocks from a hat. He's not paid by other companies to recommend one over the other. His secret is that he's an insomniac, sleeping just three hours a night.

The rest of the time, when other traders and researchers rest, spend time with their family, and take vacations, he's intently focusing on the latest news, studying the markets, and developing high-ranking contacts.

That is, however, precisely what it takes in order to hold a track record as clean as Ian's... a portfolio that scores investors like you the greatest energy trades the market has to offer.

Now, I've seen other "experts" billing themselves out for several thousand dollars a day - and their trading advice can't tread water next to the winners Ian shows you on a weekly basis.

That being said, I wouldn't feel the least big guilty for charging as high as $5,000 a year for a membership to his advisory.

But I'm not going to go anywhere near that.

In fact, the normal membership price is $1,500 a year.

Pure Energy Trader's Bottleneck Bull-Market Special Pricing

If you sign on to the Pure Energy Trader today, you can save a full 33%, and join for just $999 this year.

I know for many of you $999 is a big lump of money to take down, even considering that many of you have made hundreds of thousands of dollars following our advice.

So here's the deal. We're also offering a quarterly bill program. If you choose that method, you'll be charged $275 every three months.

It's as easy as we can make it to get you on board.

Please keep in mind - we're capping Pure Energy Trader at 2,000 investors.

In addition, we want to make sure you're 100% satisfied. So, if for any reason you're unhappy with Pure Energy Trader, you can get a full refund at any time before the end of the first month of your membership.

After that, the refund is prorated.

But you have to act now. We fully expect every last seat to be taken in the next few days!

Top 10 Stocks For 2010

2010-02-24T06:15:00.000-08:00

Looking for a shopping list of new top 10 stock ideas for 2010? Each year for 27 years, TheStockAdvisors.com has turned to the nation's most respected and well-known newsletter advisors and asked them for their single favorite stock or fund ideas for the coming 12 months.

With 10 advisors participating in this year's survey, there's something for every type of investor, from high quality blue chips to speculative home runs.

Specifically, the 75 stocks and funds selected for our 2009 Top Picks report recorded an average year-to-date gain of 34%, versus a 19% gain by the broad market over the same period.

As always, we caution all investors to only use these ideas as a starting place for your own research and only buy top stocks that meet you personal investing criteria, risk parameters, and investment time horizon.

We wish you the best of success for your investing in 2010!

AECOM (ACM): Geo?rey Seiler's top 10 stocks for 2010

"Our top pick for 2010 is engineering and construction (E&C) firm AECOM Technology (NYSE:ACM)," says Geo?rey Seiler.

In his BullMarket.com the advisor explains, "AECOM, unlike some better-known E&C names, o?ers a relatively low-risk business model. It performs no construction work at all and thus has none of the lump-sum, fixed-rate contracts that other companies might sign.

"The Los Angeles-based company focuses on a broad range of services that includes planning, design, environmental impact studies, project management, logistics and other jobs in the facilities, transportation, environmental, and energy and power segments.

"Transportation is the company's largest end market, representing 28% of the business, followed by environmental at 25%, facilities work at 24%, and Management Support Services (MSS), which delivered 17% of its revenues in fiscal 2009.

"Energy and power is the company's smallest segment, representing about 6% of its total revenues, but the company does view it as a growth opportunity. It is particularly strong in hydroelectric projects.

"The MSS business is 100% dedicated to working directly for the U.S. government, but government spending of all types -- either from federal state and local governments and foreign governments -- accounts for 70% of the company's revenue. The remainder comes from the private sector.

"AECOM has been under some pressure toward the end of the year, despite initially rallying following a strong fiscal Q4 earnings report in November. The culprit was some weak reports from fellow E&C firms and the Dubai debt debacle.

"However, AECOM isn't subject to the same type of energy sector cancellations that some other E&C companies experienced, and its exposure to Dubai is negligible.

"Impressively, AECOM is one of the few E&C firms to grow its backlog sequentially last quarter. Total backlog stood at a record $9.5 billion on September 30th, a 10% increase year over year and a 3% increase quarter over quarter.

