Posted September 28, 2011 at 12:45 am
by John Waggoner
If you haven’t looked at your financial statements lately, well, it’s no wonder. Stocks have all the appeal of a box of smelt.
That explains why collectibles have been hot. When people get disillusioned with financial assets, they gravitate toward things they can hold in both hands.
Before the stock market tanked in 2008, big collectors just thought they were spending money, says Greg Rohan, president of Heritage Auctions in Dallas. “Now, they think they’ve done a really good job at diversification.”
Because of economic hard times, the collectibles market has split in two: The very high-end, top-quality collectibles and, well, everything else.
“In the middle market, whenever you think it has reached its bottom, price-wise, it drops again,” says Harry Rinker, host of Whatcha Got, a syndicated radio show on collectibles.
The biggest interest in low-end collectibles has been in [continue]…
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Posted September 27, 2011 at 3:11 am
The Western world’s skittishness, skepticism and staunch opposition when it comes to nuclear energy won’t stand in the way of its production elsewhere in the world. It will be full steam ahead in China, India and other developing nations, says Casey Research Chairman Doug Casey, and the Western world is tiny in comparison.
In fact, “I’d say uranium is a great place to be for at least the next generation,” he tells us in this Energy Report exclusive. With ever-advancing technology enabling economic recovery in places where it previously wasn’t possible, he’s also optimistic about natural gas and oil.
The Energy Report: Next month, at the sold-out Casey Research/Sprott Inc. “When Money Dies” summit in Phoenix, you’re on tap for a presentation entitled “The Greater Depression Is Now.” Your colleague, Marin Katusa, is on the roster too, talking about “Making Money in Energy.” Marin recently told us there’s a buying opportunity for uranium companies. Given Fukushima’s repercussions in terms of the nuclear energy industry, are you bullish on uranium?
Doug Casey: Absolutely. It’s unquestionably the safest, cheapest and cleanest form of mass power generation. That’s not to say that there aren’t problems, as the Fukushima incident made clear. As much of a disaster as that was—a combination of earthquake, tsunami and radiation leakage—so far it’s just been a big industrial disaster.
I daresay that if government hadn’t been so involved in nuclear power these last 50 or 60 years, the technology would have been much further along. Nuclear power would be much safer, cheaper and cleaner than it is today. We might, for instance, be using thorium, which appears to be better than uranium in many ways. We would almost certainly have much smaller, cheaper, and robust reactors.
So, yes, I’m a huge uranium bull. If you want mass power, you need nuclear power. And today that means uranium. I’d say uranium is a great place to be for at least the next generation.
TER: But considering the fact that governments remain involved and people are even more squeamish about nuclear power post-Fukushima, won’t we see a stall in nuclear power and development?
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Posted September 22, 2011 at 1:53 am
by Tim Hanson
Hedge fund manager Bill Ackman made waves in the financial community yesterday by announcing that he was making a very bullish bet on the Hong Kong dollar.
We’ll get to the details behind the strategy in a bit. The real “Aha!” is this: Even after the market’s recent sharp decline, one of the world’s leading stock pickers is, evidently, not that interested in buying stocks.
Back to That Trade
With its value currently pegged to the U.S. dollar, the Hong Kong dollar could potentially be an inflation buster (as well as an attractive return instrument) provided Hong Kong unpegs its peg — one put in place to provide stability in a relatively small economy.
So why would Hong Kong do such a thing?
The reason is that by [continue]…
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Posted September 19, 2011 at 1:36 am
by Karl Stevenson
Right now the mainstream news media is focused on Europe. The EuroZone is finally seeing what the markets think about the true value of their currency. And for the very first time in months, the Euro is starting to collapse…
Radical change is in the wind.
The Euro has been primed for a selloff for quite some time. It’s been in the cards. European banks are unstable, Greece is once again defaulting, and the tension between the spenders and savers in Europe threaten to blow apart the Euro. But despite all the negative forces impacting the Euro, it’s been holding up.
Why?
Simply put, the Euro has been treated like a protected species. It didn’t matter if news of default or debt contagion hit the wires… the Euro somehow stayed above $1.40.
But finally that’s changed…
The Euro has traded as low as [continue]…
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Posted September 16, 2011 at 3:49 am
by Deanna Pan
Investing in companies that regularly raise their dividends is a popular strategy that marries the lure of cash with the hunt for consistent growth. SPDR S&P Dividend (SDY) is an exchange-traded fund that generates a stream of growing income from a portfolio of some of America’s most steadfast companies.
The ETF tracks the S&P High Yield Dividend Aristocrats index, which holds the 60 highest-yielding stocks in the S&P Composite 1500 that have raised their payouts at least 25 years in a row (the S&P 1500 is an index of small, midsize and large companies).
The stocks are weighted according to yield, although no issue may account for more than 4% of the ETF, and S&P rebalances the holdings quarterly.
The result is a portfolio of established firms with records of steady growth. Beyond the ETF’s biggest positions, many holdings are [continue]…
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Posted September 15, 2011 at 2:23 am
by Jeff Bailey
No telling for sure as of this writing whether President Obama will get his jobs bill passed; whether the legislation would actually do much for the economy if it does become law; or whether the stock market would get excited even if a jobs law did revive economic growth.
With all those ifs and more, it’s easy to make the case for a sideways-at-best equities market in coming months. If that’s so, what to do?
