Only 3 Months Until Everything Hits The Fan
June 2012. It could be one of the most significant moments in financial history. That's when 322 million Chinese could legally begin sucking 1.6 billion ounces of silver out of the physical market. This one moment could put a decade of market misery behind you... if you take the right steps now. Full details here.
March 5, 2012
If I'm an Apple Investor, I Want a Dividend
By Martin Hutchinson, Global Investing Strategist
Now that their stock is up more than 20-fold in the last ten years, Apple Inc. (Nasdaq: AAPL) investors have had a wonderful ride.
On top of that the company has amassed a $97.5 billion cash hoard that would be the envy of any small nation.
However, as a dispassionate observer with experience of past such glorious valuations, I will tell you: If I were an Apple shareholder I'd want a cash dividend.
In fact, I think investors should certainly demand payout of at least three quarters of that cash hoard.
Simply put, a dividend is the best way for Apple shareholders to get real value out of their investment.
Here's why.
If Apple decided to pay out a $25 billion dividend per annum, allowing shareholders to benefit directly from the company's profits, it would be less likely to diversify unwisely in the future.
By receiving such a dividend, Apple shareholders would find their capital value preserved and their income increased.
However, the temptation of the $97.5 billion cash hoard would remain and management would still dream of the $100 billion acquisition that could revolutionize Apple's prospects.
That's why besides an annual dividend of $15-$20 billion (giving a 3.75%-5% yield on a $400 billion capitalization), shareholders should demand that the cash hoard itself, or the great bulk of it, be paid out to them, by a special dividend of maybe $100 per share.
By doing that, the diversification risk would be removed, and Apple would retain only enough earnings to guard against the onset of recession.
To continue reading, please click here…
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U.S. Military on the brink of disaster...
Most people have no idea how close we came on October 24, 2008 to a massive breach of the United States military systems. The whole story is in recently declassified military intelligence. So what saved us on that single day? One technology averted the catastrophe. And it's linked to a secret that every investor should know about. Please read the shocking story here.
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Agricultural Stocks: Deere & Co. and AGCO Are Poised to Reap Gains
By Jason Simpkins, Managing Editor
Many analysts are forecasting lower food prices this year, and that's taken a toll on many agricultural stocks.
But there are two reasons why investors shouldn't be so quick to abandon the sector.
In fact, two stocks, Deere & Co. (NYSE: DE) and AGCO (NYSE: AGCO) are poised to reap gains now that ag stocks have pulled back
Here's why.
It's true that farmers currently are planting more staple crops in an effort to exploit high prices. But as we've seen in just the past few months, floods, droughts, and rapidly rising demand could easily intercede to keep prices near record levels.
The most important crop to watch right now is corn.
Preliminary USDA data suggest that farmers this year will plant the biggest corn crop since World War II. However, that's exactly what will be needed, since corn is facing the greatest supply constraints of any staple crop.
Indeed, even a bumper crop will first have to compensate for the shortages of the current crop year, which are significant. By this year's autumn harvest, global stocks of corn as a share of consumption will have fallen to the lowest level since 1974.
"There has been no rebound in global corn stocks," Ed Allen of the USDA's economic research service told the Financial Times. "This has maintained very tight markets for corn."
And while global corn production is expected to rise, there's still a chance bad weather will damage the harvest just as it has in the past two years.
Last year, wet weather early in the season delayed planting while hot weather in the summer scorched young stalks. That contributed to two consecutive years of shrinking supplies.
Analysts say a third straight year would be rare, but according to economists at the University of Illinois, there is a 40% chance corn yields will fall short in any given year.
"The odds slightly favour a corn yield above trend in 2012, but there is certainly precedent for another year below trend," the economists wrote last month. "More specific expectations about the 2012 average yield will depend on how the planting and growing season unfolds."
January droughts in Argentina and Brazil reduced global soybean production by 7.2% this year. And with farmers focusing on corn there's less land available for soybeans. The USDA anticipates soybean production will fall by 12.7 million metric tons this year.
On Oct. 1, the start of the next season, soybean inventories will be 20% lower than they were last year, according to Jefferies Bache LLC. As a result, soybean prices, which are up nearly 9% year-to-date, will gain another 6.7% by June, the New York-based commodities trader estimates.
To continue reading, please click here...
Options 101: Credit Put Spreads
Can Boost Your Gains and Lower Your Risk
By Larry D. Spears, Contributing Writer
Last month, Money Morning showed you how to use a technique called selling "cash-secured puts" to generate a steady flow of cash from a stock - even if you no longer own the shares.
It is a highly effective income strategy that can also be used to buy stocks at bargain prices.
But selling cash-secured puts does have a couple of drawbacks:
It's called a "credit put spread" and it strictly limits both the initial cost and the potential risk of a major price decline.
I'll show exactly how it works in just a second, but first I have to set the stage...
To continue reading, please click here...
June 2012. It could be one of the most significant moments in financial history. That's when 322 million Chinese could legally begin sucking 1.6 billion ounces of silver out of the physical market. This one moment could put a decade of market misery behind you... if you take the right steps now. Full details here.