"Meanwhile, AECOM is well positioned to be a beneficiary of increased government stimulus spending in 2010, as well as the possible passage of a substantial highway bill late next year.

"AECOM guided for fiscal year 2010 EPS to be in the range of $1.90 to $2.00. The midpoint of this range reflects 15% growth in earnings per share. We think the guidance is relatively conservative.

"In summary, we like AECOM's position in the marketplace, its consistent growth, and sound low-risk strategy. With a pristine balance sheet, trading at under 14x the midpoint of conservative guidance, and an over 15% expected 5-year growth rate, AECOM is undervalued and our top pick for 2010."

AOL (AOL): Bernie Schae?er's top 10 stocks for 2010

"AOL (NYSE: AOL), formerly America Online, is one of the most storied – and bloodied – names in the Internet sector," says Bernie Schae?er.

Referring to skepticism surround its early December spin-o? from Time Warner, the editor ofSchae?er's Research chooses AOL as his top pick for 2010, noting, "From a contrarian perspective, the current pessimism could have positive implications.

"AOL's merger with Time Warner in 2001 was hailed (by some) at the time as an innovative marriage of old and new media. But AOL's dial-up Internet access model was already under pressure by the time of the merger, and the AOL and Time Warner cultures never meshed.

"The merger is now regarded as one of the most disastrous in U.S. corporate history, losing more than $100 billion in market value. Steve Case, the deal's architect , resigned the chairmanship of the combined company two years later and left the board in 2005.

"Time Warner has been looking to rid itself of AOL ever since. So it was no surprise that Time Warner's spin-o? of AOL in early December 2009 was met with a heaping armful of skepticism.

"We have seen multiple media outlets weigh in negatively on AOL, perhaps an indication of how Wall Street is currently viewing the best stock to buy. In fact, the shares were initiated at 'underperform' by a major brokerage house in December.

"Moreover, Zacks reports that the stock has earned one 'strong buy' rating, one 'hold,'

and two 'strong sells.' Therefore, we view the upgrade potential on AOL favorably.

"But AOL, with a market cap of only $2.5 billion, argues that it remains a strong brand. Its 80-plus Web sites attract 100 million unique visitors each month. It still generates cash through its Internet access business.

AOL has a new management team led by former Google exec Tim Armstrong. Armstrong wants AOL to di?erentiate itself from competitors by creating original content. Yahoo, Google and others are largely aggregators of others' content ; AOL generates 80% of its own content.

"Although we emphasize that we are no in way comparing AOL to Google, the skepticism greeting the spin-o? is eerily reminiscent of what we saw around Google just prior to its initial public o?ering in 2004. hen the shares of GOOG quickly outperformed their low expectations, the bears quickly jumped on the stock's bandwagon, pushing it even higher.

"OL's shares so far are bucking the widespread pessimism as they hover above short-term support at the 23 level. From a contrarian perspective, this pessimism could have positive implications if skeptics succumb to better price action."

ETF (NYSE: BRF). The ETF remains our top stocks pick for 2010.

"In December, the Inter-American Development Bank approved a $3-billion conditional credit line with Brazilian small and mid-sized businesses on Thursday.

Around 75% of the new jobs created in Brazil this year were created by small and mid- sized businesses.

ChemTrade Logistics (CGIFF): Roger Conrad's top 10 stocks for 2010

Roger Conrad, editor of The Canadian Edge, is a leading specialist in the niche investment area of high-income Canada-based trusts.

For his top investment idea for the company year, he turns to chemical company, ChemTrade Logistics (TSX: CHE-U, OTC: CGIFF).

"ChemTrade Logistics is a major producer of specialty chemicals, particularly sulphuric acid. It's also a Canadian income trust yielding over 12% with most of its operations overseas. That adds up to a unique triple play for investors in 2010.

"First, is the high yield, paid monthly. Even with the market for specialty chemicals chronically weak in 2009, Chemtrade was able to generate cash flow to cover its distribution by a healthy margin.

