“Built” Does Not Equal “Sold”

The year is 67% finished.  A few investors apparently want to start waving their banners now, which is as good an explanation as any for today’s sharp stock market rally.  Media reports give credit to stronger-than-expected U.S. and Chinese manufacturing data.  Yet all this proves is that companies can make more stuff even in a slowing economy.  The mere fact that a product has been made does not mean anyone has bought it.  Even in today’s efficient factories, manufacturers must necessarily plan ahead.  Sometimes the plan turns out to be too optimistic and they are stuck with unsold merchandise.  Or maybe the products get partway downstream, to the distributor level, but consumers still won’t bite.

Speaking of consumers, one manufactured good they aren’t buying more of is automobiles.  Detroit just posted its worst August sales in almost 30 years.  Last August, you may recall, was the end of the “cash…

Mosseri and Loud: Hedge Your Bets

Source: Brian Sylvester of The Gold Report  

Everyday New York-based investment gurus Jeff Mosseri and Doug Loud make key decisions for their high net-worth clients. Many of those decisions involve strategically positioning investors in small- and micro-cap gold and silver plays. In this exclusive interview with The Gold Report, you will learn some of the names of those plays and how they use Mosseri and Loud as hedges against a failing economy.

The Gold Report: Today, we’re talking with Jeff Mosseri, president of New York-based Greystone Asset Management and a director of Axiom Capital, as well as Doug Loud, who is the executive director of both companies. How do you go about making your clients money?

Jeff Mosseri: We are paid by our clients to invest in small- and micro-cap stocks. We get very close to a company…

Think Small When Going International

You won’t be surprised when I say the U.S. markets are lousy right now. Can you find niches that are performing well? Sure — I often highlight these for you when I see them. But most U.S. stocks and sectors are going sideways at best. Moreover, I don’t see the situation changing in the near future.

This doesn’t mean you’re stuck in a low-yielding cash account, though. The world is full of opportunity for those who know where to look. Places like South America and Southeast Asia are still growing nicely, despite weakness in the U.S. and Europe.

Today I’ll show you how to follow this theme with an emerging new category of exchange traded funds (ETFs): International small-caps.

Small-Caps:
The Key to Growth

U.S. investors are familiar with the superior growth potential of small-cap…

VQT: S&P 500 With A Volatility Hedge

Barclays yesterday (9/1/2010) launched the Barclays ETN+ S&P VEQTOR ETN (VQT) exchange-traded notes (ETNs) that are linked to the performance of the S&P 500 Dynamic VEQTOR Total Return Index (press release).

Barclays takes “dynamic indexing” to a new level with VQT.  The underlying index can be dramatically reconfigured on a daily basis and employs a stop-loss mechanism.  The underlying index seeks to provide broad U.S. equity market exposure with an implied volatility hedge.  It will dynamically allocate investments among three components: equity (S&P 500 Total Return Index), volatility (S&P 500 VIX Short-Term Futures Index), and cash.

The VQT overview page and VQT fact sheet (pdf) provide the investment philosophy behind this product:

“the volatility component of the Index is premised on the observation that, historically, volatility in the equity markets tends to correlate negatively to the performance of US equity markets. In addition, rapid declines in the performance of the US…

Story Stocks: Abercrombie & Fitch (NYSE:ANF), Burger King (NYSE:BKC), Coca-Cola (NYSE:KO), PepsiCo (NYSE:PEP)

Abercrombie & Fitch (NYSE:ANF) said Thursday its August same-store sales rose 6%, compared to the forecast of 5.9% in a survey of analysts by Thomson Reuters. Total sales for the four-week period ending Aug. 28 rose 14% to $353.7 million. In other news, Burger King (NYSE:BKC) said Thursday it will be bought by private equity firm 3G Capital for $24 a share, or $4 billion, including the assumption of debt. The deal values the fast food company at a premium over its closing price of $18.86 a share on Wednesday. The deal comes after days of reports that the company would go private. –MarketWatcah

In a move to gain a larger share of the beverage market outside of North America, Coca-Cola…

For-Profit Education, China-style (EDU)

August was ugly for most market sectors – the dollar may have been the only safe place.  One group of stocks bludgeoned in a particularly nasty way was U.S. for-profit education stocks.

Companies like Apollo Group (APOL), Corinthian Colleges (COCO) and Strayer Education (STRA) were first hammered on news that their graduates are significantly more likely to default on federal student loans than alumni of traditional four-year colleges.  Then Barron’s quoted an analyst saying the Department of Education’s estimates are probably accurate, bringing more pain for these stocks.

Worse yet, for-profit education stocks are a subsector of the consumer discretionary space.  In this market environment, consumer discretionary names are tough bets from the long side.  Even so, there is opportunity among for-profit education names.  You just need to look outside the U.S. to China.

Consider New Oriental Education (EDU).  EDU is a Chinese provider of foreign language training, test preparation…

Time to Go Global

By Chris Wood, Editor, Casey Research

Here at Casey Research, we really don’t enjoy being a buzz-kill. It’s just that we think it’s more important for investors to be well informed about the reality in which we find ourselves today than it is to be happy-go-lucky all the time.

The good news is that when the stuff hits the fan, as it has for going on two years now, it opens up a number of unexpected opportunities for profit. Even in the hairiest situations, there are ways to protect yourself.

Having said that, let’s start with the bad news…

If you live in the U.S., your taxes are about to get much, much, higher. And I’m not talking about the Bush tax cuts set to expire at the end of this year. I’m talking about a structural deficiency in the tax base that will force the…

Can We Call This a Depression?

…

Peasgood Preaches Patience on Geothermals

Source: Brian Sylvester of The Energy Report

Wellington West Analyst Sean Peasgood covers the geothermal, plasma gasification and "Smart Grid" subsectors of the alternative energy (AE) market. He believes there’s room to make some dough in each of them but believes investors may need to be patient as these growing markets gain traction. "As these (geothermal) projects come online and are proven out, the reward to investors is going to be large," Sean says. He even reveals some names to help you earn your reward in this exclusive interview with The Energy Report.

The Energy Report: Sean, can you tell us a little about yourself and your coverage area at Wellington West?

Sean Peasgood: I’ve been covering the technology and clean-technology sectors with Wellington West now for about 10 months. Before this, I was with a bank-owned dealer for about four years covering the technology sectors as…

Story Stocks: Citigroup (NYSE:C), Apple (NASDAQ:AAPL), Joy Global (NASDAQ:JOYG), H.J. Heinz (NYSE:HNZ)

Citigroup (NYSE:C) plans to almost triple its workforce in China to as many as 12,000 people in the next three years, intensifying its rivalry with HSBC Holdings Plc in the world’s fastest-growing major economy. The New York-based bank will hire more in China than in any other Asia-Pacific country, Stephen Bird, Citigroup’s co-chief executive officer for the region, said yesterday in an interview. The expansion may make China Citigroup’s third-largest market by staff, after the U.S. and Mexico, said spokesman James Griffiths. Citigroup CEO Vikram Pandit is raising his bet on China, where banks extended a record $1.4 trillion of new loans last year. Unlike HSBC and Standard Chartered Plc, Citigroup has no plans to sell shares in China and will instead fund expansion with money generated in Asia, Bird said on Aug. 25. -Bloomberg

Apple (NASDAQ:AAPL) preparing to announce…