The Dow has run up to -- and been turned away from -- 16,000 twice before.
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Expect controversy in gold funds and a comeback of leveraged funds, among other shifts, in the year ahead.
By Don Dion, TheStreet
With total U.S. assets recently crossing the $1 trillion mark, the ETF industry has continued to swell in 2010, becoming an undeniable force in the financial universe. The story of this rapid growth has had plenty of triumphs as well as controversy. Looking ahead to 2011, here are five predictions of what's next for exchange-traded funds.
1. Physically backed gold ETFs stir up controversy. While the rumor mill has buzzed about the trio of U.S.-listed physically backed gold ETFs -- SPDR Gold Shares (GLD), iShares Comex Gold (IAU) and ETFS Physical Swiss Gold Shares (SGOL) -- for some time now, controversy may go mainstream in 2011. "Gold bugs" and certain industry insiders have relished opportunities to whisper about the gold that's behind these huge ETFs, but the sheer size of these funds will undoubtedly begin to prompt questions on a larger scale.
It's tempting to chase the huge returns these names have generated in 2010. But remember: The higher they climb, the harder they fall.
By James Dlugosch, Stockpickr
Recent trading activity for Netflix (NFLX) offers investors a cautionary tale with respect to stocks with big valuations. Since crossing $200 at the end of November, shares of the home delivery video giant have dropped by more than 10% in December.
Investors, take note: The higher they climb, the harder they fall. For those chasing returns or momentum stocks, buying Netflix at the end of November would have been a mistake. Are there other stocks trading for big valuations investors should now avoid?
Certainly the warning signs were there for Netflix. Prior to November, the stock was a big winner. Shares had more than tripled in value in 2010, thanks to earnings growth and a future that many people predicted was unlimited.
One analyst, citing internal sources, says the new BlackBerry Playbook needs help.
The upcoming BlackBerry PlayBook from RIM has a battery that lasts only a few hours per charge, writes Shaw Wu, an analyst with Kaufman Bros. The Digital Daily blog picked up on the report.
If that's the case, the PlayBook will have a hard time making a strong run against the iPad, which can last for nearly 10 hours on one charge. Even Samsung's Galaxy Tab can go about six hours, writes John Paczkowski. Update: RIM has responded to Wu's claim. More below.
With the greenback sliding again, foreign stocks, gold and industrial metals are on the move.
It's well known that the U.S. dollar plays a unique role in the global economy. As the world's de facto reserve currency, it's always in high demand, especially in times of stress. That makes it, along with U.S. Treasury bonds, the haven asset investors flock to when fear and uncertainty strike.
And since most of the world's tradable commodities are denominated in dollars, its undulations affect the prices of things like gold, crude oil, copper and other metals. The strength and weakness of the dollar also push and pull foreign stocks, as hair-trigger hedge fund types always want to be positioned in assets denominated in rising currencies.
The snack-maker says half of its products will be now made from natural ingredients.
Well, Frito-Lay now wants to change that, according to USA Today. The snack-maker, a unit of Pepsico (PEP), says that in 2011, 50% of its products will be made from all-natural ingredients.
MSG will be removed from Lay's Barbeque and Tostitos Hint of Lime chips. Some products will lose the artificial colors as well.
These aggressive plays could gain from the noted investment strategist's anti-consensus expectations.
By Paul Mazzilli, TheStreet
Doug Kass, the investment strategist and a RealMoney Silver contributor, recently published his widely followed "15 Surprises for 2011." Below are some aggressive ways to play eight of those surprises through ETFs.
Note that many of these plays include leveraged and inverse ETFs, which are most suitable for short-term trading and which may have tracking errors over time.
Surprise: In line with consensus, the domestic economy experiences a strong first half, but several factors conspire to produce a weakening second half, which jeopardizes corporate profit growth forecasts.
ETF play: Stay invested early in 2011, but later in 2011, establish a long position in a leveraged inverse ETF that seeks minus 200% returns on a broad market index. The most popular is the ProShares UltraShort S&P500 (SDS).
From video Barbie to Tonka Chuck, toys topped the list of holiday must-haves.
One analyst said Mattel (MAT) and RC2 (RCRC) were the best performers.
Mattel shares have been on a nice six-month run, going from just less than $22 to close to $26 as of Wednesday. RC2 shares have climbed from $16 to $21.30.
