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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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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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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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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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Dallas Mavs owner sees Facebook as a “trade” only

Posted May 25, 2012 at 2:53 am

by Steven Russolillo

Billionaire investor and Dallas Mavs owner Mark Cuban “likes” Facebook, but he doesn’t love it.

In a blog post, Cuban says he has snatched up 150,000 shares of Facebook. Specifically, he says he bought 50,000 shares at $33 a pop, 50,000 at $31.97 and another 50,000 at $32.50.

But he doesn’t have any plans of holding these shares for the long term. Far from it.

“It’s a trade, not an investment,” Cuban says. “Kind of like buying a Mickey Mantle, a Hank Aaron and a Barry Bonds rookie card knowing there is a card show in town next week.”

Facebook shares closed up 3.2% at $33.03. So, he’s in the money. The stock is still down 13% from its $38 IPO price.

Facebook’s trading debut last week was marred by technical glitches at Nasdaq, prompting the exchange to delay the social network’s opening trade by about a half hour. The confusion left investors unsure of whether their orders to buy and sell shares had been fulfilled.

The Facebook IPO destroyed investor sentiment at a time when confidence was already extremely low, Cuban says.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Mark Cuban Likes Facebook, Hates What it Did to IPOs" ]

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The Dirty Harry portfolio

Posted May 22, 2012 at 3:08 am

by Brett Arends

There’s a saying on Wall Street: There’s no such thing as a safe investment, only one whose risks aren’t yet apparent. Investors keep learning it all over again. J.P. Morgan Chase stock, anyone? Best Buy?

How about some Greek government bonds? After all, they’re members of the euro zone now, they should be fine!

At least here you’ll know you’re gambling. And you’re getting paid for the risks.

So, in the words of Clint Eastwood’s steel-nerved Inspector “Dirty” Harry Callahan: “You’ve got to ask yourself a question. ‘Do I feel lucky?’ Well, do ya, punk?

1. Uranium Participation Risk: High

If you’re looking for cheap fuel, this is it. Uranium prices have collapsed 30% since the Fukushima tragedy in Japan last year. A pound of uranium traded for $140 in 2007. Today: $52.

Since Fukushima, governments have scaled back plans for new reactors. Germany is going nuke-free. But it’s not the whole story. World energy demand is expected to rise 40% over 20 years. Getting there without more nuclear reactors will be especially tough. Meanwhile, the world hardly mines enough uranium to feed the reactors that already operate. Uranium is well below replacement cost.

Uranium Participation is a Canadian closed-end fund which owns physical uranium in a warehouse, the way a gold fund owns gold. The stock, which trades under the symbol “U” on the Toronto Stock Exchange and as “URPTF” in the Pink Sheets over-the-counter market, trades for about 20% below the net asset value.

4. NovaGold Resources Risk: High

Way out in the Alaskan wilderness, in the far, far northwest, is an area known as Donlin Creek. There is gold in them thar hills. Lots of it.

Developers say they’ve found at least 34 million ounces of “proven and probable” reserves—with a gross value today of $54 billion—and there is almost certainly much more.

The Donlin Creek gold project is 50%-owned by Barrick Gold, one of the world’s largest gold-mining companies, and 50%-owned by NovaGold, a small one. At $5 and change a share, NovaGold is valued at $1.7 billion.

It will be many years—maybe eight—before Donlin Creek actually starts producing its first ounces of gold. There is many a slip between cup and lip.

Gold exploration is famously exciting for investors, and not always in a good way. In this case you are taking a flyer on production, and on the future of gold prices.

Some really smart people have joined the gamble on this stock, including hedge-fund managers Seth Klarman and John Paulson and Fidelity Investments’ star fund manager Will Danoff. Speculative, but fun.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "Five Risky Plays That Could Make Your Day" ]

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5 reasons to own Facebook for the long term

Posted May 14, 2012 at 3:50 am

by Robert Peck

As an ex-Wall Street Institutional Investor ranked analyst, I’ve written on many stocks and IPOs before, including: LNKD IPO (here), BankRate IPO (here), and even a piece on Facebook back in 2007 where I argued Yahoo! needed to buy Facebook (here) for $6-7b.  