":Second, cash flow is set to surge as demand from industry rebounds for sulphuric acid. Second half results already show improvement and that trend is set to continue into the new year.

"Third, Chemtrade management expects to pay the same level of distribution in 2011, when Canada's trust tax kicks in. If it succeeds, investors will receive a windfall capital gain, since a big cut is already priced in.

"At a recent conference call, CEO Mark Davis stated 'the e?ect of the new tax would not be significant' since 'Chemtrade receives a large portion of its earnings from non- Canadian sources.

"Accordingly, in 2011 we believe that the new SIFT tax will apply to less than one-third of the Fund's income, resulting in an e?ective tax rate of less than 10 percent.' Buy ChemTrade up to $11."

China Adv. Construction: (CADC): Keith Fitz-Gerald's top 10 stocks for 2010

"China is spending $200 billion over the next few years to upgrade its rail system; and those new projects will be literally laying on a bed of cement,' says Asia expert Keith Fitz-Gerald.

The editor of The New China Trader adds, "This could lead to enormous growth potential for any cement company that Beijing involves in the

process -- such as China Advanced Construction Systems (NASDAQ: CADC).

"CADC produces and supplies specialized ready mixed concrete for use in all kinds of infrastructure projects including railways, roads, airports, bridges, tunnels, and dams. The company has already benefitted from over 9 new railway contracts from Beijing this year alone, totaling over $19.7 million.

"That may not sound like much, but realize that CADC is a small cap stock ($49.28 million market cap) so $19.7 million of new railway orders represents 39.9% of the company's total market cap. That means we could see CADC's earnings explode in 2010.

"In fact, if Beijing continues to pile money into railways, CADC could truly undergo some transformational events that lead to a double or more in 2010 – and more in the next few years.

"Meanwhile, China's massive $586 stimulus package has rocketed the Chinese economy back on track – and the result can be seen across the board from government sponsored infrastructure projects to consumer spending.

"By the end of 2009, the China is expected to have used 1.54 billion tons of cement on transportation infrastructure and logistics and warehousing projects, according to the country's top economic planning agency.

"In the transportation, logistics, and warehousing sectors alone, China is expected to have increased 2009 cement demand by 27% from the previous year, according to Guo Wenlong, a researcher with the Institute of Integrated Transportation, a?liated with the National Development and Reform Commission.

"China is literally building what amounts to an entire new country's worth of infrastructure and commercial projects.

"Economists are forecasting that China will use 40% of the entire global supply of cement in 2010. That basically makes China the world's largest construction site –something I see every time I am there.

"While concrete isn't sexy or glamorous, the industry's growth is far from boring. China's concrete market has maintained an average growth rate of 25% over last ten years.

"That adds up to a 931% compounded growth over the last 10 years. Compared to most investments, that sounds pretty glamorous to me.

As for its rail expansion, China plans on laying more track in the next five years than the rest of the world combined. That makes China's current railway plans the largest railway expansion in the last 100 years.

"The buttresses on which China's railway projects will be built are forecasted to require as much as 117 million tons of concrete alone – and that doesn't even begin to account for cement demand tied to China's other infrastructure projects.

"Basically all of China's growth, whether it's railways, roads, bridges, power-plants, dams, or commercial and residential real estate projects sit on a foundation of cement – and that means dynamic small-cap companies like CADC have plenty of room to grow and enormous profit potential moving into 2010 and beyond."

Dollar Tree (DLTR): Michael Vodicka's top 10 stocks for 2010

"Discount retailers are in high fashion right now, and 2010 could be a good time to capitalize on the macro-level trend toward value-driven consumption as consumers battle too much debt and a weak labor market," says Michael Vodicka.

To benefit from this trend, the momentum stock strategist for Zacks.com looks to Dollar Tree(NASDAQ: DLTR) as his top pick for the coming year.

"2009 was a year of surprises. Stocks ended up logging a monumental rally that kicked o? in March, most of the major domestic banks have freed themselves from TARP restrictions and the housing market has shown signs of stability.