Fears of military spending cuts are overblown, and these picks are well-positioned to win new contracts.
Rex Moore, Motley Fool Top Stocks editor
If, like me, you're an 8-year-old boy at heart, it's hard to imagine that missiles, tanks and fighter jets could ever fall out of favor.
Yet our allies in Britain are busy decommissioning warships, delaying weapons upgrades and canning the development of some high-tech military vehicles. Here on U.S. soil, meanwhile, we're hearing rumors that cuts in defense spending are as certain as slop in the mess hall (or a bad-tasting MRE). These fears have weighed on defense stocks, sending the group down 8% since the beginning of the year.
Privately held shares are being swapped so frequently that regulators are paying attention.
This is the same problem that forced Google (GOOG) into an IPO perhaps earlier than its founders wanted.
Facebook has issued privately held shares to employees and other investors, and those shares are being traded so much that the Securities and Exchange Commission has asked Facebook for more information about what's going on. The SEC has made similar requests in to Twitter, Zynga and LinkedIn, the Times reports.
These funds are well positioned to profit from a global wireless boom.
By Don Dion, TheStreet
Whereas the gadgets were once used mainly to stay in contact with friends and loved ones through phone calls and texts, consumers are increasingly turning to their iPhones, Droids and BlackBerry devices to connect with the world around them, surf the Internet, play games, check email and keep a constant eye on work.
Downloadable films feel like one more doomed move to right the once-dominant department store chain.
By Jeff Reeves, editor of InvestorPlace.com
Though it's been a happy holiday for many retailers -- sales data Tuesday confirmed many shops are on track for their best December in three years -- one battered big-box store that can't seem to get it right is Sears Holdings (SHLD). The operator of Sears and Kmart stores has projected sales will slide about 4% in the current quarter year over year.
Poor sales have become a habit at Sears and Kmart, and they have sparked an air of desperation in 2010 -- from testing Sears grocery delivery in urban markets to relinquishing a retail monopoly on the Craftsman brand via a partnership with Ace Hardware.
History suggests stocks should blast higher as we enter the third year of the president's term.
With the midterm elections behind us and 2011 looming large, Wall Street strategists are looking forward to the famously profitable third year of the four-year presidential cycle. The logic is easy: Presidents tend to be tough in the first two years, but in the final two with their re-election looming, policy turns toward stimulating the economy and securing a second term.
As a result, Merrill Lynch chief market technician Mary Ann Bartels points out, the third year of presidential terms typically delivers about 15% returns. Jeffrey Hirsh of Stock Trader's Almanac fame notes that there hasn't been a down year in the third year of a presidential term since war-torn 1939, when the Dow fell 2.9%. The only severe loss going back 100 years happened in 1931 during the Depression.
We're in the middle of the sweet spot right now: between the fourth quarter of the midterm year and the first quarter of the pre-election year.
One Morningstar analyst looks at funds that are slightly expensive but poised for growth.
But being new funds, they don't have the attractive expense ratios you'd find at older ones. The hope is to get in on these now, and asset growth would drive costs down.
If you're willing to accept that negative, then here are the nine funds that Kinnel likes:
The upcoming device will offer consumers more wireless capability, according to a report.
By Maggie Overfelt, TheStreet
Another day, another round of speculation about one of Apple's (AAPL) upcoming products.
On Tuesday, DigiTimes reported that Apple is preparing three versions of its upcoming iPad 2, some of which will be Wi-Fi- or CDMA-equipped, offering customers "more" wireless solutions than what's available with the current iPad iteration.
The automaker should benefit from rising industry sales and improving comparisons with Ford, analysts say.
By Ted Reed, TheStreet
Since returning to the public markets on Nov. 18, GM shares have traded in a narrow window between $33 and $36. Shortly after midday Tuesday, they were trading near the high end, up 81 cents to $35.41.
As the year winds down, the outlook for GM appears positive, both because a rising tide of vehicle sales should lift all boats in the auto industry and because analysts are generally optimistic about the company's prospects.
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The offering could become the second-biggest this year if underwriters exercise an option to buy more shares.
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[BRIEFING.COM] Equity indices settled on their lows following a steady, session-long slide. Similar to yesterday, small-caps paced the retreat as the Russell 2000 fell 1.6%, extending its December loss to 3.6%. The S&P 500 settled lower by 1.1%, widening its month-to-date decline to 1.3%.
There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups ... More
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