Investing in contemporary art

Posted January 10, 2013 at 1:48 pm

Investing in contemporary art can be fun and very profitable…

by Harry Newton

This painting sold for $120 million in May 2012, Contemporary art is enjoying a major boom.

It ebbed after 2008, but didn’t bust. Now it continues on its parabolic way up, defying all expectations. It is more attractive to look than paperless stock “certificates.”

So that’s a benefit.

This Edward Munch’s #120 million The Scream. This is the closest I could get to it over Christmas at New York’s Museum of Modern Art.

You can see it and other more interesting (and cheaper) paintings, like these:

Figure on spending at least four hours. MOMA has grown dramatically in recent years. In addition to their permanent exhibits they have fun ones, like this shadow thingee. You perform  in front of this “projector” which transforms your silhouette into wonderful shapes.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Thinking More About 2013" ]

Are you interested in collecting or investing in art, but don’t know how or where to begin?

See our inexpensive kindle book:
Picture-Perfect Profits: The Definitive Guide to Buying and Investing in Art

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New Aussie Battler profit target: 25% per year

Posted January 9, 2013 at 1:06 pm

by Deron Desautels
Membership Manager, M4 Research

Hello from M4 Research!

2013 has arrived and we did not suffer the end of the world as many Doomsday Preppers believed.

With the new year arrives The Aussie Battler Version 1.33.

Back in March of 2012, we adopted a successful automated Forex trading system under our M4 publishing brand that had been running on live accounts since late 2009.

This long-term, conservative system, The Aussie Battler, has continued its success since that time; and we fully expect it to continue in 2013 and beyond.

At the end of 2012, the product team (in charge of installing and monitoring The Aussie Battler on user accounts) went in and reviewed the statistics of 2012 vs. the previous years.

This included reviewing the results in all of the live accounts, running tedious back-tests with the current settings vs. alternative settings, and taking a broad look at the AUDCAD pair over the last 5+ years.

While reviewing all of this, they came to a fantastic realization:

Continue Reading…

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Return-on-Equity (ROE) is the golden number to know

Posted September 6, 2012 at 4:42 pm

by Eddy Elfenbein

Here’s a post for new investors or a helpful reminder for more experienced investors.

When you’re looking at a company, the single-most important number is return-on-equity. Forget head-and-shoulders, forget bear traps and double bottoms, forget volume, forget stochastics. Return-on-equity tells you more than anything else about how well a company is performing. It’s the best measure of efficiency, bar none.

In short, ROE tells us how much we get for how much we got.

ROE can be deconstucted down into three parts (warning, math ahead). Profits margins, asset turnover and leverage.

Think of it this way:

Profit margin is profits divided by sales.

Asset turnover is sales divided by assets.

Leverage is assets (stuff you have) divided by equity (stuff you own).

The beauty of ROE is that it works for every company. You can compare General Electric to a lemonade stand. A company like Wal-Mart may have a teeny profit margin (around 3.5% last year), but incredible asset turnover. Wal-Mart is really just one big inventory control machine. A financial company like JPMorgan has 12 times more assets than equity, but it generates less than a penny of revenue for each dollar of assets.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Why Return-On-Equity Is So Important"]

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10 tips on speculation and life

Posted August 29, 2012 at 12:17 pm

via Casey Research

In this interview, Doug Casey outlines the difference between savings, investing, and speculation.

He justifies why he would rather risk 10% of his portfolio on speculating for big gains than 100% hoping for just 10% gains.

He also explains why, as safe as you might think it is, the money in your bank account may never be given back to you.

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What the rich are doing with their money

Posted August 10, 2012 at 9:19 am

via Fidelity Viewpoints

Looking for a bit of optimism in the face of today’s daily drumbeat of negative news? Look no further than Fidelity’s latest survey on the mindset and recent investing moves of some 1,000 millionaire households.1

While they too see the myriad short-term risks out there for the economy and investors, they are more upbeat on the market outlook a year from now than at any time in the survey’s five-year history.