"But in spite of all these incredible gains, consumers are still struggling with too much debt and high unemployment. This is the ideal consumer environment for an extreme discounter like Dollar Tree.

"Dollar Tree isn't a new name, the company's been around since 1986, has a market cap of $4.26 billion and operates more than 3,600 stores in 48 states.

"It carries a wide range of consumer and household products like paper towels, cleaning goods and beauty supplies, all for less than $1.

"The company's strategic advantage was on full display in 2009, beating the consensus estimate in each quarter by an average of 11%. Its Q4 results from late November, heading into the holiday season included sales growth of 12% from last year.

"The top line growth goes well with gross and operational margin expansion, both on the upswing due to lower commodity costs and process evaluation.

"Dollar Tree bought back 3.5 million shares in 2009, with $300 million remaining from a $500 million Board approval. The company has been committed to taking advantage of the value-driven consumer environment, opening 94 new stores this year and expanding or relocating another 74.

"But in spite of these moves, Dollar Tree balance sheet still looks strong, with cash and equivalents totaling $342 million against a debt load of $267.5 million, with just $17.6 million current.

"Looking forward, analysts are optimistic about the company's prospects in 2010, targeting full-year earnings of $3.84 per share. With shares trading at $48, this stock has a forward P/E of just 12.5, a nice discount to the overall market."

Electronics Arts (ERTS): Karim Rahemtulla's top 10 stocks for 2010

"I've been tracking the companies I feel are best positioned to sustain the market's upward momentum into next year," says Karim Rahemtulla.

"Expectations for earnings for 2010 are 87 cents per share with revenues of $4.26 billion. EA came out and said that revenues should fall between 4.2 and $4.4 billion with earnings ranging from $0.70 to $1.

"That type of wide range never sits well with Wall Street, which likes much narrower ranges and more specific guidance.

"There are three reasons to buy EA now:

Second, if this economy and market are really recovering, one of the prime beneficiaries will be a company like EA, which is solidly in the consumer discretionary space.

"While a takeover would be the least likely outcome, there still is that chance and in the current climate of mergers and acquisitions, I wouldn't be surprised to see a bid made for EA.

"While shares themselves look to be a good buy, I prefer to play this one using the Electronic Arts January 2012 $20 LEAPs."

Vivo Participacoes: Bill Wilton's top 10 stocks for 2010

"Vivo Participacoes (NYSE: VIV), a Brazilian telecommunication company that provides cellular services, is my top investment pick for 2010," says Bill Wilton.

The growth stock strategist for Zacks.com, explains, "Analysts continue to raise full-year estimates for the company." Here's his bullish review.

"The company operates through a number of subsidiaries and is headquartered in Sao Paulo, Brazil. In November, VIVO reported third-quarter results that included over 2,000 more customers, up 16% year-over-year. Overall the company's market share is now just under 30%.

"Service revenues increased 4% since last year to R$3.8 billion. Higher revenues translated to a 154% increase in net profits, to R$636 million.

"There is not a regular flow of quarterly estimates for the company, but VIVO has received several upward revisions for full-year 2009 and 2010.

"Forecasts for this year are up 19 cents over the past 2 months, to $1.14. Next year's Zacks Consensus Estimate is now $2.11, up from $1.59, an 85% growth rate.

"VIVO is trading at attractive valuations, especially given the popularity of emerging markets. The forward P/E is about 17 times earnings with a PEG ratio of just over 0.5. Its price-to-sales ratio is above 1.3 times."

Vodafone (VOD): Amy Calistri's top s10 tocks for 2010

"Even in these di?cult economic times, people are upgrading their cell phones," says Amy Calistri, who selects Vodafone (NYSE: VOD) as her top pick for 2010.

The editor of Stock of the Month, adds, "Smartphone sales have been robust throughout the recession, as people want to access the latest technologies and features.

"Every one of those latest generation cell phones taps into a wireless service provider. And as essential as we consider it here in the U.S., cell phone service means everything to emerging and developing countries where landline infrastructure barely exists.

