Month: March 2012

3-6-12-Qualcomm (NASDAQ:QCOM) said it boosted its quarterly dividend 16% to $0.25 per share and approved a $4 billion stock repurchase program to replace the expiring $3 billion program, of which the company had $948 million left.The stock now yields at a 1.61% rate.QUALCOMM Incorporated develops and delivers digital wireless communications products andservices based on the Company’s CDMA digital technology. The Company’s businessareas include integrated CDMA chipsets and systems software, t echnology licensing, Eudora email software for Windows and Macintosh platforms, and satellite based systems including Omnitracs and Globalstar systems.SmarTrend is bullish on shares of QUALCOMM and our subscribers were alerted to buy on January 06, 2012 at $56.13. The stock has risen 10.7% since the alert was issued.

The Central Bank of Kenya maintained its benchmark lending rate at 18.00%, and held the Cash Reserve Ratio at 5.25%.  The central bank Governor, Njuguna Ndung’u, said of the decision: “This will ensure that the monetary policy measures in place continue to work through the economy to deliver the desired outcomes of reducing inflation, dampening inflationary expectations and sustaining exchange rate stability.”

At its December meeting the CBK increased the interest rate by 150bps to 18.00%, after hiking by 550 basis points and raising the Cash Reserve Ratio by 50bps to 5.25%at its November meeting .  That move followed a 400bp increase of the interest rate to 11.00% at its October meeting, after raising 75bps in September, and previously increasing, and subsequently decreasing the discount window rate by 75 basis points to 6.25%.

By MoneyMorning.com.au

Back in February, Kris alerted you to the idea of lazy investing. He said:

‘Let’s be honest. If you could find a way of making a lot of money without doing anything, odds are you’d jump at it.’

In the fast food sector, Kris reckoned he’d found ‘…three of the laziest – potentially – moneymaking stocks on the market.’

Since Domino’s Pizza Enterprises Ltd [ASX: DMP] announced a 23% increase in net profit, the pizza chain’s share price is up 14% in one month…

Domino’s Enterprises Limited

How many Aussie businesses have a share price that looks almost unaffected since the GFC?

The chart looks especially good when compared to other companies in the Consumer Services sector. Look at how franchisee owner Retail Food Group and the recently listed Collins Food Limited, a fast food operator has performed…

Click here to enlarge

Neither company looks like a great investment based on these charts alone.

And this is why Domino’s could be an investor’s dream in years to come.

At the time of the profit announcement, the head of Domino’s Pizza said ‘Australia has the highest labour rates in the Domino’s world of 70 countries.’

According to the director of Restaurant and Caterers Association, Greg Parkes, Australia’s labour costs account for 44% of total business costs. Compare that to other countries where total wages account for 30% or under of business costs.

Despite the wage expenses, Domino’s still managed to report a $12.6 million net profit for the start of the financial year. Overall, the company had grown Australian revenue by 8.7%. And if you’re holding the stock, you’ll get a 13-cent dividend.

Seeing as the company is turning a profit, shouldn’t it just shut up about high labour costs and accept they’re a fact of life when operating a business in Australia?

Nope. By alerting the public to the fact that labour accounts for almost 50% of business costs, the company is telling its investors what could erode future profits. And before they let profits slide, the company will do everything it can to protect them.

In fact, Domino’s is doing everything it can to lower the cost of wages.

Already it’s implemented automated phone ordering systems. And it’s created an efficient process to order pizza over the Internet.

And in keeping up with the tech generation, there’s even an ‘app’ to order pizza on your mobile phone!

In less than six months, Domino’s management reckons digital sales will account for 50% of all orders.

Based on that, it’ll come as no surprise to you that Domino’s holds almost 50% of the pizza business in Australia.

In tough economic conditions, the company is getting creative to keep profits high and keep their hold on the Australian market.

If you’re an investor, Domino’s is the sort of company you should add to your watch list.

Shae Smith
Editor, Money Morning

From the Archives…

The Stock Market Financial Winter is Coming
2012-03-02 – Dan Denning

Why You’ll Want to Watch This ‘Bad’ Retail Stock Very Closely
2012-03-01 – Kris Sayce

Higher Oil Prices – Government Guaranteed
2012-02-29 – Dr. Alex Cowie

Asymmetric and Economic Warfare with Iran
2012-02-28 – Dan Denning

Why the Greek Debt Crisis Has Nothing to Do With the Euro
2012-02-27 – Nick Hubble

Domino’s: A Surprising New Way to Profit From Mobile Technology

By MoneyMorning.com.au

Emerging markets have had a great year so far. The MSCI Asia ex-Japan index is up since the start of 2012, as is the wider MSCI Emerging Markets benchmark.

