Thursday, November 24, 2011

Richard Young

Haven't had a blurb from Richard pushing his Intelligence Report for a while, this one is really well-written and bound to draw in the bunch looking for easy money.

Here's some samples.

Pork, a staple of the Chinese diet, hit a record high price of 26.22 yuan ($4.10) a kilogram in early September. Relentless price rises in staples are harbingers of massive mob violence to come in 2012.


Q. How does China manage to have access to such superior software?
A. They steal it. China buys a meager $5.4 billion of software each year (Americans buy $140 billion worth). Even the Italians spend more! China simply copies the software it wants -- and does so with Beijing's blessing. [not sure what the investment angle is here]


shale oil is new big money.

It uses a breakthrough mechanical technique to squeeze block goop out of rock. That translates to a record 400,000 barrels of shale oil PER DAY in 2011

Want to get a little closer to the campfire, partner? Buy one or two of the explorers who have nailed this hydrofracking technology that squeezes the bejeebers out of shale rock and makes Wyoming farmers dance the Funky Chicken at tax time. [talk about your inspiring writing].


The quality and quantity of gas now available from the Horn River shale formation is staggering. Best way to play this: pipelines. In your investment report, I lay out the case for pipelines and it will make your eyes pop. [hey I'm just typing it in word-for-word]


Mattania, Ontario, is home to Bissett Creek, stunningly rich in large crystal graphite flakes. China has cornered 70% of the world's total supply of graphite, crucial for hybrid batteries, brakes, steel manufacturing, gold clubs and tennis rackets .. and, yes, pencils. But the quality is low.

Northern Graphic Corp, a super-high quality graphite mine with 100% interest in Bissett Creek, launched its IPO in 2011, and I'm watching it like a hawk.

The graphite shortage of 2011 will make the oil crisis look like a stroll in a park. [probably meant to write 2012] That's why the profits you could make in graphite (and natural gas and timber and every resource vulnerable to a short squeeze) could dwarf even the gains Young's Intelligence Report readers have made in oil stocks in the last several years.


Then, there's his 11 Reasons Why Gold Is Shooting to $11,000 in 2012 [currently under 1700]

Here's reason no. 2: Asia cannot feed itself. Food shortages lead to huge social unrest and panic gold hoarding. And no. 7: With 10 million homes and $1.5 trillion in potential losses facing banks, a massive new bankquake is now ready to rock the American system.


When Mao took over, China was mining less than 100 million tons of coal a year. By 2000, it was ONE BILLION tons. By 2010, it was an astonishing 3.2 billion tons. But ... that was the top (in red)

A few weeks ago, Beijing quietly noted that increases in coal production were entirely in the past. Now comes even more ominous news: West Virginia is being asked to stoke China's growth.

We may have more energy beneath our feed than Saudis have sand, but coal is now a rare, precious commodity and investors can expect to continue to be enriched by it mightily in 2012.


Finding the next great wave of energy success stories has nothing to do with luck.

It is just math. And the simple, inevitable, immutable Laws of Math will continue to rule our wealth in 2012.

It will drive, accoring to my math, nearly 100 major cities and even several states toward bankruptcy in 2012.

Natural resources -- gold, oil, food, commercial real estate -- these FOUR strategic resources in particular -- will respond to this crisis as a hypoglycemic patient nearing blackout responds to a needle -- with flat-out panic that will double, triple, quadruple, quintiple prices in a shockingly short matter of days.


[And that's not all!]

It is said that one third of the world's hair falls on Indian shoulders [really?]. The potential for hair-care products in India in mind-boggling. That's why Unilever is up 153% in the past decade, and Procter & Gamble is up 139%.

But one of the most interesting global companies in 2012 makes ... wheat crackers.

This a company with 35% of the snack market in India... in an economy that's growing at 7% a year. It is blessed with a seamless distribution system, a new-broom CEO and a target market that's getting a little richer every day.

The Indian rice farmer who used to buy these snacks for two cents each day to go with his cup of tea is now able to spend ten cents a day on a treat.

Do the math. [My math tells me a return of 7%. Assuming the market share remains at 35% and that ten cents remains ten cents.]


And much more. All for only $99 (normally $249!) for one year. Or even better [for Dick] $189 for two years.

Wait 'Til Next Year

Greece is burning, Italy's imploding, and the U.S. economy is limping along in a recovery so weak it's barely stronger than a recession. And investors are reeling.

But next year may turn out to be pretty good for stocks.

How can I say that? Because from here on, the market's historic calendar is in investors' favor.

And if we can stay out of recession in the United States and avoid one in the developing world, earnings of U.S. companies may hold up well enough to support somewhat higher stock prices. (A recession in Europe is already baked into the cake.)

Most of all, 2012 is a presidential election year; since 1948, markets have gained in every presidential election year except 2000 and 2008. In fact, stocks have, on average, put in their second-best performance in the fourth year of a president's term. (The third year has been best.)

And during years in which incumbent presidents run for re-election, the market has beaten its average election-year performance significantly.

It doesn't matter if the incumbent wins or loses (though no investor can know that in advance) or how good or bad a president he was. The market has just done better in "incumbent" election years than in "up for grabs" elections, like Bush vs. Gore in 2000 or McCain vs. Obama in 2008.

-- Howard Gold

Friday, November 18, 2011

resistance becomes support?

The market is now near the bottom of the mid-October to November lows, but near the top of the Aug/Sep highs. It could be that it's at a support level. (The former resistance is supposed to become the new support.)

