Stocks plunged Wednesday after Federal Reserve Chairman Ben Bernanke said a stronger economy may allow the Fed to end its bond buying program later this year.
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Although technology remains absent from the investor's list of sure things, investors shouldn't write the industry off.
By Don Dion, TheStreet
A large part of Warren Buffett's success as an investor has hinged on his ability to pick out companies he considers to be sure things. To the famous investor, sure-thing investments are typically companies in boring industries, are easy to understand and hold promise for long-term growth.
Utilizing these criteria, the famous investor has been able to identify, purchase and profit from companies such as Coca-Cola (KO), Wells Fargo (WFC) and Burlington Northern Santa Fe Railroad. However, it has also caused the Oracle of Omaha to overlook other attractive regions of the market.
In the Berkshire Hathaway (BRK.A) portfolio, consumer goods, energy, industrials and the financial industry can all be pointed to as regions of the market Buffett understands and likes.
The stocks leading this run are like an army division on the move, assaulting new highs in rhythm and showing no signs of giving up.
Here's a new indictment of this terrific market: "It looks tired. Exhausted." To which I say: What are we supposed to do? Tell it to take a nap? Give it some Lunesta? Have it lie down in a nice warm bed and give it 40 winks?
I mean, come on, give me a break. Tired? You call Jabil Circuits (JBL) tired after it shoots the lights out and then gains the most in the S&P 500 ($INX)? Doesn't seem all that tired to me. Does Carnival (CCL) need a good night's sleep? How about rosy-by-association Royal Caribbean (RCL)? Does that stock seem exhausted, sleep-deprived? To me, Carnival is on Red Bull, and Royal is on that energy drink in that little bottle that says beware of heart palpitation.
Rising commodity costs are squeezing margins, and the menu's price limit leaves the company no place to go.
An article from the Atlanta Journal-Constitution this week chronicled the rock-and-a-hard-place challenge of restaurant companies right now. On one hand, weak consumer spending and high unemployment have prompted most casual-dining and fast-food chains to slash prices to keep customers at the table. On the other, inflating agricultural commodity prices mean produce, grains and beef are getting more expensive by the day.
That means the big question for 2011 is not whether restaurants will pass those prices on to consumers but when and how much. And the lowest-priced items on the menu are natural targets, since margins are already razor thin in most cases.
The Chinese search engine might have seen market share growth peak, but the ad revenue keeps flowing.
The metal's price has skyrocketed 28% this year, and one trader owns a huge chunk of it.
One trader owns 80% to 90% of the copper sitting in London Metal Exchange warehouses, The Wall Street Journal reports. That's about half of all the exchange-registered copper in the world, and it's worth about $3 billion.
Not a bad position to be in, considering that copper prices have reached record highs this week. On Tuesday, copper hit $4.2705 a pound -- an increase of 28% this year.
Bloomberg says Amazon could sell more than 8 million e-readers this year.
Investors want a better sense of how the Kindle affects Amazon's bottom line, and Bloomberg finally gives a glimpse. Amazon will likely sell more than 8 million Kindles this year, Bloomberg reports, citing two people who know about the company's sales projections.
That 8 million, by the way, far exceeds the 5 million that most analysts have predicted for Kindle's 2010 sales. One of Bloomberg's sources says that last year Amazon sold 2.4 million Kindles.
One observer gives his reasons for not wanting one yet.
One analyst predicts Apple (AAPL) will sell 6 million this quarter -- about half of them in the U.S. "It's driving the company toward what will probably be yet another blowout Christmas period," Arends writes.
But he says he doesn't want one because it will be cheaper next year. A new one is expected in April, and it's going to be better.
The Chevy Volt is where the IBM PC was 1981: an overpriced, bulky first step toward a new world.
By Ted Reed, TheStreet
Estimates for 2011 light-vehicle sales include 13 million by Morningstar analyst David Whiston and 15 million by Bank of America Merrill Lynch analyst John Murphy. Ford sales analyst George Pipas says 2011 sales "will be above 12 million and perhaps closer to 13 million," according to The Detroit News, an increase from current year sales of about 11.5 to 11.6 million. Incidentally, Whiston puts 2012 sales at 18.5 million.