Western markets are mostly up by less than half as much. But of course, this comes off the back of an exceptionally poor year for emerging market stocks. Had you been in US equities throughout 2011, you’re still some way ahead.

As usual, there are plenty of explanations for why this is happening. Stronger US growth will boost exports. China is set to loosen its property sector curbs. Greece will avoid default and get its next bail-out.

But the reality is something a bit more tangible than that…

Returns on Emerging Markets Depend on Foreign Money

Emerging markets generally don’t have a large domestic investor base. In particular, they don’t have many institutions such as pension funds and insurers that tend to be steady buyers of stocks.

As a result, buying and selling by foreign investors has a major impact on the direction of most emerging markets. Flows in and out of the country drive a large proportion of short-term performance.

So far this year, emerging market equity funds have pulled in $19bn. That’s about half the money that flowed out last year, according to funds tracker EPFR.

You see this a lot in emerging markets. In 2008, $39bn fled the region. In 2009, $64bn piled back in. Obviously, swings this size by foreign investors trump local sentiment.

Why are foreign investors buying back in now? It’s not about the fundamentals. Very little has changed between late last year and early this year – certainly not enough to justify a completely different assessment of the risks and rewards of emerging markets.

The truth is that people are investing again because emerging markets are going up – it’s that simple. And emerging markets are going up because they’ve attracted foreign money – which in turn attracts more foreign money and so on, in a virtuous circle.

It’s just crowd behaviour. And I am in no doubt that sooner or later it will reverse, and investors will blindly dump their holdings once again.

In due course, many emerging markets will build up their financial infrastructure. With a larger core of domestic buyers, this tendency to dance to the tune of foreign buyers will decrease. But in most cases, that’s still a good way away.

Good Asset Allocation Can Deliver Excellent Returns

Dealing with this kind of volatility can be difficult – which is why many investors lose money in emerging markets. They buy and sell in line with flows, ensuring they come in and out of the markets at the wrong times.

So what’s the solution? One answer is almost to ignore it. Buy decent companies in good markets that you believe will outperform over time. As long as they do not become clearly overvalued, you ignore what happens month-to-month. In this way, you aim to pick up a premium for holding your nerve and being very patient.

This is the style of investing I prefer – but I admit it’s not exciting. The alternative is to try to design your strategy to capitalise on these moves. For most portfolios, your allocation between different assets is more important in determining your eventual returns than your choice of individual stocks. And the huge swings we see in emerging markets mean that if you get your asset allocation calls right, you can deliver some pretty good returns.

Cris Sholto Heaton
Contributing Editor, MoneyWeek (UK)

Publisher’s Note: This is an edited version of an article that originally appeared in MoneyWeek (UK)

From the Archives…

The Stock Market Financial Winter is Coming
2012-03-02 – Dan Denning

Why You’ll Want to Watch This ‘Bad’ Retail Stock Very Closely
2012-03-01 – Kris Sayce

Higher Oil Prices – Government Guaranteed
2012-02-29 – Dr. Alex Cowie

Asymmetric and Economic Warfare with Iran
2012-02-28 – Dan Denning

Why the Greek Debt Crisis Has Nothing to Do With the Euro
2012-02-27 – Nick Hubble

The Biggest Driver of Short-Term Returns in Emerging Markets

By MoneyMorning.com.au

Since 2008, three central banks have created at least $2.95 trillion in new money.

They’ve done this for two reasons: to stop a complete banking collapse and to stop an economic collapse… Oh, and to help keep them and their paymasters in a job.

You’ve seen…

U.S. Federal Reserve

Quantitative Easing I – USD$600 billion (AUD$566 billion)

Quantitative Easing II – USD$600 billion (AUD$566bn)

Bank of England

Asset Purchases – £325 billion (AUD$485bn)

European Central Bank

Covered Bond buying – €60 billion (AUD$74.6bn)

LTRO I – €489 billion (AUD$607bn)

LTRO II – €529 billion (AUD$657bn)

But as the U.S. and Europe get set for the next multi-billion-dollar bailout, we couldn’t care less.

In fact, if you’ve taken our advice and invested your money in the right place, it should be business as usual. And that means looking for dirt-cheap investments…

Getting Back to Share Buying Basics

Before we explain where to look, let’s explain why the next and any further central bank bailouts will be non-events.

Look at the following chart of the Vanguard Total Stock Market ETF [NYSE: VTI]:

We’ve drawn the rough periods of major central bank money printing on the chart. As you can see, with each new round of printing, the effect on prices has been less.

That means investors whose only strategy was to buy shares in the hope of cashing in on a stimulus-fuelled rally have run out of luck.

In the old days (four years ago!), investors bought shares they thought would do well. They did the research and bought stocks based on fundamentals.

