Here's an interesting story, which speaks volumes about the psychological dynamic of the markets. On Friday the United States Department of Agriculture (USDA) will report on end-of-season inventories, often called 'ending stocks.' Traders are getting word the report may show inventories are lower-than-usual. Against that backdrop, as a trader you certainly don't want to take a short position. So what to do? You buy, of course.
Monday's buying drove corn prices to a record high of $7.6025 per bushel, up 24.25 cents, as reported in the Wall Street Journal. Country Hedging, a brokerage firm, said: "Federal forecasters could drop the projection to less than 500 million bushels from last month's 675 million. This is a 15 year low."
Continue reading Supply Concerns Send Corn Prices to a Record High
Copper was the darling of commodity traders. The price rallied from about $6,400 per ton to a record $10,190 in the past year, The Financial Times reports. Momentum was strong and it looked like there was no end in sight. But now, prices have dropped off a bit and miners are worried that the rally has hit a brick wall. The main concern is that what drove drove prices skyward -- China's demand -- may be slowing, according to the FT.
One indication of the slowdown is the amount of stocks held in exchange warehouses. At the LME Asia + Shanghai exchange warehouses, copper stocks have increased from below 150,000 to over 325,000 tons. That buildup has worried miners. The companies affected are Freeport MeMoRan (FCX), BHP Billiton (BHP), Xstrada (XSRAF), Anglo American and Brazil's Codelco, according to the Financial Times.
Continue reading Miners Hedge Copper Inventories as Demand from China Slows
Let's go back to the financial crisis and the practices that brought this country to its knees. Banks developed a fancy scheme whereby they absolved themselves of all risk from the loans they made. They simply wrapped them up in a bundle and sold them to someone else. What they were doing is essentially packaging and reselling "junk."
When the news of how bad things were became known, the markets froze and collapsed. No one knew who had which securities, and if they did, they didn't know their true value.
Continue reading Banks Lobby Against Risk Retention on the Loans They Make
Do you remember the dot-com IPOs? Just the term dot-com captured the imagination of investors. Prices of some dot-com IPOs doubled in a matter of hours.
With the current financial crisis, the market for IPOs has slowed down to a trickle. But we still have investing ideas that capture our imagination. Just mention the word term 'cloud' these days, and you are off and running.
Such is the case with cloud computing ServiceSource (SREV
), reported in Investors.com
The issue was for 1.9 million shares, to be priced at $10 per share.
Continue reading Why Did ServiceSource's IPO Jump 22%?
An invasion of U.S. oil fields by Asian buyers is happening. Recently, companies from Korea, China and India have bought land in the oil-rich states of Texas, Colorado and Wyoming, according to Reuters.
In one of the biggest land deals, Korea National Oil (KNOC) bought one-third of Anadarko Petroleum's (APC) land holdings in South Texas for $1.55 billion. The purchase of 80,000 acres is located in the Eagle Ford Shale section, which is believed to have rich deposits of oil, natural gas and liquids, according to Reuters. KNOC also will receive 16,000 acres in the Pearsall Shale in South Texas.
Continue reading Korea, China and India Invade U.S. Oil Fields
The rebuilding of Japan will require large amounts of basic materials. One such material is cement. Cement is used in virtually every type of large building or factory.
It might be helpful to look at some cement stocks. Here are just a few, along with their recent share prices:
- Lafarge Coppee (LFRGY): $14.00. One of the world's largest cement and gypsum manufacturers.
Continue reading Cement Companies Could Benefit from Japanese Disaster
Every major crisis has its winners and losers. With the Japanese crisis, most prominent may be the uranium stocks. As you might guess they are getting hammered. The presumption is that governments will be reluctant to approve nuclear projects in the wake of Japan's nuclear meltdown.
Here are just a few companies and recent stock prices:
- Denison Mines (DNN): $2.55, down 74 cents. Denison is a worldwide mining and exploration company. It has two uranium waste recycling plants in the U.S.
Continue reading Uranium Stocks Hammered in the Wake of Tragedy in Japan
The crisis in Japan will require all sorts of construction materials for rebuilding destroyed buildings and factories. Steel is used in most construction projects. Here in the United States, U.S. Steel (X) is a dominant player.
Let's look at the company profile and earnings reports. "Based in Pittsburgh, the company operates mills throughout the Midwest, in Ontario, Canada, Serbia and Slovakia. The company makes semi finished steel, tubular and plate steel and tin products. Its annual production capacity is about 32 million tons of raw steel. The company's customers are from autos, chemical and steel service center industries."
Continue reading Will U.S. Steel Benefit as Japan Rebuilds?
The publishing industry is experiencing an new and booming business in e-books. According to Forrester Research, consumers spent $1 billion on e-books in 2010. That number is expected to triple by 2015. In the US there were about 10 million e-readers in circulation in 2010, triple that of 2009.
The two leading players in the e-reader market are Amazon (AMZN) with its Kindle and Barnes and Noble's (BKS) Nook. With these readers a single reader can use the reader or a friend can be added as long as they know each other's email, according to the Wall Street Journal.
Continue reading e-Book Lending -- the Next New Thing
The market for single cup roasters is estimated at $4 billion, according to Reuters. Single cup coffee roasters are growing in popularity, especially in business offices and waiting rooms. Naturally, coffee roasters like Green Mountain Coffee (GMCR) and Starbucks (SBUX) want a piece of the action.
The single cup roasters provide several advantages to having coffee in larger coffee pots. For one thing, coffee which sits for hours in a pot loses some of its fresh flavor or becomes bitter. Enter the single cup roaster. You simply pop a small container of coffee in the machine, and viola, you get a single cup of coffee with little or no mess, and always fresh.
Continue reading Starbucks and Green Mountain Coffee End Battle for Single Cup Roasters
Warren Buffett invested $232 million in BYD (BYDDF), a Chinese auto maker during the financial crisis, as reported by Reuters. As of December 2010 Buffett's 225 million shares were worth $1.18 billion. In 2009, the shares were valued at just under $2 billion. So from 2009 to 2010, Buffett's Berkshire Hathaway (BRK.A) lost about 40% of his investment.
But that is just the beginning. Now there is criticism surrounding the new Chinese car, dubbed the hybrid car F3DM.They center around two major areas, authenticity of the design and the overall workmanship of the car itself.
Continue reading Will Buffett Back Away from His Deal with BYD, the Chinese Auto Maker?
Our recommendations center on a collection of five stocks that we believe, as a group, will outperform the market this month. The Buyback Premium Portfolio is beating the S&P 500 by more than 67% since its inception (August 2, 2000)! This portfolio is up 60.00% since inception (August 2, 2000) vs. a decline of 7.70% in the S&P 500 over the same time frame. We hope that you are participating in these profits. For the month of February 2011, The Buyback Premium Portfolio gained 3.57% vs. a gain of 3.20% in the S&P 500.
New Premium Portfolio Recommendation: On March 2, we issued a sell recommendation on four stocks (AET, DLTR, FRX and RAFG) at market. We recommended you use the proceeds and available cash to buy equal dollar amounts of the following four stocks at market:
Continue reading Buyback Letter Newsletter: Mid Month - March 2011
This is indeed a dramatic move. The world's largest bondholder, Pacific Invest Management Company, dubbed Pimco, sold all of its U.S. government holdings including U.S. treasuries.
At the end of February, Pimco had $236.93 billion or 12% of its holdings in the Total Return Fund in U.S. holdings. That was cut to zero.
Continue reading Pimco's Gross Sells All U.S. Government Holdings
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