"Africa is actually the fastest growing wireless market in the world. With little landline infrastructure and an average population that is still some distance from computer ownership, cell phones have become Africa's link to the world.

"So where can you find a company that has the loyalty of the stable U.S. wireless market but also has inroads into the fast-growing African subscriber base?

""Vodafone is the largest wireless communications company in the world, with operations in Europe, the U.S., the Middle East, Africa, and Asia Pacific. Its owns a 45% stake in the largest U.S. wireless communications operator, Verizon Wireless.

"Along with its stable Verizon U.S. subscriber base, VOD also owns an interest in the growing base of African subscribers. Vodafone has a 65% stake in South Africa's Vodacom. Vodacom currently has 41.6 million subscribers, but that is expected to grow.

""I especially like dividend-paying stocks in challenging markets. After all, capital gains can ebb and flow, but cash in hand is yours to keep forever.

"Vodafone's dividend yield is approximately 6% at current prices. While other companies are throwing their dividends under the bus, VOD management seems committed to keep the income flowing.

"Vodafone has instituted a 'progressive' dividend policy that boosts the dividend based on rising free cash flows, even if earnings fall.

"And of course because the dividends are first determined in British pounds and then converted to U.S. dollars, a continuation of the U.S. dollar's declining value will boost the payout to U.S. investors."

Powershares US Dollar Bullish (UUP): Alex Green's top ETF for 2010

"When extreme valuations are accompanied by unbridled optimism or abject pessimism, it virtually always marks a turning point – and an opportunity; and this is no exception," says Alex Green, referring to the US dollar.

Here, the senior investment advisor to The Oxford Club and InvestmentU looks to PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP) as a favorite idea for the coming year.

"We all know the dollar is in the cellar right now and also know why it is expected to continue right through the basement floor:

1) Massive budget and trade deficits

2) Ultra-low interest rates. (Zero on the short end.)

3) $59 trillion in unfunded liabilities for Social Security, Medicare and Medicaid.

4) Bernanke conjuring extra trillions out of thin air to buy Treasuries and mortgage- back securities and patch various holes in the U.S. economy.

"There is no reason to believe any of these problems will vanish in the months ahead.

Yet the dollar will soar in 2010. Why? Two reasons:

"First, all of the problems mentioned above are already well recognized and priced into the greenback. Second, dollar psychology is overwhelmingly bearish.

"Just as 10 years ago investors couldn't imagine internet top stocks for 2010 doing anything but soaring higher and five years ago they couldn't imagine real estate doing anything but barreling down the same one-way street, record lows for the dollar are coinciding with enormous confidence that the dollar has nowhere to go but down.

"Commentators seem to forget that all currency values are contingent. You can't just look at fundamentals here. You have to look at them abroad, too. And there isn't much out there right now that's terribly positive.

"In the third quarter, for example, the 16-nation euro-zone grew at a 1.5% annual rate. The U.S economy, by comparison, grew at 3.5%.

"European consumers and most business sectors are still feeling the pain from the deepest recession since the 1930s. The continent is likely to be the weakest region for global expansion next year, according to Julian Callow, chief European economist at Barclays Capital in London.

"The U.K. is no bastion of strength, either. Europe's biggest economy outside the euro zone is still in recession due to overly indebted British households and tight credit. British GDP contracted at an annualized 1.6% in the third quarter.

"How about Japan? It has its own problems. At 172% of gross domestic product, Japan's government debt is by far the largest among rich nations.

"The ratio is expected to reach 200% next year – and hit 300% within a decade. Rising social security costs and the weak economy are the primary culprits.

"The new government there is trying to prevent a double-dip recession by spending even more. But with government debt soaring to records, talk of new stimulus measures is already pushing up long-term rates and threatening to curtail the impact of fresh spending.

"Recognize that Europe and Japan are hardly experiencing heady economic growth and great fiscal probity. Most are bogged down economically and running fiscal deficits as bad as ours.

"And, personally, when the whole world is in this big a mess, I'll take the greenback over the euro, the pound or the yen. My bet is in 2010 so will most world currency investors.

