Month: January 2012

Ford to Pit Next Fusion Against Chevy’s Volt and Nissan’s Leaf

by Jeannette Di Louie, Investment U Research
Wednesday, January 11, 2011

Ford Motor Company (NYSE: F) thinks it can do something its competitors just haven’t been able to yet, try as they desperately have. It’s taking a drive into the world of environmentally conscious consumers with its newest model of the Ford Fusion.

That might not sound all that scary a decision for a business to make, since green energy certainly seems to be all the rage these days. But that doesn’t mean it always makes a great investment, as General Motors (NYSE: GM) found out the hard way last year with its Chevrolet Volt.

Everyone ranted and raved about the electric vehicle (EV) when it first hit the news. Back then, before anybody could prove otherwise, Chevrolet claimed its newest creation was a new breed of transportation altogether…

It wasn’t a hybrid or a plug-in hybrid, the company said. It was an “extended-range electric vehicle,” which sounds so much cooler.

With that kind of hype surrounding it, the Volt seemed to have it all, from its eco-friendly engine to its sleek and sassy chassy. People could not only save the planet from the ravages of carbon emissions, but they could do it in style.

Or so the automotive media claimed. Cross their hearts and hope to die.

A Trend for Electric Cars?

Unfortunately for Chevrolet, the reality was far less spectacular than the dream, as it oftentimes is.

Well before it had to start recalling the vehicles for the fire hazards they could present after side-impact collisions, the Volt wasn’t even coming close to meeting its sales goal of 10,000 units for 2011. And while it did get a nice bump in December, it still finished the year out down by 2,329.

An embarrassing failure by any standards, recession or not.

Admittedly, General Motors hasn’t been the healthiest company around for a while, as evidenced by their repeated requests for federal finances to keep their crumbling company alive in 2008 into 2009. Even so, the Volt’s big competition last year, Nissan’s (OTC: NSANY.PK) Leaf, fell short as well, though by merely 1,280 of its 10,000-unit goal.

None of that negative data seems to disturb Ford, however. Chief Executive Officer Alan Mulally and his team of automotive experts are busy even now working on their newest version of the ever-popular Ford Fusion for 2013.

It’s going to be an EV… and they’re all but daring consumers not to love it.

Ford Fusion Runs on Past Successes

Ford might seem late to the game when it comes to electric vehicles, considering all of the hype surrounding them for the past few years. But like the tortoise racing the hare, that might be their saving grace.

More often than not, when it comes to big purchases, consumers need some time to wrap their head around the idea of trying out something new. They need to be wooed into the purchase gently, convinced that their money is well spent on such a giant leap of faith.

That’s oftentimes partially because bigger purchases such as cars are usually more necessity than luxury, which means that they need to be practical. And let’s face it: Right now electric cars are not all that practical. For one thing, there’s an appalling lack of plug-in stations on the road these days and, without those pit stops, EVs have a disturbingly limited battery life.

But the technology seems to keep improving as time goes on, as technology often does. And so, by holding out until 2013 while its competitors went all in last year, Ford might have saved itself a lot of grief.

It can fine-tune its craft while simultaneously learning from Chevrolet and Nissan’s mistakes. So its finished product will probably be stronger, more practical and more attractive to consumers. It’s a technique that has worked wonders in the technology world over the past few years for Apple (Nasdaq: AAPL).

More than likely, Ford is going to end up showing its competitors how real business is done.

Good Investing,

Jeannette Di Louie

Article by Investment U

BMO Capital analyst Joel Jackson issued a note to clients saying fertilizer demand was expected to re-emerging in the first-quarter.The analyst expects potash prices rising 5% – 10% in 2012, and also said he expects urea nitrogen to fall 3% – 5% while DAP phosphate to fall 13%.Jackson lowered his Henry Hub gas estimate to $3.80 vs. previous estimate of $4.50.The analyst upgraded Agrium (NYSE:AGU) and CF Industries (NYSE:CF) to outperform from market perform.

