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Investors should focus on the gap between price and value, Intrepid Capital Funds' Mark Travis says.
By Robert Holmes, TheStreet
With stocks in a slump -- the benchmark S&P 500 ($INX) has fallen 5% from a peak two months ago -- individual investors are trying to figure out which companies may rebound because they offer value and which may continue their slide.
In this topsy-turvy world -- even hot-gadget maker Apple (AAPL) and defensive stalwart Exxon Mobil (XOM) are down -- emulating private-equity investors' approach to evaluating companies may be the smartest move.
Stocks are barely up so far in 2011 after two years of strong gains as higher commodity prices crimp corporate profits, consumer spending is lackluster amid high unemployment and the Federal Reserve is ending its second stimulus program this month. By focusing on corporate balance sheets and private-market valuations, investors may be able to navigate volatility in these summer months.
Investors should look to emerging economies for gains in the second half of the year, Jim Jubak says.
Here are four funds that have taken advantage of the recent decline in commodity prices.
By Don Dion, TheStreet
Once seemingly impervious to weakness, the commodities space has recently been cast under an unsettling shroud of uncertainty, leading many investors to question the long-term strength and attraction of hard assets.
Although in the near term, those looking for direct access to energy, minerals, and individual agricultural products may face an uphill climb, there are a number of ways ETF investors can actually benefit from the recent upheaval in commodities. Below are a handful of funds that look set to benefit as resource prices remain subdued.
SPDR S&P Retail ETF (XRT): Throughout the final months of 2010 and first quarter of 2011, cotton prices stuck to a steep upward path, as evidenced by the rise of the futures-tracking iPath Dow Jones UBS Cotton Subindex Total Return ETN (BAL).
We're in the midst of a huge social-media bubble, and as these stocks start popping, some will prove to be spectacular duds.
It's not who is the next E-Toys or Webvan, two of the most spectacular crash-and-burn dot-coms of a bygone era. It's who is the next MySpace, the social-media bomb that News Corp. (NWSA) paid $580 million for and has now reportedly sold for a mere $35 million in a hasty bid to get the darned thing off the balance sheet by the end of the quarter.
MySpace was all the rage at one point, before it was polluted by ads and superseded by super-slick Facebook. At the time News Corp. purchased MySpace, it was considered to be the coolest move by old media to capture the pizazz of new media.
We know we have a huge bubble going on for the moment when we hear that games maker Zynga could be valued at three times higher than Electronic Arts (ERTS). We know we have a huge bubble when the barely profitable LinkedIn (LNKD) garners an $8 billion valuation after eager investment bankers slap buys on it, no doubt in a pre-Spitzer attempt to wrangle more social-media business in the future.
Once valued as high as $1 billion, the struggling social-networking site gets a deal for only $35 million.
News Corp. (NWS) has sold the social media site to an online advertising company called Specific Media. Although the price wasn't announced, the AllThingsD site reports that it was $35 million. That's well below the $100 million News Corp. initially wanted.
At one time, MySpace was worth a cool $1 billion. And News Corp. bought it six years ago for $580 million. Oh, how things have changed.
Check out the following video news report on the deal. Post continues after video:
Emerging markets are the rage these days.
Wherever you put your money, it’s important to stick to your investment discipline. As a value investor, I focus on three attributes: quality, growth and valuation. A quality company will have long-term-oriented, shareholder-friendly management; a competitive advantage that will protect its future cash flows from rivals; a high return on capital; and a strong balance sheet. Its business will also have a high recurrence of revenue, which will result in stable cash flows.
Investors looking for exposure to the now-strengthening tech sector should focus on these two stocks, which are likely to outperform even tech’s finest in the near term.
A painful multi-month decline in stocks and risky assets comes to a definitive end on key technical breakouts.
The sell-off in stocks and risky assets, which began with bank stocks back in February and spread like an infection in the months that followed, appears to be well and truly over. The end couldn't come soon enough. From its peak, the Dow Jones Industrial Average shed nearly 8% to its intraday low last week.
The catalyst for the rebound, as I've been discussing in my recent blog posts and columns, has been a turn in the economic data here at home as well as a vigorous response by European policymakers to the latest Greek debt problem. Home prices are moving higher again as sales perk up. And the index of leading economic indicators suggests that GDP growth is set to re-accelerate later this year. With sentiment so low, it's easy for the data to surprise markets to the upside. And that's precisely what's happening now.
