Stock Tips Investment

Wednesday, June 19, 2013

The Bull is on the Move, Especially in Small Caps

"TUESDAY" production sign (Photo credit: Vaguely Artistic)

The Russell 2000 broke from a two-month consolidation and ran to a new high

By Sam Collins, InvestorPlace Chief Technical Analyst

New York, Jun.19, stock advice .- The Dow industrials had their second triple-digit up day on Tuesday, and the other major averages closed higher as well. The press attributed the gains to the expectations of positive comments about U.S. economic growth at today’s Fed policy meeting.

In the past, however, such talk of economic growth was coupled with reducing Fed stimulation, and the word “taper” is now being applied to the process. In the past, any hint of a scaling back of quantitative easing has resulted in a market sell-off. Investors want to know what makes “taper” different from “a gradual cutback” in the purchase of bonds by the Fed.

Small-cap stocks were the focus of buyers on Tuesday. The Russell 2000 small-cap index rose to a new high, up 1.2% versus the Dow industrials’ 0.9% gain.

At the close, the Dow Jones Industrial Average gained 138 points at 15,318, the S&P 500 rose 13 points to 1,652, and the Nasdaq jumped 30 points to 3,482. The NYSE traded 646 million shares and the Nasdaq crossed 371 million. On both the Big Board and Nasdaq advancers outpaced decliners by over 2-to-1.

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The chart of the Russell 2000 shows focused buying directed at the small-cap stocks. The break from a two-month consolidation from March to May resulted in a run to an intraday high of over 1,000 on May 22.

But talk of a Fed cutback in their monthly bond purchase plan reversed the advance with a Key Reversal Day (see May 23 Daily Market Outlook). This is usually a negative development; however, instead of a sell-off, buyers have formed an inverse head-and-shoulders with a neckline at about 1,003.

Our internal indicator, the Collins-Bollinger Reversal (CBR), has issued two buy signals, and the well-regarded MACD appears on the verge of triggering a buy signal as well.

Conclusion: Should the Russell 2000 close above the neckline of the inverse head-and-shoulders formation at 1,003, the target for the index would be 1,042 and the rush to buy small caps would be on.

But investors should also be impressed with the broad-based advance represented by the other indices. On Monday, each of the major indices closed above their respective 20-day moving averages, which during all of June has marked the top of a very narrow trading range.

The bull is on the move, apparently nudged along by the word “taper,” which means, “a gradual cutting back.” The wording of today’s Fed announcement will be examined as thoroughly as Alan Greenspan’s famous warning in the 1990s of “irrational exuberance.” Perhaps we may even get a definition of the term as applied to Fed policy. ...

How to Play the Fed's New “Tapering” Policy

The Snowball: Warren Buffett and the Business of Life (Photo credit: Wikipedia)

By Investment U

Washington, Jun.19, online stock trading .- It's amazing just how often - and how effectively - the media and its various talking heads get investors to take their eye off the ball. (In case you don't play golf or baseball, taking your eye off the ball causes anything from a shank to a whiff.)

Right now, for instance, the topic du jour is "When will the Fed begin ‘tapering' its bond-buying program and how should I play it?"

It's a big, fat softball of a question for stock market "analysts" who like to show off how much they know while simultaneously revealing that they don't have a clue what successful investing is really about.

Hot Air

On one side you have the serious "experts" who insist the economy is too weak and the recovery too fragile for the Fed to pull the plug on its quantitative easing program (QE3). They use this as a rationale for staying invested in equities (and often bonds too).

On the other side you have experts with equally furrowed brows who believe the recovery is gaining traction and so the Fed will begin tapering sooner than expected. This is why, they say, the stock market will soon sell off.

But let's consider both sides for a moment.

Does anyone really know what the Fed is going to do and when? Of course not. So this isn't analysis. It's guessing.

And do you really want to risk your hard-earned capital on some talking head's hunch about the unknowable?

My guess is no.

Yet I know investors and traders who spend countless hours listening to this drivel on CNBC and its sister stations.

The odd thing is they invested equal time a few months ago pondering the myriad investment implications of the "fiscal cliff," something that turned out to be a complete nonevent. However, it was a big success for the media outlets that love to hype buzzwords - "fiscal cliff," "the sequester," "Y2K", etc. - to alarm and attract viewers and satisfy advertisers.

Slicing the Pie

In short, if you're devoting your limited time on this little blue ball to Bravo Sierra like this, you're patronizing businesses that are playing you for a fool.

So what should serious investors be focused on instead? If you are a long-term investor - and you should be if you aren't eyeing the actuarial tables and spending down your nest egg - you should be most concerned about your asset allocation. This is how you divide your portfolio between various asset classes like stocks, bonds, real estate investment trusts, TIPS, etc.

