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Mid-Week Update 05-26-10

The focus of healthcare reform continues to be on improving care and coverage while lowering overall costs to Americans. However, some may overlook that there are other measures beyond expanded insurance coverage and technology adoption that will be used to accomplish this. One such measure included in the healthcare overhaul signed into law earlier this year permitted U.S. regulators to approve generic forms of biological drugs.

Biological drugs, or biologics, are those drugs made from a living organism (or its products) used to prevent or treat cancer, arthritis, and other diseases. It’s a big and promising market, so it’s not surprising that Growth Portfolio member Teva Pharmaceutical (TEVA) is working to enter it in the U.S.

The Israeli-based, worldwide generic drug leader is currently recruiting patients for clinical trials of a “biosimilar” that treats rheumatoid arthritis. The name brand drug, Rituxan, is also used to treat non-Hodgkin’s lymphoma and is the second biggest selling drug of Roche Holding AG (former Growth Portfolio member). Teva already sells the generic version, dubbed MabThera, outside the US, but is working for regulatory approval here by 2014.Read more...

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Market Update 01-11-10

Short-Term Key: Negative
Long-Term Key: -95 (Negative-to-Neutral)
 
-------------------------------------
Inside this week's update...
 
***** China's new solar initiative.
***** 3 ways to profit from silver's bright future.
***** Keeping an eye on our Master Key.
------------------------------------
 
If you read the New York Times last weekend, you may have noticed an article on China's new foray into the business of solar collectors.
Solar collection is a form of solar energy. However, rather than use photovoltaic panels to convert light directly into electricity, solar collection uses hundreds of thousands of mirrors (called heliostats) spread over a wide area to concentrate the sun's rays on tanks of water.
Read more...

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3 ways to ride the precious metals boom 01-11-10

Short-Term Key: Negative
Long-Term Key: -95 (Negative-to-Neutral)
 
-------------------------------------
Inside this week's update...
 
***** China's new solar initiative.
***** 3 ways to profit from silver's bright future.
***** Keeping an eye on our Master Key.
------------------------------------
 
If you read the New York Times last weekend, you may have noticed an article on China's new foray into the business of solar collectors.
Solar collection is a form of solar energy. However, rather than use photovoltaic panels to convert light directly into electricity, solar collection uses hundreds of thousands of mirrors (called heliostats) spread over a wide area to concentrate the sun's rays on tanks of water.
Read more...
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The enduring safety of gold 11-02-09

Short-Term Key: Negative Long-Term Key: -30 (Neutral) Read more...

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Market Update 11-02-09

Short-Term Key: Negative Long-Term Key: -30 (Neutral)
 
This morning in our office, someone jokingly quipped that with gold over $1,000 an ounce we might have to stop using gold bars as doorstops. I said, “Don't worry, they're insured.”
 
Of course, we don’t actually have gold doorstops, but if we did, the only thing to worry about would be theft. Gold has the unique advantage of being virtually immune to the physical risks that plague other assets.
 
For instance, unlike other commodities, gold will not degrade over time. Its beauty endures in a way that makes ageing film stars and fashion models green with envy. It does not oxidize and corrode like other metals do, nor is it fragile in any way.
 
True, gold's chemical properties can be replicated somewhat using silver or platinum, but neither of these comes as close to gold in attaining the Platonic ideal of timeless beauty.
 
Moreover, the gold supply has remained fairly constant throughout history.
Read more...

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Market Update 09-29-09

As expected, the Fed decided not to make any significant changes to its policies last week, keeping the interest rate at virtually zero. Additionally, the Fed announced the continuation of its Treasury buyback program, set to end in October, while deciding to slow down the pace of purchasing agency debt and mortgage backed securities – now set to be completed in March of 2010, rather than by year’s end as originally planned.
 
While acknowledging improvements in the financial markets and the housing sector, the FOMC statement sounded more cautious regarding consumer spending. No wonder – the consumer is being constrained by ongoing job losses, little income growth, lower household wealth and tight credit.
 
The fact that the Federal Reserve intends to keep interest rates at the lowest level possible for an indefinite amount of time is another indication that the economy is still very fragile. We are concerned that the Fed doesn’t appear to have any exit strategy in place as inflation potentially could come on very quickly, brought in big part by the loose monetary policy implemented around the world.
 
Oil ended last week at about $66 per barrel, falling over 8 percent last week. This was the largest weekly drop in two months, pointing to still weak energy demand and again confirming that recovery isn’t going to happen overnight.
Read more...

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Likely Losers

As inflation heats up, don’t even think about buying these stocks

 
Short term, stocks may have a few upside hi-jinks left (see Marketpulse). Longer term, though, we’re likely facing a broad trading range in which only a relative handful of stocks will earn you money in real terms. The others will leave you poorer than when you started. Over the next 10 years, avoiding these stocks will be critical to protecting your investment health.
 
And be forewarned: these lemons will include many stocks that might seem on the surface like can’t-lose propositions—wellknown companies with rock-solid profit growth that nonetheless will prove to be stock market duds.
 
Let’s look in more detail at what the future likely holds.
 
A broad trading range. Stocks will be protected on the downside by rising profits. Why are we so sure profits will be strong? Because in today’s leveraged, high-debt world, economic growth has become an absolute necessity.
Read more...

Homeland Security: Big Today, Bigger Tomorrow

It’s a vast frontier with tremendous investment potential

 
Editor’s Note: Two of the stocks recommended below, Thermo-Electron and Tyco International, were also featured last issue (May 2004) in our front page article; in addition, Tyco is a member of our Growth Portfolio—SL.
 
With our attention diverted by prison scandals and political campaigns, it’s easy to forget that the U.S. homeland remains a de facto battleground. After all, aside from increased airport security, most Americans haven’t been directly affected by efforts to improve homeland security. But very quietly, America has been putting gargantuan resources into making the homeland safer. In fact, for fiscal 2005, the federal government has budgeted some $47 billion for homeland security—a figure equivalent to nearly 10 percent of the Defense Department’s 2003 budget—and the amount is expected to grow by roughly 14 percent a year for at least the next three years.
 
Can investors still get in on the action? Absolutely.
Read more...

Making It With Metals

Rising industrial demand should push platinum and palladium higher

 
A few years back, after a long period of steady prices, platinum and its sister metal palladium had huge moves. These stemmed both from bureaucracy-induced supply bottlenecks in Russia, a major producer, and a growing recognition that the metals are indispensable in certain industrial applications. Palladium rose to more than $1000 an ounce from its prior $100-$200 level, while platinum went from around $350 an ounce to above $600. Eventually, as economic growth stalled, prices came back down. But lately, with economic growth picking up, both metals have once again been uptrended, with platinum surging past prior highs.
 
Clearly you can make a lot of money investing in these metals. You also can lose big—Ford Motors, for instance, a major user of palladium, which is essential in emission-reducing catalytic converters, blew $1 billion because of colossal timing errors in its purchases.
 
We think that demand for these metals will remain strong and that their uptrends will continue to gain force.
Read more...

Mid-Week Update 07-08-09

The market broke through a key support level and remains perilously close to taking a major spill. With little positive economic news to build from, and technical indictors looking weak – we continue to think the market is heading lower. This makes it all the more important to fill your portfolio with market hedges, like precious metals, Treasury Inflation Protected Securities (TIPS) and ample cash. You also want to make sure the bulk of your holdings are comprised of stocks that can weather the storm. Read more...

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