Source: ForexYard

Negative comments by a top credit agency turned the euro bearish today, following several days of upward movement. The comments served as a warning to any trader who thought that the currency could maintain its bullish momentum. The EUR/USD once again dropped toward a 16-month low as investors reverted their funds back to safe-haven currencies.

Tomorrow’s batch of European news is forecasted to influence the market-place. The European Central Bank’s interest rate decision and subsequent press conference is expected to generate heavy market volatility. Additionally, euro-zone debt auctions scheduled to close out the week will illustrate just how bad the current euro-zone crisis actually is.

Traders should note that unless the debt auctions go smoothly, the euro is unlikely to stage any kind of meaningful recovery before the end of the week. With market sentiment overwhelmingly against the euro at the moment, it would take substantially good news to turn the currency bullish.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Supervalu (SVU) announced that its third quarter loss increased to $750 million, or $3.54 per share, versus $202 million, or $0.95 per share in the same period last year. Excluding one time charges, the company did earn a profit of $50 million, or $0.24 per share.

Microsoft (NASDAQ:MSFT) and News Corp (NASDAQ:NWSA) announced plans to launch a series of new apps for Xbox LIVE that will feature content from News Corp.’s leading broadcast, news and Web properties. The apps will incorporate content -as well as voice- and motion-activated controls using Kinect for Xbox 360 – from brands including Fox Broadcasting Co., or FOX, Fox News Channel, IGN Entertainment Inc. and The Wall Street Journal.Video content from the Fox News Channel and FOX apps will be made available to authenticated subscribers of participating cable and satellite television distributors. News Corp. expects to announce authentication agreements to support the FOX and Fox News apps in the near future. All the News Corp. apps will be available to Xbox LIVE Gold members and are slated to launch in 2012.Microsoft (NASDAQ:MSFT) has potential upside of 11.2% based on a current price of $27.94 and an average consensus analyst price target of $31.08.

Some aspects of trading (especially patience) can be likened to that of a fisherman. Trading, like fishing requires a patient mind in order to be successful. A fisherman can go to an open sea with endless opportunities of catching fish; however, they are unable to see what fish, or how many fish are under the water which is why they must equip themselves with the right mindset and ‘tools’ giving them the best chance of a catch. The same can be said of a trader. A trader participates in a market with endless opportunities for making money; however similar to the fisherman, a trader is unable to know which trades they must take in order to be profitable unless they equip themselves with the right mindset and tools.

When fishing, a fisherman must first determine what tools give him an ‘edge’ or the best chance of catching fish; he must decide what the best time and location to fish are, along with an appropriate rod and bait. A trader must do the same as a fisherman before they start trading if they are to be profitable. A trader should determine the best time to trade based on their circumstances (i.e. location & market volatility). The trader must then determine what is an appropriate ‘rod’ and ‘bait’ for profitable trading. A traders ‘rod’ and ‘bait’ is the system/strategy they will use to gain an edge in the market.

Possibly the most important aspects of being a good fisherman and trader are patience and discipline. Both are required for a successful outcome; having one and not the other can have a detrimental affect on success; having neither leads down a short road to almost certain failure.

Good fishermen, like good traders have patient minds and know that if they can adhere to their ‘rules’ or plan, they’re putting the odds of success in their favor. It’s not uncommon for a fisher man to sit by the side of a lake or on the ocean for hours a day and not catch anything. However they are usually patient enough to know that like trading, when fishing, you’re not guaranteed a catch (or winning trade) everyday.

Truly great traders fully understand the concept of patience. They genuinely have accepted that without being patient their chances of profitability are not as good. Patient traders will only take trades that meet with their predefined set of criteria (their system/strategy and trading plan). Its not uncommon to see impatient traders constantly over trading or entering trades that do not meet their rules with the mind set of ‘the more trades I take, the more chances I have of making money’. Unfortunately this is rarely the case; being impatient often forces the trader to experience a rollercoaster of emotions having a negative affect on their success.