Your asset allocation is the primary determinant of your long-term investment returns and is your single most important investment decision.

If you are a short-term trader, you should be seeking public companies with good (and protectable) margins, growing market share and rising earnings that are likely to beat consensus expectations in the months ahead. (Beating expectations - whatever they happen to be - is the primary driver of short-term share price appreciation.)

How about Fed policy... where does it fit in? That's just it, it doesn't.

Listen to the greatest investor of all time, Warren Buffett. More than two decades ago he told the world, "If Fed Chairman Alan Greenspan were to whisper to me what his monetary policy was going to be over the next two years, it wouldn't change one thing I do."

So turn off CNBC. If you haven't noticed, it's summer outside..

The No. 1 Ranked StreetAuthority Stock Is...

(Photo credit: Wikipedia)

By StreetAuthority

Boston, Jun.19, national stock exchange .- In the more than 10 years StreetAuthority has been in business, we've never come across a trading system that's got this much potential.

In preparation for the inaugural issue of the advisory Maximum Profit, StreetAuthority's latest investment advisory, Michael J. Carr took a close look at all the holdings in all of StreetAuthority's newsletters -- more than 130 stocks, partnerships and trusts across 10 portfolios.

The mission was to discover the No. 1 ranked stock -- the stock that had the most potential for capital appreciation in the current climate -- from a group of fundamentally strong holdings that had already been vetted by the StreetAuthority experts.

Of the dozens of choices, which single pick would rise to the top? Which stock would show the greatest momentum and value in the current environment? Which current StreetAuthority holding would rank highest in Mike's all-important combined indicators of relative strength and cash-flow growth?

It turns out the No. 1 ranked stock as of last week was actually nearly five years in the making.

In the fall of 2008, StreetAuthority's stock market strategists liked what they saw in a tiny aircraft leasing company based in Ireland.

Major global markets were in free fall at the time. However, this company was doing the lion's share of its business in some of the larger emerging markets such as China, India, Russia and Mexico, which were continuing to grow.

Moreover, according to High-Yield PRO, leasing companies stood to benefit from rising demand for used aircraft, as airlines sought to contain costs in a beleaguered environment.

On Monday, October 20, 2008, FLY Leasing (NYSE: FLY) -- then known as Babcock & Brown Air -- was added to the High-Yield PRO portfolio at $8.03 a share.

Fast-forward five years...

By today, FLY's share price had more than doubled to $16.45. Including dividends, FLY's total return amounted to 155.3%, nearly twice the total return of the S&P 500 during the same span.

Over the past half-decade, FLY's sales have risen an average of 67% a year. Earnings growth has averaged 11% a year during that time. And free cash flow increased an average of 21.8% annually (180% in the past year alone).

It was that last metric -- cash-flow growth -- in combination with a strong relative strength reading that catapulted FLY to the top of the rankings.

That's not all Mike liked about FLY Leasing:
"FLY is currently yielding 5.4%. As I pointed out last week, my system doesn't specifically look for income stocks, but nearly a third of the stocks that are potential buys currently have a yield of greater than 4%. More than two-thirds of the stocks I look at pay a dividend.

FLY is also a value stock. FLY trades at a nearly 20% discount to its $20 book value. It's also likely that the book value actually understates what the company could sell its assets for. FLY has consistently sold its aircraft at the end of leases for more than 120% of their book value."

Recently, Mike issued a buy recommendation on FLY Leasing, based on the No. 1 ranking. Since then FLY has outperformed the broader market by 3 percentage points.

Every two weeks in Maximum Profit, Mike will rank all the stocks in all the StreetAuthority portfolios -- proven winners that show the strongest potential at that moment in time. Mike's next pick will be revealed to his subscribers on Thursday after the market closes. ...

This Pizza Chain Is Riding Technology To Double-Digit Gains

Domino's Pizza in Panaji‎, Goa, India (Photo credit: Wikipedia)

By StreetAuthority

New York, Jun.19, investment opportunities .- When you think of pizza, you don't often think of technology. But Domino's Pizza (NYSE: DPZ), one of America's largest pizza chains, has combined the two into a formula for success.

Until 2010, the stock struggled to break $15 as revenue and earnings growth were sluggish. But between 2010 and the end of 2012, earnings accelerated almost 32%, going from $1.45 to $1.91 in the three-year period. The stock responded with a vengeance, up nearly 500% since the summer of 2010.

The earnings and share price acceleration can be attributed to several factors: successful advertising campaigns, a tastier pizza recipe and international expansion, but perhaps most importantly, technology -- specifically digital ordering technology.

