Top Stocks

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.

 

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.

 

Or how about Netflix (NFLX) and Google (GOOG)? They need to spend some time in the sack?

 

By Jeff Reeves, Editor, InvestorPlace.com

An article from the Atlanta Journal-Constitution​ this week chronicled the rock-and-a-hard-plac​e 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.

 

 

Hoarding commodities is a risky business. Just ask "Choc Finger." But for one trading company, stockpiling copper appears to be paying off.

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. 

Amazon (AMZN) has stubbornly refused to give real sales information for its Kindle, preferring only to describe the e-reader as its best-selling product.

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. 

Is the iPad truly the hottest gift this year? That's what Brett Arends of The Wall Street Journal says. I don't know anyone asking for an iPad this year.

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. 

By Ted Reed, TheStreet

 

Auto sales seem likely to rise in 2011, a positive sign for both the economy and the automakers, which should all benefit as a rising tide lifts all boats.

 

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.

 

 

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. 

 

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.

 

On Wall Street this year, no one wants to be a Zero.

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. 

It's really difficult to roll out a television service. Ask Apple (AAPL), which has worked on Apple TV for years. Or TiVo (TIVO), which has rolled with about every punch out there.

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. 

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.

 

By Brian O'Connell, MainStreet

 

Coffee giant Starbucks (SBUX) will roll out a new mobile payment system nationwide early next year after successful trial runs in New York, California and Seattle.

 

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.