Focusing on dividends is never a bad idea. Rocket-like stock appreciation is always sexier, of course, and who doesn’t like the trajectory of this chart of Amazon’s (AMZN) market cap?
But thankfully many smart market commentators have in recent months pumped out persuasive articles on the power of dividends. We all know payouts are important, but being reminded helps encourage us to keep hunting for dividend-paying companies.
Ben Baden at U.S. News argues that dividends represent the bulk, over time, of the return one sees in the S&P 500, far more than stock price appreciation. He also notes, in this primer, that dividend-paying companies tend to have solid balance sheets, and thus can withstand tough times.
Dividends are so powerful in [continue]…
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Posted September 8, 2011 at 12:23 pm
5 colorful ways for collectors to diversify a traditional portfolio
by Virginia Harrison
Art lovers are often savvy investors, without even realizing it.
As an asset class, art is a proven long-term store of wealth. With stock-market volatility and sovereign-debt woes driving investors toward hard assets, art is an increasingly popular way to add depth to a traditional investment portfolio.
Art offers low correlation to the price movements of other assets, and it’s effective as a unique hedging strategy. Works of art can also attract an income stream. Experts point to annual rates of return of between 8% and 20% for the best-performing sectors.
Plus it looks nice on the wall.
But these so-called emotional assets, or “passion investments,” aren’t for everyone. Here’s a basic rundown on what to look for — and what to avoid — for newly etched art investors.
1. Getting started
Most first-time art investors start with between $2,000 to $10,000, said Qeturah Rasyth, president of QMR Fine Art Consulting, a Pittsburgh firm that specializes in 19th-century American masters.
“When starting out, tailor it to your budget,” Rasyth said. “Get the best work of art from the best artist, at that price.”
Emerging artists allow new investors to dip into the market but carry more risk [continue]…
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Posted September 2, 2011 at 2:21 am
by The CXO Advisory Group
Is fine wine a good investment? Two recent studies are on the case. In their February 2010 paper entitled “Raise your Glass: Wine Investment and the Financial Crisis”, Philippe Masset and Jean-Philippe Weisskopf examine the risk, return and diversification benefits of fine wine.
In their August 2011 paper entitled “Is Wine a Premier CRU Investment?”, Liam Devine and Brian Lucey investigate Bordeaux and Rhone wines as investments. Both studies employ repeat-sales regressions from auctions via The Chicago Wine Company to construct wine price indexes. Using wine auction prices and other sources of wine returns from as early as January 1996, they find that:
In “Raise your Glass: Wine Investment and the Financial Crisis”, the authors construct wine indexes for various regions and price ranges. They assess the return and risk of investment in wine and the diversification benefits of allocating 20% of a portfolio of traditional asset classes to a wine index.
Using auction prices for frequently traded wines from several major wine regions around the world during 1996 through 2009 for (more than 400,000 observations over 13 years, involving vintages from 1981 through 2005), they conclude that [continue]…
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Posted August 29, 2011 at 1:25 am
by Ken Sweet
Bank of America finally caught a break.
Warren Buffett’s Berkshire Hathaway announced a surprise $5 billion investment in Bank of America Thursday morning, sending shares of the struggling Dow component surging higher.
The investment is seen as a major vote of confidence from one of the world’s foremost long-term investors.
“Bank of America is a strong, well-led company, and … I wanted to invest in it,” said Berkshire Hathaway (BRK) Chief Executive Warren Buffett, in a statement.
According to the terms of the deal, Bank of America will issue 50,000 preferred shares to Berkshire at a value of $100,000 each.
The preferred shares will carry a somewhat hefty 6% annual dividend, paid out quarterly [continue]…
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Posted August 18, 2011 at 3:45 am
by Daniel Kiernan
Perry Vieth baled hay on a neighbour’s farm in Wisconsin for two summers during high school in 1972 and 1973. The gruelling labour left him with no doubt about getting a college degree so that he’d never have to work as hard again for a paycheque.
Thirty-eight years later, and after a career as a securities lawyer and fixed-income trader, Vieth is back on the farm. Except, now, he owns it. As co-founder of Ceres Partners, a Granger-based investment firm, Vieth oversees 61 farms valued at $63.3 million in Illinois, Indiana, Michigan and Tennessee.
He’s so enthusiastic about the investments that he quit a job in 2008 overseeing $7 billion in fixed-income assets at PanAgora Asset Management Inc, a Boston-based quantitative money management firm, to focus full time on farming.
On a spring afternoon, Vieth, 54, barrels along backcountry roads in a Jeep Cherokee in Indiana and Michigan to scout a fruit orchard and corn and soybean farms to buy. Rural towns with names such as Three Rivers pass by in a blur, separated by a wide horizon of fields with young crops popping up.
Double whammy
“When I told people I was leaving to start an investment fund in farmland, they said, ‘You’re doing what?’” says Vieth, in a red polo golf shirt and khakis.
“It will always be difficult for Wall Street firms to understand. It’s not like buying stocks on a computer.” It’s much better: Returns from farmland have trounced those of equities. Ceres Partners produced an average annual gain of 16.4 per cent after fees from January 2008, just after the firm started, through June of this year, Vieth says.
The bulk of the returns are in rent payments from tenant farmers who grow and sell the crops and from land appreciation.
The Standard & Poor’s GSCI Agriculture Index of eight raw materials gained 5.3 per cent annually over the same period, and the S&P 500 Index dropped almost 1 per cent.
Investors are pouring into farmland in the US and parts of Europe, Latin America and [continue]…
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