In many ways, Domino's is revolutionizing the way pizza is ordered and delivered. Want a steaming-hot pizza? No need to pick up the phone and speak to a person to place an order. Now there's an app for that.

In 2011, Domino's created an app to order a pizza through an Apple (Nasdaq: AAPL) iPhone. Ayear later, it followed with an app built forGoogle's (Nasdaq: GOOG) Android platform and Amazon.com's (Nasdaq: AMZN) Kindle Fire. And just this month, the company launched its newest voice-activated ordering app for Windows 8 smartphones. With the addition of this newest app, Domino's pizza can now be ordered on nearly 95% of all smartphones in the U.S.

Last year, Domino's made more than $2 billion globally from digital sales -- making it one of the world's leading technology-driven brands. In fact, the pizza chain's mobile and online ordering systems brought in 30% of all revenue in 2012.

During the first quarter of 2013, digital ordering accounted for more than 35% of sales. According to Domino's CEO, Patrick Doyle, digital ordering -- through online and mobile platforms -- will likely account for 50% of all orders in the coming years.

Domino's is driving digital applications even further. In the future, the company may have drone helicopters replace pizza delivery drivers. This could even be a reality in the next several years, as soon as unmanned autonomous vehicles (UAVs) are approved for commercial operation.

These innovative technological solutions are helping push Domino's stock higher.

Since June 2010, when shares hit a low near $10, they have been on a major uptrend surging nearly 500% to date.

After touching a high near $42 in March 2012, DPZ retreated to a bottom around $28 in June 2012, but quickly bounced back, forming an accelerated uptrend line.

During the June 10 trading week, shares touched an all-time high above $61 and show no sign of slowing. DPZ is currently trading above the accelerated uptrend line.

A small shelf of old resistance, now new support, rests around the $53 level. As long as shares can stay above $53, they should continue to move higher. With no historical resistance in sight, DPZ could rise further. The next logical target is $70, a round number where the shares may hit new resistance.

The bullish technical outlook is supported by strong fundamentals. For the upcoming second quarter, scheduled to be reported July 23, analysts expect increased digital sales will push revenue up 7.7%, to $405.2 million, compared with the same quarter last year.

For this year, analysts anticipate increased global demand, coupled with wider adoption of digital ordering technology, will help revenue climb 6.6%, to $1.79 billion.

The earnings outlook is equally bright. For the upcoming second quarter, analysts anticipate increased sales volume will cause earnings to rise 19%, to 56 cents a share. And analysts expect full-year 2013 earnings will clock in at $2.40 per share, also a 19% increase.

In addition to a strong fundamental outlook, the stock has a forward annual dividend yield of 1.3% (80 cents per share).

Risks to consider: Domino's has emerged as a leader in digital ordering technology. However, as competitors adopt similar technologies, Domino's sales could suffer. Traders should keep an eye on the competitive response of other pizza delivery chains.

Action to Take -->

-- Buy DPZ at the market price.

-- Set stop-loss at $52.98, just below a small shelf of support.

-- Set initial price target at $69.98 for a potential 17% gain by Sept. 30..

“How to Cure a Poisoned Economy”

English: Paul Volcker, former head of the Federal Reserve Board . (Photo credit: Wikipedia)