Success in trading is heavily influenced by the level of discipline a trader can commit to. Once a trader has determined what system he will use, he must develop a trading plan. Following his plan with strong discipline can be one of the most difficult obstacles he faces in his trading career. It’s not uncommon to see struggling traders lacking discipline. Many undisciplined novice traders find themselves drifting from one system/strategy to another when they experience a few losing trades. A good fisherman understands the importance of discipline. They are confident in the way they go about their business and know not everyday will be a positive day; however they are disciplined enough to know that just because today was a ‘slow day’ tomorrow may improve. They don’t change their fishing style or buy new tools because they had a few catch less days on the water. A good trader has the same mindset. A disciplined trader may experience a string of losing trades; however they don’t panic or change their methods, they understand losing trades in forex is the ‘cost of doing business’.

Although the two are completely different; forex and fishing have a lot in common; mainly stemming from patience and discipline. Trading like a fisherman with a patient and disciplined outlook can turn an erratic equity curve into a smooth upwards moving line.

Article by vantage-fx.com

Guggenheim analyst Shing Yin said that Apple (NASDAQ:AAPL) may be open to a prepaid iPhone, iPhone 4 likely first.The iPhone 4 is likely to take the place of the 3GS, and the 4S will likley replace the 4 when Apple launches the iPhone 5 later this year.MetroPCS (NYSE:PCS) and Leap Wireless (NASDAQ:LEAP) could offer a prepaid iPhone 4 for $200 at retail, after $150 subsidy.Guggenheim rates PCS with a neutral and LEAP with a buy.

The Top Five “Green” Predictions for 2012

by David Fessler, Investment U Senior Analyst
Wednesday, January 11, 2011

It’s no secret that a number of companies – and their shareholders – are cleaning up in the shale oil and gas business. I’ve written about many of them right here.

However, I thought I’d stick my neck out (again) and make a few predictions regarding “green” products and services, and give you my take on them from an investment standpoint.

Last year we saw the demise of Solyndra and Beacon Power here in the United States. So much for the federal government picking winners. A more sound policy would be to incentivize private industry, but let the chips fall where they may.

While they’re falling, could there be some winners in 2012? Let’s see what could happen in the green space this year.

Prediction #1: EV Sales Continue to Accelerate

After a slow start in 2011, electric vehicle sales will continue to make inroads on their gas-guzzling counterparts in 2012. The Nissan LEAF and Chevy Volt have the early lead, but Toyota will be introducing a new line of its popular Prius model. Some will come with a plug and a larger battery, allowing for Volt-like range and performance.

The reality is that, this year, it’s different. Why? Just about every car manufacturer you’ve heard of – and some you probably haven’t – is producing, or has announced, some form of battery electric vehicle (BEV) or plug-in hybrid electric vehicle (PHEV).

It probably won’t be the United States that drives sales, as some politicians are already calling for the third demise of electric vehicles, and the elimination of the $7,500 federal tax credit.

Unlike the United States, other countries are aggressively jumping on the EV bandwagon. Europe is especially interested, as gasoline prices are nearly twice what they are here in the states.

Asia’s not far behind in its push towards electrics, as supplies of gasoline and diesel are expected to become scarce, and more expensive, as demand increases dramatically over the next three to five years.

Prediction #2: Smart Meters… Smart Bet

While not really a green product, smart electric meters are becoming more widely adopted around the world. Here in the United States, many utilities are slowly replacing all their old meters with new smart ones.

The advantages are that they can be read remotely and customers will have the option of programming “smart” appliances to operate when electric costs are lower, thereby saving energy.

Great Britain expects to have all of its meters replaced with smart meter technology by 2018. Smart meters will also spawn information technology companies specifically geared towards developing software to interact with them. Yes, there will probably be “an app for that.”