As a result, the bulls have pushed stocks up and out of its two-month downtrend while haven assets like U.S. Treasury bonds plummet. In fact, T-bonds are falling with a violence not seen since last October -- a sign that investors are feeling confident. This, along with solid market breadth and other technical indicators, suggests this new uptrend has legs. Here's why.
Saving 10 cents a gallon sounds great until you consider what you'll give in return.
Just what we need, with months of road trips ahead of us. And it's just what Wal-Mart needs, too, as it tries to reverse its worst U.S. sales slump ever.
Unfortunately, the discount is good only at Murphy USA and Wal-Mart gas stations in 18 states, mostly in the heartland (full list here). California and the Northeast are out of luck.
So if you're in the right state, is this a good deal? As it turns out, what Wal-Mart gets in return more than compensates for any loss it takes from the discount. Let's go over what Wal-Mart receives from this promotion:
The 3,600-square-foot advertisement is part of Coca-Cola's mission to go green -- and make more green as a result.
Coca-Cola Co. (KO) is one of the most innovative companies on the planet. According to some accounts, Coke is responsible for the proliferation of the six-pack and even the image of the modern Santa Claus as we know it, thanks to its yearly holiday ad campaigns.
That spirit of innovation and creativity at Coke lives on in green business practices and environmentally friendly products for the 21st century. While Coca-Cola certainly does plenty of things to decrease its carbon footprint, perhaps none is more spectacular than its recent construction of a 3,600-square-foot living billboard.
Made from recycled bottles and thousands of tea plants, the billboard takes Coke's green streak to another level.
The Malaysia and Indonesia ETFs have been refreshingly stable while other global funds have slumped.
By Don Dion, TheStreet
Weeks of shaky action has taken its toll on investor confidence, leading many individuals to a "risk-off" mindset. Interestingly, as droves of people flee risky corners of the investing universe, many of these areas are starting to outperform.
For instance, Southeast Asia has become a shining region of the globe as developing nations including Malaysia and Indonesia pull ahead of developed countries such as the U.S., Canada, and the European Union. Using ETFs, investors have the opportunity to target each of these emerging leaders.
The Market Vectors Indonesia ETF (IDX) and the iShares MSCI Malaysia Index Fund (EWM) are the largest, most liquid options for individuals looking to take on exposure to these two Southeast Asian superstars.
Autos, energy and clothing offer the best ways to take advantage of a peak in commodities as we enter the second half of the year.
I think the answer is when we failed to create any jobs to speak of and became a suspect place in which to do business. It happened when our budget deficit became laughable, such that everyone knows that any other country with a balance sheet like ours would see its interest rates soar. I think we became this way once it was clear that China's tightening was more important than our loosening.
That's the bad news.
The good news is that with the sudden break in commodity inflation, we have a chance to create some wealth in the companies that export overseas and depend on emerging growth. That's because emerging-growth countries will stop being forced to slam on the brakes, as they have for most of this year.
The annual survey by CNBC says Virginia has a strategic location and friendly business climate.
CNBC has once again ranked all states to find out which is the best for doing business. Some of the categories include quality of life, a low cost for operating, economy, workforce, education and cost of living.
This time around, Scott Cohn reports, Virginia won the best point total in the history of the study.
Here's a rundown of all five top finalists and why they're so appealing to businesses, starting with Virginia:
The convicted Ponzi schemer says the judge who sentenced him was unfair and didn't understand the financial industry.
In interviews with The New York Times, the convicted fraudster is wallowing in despair. The judge that sentenced him, Denny Chin, could have picked a shorter prison term, he said. And being described as an evil monster is downright insulting.
"In my mind, Chin was anything but fair, with zero understanding of the industry," he said, adding that the judge made him "the human piñata of Wall Street" while bank and government officials received no prison punishment at all.
"Remember, they caused the recession, not me," he added.
The battery maker ends a key joint venture, opening up new opportunities in the energy grid market.
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Stocks are lower in light volume trading ahead of the upcoming holiday weekend.
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[BRIEFING.COM] After opening sharply lower, the three indices have spent the entire day in a steady climb toward yesterday's closing levels. While the Dow has been able to cross into positive territory, the S&P 500 remains lower by 0.2% as nine sectors continue to trade in the red.
The financial space has shown some recent strength as the sector returned to its flat line. Further gains in this influential sector would likely give the broader market the boost needed to return into the ... More
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