If not, we could see a 1000 point drop in which case the old support becomes the new support. Why on earth would any of this work? Because of people like me looking at the charts (see self-fulfilling prophecy).

Tuesday, November 15, 2011

New Morningstar Analyst Ratings

Our new Morningstar Analyst Ratings are more than 20 years in the making. We've been analyzing mutual funds since the late 1980s. Our analysts have been rating the best and worst funds as Picks and Pans since 1999. Throughout the next year, we will rate all the funds we cover.

In the past, we've used a four-person Picks committee to vet each fund nominated to be an Analyst Pick. Now, we have three separate ratings committees based on asset class, and we've spent the past five months vetting ratings.

The committees aim to ensure that Morningstar's fund analysts have fully researched all the key issues on a fund and that we are treating funds in similar fashion across the board. I encourage you to read a fund's analysis so that you can understand the analyst's thought process in arriving at the rating. Our analysts have done some excellent work in fleshing out each fund's strengths and weaknesses. The better you understand a fund the better experience you'll have.

As with our picks and pans, we are rating funds based on their long-term potential for superior risk-adjusted performance. We judge each fund's competitive advantages and disadvantages to come up with an overall rating.

Our ratings have five levels: Gold, Silver, Bronze, Neutral, and Negative. We're not imposing a bell curve on the ratings but you'll see funds spread throughout that spectrum. Even some big funds will be in the Negative and Neutral camps.

The ratings reflect a synthesis of each fund's fundamentals. We break those fundamentals down into five pillars: People, Process, Parent, Performance, and Price. These are the big, fundamental areas that are vital to a fund's long-term success. However, we don't simply tally up the pillars, as each one has some overlap with the others. It's really about how they work together, and that varies from fund to fund.

Friday, November 11, 2011

buy the worst

Buy low. Sell high. That's how you beat the market, right? Sounds simple, but it's not.

Buying while everyone you know and respect is selling is not easy; nor is it a simple task to cash out while your stocks are setting record highs with each passing day. Carlson's method attempts to circumvent these emotions, which betray our better investing sense.

In a basic sense, here's how it works:

• Find out which five stocks in the Dow Jones Industrial Average (INDEX: ^DJI ) have performed the poorest over the past year.
• Buy those five stocks (forcing you to buy low).
• Hold them for one year.
• Sell those stocks (forcing you, theoretically, to sell high).
• Wash, rinse, repeat...

Carlson went back to the 1930s and ran the numbers: "What I discovered was that buying a basket of the Dow's worst-performing stocks (I call these underachieving stocks "Dow underdogs") and holding them for a year outperformed the Dow by a wide margin going back to 1930. What's more, the strategy has been even more profitable over more recent time periods, including the last 10 years and especially during the volatile markets since 2000."

The theoretical underpinnings make sense. Carlson is self-selecting from a group of 30 very mature, well-established businesses; there are no rocket stocks or start-ups here. And as a group, they serve as a fair proxy for the larger market (actually, to some, they are the proxy). By buying the poorest performing members of this group of 30 and holding them for a year, Carlson believes that on average, those stocks will revert to their mean, and outperform their peers.

Carlson admits that this year, the system doesn't seem to be working. That being said, there are still several weeks left in the year for performance to turn around.

Thursday, November 03, 2011

protesting against themselves?

As a writer, it's usually only in hindsight that you know which topics will strike a chord with readers. Sometimes you write something you think is great, and it flops. Other times you write what seems like a mild article, and the response is deafening.

I had an experience with the latter this week. In an article titled "Attention, Protestors: You're Probably Part of the 1%," I showed that those who might be considered low-income Americans could actually be classified as the 1% richest of the world. "[T]he poorest [5%] of Americans are better off than more than two-thirds of the world population," I quoted a World Bank economist as noting. I then linked it to the current Occupy Wall Street protests: "Many of those protesting the 1% are, ironically, the 1%."

That opened up the floodgates. The article has generated upward of 10,000 comments on various forums across the Internet. Bret Baier of Fox News did a segment on the article Monday; CNN followed on Tuesday.

While quoting from the article directly, the Fox segment might have used the piece to portray an anti-Occupy Wall Street message. Indeed, one of the most common interpretations of the article was that it directed protestors to "quit complaining, shut up, and go home," as one reader wrote.

That wasn't my intent. In fact, I support much of the Occupy Wall Street movement.

But I still stand by the message in my original article: Perspective is key when discussing these issues. Many protesters indeed are among the 1% richest people on the planet. America might be packed with injustice and wrongdoing, but it's important to remember that on the whole, our system has created more prosperity -- even for our poorest members of society -- than most of the world can fathom. That's why it's crucial that protesters not turn anticapitalist, but instead remain focused on perversions of capitalism like cronyism, bailouts, and corruption.

-- Morgan Housel

[10/3/12] NEW YORK (CNNMoney) -- Think it takes a million bucks to make it into the Top 1% of American taxpayers?

Think again. In 2009, it took just $343,927 to join that elite group, according to newly released statistics from the Internal Revenue Service.

Occupy Wall Street protesters have been railing against the Top 1%, trying to raise anger and awareness of the growing economic gap between the rich and everybody else in America.

But just who are these fortunate folks at the top of the income ladder?

Well, there were just under 1.4 million households that qualified for entry. They earned nearly 17% of the nation's income and paid roughly 37% of its income tax.

Collectively, their adjusted gross income was $1.3 trillion. And while $343,927 was the minimum AGI to be included, on average, Top 1-percenters made $960,000.