Whatever the exact numbers, the trend is obvious, given 2009 sales of 10.4 million, the lowest total since 1970. Automakers may not be at the center of the U.S. economy, as they were a few decades ago, but it is clear that few economic indicators are more important than consumer decisions to spend tens of thousands of dollars on a new vehicle.
The markets want to know how the economy is growing, and experts are confident of an upward revision.
After a long period of underperformance, REITs are on the move again.
Stocks have had an impressive few months. The major averages are trading at new multi-year highs. And the S&P 500 is up nearly 21% from its late-August low. But not all stocks have participated equally.
Real estate stocks in particular have fared poorly. The iShares Real Estate (IYR) -- which tracks the performance of a collection of high yield REITs -- has lost nearly 10% on a relative basis compared to the S&P 500 over this period.
That's changing now. With bonds selling off, cautious investors are gingerly stepping back into stocks. As a result, real estate stocks have outperformed the broad market over the last three days -- and the sector looks ready for more. Here's why, along with a fast moving recent IPO that looks ready to soar.
These three bond funds employ strategies designed to excel in difficult market conditions.
By Stan Luxenberg, TheStreet
During the past month, the average intermediate-term bond fund lost 1.1%, according to Morningstar. Now many economists worry that bond markets could face more hard times in 2011. Which bond funds will do best in the coming year?
To find promising choices, consider funds that proved resilient during the hostile bond markets of recent weeks. Among the top performers of the past month, my favorites include Pimco Floating Income (PFIAX), Templeton Global Bond (TPINX) and DoubleLine Total Return Bond (DBLTX). These resilient funds employ strategies that are designed to excel in difficult market conditions.
Bond funds have suffered lately as interest rates have risen. Yields on 10-year Treasuries have climbed to 3.33% from 2.6% in early November. Many forecasters predict that rates will continue rising in the next year. When rates climb, bond prices tend to drop as investors flee existing issues in search of new bonds with higher yields.
Banks are paying bigger salaries and cutting back on bonuses. And that can hit employees hard.
Those are the back-office employees and mid-level bankers that will get no annual bonus this year, The New York Times reports. At one time, this would have been unimaginable. But after the financial crisis, many banks cut bonuses and compensated by raising salaries.
So the Zeroes get more in their paychecks, but at the end of the year they see no bonus. "Even though employees will receive roughly the same amount of money, the psychological blow of not getting a bonus is substantial, especially in a Wall Street culture that has long equated success and prestige with bonus size," the Times reports.
The company is finding that a television service with multiple hardware partners is not easy to develop.
Google (GOOG) is now seeing just how tough the TV landscape is. Its much-anticipated Google TV was supposed to get a glitzy launch next month at the Consumer Electronics Show in Las Vegas.
Now Google is delaying the launch to improve the software, which people aren't crazy about, The New York Times reports. The company is telling TV makers to hold off on any introductions.
These funds should capture the strength of the power industry in 2011.
By Don Dion, TheStreet
The global energy industry will likely be an interesting region of the market to watch in the new year. As emerging markets turn to various fuel sources to feed their insatiable thirsts for energy, developed corners of the globe seek resources such as oil, coal and natural gas to prolong their ongoing recovery pictures.
ETF investors can use a number of strategies when it comes to capturing the strength of the energy industry in 2011. Products such as iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) or Market Vectors Coal ETF (KOL) provide ample exposure to a diverse collection of energy-related companies worldwide.
US customers will soon be able to pay for their coffee with their smart phones.
By Brian O'Connell, MainStreet
In a note to customers dated Nov. 1, product manager Chuck Davidson said the Starbucks mobile app is up and running in 300 locations in New York and at select stores in Seattle and Northern California.
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[BRIEFING.COM] Equities ended on their lows with the S&P 500 down 1.4%.
The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
Stocks traded with slim losses until this afternoon's FOMC Statement and subsequent comments from Chairman Bernanke sent equities and Treasuries to their lows while also providing a significant boost to the dollar.
Today's Statement was ... More
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