March 5, 2012
If I'm an Apple Investor, I Want a Dividend
By Martin Hutchinson, Global Investing Strategist
Now that their stock is up more than 20-fold in the last ten years, Apple Inc. (Nasdaq: AAPL) investors have had a wonderful ride.
On top of that the company has amassed a $97.5 billion cash hoard that would be the envy of any small nation.
However, as a dispassionate observer with experience of past such glorious valuations, I will tell you: If I were an Apple shareholder I'd want a cash dividend.
In fact, I think investors should certainly demand payout of at least three quarters of that cash hoard.
Simply put, a dividend is the best way for Apple shareholders to get real value out of their investment.
Here's why.
If Apple decided to pay out a $25 billion dividend per annum, allowing shareholders to benefit directly from the company's profits, it would be less likely to diversify unwisely in the future.
By receiving such a dividend, Apple shareholders would find their capital value preserved and their income increased.
However, the temptation of the $97.5 billion cash hoard would remain and management would still dream of the $100 billion acquisition that could revolutionize Apple's prospects.
That's why besides an annual dividend of $15-$20 billion (giving a 3.75%-5% yield on a $400 billion capitalization), shareholders should demand that the cash hoard itself, or the great bulk of it, be paid out to them, by a special dividend of maybe $100 per share.
By doing that, the diversification risk would be removed, and Apple would retain only enough earnings to guard against the onset of recession.
The Larger Case for an Apple Dividend
But that's not the only reason why Apple should do the right thing and start paying a dividend.To continue reading, please click here…
------------------------------
U.S. Military on the brink of disaster...
Most people have no idea how close we came on October 24, 2008 to a massive breach of the United States military systems. The whole story is in recently declassified military intelligence. So what saved us on that single day? One technology averted the catastrophe. And it's linked to a secret that every investor should know about. Please read the shocking story here.
------------------------------
Agricultural Stocks: Deere & Co. and AGCO Are Poised to Reap Gains
By Jason Simpkins, Managing Editor
Many analysts are forecasting lower food prices this year, and that's taken a toll on many agricultural stocks.
But there are two reasons why investors shouldn't be so quick to abandon the sector.
In fact, two stocks, Deere & Co. (NYSE: DE) and AGCO (NYSE: AGCO) are poised to reap gains now that ag stocks have pulled back
Here's why.
- Much of the pessimism surrounding crop prices is overdone.
- Many ag stocks are still excellent long-term plays - despite any short-term trepidation.
It's true that farmers currently are planting more staple crops in an effort to exploit high prices. But as we've seen in just the past few months, floods, droughts, and rapidly rising demand could easily intercede to keep prices near record levels.
The most important crop to watch right now is corn.
Preliminary USDA data suggest that farmers this year will plant the biggest corn crop since World War II. However, that's exactly what will be needed, since corn is facing the greatest supply constraints of any staple crop.
Indeed, even a bumper crop will first have to compensate for the shortages of the current crop year, which are significant. By this year's autumn harvest, global stocks of corn as a share of consumption will have fallen to the lowest level since 1974.
"There has been no rebound in global corn stocks," Ed Allen of the USDA's economic research service told the Financial Times. "This has maintained very tight markets for corn."
And while global corn production is expected to rise, there's still a chance bad weather will damage the harvest just as it has in the past two years.
Last year, wet weather early in the season delayed planting while hot weather in the summer scorched young stalks. That contributed to two consecutive years of shrinking supplies.
Analysts say a third straight year would be rare, but according to economists at the University of Illinois, there is a 40% chance corn yields will fall short in any given year.
"The odds slightly favour a corn yield above trend in 2012, but there is certainly precedent for another year below trend," the economists wrote last month. "More specific expectations about the 2012 average yield will depend on how the planting and growing season unfolds."
Good News for Agricultural Stocks
Corn isn't the only crop facing supply constraints, either.January droughts in Argentina and Brazil reduced global soybean production by 7.2% this year. And with farmers focusing on corn there's less land available for soybeans. The USDA anticipates soybean production will fall by 12.7 million metric tons this year.
On Oct. 1, the start of the next season, soybean inventories will be 20% lower than they were last year, according to Jefferies Bache LLC. As a result, soybean prices, which are up nearly 9% year-to-date, will gain another 6.7% by June, the New York-based commodities trader estimates.
To continue reading, please click here...
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Options 101: Credit Put Spreads
Can Boost Your Gains and Lower Your Risk
By Larry D. Spears, Contributing Writer
Last month, Money Morning showed you how to use a technique called selling "cash-secured puts" to generate a steady flow of cash from a stock - even if you no longer own the shares.
It is a highly effective income strategy that can also be used to buy stocks at bargain prices.
But selling cash-secured puts does have a couple of drawbacks:
- First, it's fairly expensive since you have to post a large cash margin deposit to ensure that you'll be able to follow through on the transaction if the shares are "exercised." Thus the name, "cash-secured" puts.
- Second, if the market - or the specific stock on which you sell the puts - falls sharply in price, you could have to buy the shares at a price well above their current value, taking a substantial paper loss.
It's called a "credit put spread" and it strictly limits both the initial cost and the potential risk of a major price decline.
I'll show exactly how it works in just a second, but first I have to set the stage...
To continue reading, please click here...
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