Prediction #3: Energy Catastrophe Will Strike Again

Three Mile Island… Alaska’s Exxon Valdez spill… Russia’s Chernobyl… BP’s Gulf disaster… Japan’s Fukushima… All of these incidents cite the fragile and sometimes careless attention the world gives to its energy supplies.

What’s next? Iran? North Korea? A terrorist bomb on a pipeline? I don’t know. But I do know this: Whatever happens, it won’t be good for oil prices. Oil traders have their trigger fingers poised to send oil soaring at the slightest hint of a disruption in supply, regardless of the source.

Prediction #4: The Future Lies Offshore

Despite the complete lack of it here in the United States, offshore wind energy is making great strides elsewhere, particularly offshore Europe.

As of June of last year, according to the European Wind Energy Association, there were 1,247 offshore wind turbines located at 49 farms in nine countries. These are fully connected to the grid, and provide a total of 3,294 megawatts (MW) of power.

This year, an additional 1,084 MW are due to be added, primarily in Germany and the United Kingdom.

Here in the United States, Maine, Rhode Island, Massachusetts and Virginia all have active projects in various stages of planning and approval. However, it’s still unclear when actual construction of the first offshore wind facility will start, and where it might be located.

Prediction #5: The United States Won’t Pass a Comprehensive Energy Plan in 2012

This one shouldn’t be too surprising. After all, it’s an election year. Little if anything of substance will happen on the energy front. Much of what happens in 2013 will depend on who gets elected. If Obama gets re-elected, green projects will continue to receive more attention than if he loses.

Oil and gas companies will fare just the opposite. It will be bullish for oil if Obama loses, and somewhat bearish if he wins (everything else being equal, which it won’t be).

There are a lot of intangibles affecting the price of oil right now, and that will continue to be the case for the foreseeable future.

As for Green investing?

Offshore wind? Not yet. EVs? Not enough traction yet (pun intended). Solar? Still too expensive.

Smart meters? Itron, Inc. (Nasdaq: ITRI) comes to mind, but its stock is off 33% over the last year. A better, but much more diverse, bet would be General Electric Company (NYSE: GE), which is actually up 3% in the last year.

In general, most green technologies are in their infancy. As such, they’re niche products and services, and not particularly well suited as investments. Unless, of course, you’re prepared to wait a long time.

The best green investment? Natural gas producers and pipeline transmission companies…

Gas is so cheap, power plants and vehicle manufacturers are switching over to it. The big truck transportation sector could begin a widespread switch to it in a couple of years.

That will give the other green technologies time to mature and become more mainstream. And just maybe the feds will have a comprehensive energy plan by then. Hope springs eternal.

Good Investing,

David Fessler

Article by Investment U

Jamie Dimon’s Medicine to Cure America

by Marc Lichtenfeld, Investment U Senior Analyst
Wednesday, January 11, 2011: Issue #1684

It’s difficult to spend time at the J.P. Morgan Healthcare Conference and not feel optimistic.

Sitting in on presentations, talking with brilliant scientists, meeting with CEOs and hearing about incredible developments in medicine and medical technology always gives me the feeling that tremendous progress is being made in the way many diseases are treated.

But none of the doctors had a prescription for what’s ailing America and its economy.

However, J.P. Morgan Chase’s (NYSE: JPM) CEO, Jamie Dimon, did.

In a stirring one-hour interview with CNBC’s Maria Bartiromo during the lunch break, Dimon showed why he’s one of the most revered business leaders in America today. With his standard bluntness, Dimon told Maria and the audience of 8,500-plus why things aren’t so bad and how they can get better.

Dimon, the unapologetic capitalist, told the audience, “You should feel pretty good about the lives you save. And you should be allowed to make a profit.”

He said the United States is in a mild recovery, which is strengthening and is broad based across most sectors. “Companies are in fabulous financial shape,” he stated.