By The Daily Reckoning

Chicago, Jun.19, hot stocks .- When I became chairman of the Federal Reserve, there was a general feeling in this country that economic affairs, and inflation in particular, had reached a kind of crisis point. Things were not going very well. There was a feeling of uncertainty. There was a lot of speculation in commodities and the gold price, which was then free to fluctuate up to $800 an ounce. In an odd kind of way, that's a good time to step into a job because people thought that something needed to be done. The mood of the country was willing to accept action, which 10 years earlier they wouldn't have been willing to accept. And once we got caught up in an anti-inflationary effort, there was a certain willingness to take very high interest rates and eventually a rather severe recession, with the hope and expectations that things would get better. And if we could restore any sense of stability in the currency, the country would be better off as long as we sustained that phase. There was a lot of opposition and concern, understandably. It was a bad recession, but there was this underlying core that the country had not been on the right path economically and that it needed to be shaken up in order to restore stability. And that faith sustained the country. It was a situation where a stronger approach was acceptable. And although it was controversial, there was a basic core of support and willingness to do it. I repeat it all the time: Don't let inflation get out of control and build a kind of momentum. If that happens, we will all find ourselves back in the days of stagflation and unacceptable economic performance. Right now we are in a very difficult circumstance. We are in a financial world with lots of excess spending and lending. These many excesses put a lot of pressure on economic institutions. The question becomes how much pressure will they put on the economy as a whole? In the past 20 years, we have had a very good run of economic activity and a lot of success in the financial world. But now we have reached a point of excess, maladjustments and tensions. Correcting them is going to be a little bit painful.
The period beginning in the mid- to early 1990s has been one of remarkable success and leadership in the world economy by the United States. But a lot of things have contributed to it. Price stability, which has been characterized with higher stock prices or lower interest rates, is one factor that has contributed to that success. Following a period of low productivity growth in the United States, the explosion of high-tech industries and high productivity in the 1990s also led to broader economic policies. One crucial occurrence was during the Clinton administration. The movement toward a balanced budget was something that this country had not seen for a long time, and there was this worry that we would be so successful in running budget surpluses that the national debt would disappear in a few years. It was an indication of a sense of financial discipline that hadn't existed earlier. Now that has been eroded. In recent years, we had a small recession, which grew out of the excesses of the high-tech era and the extremely high stock prices for Silicon Valley-type firms. I'm afraid budget deficits, which to some degree are certainly tolerable and manageable in the light of the economic situation, will get us back in the habit of running deficits as a matter of course. And of course, the big problem for this country fiscally is a need for more spending -- an inherent need for more spending in Social Security, Medicare and other areas. That spending presents a very large fiscal challenge in coming years. It's not here right now, but we'll see whether a democracy can deal with an obvious problem that's going to be present in not too many years; and the earlier we take action to deal with it, the better. But are we going to take action or not? That's the crucial issue. There will be all kinds of consequences and uncertainty if we don't deal with these problems. Letting inflation get a little bit out of control and not dealing with economic problems effectively in the '70s led to a very uncomfortable crisis. We don't want to have to go through big recessions again to teach people fiscal responsibility. Instead, we should anticipate what needs to be done while maintaining the growth of the economy. And the threat will always be an unstable economy and an unstable currency. And that's not just destructive to economic life. It can be destructive to America's position in the world. Regards, Paul Volcker for The Daily Reckoning

Tuesday, June 18, 2013

Why You Shouldn’t Heed Calls of a Market Top

Dow Jones 2006 (Photo credit: caseorganic)

Some well-respected technicians are calling for a breakdown, but I see the market building a bullish base

By Sam Collins, InvestorPlace Chief Technical Analyst

New York, Jun.19, hot stock picks .- A volatile session Monday ended with a triple-digit gain for the Dow industrials despite a scary dip that occurred in the afternoon. The Dow fell 140 points at 1 p.m. following a Financial Times story that said Fed Chairman Ben Bernanke would most likely discuss “tapering at his Wednesday press conference.” The story was later softened and the markets rebounded to close with gains. Better-than-expected results from the housing market also contributed to the late advance.

At Monday’s close, the Dow Jones Industrial Average was up 110 points at 15,180, the S&P 500 gained 12 points at 1,639, and the Nasdaq rose 29 points to 3,452. The NYSE traded 679 million shares and the Nasdaq crossed 383 million. Advancers led decliners by about 2-to-1 on both exchanges.

Click to Enlarge

The Dow industrials are still trading in the narrow range between the 50-day moving average at 15,003 and the 20-day moving average at 15,212. The index is also supported by its intermediate trendline at about Monday’s low of 15,079. Internal indicator MACD is close to a buy signal.

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Like the industrials, the transports are in a bull market with intermediate trendline support — at about 6,200. It is also trading in the space between its 50-day and 20-day moving averages (6,249 to 6,331). Its MACD indicator is also close to a buy signal.

Conclusion: On Monday, Jeffrey Saut, of Raymond James, pointed out that he doesn’t believe that anyone can consistently “time” the stock market. But Saut does believe that the Dow Theory, for the primary trend of the market, is like a “roadmap.” He points out that it gave a sell signal in September 1999, a buy signal in June 2003, a sell signal in November 2007, and a buy signal earlier this year that remains in force.

The Dow Theory, though not perfect, has had a remarkable record of calling tops and bottoms. Combined with our own 17-month moving average chart, which I include at the end of each month, a strategy can be implemented that could provide investors with superb long-term gains.

But Saut, along with other technicians, thinks that “we are in a short/intermediate topping process. The timing models that have worked so well year to date targeted June 11/12th as the days that a feint to the downside would start.”

I have always respected Saut’s opinion but would advise our readers not to anticipate this breakdown. The market is building a base that looks bullish. Unless the 50-day moving averages and the intermediate trendlines are broken, we should remain bullish. Mr. Market will tell us of his next move, and I believe it will be up but will extend the current base through the summer..