(By the way, we’re not talking about technical analysis here. That’s a whole different kettle of fish. For a technical analysis view, check out Murray Dawes’ latest free stock market update by clicking here).

But then, when the share market and economies went into a tailspin, things changed. Governments and central banks decided they wouldn’t let the system collapse on their watch.

So, what did they do? They started the printing presses. And since then they’ve cranked out about $3 trillion-worth of new money.

This helped push up nearly all asset classes at the same time. It was hard not to make a buck what with all the new cash flooding the market.

But as we’ve pointed out, the more money they printed each time, the more they had to print the next time for it to have the same impact. That’s not viable.

And so, now share investing has come full circle. Because if you can’t rely on money printing to push up asset prices, you have to go back to basics. That means looking at the fundamentals of individual stocks…

Buy Half the Share Market for Less Than 20 cents

That’s why we’re looking hard at the hundreds of small-cap stocks on the Aussie market.

You see, with all the excitement about the economic recovery, the Aussie economy not going into recession, and the U.S. market almost doubling in three years, most investors don’t realise how cheap many Aussie shares are.

For instance, you probably don’t know that half the shares listed on the Australian Securities Exchange (ASX) trade for 20 cents or less.

Based on this morning’s prices, it’s actually 984 of them!

Of course, a cheap share price doesn’t always mean a bargain stock. In many cases, a share is five or 10 cents because that’s all it’s worth.

But in just as many cases, there are shares that have taken an unfair beating. Those are the stocks you should be interested in…

Last Week Was For Selling Shares, Today is For Buying

The key thing to remember is that regardless of big picture events, some shares can still make investors big returns. Conventional wisdom is that when things are bad, you should ditch risky stocks and buy safe stocks instead.

Trouble is that’s bad advice.

Safe stocks (such as good dividend payers) are investments you should hold all the time.

And for the most part, you shouldn’t trade in and out of them. By contrast, you can trade in and out of the risky stuff (such as small-caps).

But, that doesn’t mean ditching all your risky investments at the first sniff of trouble. In fact, if you’ve allocated your assets properly, your first reaction should be to look for chances to add to your portfolio rather than take away from it.

Of course, you should have a risk-management strategy. And you should be prepared to ditch shares that aren’t as good as you thought.

But right now, we’re looking to use ongoing market volatility as a chance to buy beaten-down stocks.

That means picking high-risk plays that have the potential to discover a new resource, exploit a booming sector or take advantage of changing consumer habits.

Those shares could do well whatever happens to the broader economy.

It’s a high-risk approach. But when used within a carefully allocated portfolio, it can offer high rewards too.

Cheers.
Kris.

P.S. Slipstream Trader, Murray Dawes says the market has just hit a key inflection point. This morning he told us, “Bad economic news globally – including China’s forecast lower growth rate and the aftermath of Europe’s LTRO – and today’s bad Aussie GDP number (0.4% against expectations of 0.8%) means the market has turned bearish.” But before you panic and rush to sell everything. Remember there is a way to make money from falling markets. To find out how Murray plans to help his subscribers do this, check out his latest free stock market update…

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Why You’ll Want to Watch This ‘Bad’ Retail Stock Very Closely

Why I Couldn’t Care Less About The Next Bailout When it Comes to Buying Shares

By TraderVox.com

Tradervox.com (Dublin) – The yen remains strong against major peers, holding gains made yesterday. This has come amidst falling Asian stocks that has boosted the appetite for the currency as a safe haven. The Australian dollar dropped after a report showed that the economy expanded less than it had been forecasted in last year’s fourth quarter. The euro is another currency that increased against the US dollar due to speculations that it had reached a level that made the value of some contract worthless. However, the appetite for the euro was limited as the deadline for debt-swap deal for Greece approaches.

According to Satoshi Okagawa, the market is in a risk-off environment hence the yen is more likely to be bought than most other currencies hence the increase. Satoshi also estimate that the yen might strengthen beyond 80 per dollar today. The Japanese yen sold at 106.27 per euro at 11:00 am in Tokyo which was is a drop from yesterdays 106.07 in New York. The yen had gained 1.6 percent against the euro in New York trading session which is the sharpest increase since November 9 last year. The JPY remained unchanged against the US dollar at 80.89 yen. The euro increased by 0.3 percent against the dollar at the opening of the Asian session.

The MSCI Asia Pacific Index of share declined for the third day by 0.9 percent while the standard & poor’s 500 index declined by 1.5 percent. MSCI World Index dropped by 2.1 percent yesterday. Another index showing the volatility of the market today –the Chicago Board Options Exchange Volatility Index- closed at 20.87 yesterday which is the highest since February 15.