"Virtually no one is expecting it, but the dollar is likely to climb 20% against the euro and the pound next year and 15% against the yen.

"Given that, shares of the PowerShares DB US Dollar Index Bullish ETF will appreciate in price, accordingly.

"Hedging is fine, of course, too. But if you have too much exposure to foreign-currency denominated bonds, CDs or bank accounts, rein it in."

Cleantech: How China Sizzles and U.S. Diddles

2010-02-23T06:35:00.000-08:00

The United States is rarely referred to as a silver-medal nation. But that's exactly what we're becoming with respect to the race for clean energy.

There's been progress on domestic soil to be sure. Installed wind capacity has grown over 900% since 2000. Solar installations have kept similar pace.

But there's an unexpected place where clean technology is being deployed at a more rapid rate. A place often condemned for its perverse pollution; a country often decried as the world's biggest emitter of greenhouse gases (GHGs): China.

Enter the Dragon

As the U.S. continues its polarized debate around cleantech policy — diddling with implementing some type of carbon pricing, a federal renewable energy standard (RES), and a way to streamline large projects — the Chinese have quickly lept to a leadership position in the industry.

In 2006, they passed an RES calling for renewables to comprise 15% of the energy mix by 2020. But Shang Xiaoqiang, vice chairman of the country's National Development and Reform Commission (NRDC), recently said capacity could grow to 20% by that time.

Studies also show that by 2020, China could actually install three times its 30 gigawatt (GW) wind target. And they'll meet their 2020 solar target of 1.8 GW next year.

The U.S. hasn't even set national targets, so meeting or beating them is a moot point.

And when it comes to government investment, the Chinese have long pulled away. Our Recovery Act called for $80 billion to be invested in the sector. China has announced $217 billion for the next five years, and could invest upward of $650 billion in the next decade.

One recent report claimed they're spending $12 million per hour ensuring they emerge on top.

For the U.S., 'losing' could quickly turn into 'lost.' Fortunately for investors, stock exchanges are border agnostic.

The Cleantech Arms Race

In a very real way, democracy is hindering the States' deployment of cleantech assets. The infamous Cape Wind project has been stymied because it'll "ruin the view." Massive utility-scale solar installations in southwestern states have been delayed on behalf of reptiles.

And that's without mentioning the see-sawing in Congress as lobbyists on both sides of the issue wield their well-funded swords. A recent Reuters report succinctly noted:

Beijing's top leaders have made clear their intention to have their nation dominate this new industry, up and down the value ladder. And in their quest for the prize, they are not burdened by concerns facing their Western counterparts — such as the impact of wind turbines on landscapes, higher energy prices for consumers, or investor returns.

Our leaders' inaction has not only delayed development of what could be a trillion-dollar domestic market — not to mention energy independence — but they've forced companies within that market to tread water by providing inconsistent incentives and policy guidance.

The evidence of this is abundant. But the issue really came to the fore when a Chinese company, A-Power Generation (NASDAQ: APWR), was selected to provide turbine parts for a $1.5 billion U.S. stimulus-funded wind farm in Texas.

Politicians on both sides cried foul before A-Power announced it would build a manufacturing facility in the U.S. that will employ 1,000 workers while cranking out parts for wind turbines.

So it's not only difficult for U.S. cleantech companies to get ahead, it's increasingly easier for China-based companies to row their boats ashore.

Made by China

China's laser-like focus on cleantech has thrust them squarely into a global leadership position.

Last year, Chinese companies produced about 50% of the world's solar cells. And that's likely to rise to 70% in the next few years, as costs continue to fall more quickly there than in Europe or the U.S. In fact, firms based in Germany — the cradle of the modern solar industry — have been finding it's cheaper to buy from the Chinese than it is to make their own solar cells.

And they're not just ramping up production; solar installations are also on the upswing. China will meet its 2020 target of 1.8 GW next year, and Greentech Media is forecasting installed solar capacity could actually hit 10 GW in the next decade, implying a 450% expansion.