'Bernanke-Proof' Your Portfolio With These Dividend Growers

Stock II (Photo credit: hawkexpress)

By Street Authority

New York, Jun.18, free stocks .- Will interest rates continue their recent ascent?

If so, many investors will come to question the wisdom of holding dividend-paying stocks. After all, bondsand CDs are virtually riskless, and if they sport more attractive yields, why bother with riskier stocks?

The simple reason: Interest rates (such as on the 10-year Treasury note) are unlikely to move past 4%,as I noted recently.

Any stock with a yield above that threshold should still hold appeal -- as long as that dividend doesn't look vulnerable to a reduction or elimination in a changing economic environment.

Yet there is a whole different type of income-producing stocks that fail to meet that 4% yield threshold but should still hold great appeal. These are the stocks with fairly low yields right now but look poised for robust growth, which should set the stage for future yields well above 4%, using today's prices as abasis.

Notes From The Guru
Over the past six months, I've been eagerly awaiting the latest newsletter issues from my colleague Amy Calistri, author of StreetAuthority's Daily Paycheck. Amy has been spelling out a game plan for how to deal with the inevitable rise in interest rates that may now be underway, helping readers to separate winners from losers in a higher-rate environment.

In her most recent issue to subscribers, Amy focuses on an exchange-traded fund (ETF) that should fare quite well, even as rates rise higher. The current yield on this ETF is around 3.5%, which is below the 4% level I noted earlier.

Yet here's the rub: This ETF is chock-full of companies that are boosting their dividends at a fast pace, and a 3.5% yield today could easily morph into a 5% yield in a few years and a 7% or 8% yield in half a decade.

The combination of solid current and future dividend streams and potentially robust priceappreciation makes me think Amy has delivered another winning pick to her subscribers.

There's another reason to focus on dividend growth: "Companies with a long history of dividend growth display high returns on equity (ROE)," according to WisdomTree's head of research, Jeremy Schwartz. The data bear that out: The companies in the widely followed NASDAQ US Dividend Achievers Index had a 22% annual ROE over the past 10 years, according to Schwartz, compared with 13% annual ROE for all companies in the S&P 500.

Other Options
I can't share Amy's dividend growth-oriented ETF pick, as that would be unfair to her current subscribers, but I can share some similar investing options that capitalize on this theme.

WisdomTree -- which has pursued the dividend angle for a number of years with funds such asWisdomTree Emerging Markets SmallCap Dividend ETF (NYSE: DGS) and the WisdomTree LargeCap Dividend ETF (NYSE: DLN) -- recently pursued the growth angle with a newly launched ETF, the WisdomTree U.S. Dividend Growth ETF (Nasdaq: DGRW).

This fund uses an index-based approach to select the top companies in a 1,330-stock universe in termsof dividend growth, sustainability of those dividends (in terms of a payout ratio above 1.0) and current yield. Tech stocks represent the largest weighting of any sector, at around 20%.

And that makes sense: The number of dividend-paying technology firms in the S&P 500 has shot up by one-third since 2010, according to S&P Capital IQ's Scott Kessler, who runs that firm's technology research department. "You need to think about the tech sector as being uniquely positioned for robust dividend growth in the years ahead," he adds. (Here's a hint: Amy Calistri's newsletter readers are well aware of that looming trend.) Along with tech, industrials, consumer discretionary stocks and consumer cyclical stocks are the primary focus.

My primary complaint with this fund is that it is focused only on large firms (each component has a market value of at least $2 billion). Smaller companies are often capable of even more robust dividend growth as they can tend to be earlier in their life cycle.

There is the WisdomTree SmallCap Dividend ETF (NYSE: DES), but this doesn't really have the dividend growth orientation that we're talking about. The fund's 0.28% expense ratio is respectable, but cheaper options are available. (Note that according to recent filings, Wisdom Tree indeed appears to be poised to launch a small-cap version of the dividend growth ETF.)

The Vanguard Option
For the ultra-low-cost approach, check out the Vanguard Dividend Appreciation ETF (NYSE: VIG), which owns companies with a history of 10 straight years of dividend growth. This approach brings two small drawbacks.

First, any companies that were forced to reduce or eliminate their dividend during the financial crisis of 2008 won't be here, even though a number of these companies are now back on track with solid divided boosts.

Second, it ignores the wide variety of tech stocks that only began paying dividends in recent years. For example, Apple (Nasdaq: AAPL) won't be in this fund for another decade.

Still, the Vanguard fund has real strengths. In giving the fund a five-star rating, Morningstar analystsnoted: "Whereas many dividend-focused funds concentrate in smaller value companies, this fund shades slightly toward growth. VIG is a great choice for a core allocation."