The CEO noted the consumer debt ratio is back where it was 20 years ago, and that housing supply and demand are starting to balance out.

He believes housing is near the bottom. “When you see employment going up three, four or five hundred thousand a month, you better buy that house you want because the price won’t last,” he warned the audience.

But it wasn’t all sunshine and rainbows. There’s a lot of hard work to do. Dimon’s recipe for getting America back on its feet is for executives to stop griping and work hard to build their companies regardless of the economic, geopolitical, or regulatory environments.

In dealing with tough economic times, Dimon suggests every business run a stress test, like banks are required to do. He told the assembled group, many of whom were healthcare executives, to model a worst-case scenario in terms of revenue, cost of goods, etc.

He practically laughed at the notion that businesses should take geopolitical concerns into account. “They are there every day of your life,” he said. “Iran doesn’t matter because there’s always something out there… Always.”

In terms of regulatory issues, his approach was two-fold.

One, make sure you’re represented in Washington. Allocate resources to ensure that your case is being heard in Washington. “There’s nothing wrong with that. It’s democracy.”

Two, deal with it. Dimon emphasized that he’s all for regulation when it’s done properly. Usually, it’s not. But he has no choice but to figure out the best way to run his business within the rules as they stand. Hopefully, some day they get better. But executives have to keep plugging along and grow their companies whether the rules are strict or not.

He got political as well about various topics:

Occupy Wall Street – “Stop vilifying big business. Things are pretty good, but we can’t get out of this malaise (if business continues to be attacked).”

Immigration – “America has the best military and universities in the world. It’s pathetic and immoral that we teach kids from all over the world and then make them go home.”

Subsidies – “Government should stop subsidizing business. Just get out of the way.”

Obamacare – “Would I like to see universal healthcare? Yes. But all we did was pile more stuff on top of a crappy system.”

Payroll tax – “The payroll policy is in effect for two months! What kind of a joke is that?!”

He snapped at an audience member who questioned Wall Street’s short-term focus on quarterly results. “Sometimes the market will overvalue your company. Sometimes it will undervalue it. Get over it. Run your company and build your business for the long term.”

Thoughts From the Conference

This year, more than 8,500 people are attending the conference. That’s the most in the six years I’ve been here. Chatter in the hallway indicates there’s money to invest looking for a home in the healthcare space.

Canaan Partners, a Menlo Park, California-based venture capital fund, raised $600 million that will be invested in technology and healthcare companies.

Many presentations are standing room only. If you didn’t get to Dendreon’s (Nasdaq: DNDN) 10 minutes early, you were probably standing in the hall.

Of the presentations I’ve seen so far, Vertex Pharmaceuticals (Nasdaq: VRTX) was the most interesting. Rather than crowing about hepatitis C drug Incivek having the strongest product launch in biotech history, the CEO spent much of his time on the company’s pipeline, including Kalydeco. The FDA makes its decision on the cystic fibrosis drug on April 18. This would be the first drug for CF that addresses the cause of the disease, not just a symptom.

However, it’s only designed to treat a small minority of CF patients that have a specific genetic defect.

The conference is still going on. I’ve got a ton of presentations to still sit through and several sit downs with CEOs. I’ll have lots more next week after I’ve had time to go over all of my notes. Stay tuned.

Good Investing,

Marc Lichtenfeld

P.S. Here’s a one-on-one interview that Dimon did with Maria Bartiromo for CNBC. It’s not the same one-hour interview that Marc talks about above, but Dimon touches on some of the same issues:

Article by Investment U

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 11 January 2012, 08:40 EST

SPOT MARKET gold prices rose to a one-month high of just under 1647 per ounce Wednesday morning – a 5.1% gain for January – before easing back as the Dollar rallied on the currency markets.

The gold price in Euros meantime touched levels not seen since December 8, hitting €41,502 per kilogram (€1290 per ounce), while the Euro currency fell to 15-month lows against the Dollar following disappointing German growth data.