Importantly on Facebook, I think when one looks at the company’s potential, it’s paramount that one thinks bigger picture and longer term – this post is predicated on this.  

In the essence of being succinct, below I point out my Top 5 reasons I’m bullish on Facebook long term, as well as my Top 5 concerns.  There are an endless number of items for each list, but I think these items sum up the major points.

1 – Facebook is a Force Majeure @ 900m Users – Facebook dominates one of the largest forces on the Internet, Social.  It clearly embodies everything we do that’s social from posting pictures, to sharing our real time thoughts, to connecting with old friends, to making new friends.  

It reflects how we behave offline and exemplifies how social behaviors pervade much of what we do on a daily basis.  Facebook is the king of one of human’s most basic communication needs – sharing.  Further, the company has managed to expand outside its own website or app.

3 – Mobile Monetization is Just Starting – Facebook grew revenues ~45%  in the most recent quarter – that’s impressive.  However, what is most astounding, is that >50% of its monthly users visit the platform via a mobile device and these users haven’t been monetized yet.  Facebook is just starting to monetize >50% of its user base!  Imagine the lift in the financials from not only growing the users, but by merely monetizing over one-half of the current un-monetized base.

[ Details / Source: Above is our hand-picked KEY excerpt(s) from this full article: "The Facebook ($FB) IPO – the Enormous Upside Potential" ]

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An NFL draft for stocks?

Posted April 27, 2012 at 3:02 am

by Matthew J. Belvedere

Lots of people are familiar with the NFL draft, where professional football teams swap, deal and finally pick the most promising collegiate players looking to join the league. In fact, the latest episode starts tonight.

What if you could do that for stocks?

CNBC’s “Street Signs” will be trying to do just that, beginning today. It will feature a “stock draft” where seven well-known stock pickers will play the part of NFL owners, picking and choosing among a pool of 21 popular stocks (i.e. the promising players).

For investors, what may be more telling is which stocks don’t get picked. The “drafted” picks will be tracked and monitored up to the next Super Bowl (just like players for the upcoming season). Performance will be measured on a percentage basis. So the traders may elect to pick a beaten up stock (like some techs and retailers of late) in hopes of a good bounce instead of one that is currently in good standing.

The details [continue]…

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This ETF is up over 20% YTD

Posted April 18, 2012 at 3:57 am

by Stoyan Bojinov

Columbia Large-Cap Growth Equity Strategy Fund (RWG): Up 20.53%

This is the top performing active ETF year-to-date; with gains nearly double that of the S&P 500, RWG can certainly boast bragging rights when it comes to bottom-line returns.

This ETF has been able to charge ahead of most broad-based equity benchmarks thanks to its creative security selection approach; the management team behind RWG combines fundamental and quantitative analysis to select large cap securities which are deemed to have above-average growth prospects.

[ Source: The above excerpt is from this article: "Three Active ETFs Beating The Market" ]

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Investing In luxury watches

Posted April 9, 2012 at 3:04 am

by Paul Sullivan

FINE watches have long been about more than just telling time. They have served as gifts for graduation and retirement. They have been collected and coveted for their craftsmanship. They are often flaunted as status symbols.

Even so, the current economic climate would not seem conducive for timepieces filled with wheels and springs — the finest ones do not use batteries — that start at $15,000 and go up to $1 million or more. Plus, any cellphone can tell you the time.

It turns out, though, that the market for vintage timepieces has been booming. Watches are now the sixth largest department at Christie’s, accounting for $116 million in sales in 2011. That was a 26 percent increase from the year before, and much of the growth is being driven by Asian collectors.

“We have new collectors looking at watches as alternative investments,” said Sam Hines, head of watches in Asia for Christie’s. “There has also been the formation of a trophy market.”

These trophies are watches that are very rare, if not one of a kind. Last year, the most expensive wristwatch sold at auction was a Patek Philippe chronograph from 1928, which sold in Geneva for $3.6 million, a record price for that model.

The demand is only partly driven by [continue]…

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