Moreover, like many Vanguard funds, the 0.13% expense ratio is quite pleasing, so your long-term gainswon't be diverted away to the fund company's coffers.

The PowerShares Dividend Achievers ETF (NYSE: PFM) and the First Trust Morningstar Dividend Leaders Index (NYSE: FDL) have a similar focus to the Vanguard fund, though they carry higher expense ratios of 0.60%, and 0.45%, respectively.

Risks to Consider: Dividend growers should relatively greater appeal than companies and funds that have limited growth prospects, but all equity-based income producers may sell off if fixed-income rates move sharply higher.

Action to Take --> Though rates are coming up off of generational lows, they are unlikely to rise much higher, killing the dividend party. Instead, assume a moderate move up in rates over time that still leaves plenty of room for robust dividend growers in your portfolio as well. ...

Benjamin Graham Was A Crappy Hedge Fund Manager

Jack Bogle, the outspoken godfather of index funds and passive investing strategies, didn't approve of a recent Wall Street Journal article defending hedge funds.

In particular, he took issue with the author's reference to Benjamin Graham, the legendary Columbia finance professor who literally wrote the book on Security Analysis and mentored Warren Buffett.

Bogle wrote a letter to the editor. Here's an excerpt: Citing Benjamin Graham as the first "hedged fund" operator is an especially unfortunate example. "The trick," Mr. Rice writes, was Graham's "clever way to make money . . . whether it [the market] continued to rise, or started to fall." ...

Proposal for New Hedge Fund Fee Structure: 1% + 33% of Alpha

By The Big Picture

One of my pet peeves is the way that insiders -- whether corporate CEOs, hedge fund managers, or elected politicos -- capture compensation (or credit) for normal cyclical gains they had little or nothing to do with.

This is the approach favored by the Crony Capitalists — those people pretending to be free market participants, and who merely pretend to be creating value. They are taking credit for structural successes that would have occurred with or without them. What they are actually doing is capturing value, not creating it — and then transferring it from its true owners (shareholders/investors) to themselves.

This is wrong; it is legalized theft.

If you want to see a good example of how CEOs transfer shareholder wealth to themselves, a good place to start is Roger Lowenstein’s 2004 book, Origins of the Crash: The Great Bubble and Its Undoing. The section on CEO compensation is astounding; these guys were essentially getting wildly overcompensated for being CEOs during a bull market. The prime example was the CEO of Heinz, who gave himself (with the tacit approval of his Board of~~Crony~~ Directors) a $90 million bonus. And this was back in the early 1990s, when $90 million was real money.

Why Do You Want To Be A Hedge Fund Investor?

www.ritholtz.com

Earlier this year, Goldman Sachs Asset Management announced that it would launch a new mutual fund that — apparently — will bring the joy of hedge fund investing to the masses. For as little as $1,000, the Multi-Manager Alternatives Fund (GMAMX) allows mom-and-pop investors to put their life savings into some of Wall Street’s riskiest and most expensive products. This “fund of funds” will, according to its prospectus, let investors gain exposure to the trading strategies of hedge funds...

Public pensions fare well with hedge funds

Big public pension funds reaped strong returns from their hedge fund portfolios in 2012, with most of them handily surpassing their own benchmarks and well-used industry indexes. The hedge fund portfolios, for the most part, achieved close to what chief investment officers wanted, despite a 1,500-basis-point difference between the best and worst performers, according toPensions & Investments' analysis of the returns of 19 hedge fund portfolios from 17 U.S. public retirement plans with aggregate hedge fund assets of $60.7 billion.

Daniel Loeb surfing to the top of the hedge fund charts again

Something must be in the water over at 399 Park Avenue, where Daniel Loeb's hedge fund Third Point is headquartered. His Third Point Ultra fund has already gained 12.42 percent this year through the 13th of March, according to data from HSBC’s Private Bank.

The portfolio added 3.3 percent alone between March 1 and March 13. By comparison, hedge funds have returned about 4 percent year-to-date, according to HSBC.

The roughly $1.7 billion Ultra portfolio is a levered version of the firm’s flagship Offshore fund, which manages about $5.7 billion and has gained 8.5 percent over the same period. ...

CHART: Hedge Fund Gold Allocation Falls

After taking a cursory look at the recent 13-Fs filed by hedge funds, it became apparent that hedge funds were scaling back their exposures to gold. George Soros was among the big names that unloaded his position. According to Goldman Sachs' new Hedge Fund Trend Monitor report, hedge funds in aggregate scaled back big time.

Despite low turnover, hedge funds notably reduced holdings of underperforming long-time favorites Apple and gold while raising allocations to rallying Financials. For the first time in three years AAPL was not the top stock in our VIP list, instead ranking as the third most frequent top-10 holding... Continue to read.

