Posted April 2, 2012 at 3:11 am
by Vedran Vuk
Exchange-traded funds have been all the rage in recent years – they are easy to buy, easy to sell, and often have lower expense ratios than index mutual funds. But the Casey Research team dug deep into the complex world of ETFs and found that in many cases, their names can be utterly deceptive.
Here are a few excerpts of our revealing special report, The Top Ten Misleading ETFs.
Market Vectors Junior Gold Miners (GDXJ) – This ETF sure has a funny definition of a junior mining company. In my opinion, a junior miner is a small, speculative company just getting off the ground. Our publication, Casey International Speculator, specializes in this particular kind of company.
If I had to put a number on the market cap, I’d say that junior miners fall under the $500 million mark. If you really want to push the definition to its limits, maybe a market-cap ceiling of $1 billion could still qualify for junior status.
Regardless of the exact line of demarcation, most of us can agree that “junior” means “small.” Furthermore, most investors can agree that market caps over a billion dollars are anything but small. A billion isn’t a major, but it’s clearly in mid-tier territory. That said, the Junior Gold Miners ETF’s top 10 holdings are all over a billion dollar or more.
The top holding, with 5.23% of assets, even has a market cap of $2.4 billion – that’s not exactly a junior, to say the least, and neither are the other companies on the list [continue]…
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Posted April 2, 2012 at 3:04 am
by Gary Gordon
Jamie Dimon, CEO of JP Morgan Chase, believes that the housing market has bottomed and that there’s virtually no risk of recession. However, the head of the most profitable U.S. financial corporation may be banking too much on the Federal Reserve alone.
Granted, Bernanke is unlikely to step away from the electronic money printing press until job growth is double what it is today. And the ultra-accomodative monetary policy is indeed benefiting stockholders and businesses.
However, the market may be overlooking the potential for year-end political ineptitude.
For instance, Barclays Capital estimates that if the Obama payroll tax reduction, emergency unemployment benefits and the Bush era tax cuts all expire at the end of 2012, as they are currently slated to do, it would subtract 2.8% from GDP in Q1 2013. That alone could be enough for contraction in the first few months of next year.
Why worry about next year? Won’t cooler minds eventually prevail? I’d like to think so.
That said, an Obama victory could make for a [continue]….
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Posted April 2, 2012 at 1:11 am
Don Johnson won nearly $6 million playing blackjack in one night, single-handedly decimating the monthly revenue of Atlantic City’s Tropicana casino. Not long before that, he’d taken the Borgata for $5 million and Caesars for $4 million. Here’s how he did it.
by Mark Bowden
Don Johnson finds it hard to remember the exact cards. Who could? At the height of his 12-hour blitz of the Tropicana casino in Atlantic City, New Jersey, last April, he was playing a hand of blackjack nearly every minute.
Dozens of spectators pressed against the glass of the high-roller pit. Inside, playing at a green-felt table opposite a black-vested dealer, a burly middle-aged man in a red cap and black Oregon State hoodie was wagering $100,000 a hand.
Word spreads when the betting is that big. Johnson was on an amazing streak. The towers of chips stacked in front of him formed a colorful miniature skyline. His winning run had been picked up by the casino’s watchful overhead cameras and drawn the close scrutiny of the pit bosses. In just one hand, he remembers, he won $800,000. In a three-hand sequence, he took $1.2 million.
The basics of blackjack are simple. Almost everyone knows them. You play against the house. Two cards are placed faceup before the player, and two more cards, one down, one up, before the dealer. A card’s suit doesn’t matter, only its numerical value—each face card is worth 10, and an ace can be either a one or an 11. The goal is to get to 21, or as close to it as possible without going over.
Scanning the cards on the table before him, the player can either stand or keep taking cards in an effort to approach 21. Since the house’s hand has one card facedown, the player can’t know exactly what the hand is, which is what makes this a game.
As Johnson remembers it, the $800,000 hand started with him betting $100,000 and being dealt [continue]…
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Posted March 27, 2012 at 12:57 am
via Turn Key Oil
Mad Money’s, Jim Cramer, always gives us a good heads up on good looking oil stocks. This time he is eyeing Statoil. Statoil has been one of the stocks we have really enjoyed watching over the past year. Hawkinvest gives us the inside scoop on Cramer’s analysis.
Mad Money‘s Jim Cramer recently gave Statoil shares a buy rating. When Cramer says buy, many people listen and stocks favored by Jim Cramer are often discussed on his show repeatedly over time.
Cramer thinks that Statoil has an impressive track record and he believes the company has many positive catalysts on the horizon.
Cramer is not the only one taking notice, on March 9, Deutsche Bank upgraded Statoil to a buy rating as well [continue]….
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Posted March 26, 2012 at 12:03 pm
By Tom Cleveland of Forex Traders
The Internet has revolutionized nearly every aspect of life that it has touched, but one area that has been truly revamped is the field of investing.
No longer must you call your broker and place orders without the benefit of any key market data. Besides convenience, the ordinary investor can now easily access all manner of investment vehicles, including commodities, options, and currencies.
In the past few years, many investors, however, have shied away from stocks due primarily to the uncertainty brought about by the European debt crisis and the volatility that followed in market valuations.
Currency trading has garnered enormous popularity as a result of disgruntled investors choosing to move to perceived greener pastures. Forex, nonetheless, has a high-risk profile, and beginners are encouraged to gain ample knowledge from seminars and seasoned veterans and acquire substantial experience on free demo systems before ever putting any real capital at risk.