So what are the rich doing with their money? The number one investment added to portfolios in the last year was U.S. equities. And that was regardless of respondents’ outlook on the economy, financial goals, or whether they were born into wealth (14%) or made it themselves (86%).

Of course, these successful investors understand the power of building and maintaining an asset allocation mix in line with their personal style, time horizon, and investing goals.

Self-made millionaires report they also added individual domestic bonds and domestic equity mutual fund investments among their top additions, while those who were born wealthy contributed more to real estate investments and bond ETFs.

Growth-oriented millionaires were more interested in adding individual U.S. stocks, international and emerging market stocks, equity ETFs, as well as individual bonds.

On the other hand, wealth preservers were relatively more focused on CDs and other money market equivalents, as well as annuities, though they too cited individual domestic stocks and bonds, equity ETFs, and real estate as top investments in the last year.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Inside The Millionaire Mindset"]

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Profit from a real estate rebound

Posted August 9, 2012 at 6:44 pm

by Joe Light

There is reason for optimism. Not only are single-family home prices steadily climbing, but the Joint Center for Housing Studies at Harvard University in a June report said inventories of new, single-family homes in March were at the lowest level in 49 years.

The upshot: It would take fewer than six months to sell the current inventory, the traditional boundary between a strong and weak market, says Eric Belsky, managing director of the center.

To be sure, some promising signals during the recession turned out to be false alarms. In mid-2009, the 20-city S&P/Case-Shiller Home Price Index began a yearlong rise, only to fall again. Yale professor Robert Shiller, who called both the early 2000s stock-market crash and the recent real-estate bust, says he isn’t certain prices have bottomed.

But even if the absolute nadir hasn’t been reached, most economists say the odds are good that real estate will be stronger over the next few years than it has been in the past few.

The easiest way to make a broad bet on home builders is through an ETF, such as SPDR S&P Homebuilders (XHB: 22.43, 0.26, 1.17%) or iShares Dow Jones US Home Construction (ITB: 17.34, 0.31, 1.82%) . Given the market’s run-up, however, it might be smarter to stick with specific home-related stocks that have the most room for growth, says Bob Wetenhall, a senior analyst at RBC Capital Markets.

KB Homes (KBH: 10.74, 0.64, 6.34%), for example, has shown improving new-home orders that set it above other home builders, Mr. Wetenhall says. What’s more, after accounting for tax benefits that it accrued during the housing downturn, the company’s price/book ratio is 1, about 30% below that of other home builders, he says.

Lennar (LEN: 31.49, 0.78, 2.54%), which has a price/book ratio of 1.5 after adjusting for tax benefits, looks expensive next to its peers. But since it gets revenues not only from single-family homes but also multifamily housing and other kinds of real estate, it will be buttressed, Mr. Wetenhall says.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "How to Invest in a Real-Estate Rebound"]

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The Facebook Index is up 21% YTD

Posted July 22, 2012 at 7:22 pm

by Rebecca Lipman

The Facebook Index

The most significant role Facebook users play in providing value to businesses is word-of-mouth recommendations to friends. If you “like” a page, you are more likely to purchase that company’s products and twice as likely to recommend that page’s products to a friend.

That being said, it appears there is not much companies can do to attract “likes” to their page, but are better served encouraging those who already visit the page by maintaining an active online presence and rewarding loyal followers.

It is also uncertain if there is causation between liking a page and making purchases, or making purchases and then liking the page.

Business Section: Investment Ideas

Data is still being mined on the success of Facebook fan pages and advertising dollars, but preliminary studies are encouraging.

If, as an investor, you believe a larger presence on Facebook can truly translate into better business performance, then it would be prudent to keep an eye on user engagement.

With this in mind we list here the top nine companies with the most “likes” on Facebook. Who knows…

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "The Facebook Index : The Most Liked Firms on Facebook..."]