Wind energy is witnessing a similar scenario. The Global Wind Energy Council (GWEC) has reported that China "doubled its entire installed capacity each year since 2005." Last year, they became the largest wind market in the world, installing 13 GW compared to 10.5 GW in Europe and 9.9 GW in the U.S.

That growth is largely due to a booming Chinese wind manufacturing market. Producers like Sinovel and Goldwind are already top ten globally, and could soon threaten companies like GE and Suzlon that currently inhabit the top five.

The Chinese cleantech production model is so robust that it's now being exported around the globe, in much the same way that other Asian countries have taken automobile manufacturing abroad.

A-Power — the company awarded part of a U.S. stimulus-induced wind project — is already setting up manufacturing on U.S. soil. Yingli Green Energy (NYSE: YGE) has announced plans to build a solar manufacturing facility on U.S. Turf; so has Suntech Power (NYSE: STP).

And, in the most revelatory example of all, the Wall Street Journal has reported that "Duke Energy Corp.(NYSE: DUK) is in talks with State Grid Corp., China's biggest electricity distributor, over a joint venture that may involve cooperating on power transmission lines in the U.S."

While we were distracted by health care, Tea Parties, and executive pay, China quickly pounced on what is proving to be the most vital and valuable industry of the 21^st century. They've mastered the production side and, as the Duke example highlights, they're moving on transmission as well.

Our energy assets of tomorrow may not be made in China, but it looks like they'll made by China. And, as you can imagine, Chinese cleantech success is also apparent in public markets.

Rated to Outperform

Here in the States, First Solar (NASDAQ: FSLR) is by far the most recognizable solar name. The company still boasts one of the lowest costs per watt and highest efficiencies for thin film solar. But First Solar, too, is losing ground as Chinese firms continue making inroads. The best stock to buy is down nearly $200 from its 2008 high over $300.

The same holds true for Germany's Q-Cells, one of the largest solar cell producers in the world. The growing Chinese advantage in both cost and scale have led to a huge discrepancy in prices for top stocks that share the same peer group, as companies like Trina Solar (NYSE: TSL) and Canadian Solar (NASDAQ: CSIQ) have pulled investors away from traditional solar stocks.

That trend is being mirrored in the wind industry, where protectionism has forced billion-dollar development costs to remain on the balance sheets of Chinese companies. Though industry stalwarts like Vestas (COP: VWS) and Gamesa (MCE: GAM) are knocking hard on the door, failure to penetrate the Chinese market has caused investors to look elsewhere for wind-blown returns.

Most analysts and industry insiders — myself included — don't see this trend abating anytime soon. Feed-in tariff (FiT) cuts for cleantech in Europe, though a sign of industry maturation, are driving sales higher in China as installers race to buy turbines and panels at the lowest cost before subsidies are cut later this year.

And the lack of long-term policy guidance in the U.S. is forcing cleantech companies here into a holding pattern, hesitant to invest in new manufacturing capacity or asset deployment with uncertainties still rampant with respect to the tax code and incentives. With price parity still not reached, renewable energy developers sometimes don't even know if there will be an end buyer for their electricity.

China, on the other hand, passed a law last year requiring grid operators to buy all the electricity produced by renewable resources. What's more, the Chinese cost advantage is leading to rebranding, wherein a company like GE buys solar panels from a second-tier Chinese company and sells them as their own.

This is paving the way for many companies you've never heard of to emerge as global players. Yingli, JA Solar (NASDAQ: JASO), Renesola (NYSE: SOL) and others are already becoming household names. Yingli is even sponsoring this year's FIFA World Cup.

The initial public offering (IPO) market is also flooded with Chinese entrants. Blade maker HT Blade, polysilicon producer Daqo, and wafer maker JinkoSolar have all already filed.

Indeed, it looks like the global cleantech game will be dominated by Chinese players for the foreseeable future. And that's a vast departure from standard practice, where China has typically trailed European and U.S. companies in entering nascent industries.