The Australian dollar dropped by 0.2 percent to $1.0536 after a report showed that the economy rose by 0.4 percent which is lower than the o.8 percent growth rate registered in the third quarter. The bureau of statistics released this report in Sydney today. According to Lee Wai Tuck, a Currency Strategist at Forecast LTD in Singapore, the talk of barrier options with a $1.3100 knock-out strike appears to be buying the euro to remain on the safe side.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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3-6-12-Dick’s Sporting Goods (NYSE:DKS) reported Q4 EPS of $0.88, inline with consensus estimates.Revenues in the quarter rose 6.1% year-over-year to $1.61 billion, inline with estimates.The company said it sees FY 2013 EPS of $2.38 – $2.41, vs. estimates of $2.39.Dick’s Sporting Goods, Inc. is a sporting goods retailer that operates stores primarily in the eastern and central United States. The Company’s stores offer a broad selection of brand name sporting goods equipment, apparel, and footwear.SmarTrend is bullish on shares of Dick’s Sporting Goods and our subscribers were alerted to buy on January 12, 2012 at $40.33. The stock has risen 13% since the alert was issued.

3-6-12-Blackstone (NYSE:BX) is in talks to acquire Avgol Industries 1953 Ltd. From Israel Petrochemical Enterprises Ltd., Calcalist said today.Calcalist didn’t provide details on the source, nor was Avgol available for comment.After the Bloomberg report, Avgol (TLV:AVGL) issued a statement to the Tel-Aviv stock saying that it was in talks with Blackstone over the deal.The Blackstone Group LP is a global alternative asset manager and provider of financial advisory services. The firm’s asset management businesses include the management of corporate private equity funds, real estate funds, mezzanine funds, proprietary hedge funds and closed-end mutual funds. Blackstone also provides M&A and reorganization advisory, as well as private placement services.SmarTrend currently has Blackstone in a Downtrend. Since 2008, SmarTrend subscribers trading Blackstone using our alerts outperformed the stock by 183%. We are monitoring these developments and will alert subscribers to any change in trend.

By James Woolley

You will probably already know that there are a few different ways you can trade the forex markets. You can apply for a trading job in the City, whereby a bank will employ you to trade the markets on their behalf, or you can use your own money to trade from home or from work. Whichever you choose, you have to bear in mind that they are totally different.

To begin with, it is not easy to get a job with a top financial institution. You can by all means apply to every one of the banks in the City, but you will have no success at all unless you have a good degree from a good university behind you. There have been times when people have got in without a degree, but this is often because someone in their family has very good contacts.

If you like the idea of being a self employed forex trader, then it is a lot easier to get started. You can easily open an account with a forex broker and deposit some of your savings. Then you can trade whenever you want, providing you have an internet connection. With regards to the amount you need, it doesn’t have to be a six figure sum, but you do need to make sufficient profits to live on.

This is a notable difference because when you are employed as a trader, you are not actually trading your own money. There is still the pressure from above to make money of course, and you will receive some big cheques if you manage to do this, but at the back of your mind you always know that you have a big salary to fall back on.

When you are self-employed, you will not make any money at all unless you make a profit. Furthermore your standard of living is entirely dependent on how successful you are at trading the currency markets.

As a result of this, there are different pressures associated with each position, and they involve different mindsets to some degree. Those who work from home will have a different mindset to those working in the City because there are different incentives involved. One group of people are interested in earning big bonuses, whilst the other has to make money in order to earn a decent standard of living.

City traders have the luxury of being able to take a few more chances due to the fact that it is not their money on the line. People who work from home, however, do not have this luxury and have to preserve their capital at all costs before they can even think about making any money.

In some ways it is a lot easier to work in the City for a large bank. Even if the worst happens and you lose a lot of money from poor trading decisions, you will still have earned a huge salary before losing your job. It may not even get to that stage anyway because when working in the City you have a lot of trading tools at your disposal, which home-based traders simply cannot afford.

So overall you have to say that the two jobs are completely different, and you need to adopt a completely different mindset for each one. This is because there are different pressures involved. Even though your job is on the line when working for a bank, your entire livelihood is on the line when you work for yourself. So this is something that you should always bear in mind.

About the Author

Click here to read a full review of the Forex Profit Accelerator software and to learn about the 4 profitable trading strategies that are included with this software, and to find out what you should look for when choosing the best forex course.

AUDUSD breaks below 1.0596 key support and reaches as low as 1.0507, suggesting that the uptrend form 0.9861 (Dec 15, 2011 low) has completed at 1.0855 already. Further decline is expected after a minor consolidation, and next target would be at 1.0450. Resistance is at 1.0600, as long as this level holds, the downtrend from 1.0855 will continue.

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