Impatience and inexperience, coupled with an inability to control one’s emotions, are the principal reasons for failure in this trading arena. Casualty rates are as high as 65% by some reports, but not everyone is cut out to be a trader. It is not gambling. One must treat it like a business and rely on a “step-by-step” trading routine at all times.
Are some currency pairs riskier than others and are any immune to the travails in Europe?
The first part of that question can be answered by the information in the following table:
There are seven “major” pairs, all connected with the U.S. Dollar, and a number of “crosses” among the other currencies, “EUR/GBP” for example.
In the academic world, risk is often measured as the degree of change in value over a given period of time. The figures above reflect this “risk” definition for each pair and illustrate the average daily trading range in “pips”, which roughly translates to basis points of change.
By prudently employing “leverage”, a trader can convert these small changes into healthy gains, and, unfortunately, losses as well, if he is not careful.
All of the figures above are “inflated” to a degree by the uncertainty in Europe. As one might suspect, the “EUR/USD” pair is higher than normal, just under 200 basis points, yet, a few years back, 120 “pips” was the rule. Beginners are often counseled to begin with this pair since it has the highest trading daily volume and tends to have the lowest broker spread/commission. Lower liquidity generally means a higher fee spread.
In this era of globalization, all of our financial markets are interconnected and interdependent in ways that can be confusing at best and difficult to rationalize when trying to make informed decisions. One might think that the “USD/CAD” pair would rarely reflect any influences from across the Atlantic. Its price path over the past few months, however, has correlated perfectly with the Euro. The truth is that if Europe imports decline, the U.S. economy will suffer. U.S. companies would then need less oil from Canada, leading to a decline in exports and a reduced value for the “Loonie”.
The “interconnectedness” of our modern financial markets are perhaps nowhere more apparent than when viewing the foreign exchange market. Forex trading software can display the charts for all major pairs on one screen, and it is quite amazing to observe all of them move in tandem on each and every move, some obviously more than others.
In the forex world, each currency pair has its own “personality”. The best advice is to focus on one pair, learn its nuances, and proceed from there.
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Posted March 26, 2012 at 3:50 am
by Ken Fisher
Last year was a dismal year for Chinese stocks. The popular FTSE/Xinhua China 25 Index of blue chips fell nearly 18%. This year it has already gained 7.9%, and I think Chinese stocks will shine in 2012.
Readers may remember that a year ago I wasn’t very bullish. Now I am. China’s stars are in alignment right now. China frequently confounds stock market prognosticators because it has a penchant for straying markedly from other broad global indexes year-by-year over the decades—even from emerging markets. It’s hit or miss.
Nevertheless, I think I have discovered a neat way to forecast Chinese stock market cycles. China’s stock market is inextricably tied to politics. China’s powerful Communist Party leadership has a cultural history of trying to depress the economy (and hence stocks) in varying ways two years before elections, which occur every five years. Then they gun it as the election approaches.
Over the last 20 years China’s GDP growth has been [continue]….
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Posted March 25, 2012 at 11:26 pm
In Common Stocks and Uncommon Profits, legendary investor (and one of the rare people to influence Buffett’s investment style) Philip Fisher provides fifteen questions to ask yourself before investing in a company.
These are aimed at identifying the qualitative factors that are associated with well managed companies with strong growth prospects.
Here they are:
Continue to questions #8 thru #15 here…
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Posted February 21, 2012 at 3:47 am
by Chris Kimble
For more charts / commentary like this, go to Kimble Charting Solutions..
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Posted February 21, 2012 at 2:29 am
by David Merkel
When I read the following article at SmartMoney, I said to myself. “I have done almost as well, I am more diversified, and I am willing to explain more of what I do.”
Truth is, clever investors, or lucky investors can get an attitude, saying that they don’t have to explain themselves to outsiders. Not a good place to be. I am not saying that the performance is due to luck but there is a certain amount of respect due to investors for investing with you.
Before I write more, let me state that I respect Allan Mecham. He manages more money than I do, and has a better track record. If I were in the shoes of the investors who were analyzing him, I probably would have placed $5 million with him, and would have watched what he did carefully.
Why would I take the risk? It’s tough to find non-consensus views that make significant money. I wouldn’t want to make it a huge allocation initially, but I would put a toe in the water to see what he would actually do. If it didn’t work over 5 years, I would pull the plug.
All that said, when you run a very concentrated portfolio, it is possible for a few decisions to [continue]…
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Posted February 16, 2012 at 1:59 am
by Janice Dorn
“One bright day in the middle of night two dead boys rose to fight. Back to back they faced each other, drew their swords and shot one another. A deaf policeman heard the noise, and saved the lives of the two dead boys. If you don’t believe this lie is true, ask the blind man, he saw it too…” -Unknown
We are hard-wired to believe and hold to these beliefs, often in the face of contradictory evidence. In life outside the markets, this may achieve many purposes and actually be a source of strength. This does not, however, serve a trader well.
One of the most important questions for the trader to ask every day is “What do I believe that is not true?” And how do we know the truth? The markets tell us. It really is that simple, and yet so difficult for most to accept and practice on a daily basis.
It is important for a trader to assess beliefs regularly, because at any given market moment, the trader is [continue]…
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