In a recent talk at an industry conference in Washington D.C., President of GCL Solar Energy Hunter Jiang didn't mince words about his country's position. His company is now the third largest producer of polysilicon in the world. After ruminating on China's laggard position throughout modern history's industrial revolutions and commenting on how automobiles and computers were cradled elsewhere, he said, "Today we are the leader."

Gates' Next Billion-Dollar Power Play

2010-02-23T02:35:00.000-08:00

The rich get richer.

That phrase has entered our common diction for a reason: by and large, it holds true.

You see, the rich aren't just good at staying rich — hoarding assets, beating the tax code — but they're also good at creative financial thinking. If financial planning were a chess game, the rich would always be thinking several moves ahead.

Case in point: Bill Gates.

Even in his younger days, Gates knew how turn a dollar. In eighth grade, he used proceeds from a yard sale to buy a precursor to the modern computer: an 8-bit ASR-33 made by Teletype. You know the rest of the story...

But here's the thing about the rich: their frame of mind never changes. It's always about the next big thing — identifying the next mega market trend before anyone else.

Right now, Gates is at it again. And you might be surprised to learn the market he's after.

Gates' Stealth Company

Of course, you know about Microsoft's success because of its immense public presence. But the rich are good at hiding things — be it lumps of cash in offshore havens or big ideas in the works.

So I'm guessing you've never heard of Intellectual Ventures, which BusinessWeek calls Gates' "innovation/invention incubation outfit."

This time, Gates is working on what he refers to as an energy miracle, incubating a company called Terrapower. The company's website boasts that "a wave of fission moving slowly through a fuel core could generate a billion watts of electricity continuously for well over 50 to 100 years without refueling."

Put simply, Gates is looking to build a nuclear plant that uses natural or depleted uranium.

Can it happen? That's yet to be seen. By its own admission, Terrapower says any such plant wouldn't come online until the "early 2020s." Still, I pass this tidbit along not for its energy implications, but for the investment philosophy behind it.

Ahead of the Nuclear Curve

Gates is clearly able to assess the long-term writing on the wall.

He was funding Terrapower long before nuclear energy made its way back into the limelight. He knew nuclear energy had to make a resurgence if we're ever to truly enjoy energy independence and reduce our emissions.

He was thinking several chess moves ahead.

And look what's happening now...

Obama just called for a "new generation" of nuclear power plants to be built in the United States and has requested $54 billion in his budget to get them started.

Just this week, the Wall Street Journal reported, "The Department of Energy (DoE) is awarding the first conditional loan guarantee for a new nuclear power plant in the U.S. to Southern Co.'s Vogtle plant in Georgia."

Think Like the Rich Form Top Stocks

So here's your opportunity to think like a rich investor, because it's unlikely you're able to fund a nuclear start-up like Gates can.

For starters, you'll want to look at the next companies in line for nuclear loan guarantees... like the one just awarded to Southern Co. (NYSE: SO).

According to DoE filings, Scana Corp. (NYSE: SCG), Constellation Energy (NYSE: CEG), and NRG Energy (NYSE: NGR) are next on the list.

But there's an even better way to think like a billionaire investor — by capitalizing on the one thing every new and existing nuclear power plant needs, regardless of who builds them: fuel.

By investing in nuclear fuel, you gain exposure to the entire industry and all of its coming growth.

Now, the standard names are already out there. Cameco (NYSE: CCJ) is the obvious choice. But to truly think like the rich, you have to think outside the box.

And there's a company doing just that. It's making a nuclear fuel additive that allows 25% more energy to be extracted from existing nuclear fuel. Even better, it absorbs much more heat, preventing meltdowns from happening ever again.

It's truly a few steps ahead. This company is already lining up massive sales contracts. It'll be common knowledge soon — but right now, it's still being "incubated," as Gates would say.

The company is public and you can buy shares now.

Top Stocks For 2011

2010-02-22T06:26:00.000-08:00

Looking for a shopping list of new top stock ideas for 2011? Each year for 27 years, TheStockAdvisors.com has turned to the nation's most respected and well-known newsletter advisors and asked them for their single favorite stock or fund ideas for the coming 12 months.