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Counting on a 300% gain in falling treasury bond prices

Posted July 20, 2012 at 12:05 am

via The Mad Hedge Fund Trader

Commodity prices can be roaring, but as long has globalization drives down wages at home, as it has for the last 30 years, their overall impact will be modest, at best. So add it all together, and you get an inflation rate that is stagnant at low single digits. You are obviously not working hard enough.

I am interested in all this because I have a dog in this fight. I happen to be short out of the money call spreads on the Treasury bond ETF (TLT). I also have more than a passing interest in the (TBT), a leveraged ETF that bets that the Treasury bond interest rates will rise and prices will fall. I used to think that a resurgence of inflation would take it from the current $14.50 to $200. I don’t believe that anymore. I instead think we will see a rise only to $43, which equates to a ten year Treasury bond yield of 4.10%, up from today’s 1.45%.

That is still a potential gain of nearly 300%, which is better than a poke in the eye with a sharp stick in this zero return world. And that middling profit will not be delivered by a reincarnation of the inflation beast, but by the sheer volume of issuance of bonds demanded by our enormous budget deficits.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "The Death of the Bond Vigilantes... "]

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Multiple cash-like investments

Posted July 9, 2012 at 6:10 pm

by J. Alex Tarquinio

Along with the now standard advice from financial planners to focus on large, dividend paying stocks and ultra-short term bonds, he’s advising clients to stash real estate investment trusts into the alternative asset portion of a balanced portfolio. Rosenberg has stopped recommending commodities, including gold, to clients. “Commodities are dead,” he says. “They expand with economic growth.” And that has become a scarce commodity recently.

Financial planners also advise sticking with a long-term strategy, especially when saving up for distant goals like your children’s college tuition or your own retirement. Yet the best of them are constantly tweaking their clients’ portfolios to adjust to the markets ups and downs.

* * *

The above portfolio allocator is from the Smart Money article link below. It is one of 12 portfolios, by allocation, based upon a ‘life-stage’ scenario (example of one shown above).

All portfolios, of course, have a few commonalities. One of which, is ‘cash‘ !

So, the question is: Where can you get cash-like investments outside of a boring savings account? Outside of low-yielding bonds?

Look no further than our ‘Where to Stash Your Cash‘ section inside the Vault.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Perfect Portfolios: Your Next Move in This Market…" ]

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A “backdoor” way to profit from the rise of China’s nouveau riche

Posted May 25, 2012 at 3:47 am

by Charles Sizemore

But you shouldn’t limit yourself to the world of ADRs.  Doing so may eliminate some otherwise great investment opportunities.

Consider BMW, which I mentioned above.  I love BMW for precisely the same reasons I like Daimler.  Luxury German cars are an aspirational status symbol around the world, but particularly in emerging markets.  I consider BMW a fine “backdoor” way to profit from the rise of China’s nouveau riche, and the company’s operating results have been nothing short of stellar even in the midst of a European debt crisis. 

BMW had record profits in 2011 and raised its dividend to a new record level.  More rises are likely.  I’d prefer the ease of buying BMW as an ADR, but I would be perfectly comfortable buying it on the German exchange as well.

Much the same could be said for the two fashion brands I mentioned above.  I love ADR-traded LVMH as an indirect bet on emerging market growth.  But if I love LVMH, why would I also not love Burberry or Prada?  All three companies are wildly profitable, have incredible brand equity and cater to the taste of high-income earners in Asia and elsewhere.

As capital markets become more globally integrated and information more dispersed, the barriers to buying and selling locally-traded shares are getting smaller. 

Most large, foreign blue chip companies publish their annual reports in an English version, and even for those that do not there is usually ample data available to help you in your decision making.   Reporting standards do vary from country to country, but this should be no impediment to a motivated investor willing to roll up his sleeves and do a little research.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "The Ins and Outs of International Investing" ]

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