10 Publicly Traded Hedge Funds That Pay a Dividend
Investing in publicly traded hedge funds is a great way for an investor to see returns through capital appreciation and dividend payments in the financial sector. When it comes to investing, many think of the process as a choice between growth and value stocks; you’re either taking on risk in search of capital appreciation, or you’re seeking out stable sources of current income through dividend payments. Luckily, Wall Street has many investment options and investors don’t have to make a clear-cut choice between capital gains and dividends. There are a lot of misunderstandings about dividend stocks out there; make sure you’re investing for the right reasons, check out 5 Common Misconceptions About Dividend Investing. ... Continue.

Hedge Funds Love These 3 Outperforming Semiconductor Stocks ...
Do you like to follow the buying trends of smart money investors? We ran a screen to find semiconductor stocks currently in favor by hedge fund managers. We began by screening the semiconductor industry for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages, indicating that these stocks have strong upward momentum.
We then screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. ... Continue.

10 REITs Absolutely Adored By Hedge Funds
After identifying the most popular stocks among hedge funds (see our full Top 10 here) according to their third-quarter 13F filings, we have decided to break down the top 10 REIT stocks that hedge funds love. The REIT industry, notably specialized REITs in hospitality and healthcare, should see positive growth from a rise in job growth and expansion due to freeing up of the credit markets. Our list includes 400 hedge funds and prominent investors that are required by the SEC to disclose their public equity holdings quarterly. In descending order, we have outlined the most-loved REIT stocks based on the aggregate number of funds owning each. ...Continue.

Apple Stock Hit by Panic Selling: 'Someone Yelled Fire'(Yahoo) Forget the "fiscal cliff." The real panic on Wall Street is over Apple's stock. Nearly every mutual and hedge fund has piled into Apple Inc. (NASDAQ:AAPL) during its spectacular rise over the past few years. Now, these same funds are scrambling for the exits as the stock goes through an equally spectacular decline. Apple plunged to a six-month low Thursday as funds rushed to take profits on the stock before it's too late. Shares are now off 25 percent since late September-shortly after the iPhone 5 launch and a month before the iPad Mini introduction. The stock, once up 74 percent on the year, is still up 30 percent for 2012. That's why Wall Street is getting out while it can. ...

Billionaire George Soros’s Latest Stock Picks (InsiderMonkey) George Soros is best known for the fortune he made shorting the British pound in 1992, but he currently invests a considerable amount of money in equities and so is required to report many of his long positions in 13F filings. We’ve gone through the 13F for the third quarter of the year and compared Soros’s holdings at the end of September to three months earlier. Read on for our impression of his moves and compare them to what he's bought and sold before. AIG. American International Group, Inc. (NYSE::AIG) became Soros’s largest 13F equity holding during the third quarter with a position of over 15 million shares being reported in the filing. A number of value investors have been getting into the insurer over the course of the year, and at a P/B ratio of 0.5 it certainly looks cheap compared to the book value of its equity. We also like its earnings multiples- it trades at 9 times forward earnings estimates- and revenue was up strongly in the third quarter compared to the same period in 2011. Fellow billionaire Dan Loeb had initiated a position during the second quarter of 2012 and we think that it still looks like a good buy for investors. ...

Duke Energy CEO Jim Rogers still facing issues as tough year nears an end (BizJournals) In late 2011, Jim Rogers seemed almost golden. He was about to close his last big merger deal. He was poised to take a corporate chairmanship tailored to his penchants for energy policy and reshaping the utility-business model. He was ready to bask in the spotlight of a national convention he’d helped bring to Charlotte. But by late 2012, it’s evident things have not gone so well. “It has been a year of challenges,” the Duke Energy Corp. chief executive concedes. “Nothing in life is perfect.” Dan Fogel, associate director of the Wake Forest University Business School’s Center for Energy, ...

Argo unveils emerging markets hedge fund (InvestmentWeek) Argo Group has launched an emerging markets hedge fund investing in bonds and currencies from a universe of over 40 emerging market countries. The Argo Local Markets fund aims to hold between 20 and 30 positions and has been launched with an initial $7m of seed capital. It will offer investors weekly liquidity and has a mandate to take on moderate leverage. Argo chief executive Kyriakos Rialas said: "The case for investing in emerging markets is compelling. ...