The previous day saw spot market Dollar gold prices break through their 200 day moving average, which yesterday sat at $1626.86 per ounce by PM London Fix prices.

“The move higher today was not expected as it was against a bearish picture,” writes Russell Browne, technical analyst at bullion bank Scotia Mocatta, adding that “it will take a number of days of closes above the 200 day moving average to give the bulls confidence to re-enter the market.”

“While the Dollar may not see a significant correction soon,” says a note from Societe Generale, “and is likely to continue to gain against the Euro as the Eurozone crisis persists, the negative effects of a stronger Dollar on gold are likely to be largely diminished in 2012, allowing the bullish macro drivers to dictate price action once again.”

Silver prices meantime rose to $30.31 per ounce – level with the week’s high and 8.6% up for the month so far – before they too eased back, while stocks and commodities ticked lower and major government bond prices gained.

Germany’s economy shrank by 0.25% in the fourth quarter of 2010, newswire Reuters reports, citing an official from the Federal Statistics Office. For 2011 as a whole, gross domestic product grew at 3.0%, down from 3.7% a year earlier, official data show.

Growth in the Eurozone meantime was half that initially reported in Q3, European Union statistics agency Eurostat now says, after revising Q3 2011 growth from 0.2% to 0.1%.

“Germany cannot isolate itself so easily from tensions within the Eurozone,” says Joerg Zeuner, chief economist at VP Bank in Liechtenstein.

“In addition the export sector is facing a difficult period given the fall in global demand.”
“The best resolution [to the Eurozone crisis]…is that Germany take steps to reverse its trade surplus,” argues Beijing-based economist Michael Pettis.

“[However,] countries that run large and persistent trade surpluses never seem to understand that their surpluses are mainly the consequences of domestic policies that generate additional domestic growth by absorbing foreign demand.”

Italian prime minister Mario Monti has called for more support from the European Union ahead of a meeting in Berlin today with German chancellor Angela Merkel.

“I am demanding heavy sacrifices from Italians,” he tells German newspaper Die Welt.

“[Unless] concrete advantages become visible…a protest against Europe will develop in Italy, including against Germany, which is seen as the ringleader of EU intolerance, and against the European Central Bank.”

Almost the entire €489 billion the ECB lent to Eurozone banks at last month’s 3-Year longer term refinancing operation has been redeposited with the central bank reports news agency Bloomberg, citing estimates from Barclays Capital made using ECB data.

“It’s illusory to think that the [3-Year LTRO] will translate into credit generation,” says Philippe Waechter, chief economist at Natixis Asset Management in Paris.

“It will assuage some of the anxiety banks have regarding their liquidity needs. But they’ve engaged into a massive overhaul of their strategy and shrinkage of their balance sheets, which is, coupled with the deteriorating economy, not compatible with increasing credit.”

Authorities in Iran meantime have blamed Israel for a car bomb that killed a nuclear scientist in Tehran.

Also in Iran, local press reported yesterday that officials had denied rumors that the authorities were blocking any text messages that contained phrases such as ‘Dollar’ or ‘foreign currency’. The imposition of US sanctions has reportedly led to increased interest in holding gold and Dollars as a hedge against Rial depreciation.

Gold bullion dealers reported strong demand from India on Wednesday, Reuters reports, as the Rupee rallied 1.5% against the Dollar to hit a one month high. The weak Rupee saw record domestic gold prices in India last year, weighing on demand during what is traditionally a strong season for buying gold.

China meantime imported a record volume of gold from Hong Kong in November, according to official data. The Hong Kong government’s Census and Statistics department reports that just under 102.8 tonnes of gold were imported by China, equivalent to 18% of China’s total private sector gold consumption in 2010 by World Gold Council figures. Imports from Hong Kong are generally regarded as a proxy for overall imports.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.