Argentina's President Is Making Great Political Theater Out Of Paul Singer Seizing The Country's Naval Ship(BusinessInsider) Cristina Fernandez de Kirchner is turning her feud with hedge fund manager Paul Singer into a political rallying cry in Argentina. The President has refused to pay Singer's firm Elliott Management the $1.3 billion it owes the fund after it defaulted in 2010. de Kirchner says it's because Singer was given multiple chances (in 2005 and 2010) to restructure, like other hedge funds did, and take a haircut to recoup at least a portion of their losses. Singer, needless to say, did not. Instead, he decided to capture one of Argentina's naval vessels as collateral, and got Ghana to give him an order to detain the ARA Libertad last month. ...

Tom Steyer New Investments
FARALLON CAPITAL Hedge fund billionaire into politics (DailyDemocrat) Hedge-fund billionaire Tom Steyer staked millions of his own money to take on big oil and then to close a corporate-tax loophole costing California $1 billion a year -- and won both times. Ever heard of him? Don't worry, you will. With his latest behind-the-scenes win at the polls as the man who stared down big business by standing up for Proposition 39, this Stanford MBA and top Obama fundraiser has become an out-of-nowhere big-time political player in California. So what does Tom Steyer want now? "I am an enormous lover of California and to the extent that I see something wrong, I will be involved in trying to fix it," Steyer, 55, said Monday. "What form that takes, I don't have a fixed idea." ...

This Hedge Fund Returned Nearly 25% Last Quarter
Artis Capital Management was a top performing hedge fund during the third quarter. Coming in with the fourth best Q3 performance, the fund’s picks had a weighted average return of 25.5% during the first half of the year, and returned 24.6% for the third quarter, boosting the fund’s year to date performance to 56.4%. Artis Capital was founded in 2001 and is a San Francisco-based hedge fund with a focus on public technology companies. ... Read more.

More ETFs Play Hedge Fund Copycat
What if you could emulate the actions of the most successful hedge fund managers for a fraction of what they cost? Two ETFs that debuted this summer are trying to do that by using public filings to replicate their portfolios. And a third, which launched early this month, promises to add another hedge fund dimension to ETF copycats by adopting what its sponsor calls the only true market-neutral strategy in the lot. Researchers have been trying to emulate hedge fund strategies since the 1990s ... Read more

BMW Pininfarina Gran Lusso Coupé.

BMW and Pininfarina are two of the most tradition-swathed names in the motoring world. Each is a byword for cutting-edge technology, style, dynamics and aesthetics. With the BMW Pininfarina Gran Lusso Coupé, the two

time-honoured companies are unveiling the outcome of their first collaboration at the Concorso d’Eleganza Villa d’Este 2013. The BMW Pininfarina Gran Lusso Coupé is a one-off and represents the exclusive interpretation of a luxurious BMW Coupé as seen through the eyes of Pininfarina.

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All Time Record Gold Transactions Reported By LBMA

The precious metals have been weak again in May with gold falling 4.4% despite this weeks’ recovery. Silver is down 7% and platinum by 2.6%. Palladium has recovered from recent weakness and those who accumulated on weakness are set for the best month since November after it surged 6.6% in May.

Weakness in gold and silver is leading to robust demand internationally as store of value buyers accumulate gold and silver on this dip. This is particularly the case in Asia where premiums remain robust and supply demand imbalances remain. ...

6 Tips to Work From Home Successfully

The future of work is the work itself, not where and when the work takes place. Workplace flexibility programs are already catching on and will soon become standardized as more millennials enter the workplace. All workers, not just millennials,want freedom and flexibility and some are even quitting their jobs to becoming freelancers in order to gain that freedom. oDesk.com has 3.3 million registered freelancers, and Intuit predicts that by 2020, 40% of Americans will be freelancers. When it comes to working from home, 13.4 million people (9.4% of all American workers) work from home at least one day per week compared to just 9.2 million in 1997 according to one Census Bureau.

Today's top Green Energy Good News

Russia is funding research into powering its airplanes with solar energy. The airline industry is being hurt by high fuel prices, and solar-powered planes would not only be cheaper but also would remove a major source of carbon pollution that contributes to global warming.

Texas is set to double its wind energy generation from 60 gigawatts to 120 gigawatts in 2013.

Britain has made substantial investments in wind energy and its technology. British PM David Cameron is touting his country’s green expertise on his trip to India to promote trade with that country. ... Continue.

High-Dividend ETFs with Reasonable Valuations

Investors have picked over the ETF universe in search of any kind of yield in an extremely low-rate market for bonds. As a result, ETFs tracking many traditional high-yield sectors have been bid up to expensive levels, but there are still places investors can go for income without paying nosebleed valuations. “Unfortunately, valuations [for dividends, high-yield junk bonds, MLPs, and REITs] are approaching sky high levels in many instances as more investors fall in love with these products ... Continue.