Diversify Savings into Other Currencies & Overseas Assets

With an unprecedented increase in federal spending, a record number of newly printed dollars entering the system, and the shrinking tax base, time is running out for savers, earners and investors who still have all their savings, salaries, homes and their investments denominated in U.S. dollars.  The U.S. economy looks grim…multi-billion dollar bailouts at taxpayer expense…billions of dollars in stock value evaporating overnight…dried up credit…collapsing mutual funds…disappearing retirement accounts.

Couple this inflation threat with the 100% certainty of higher taxes in the future. If you earn $62,068 or more, you already pay 80% of everything collected by the IRS.  But at the other end of the scale, about 50% of adult Americans don’t pay any taxes whatsoever.  This shrinking tax base will force Washington to collect more of the tax take from those who already shoulder most of the tax burden.  Anything else would be political suicide.

• Smart investors have already positioned themselves for the inevitable when the dollar fails.  They’ve diversified into non-dollar denominated investments, and there are a lot of them to choose from.  Stocksonwallstreet.net regularly discusses equity investments overseas and in emerging markets, so I won’t dwell on that here.

• Invest in foreign currencies directly.  Currency investing can be tricky and volatile, but in countries like Japan and Hong Kong, financially savvy housewives are heavy day traders of currencies.  There’s no reason Americans cannot do the same.  Just beware and educate yourself well before diving in.

• Another strategy is to invest in real estate that’s bought and sold in a currency other than the dollar.  For example, Brazilian real estate is traded in the Brazilian Real, a currency that’s very strong and will probably get stronger as the dollar declines.  However, overseas property investments can be fraught with scams and fraud, so buyers beware!  A lot of foreign investors have been burned in places like the overheated Shanghai property market.  Given the pitfalls, this is not an investment option I’m not particularly keen on.

• The erosion of the dollar can also make the value of the currency part of the equation in determining where to retire.  In many places around the world, you can enjoy an upscale but low-cost retirement…a wonderful high-quality lifestyle for a fraction of what it costs at home.  There’s never been a smarter time to explore.  There are already 7 million Americans abroad for whom the American Dream has simply been priced out of reach.

There are places you can still own your own home or beach house and enjoy appreciation of 20-60% per year…where world-class health care won’t send you to the poorhouse…where the government doesn’t involve itself in every aspect of your personal life…and won’t even charge you taxes.  A house on the beach, a mountain villa, or a super-modern city condo can cost 50-75% less than it might at home.  Same goes for the overall cost of living.  A week’s worth of groceries, dinner at a fine restaurant, a night at the symphony, even full-time household help – like a maid or a gardener – can cost pennies on the dollar.

Google.com Vs. Google.cn: The Difference Chinese Censorship Makes

Today reading John Chow’s blog I came across a really interesting article that I thought would interest you all here it is:

Google.com Vs. Google.cn

“With Google’s decision to no longer censor search results at Google China, I thought it’ll be interesting to show how big of a difference a result can be between Google.com and Google.cn. While many are praising Google for standing up for free speech and stuff, my feeling is this is more of business decision than a moral one. Unlike in the rest of the world, Google is not the number one search engine in China. They place a distant second behind Baidu. While Google China operations did generate $600 million in revenue, Google’s cost of doing business in China could be just as high if not higher. Google stated that losing the China market wouldn’t make a dent in their profit margin. My take on this – Google had no way of beating Baidu in China and decided to get out with some goodwill marketing back home by playing the anti-censorship card. It seem to have work too judging by all the “Good job Google!” posts all over the Web. So just how different are the search results between Google.com and Google.cn? Below is the imagine results I got from Google.com for the term “tiananmen.”

And this is the results I got for the same term on Google.cn.

You have until the end of this month to enjoy the old Google.cn. Next month, you’ll see results similar to Google.com. And you’ll probably see Google being escorted out of China under armed guards.

On a side note, anyone interested I am looking for someone who wants to be a guest writer on anything about politics, business, finance, trading, etc. This will only be a 2-4 week stint. Your blog will get great credit and traffic and could eventually turn into a weekly segment. I just need help filling in some posts as I recover and go through physical therapy.

Top 5 Safe Stock Bets in 2010

Here are 5 safe stock picks for 2010 and five reasons to own them.

Goldman Sachs (GS) Current Price: $168.80 12-month target: $250

1. Pickup in M&A and IPO activity will launch the rest of Goldman’s business ventures
2. Lower compensation expenses due to protests.
3. Goldman’s fixed-income, currencies, and commodities business should soar.
4. Healthy balance sheet and advantage over its peers due to its premium brand name.
5. Goldman is a very attractive opportunity right now and it is undervalued compared to what it should be pegged at.

Read the full stock report on Goldman Sachs.

PetroBras (PBR) Current Price: $47.68 12-month target: $80

1. PBR plans to invest $174 billion by 2013 to support the largest oil discovery in 30 years.
2. PetroBras has both the backing of the Brazilian government who invested over $30 billion and the Chinese private investors who have pledged over $20 billion to PBR’s discovery.
3. Brazils government proposed to make PBR the only operator of all new offshore pre-salt oil fields yet to be exploited.
4. PetroBras expects oil production to increased from 2.4 million barrels a day to around 5.7 million barrels a day by 2020.
5. PBR has long-term views and have been expanding renewable energy programs such as solar, biofuel, and energy. Biofuel production is expected to increase 18% by 2013.

Read the full stock report on PetroBras.

Under Armour (UA) Current Price: $27.27 12-month target: $37

1. I see potential in opportunities for new product adjacencies, and expanding distribution worldwide.
2. Footwear growth will continue to increase. Revenues for these products have increased over 69% in 2009.
3. Adding to this I still see growth in Under Armour’s apparel sales, which are up 8%.
4. Under Armor had yet to even break into the international market, which offers a plethora of new opportunities for this growing brand.
5. I believe sales will rise drastically in 2010 driven by international sales, new women’s clothing line, and expansion within their own footwear line.

Read the full stock report on Under Armour.

Fluor (FLR) Current Price: $45.04 12-month target: $65

1. Large growth opportunities with huge worldwide infrastructure expansions in China, Brazil, U.S., etc.
2. I expect demand to increase in 2010 backed by more oil and gas projects, government spending worldwide on construction projects.
3. FLR has over $31 billion in future project backlogs adding value if the economic crisis were to continue longer than expected.
4. FLR has a strong balance sheet with a solid ROA, strong profit margins, and little debt.
5. I think PE ratios and earnings estimates will improve in the New Year. In 2009, earnings dropped due to the large amount of cancellations as a result of the credit crunch. With banks getting healthy and more willing to lend we can expect for infrastructure projects to start up again.

Read the full stock report on Fluor.

The Buckle (BKE) Current Price: $29.28 12-month target: $42

1. I like BKE due to their strong brand management and overall sales appeal
2. Per store sales have gone up from $1.32 million to $2.19 million in the last 7 years, a net growth rate of 66%.
3. Long-term growth prospects are bullish heading into 2010 as I expect sales double-digit sales for a third consecutive year followed by strong earnings estimates.
4. Currently they have $3 a share in cash, zero debt, and a current ratio of 3.70.
5. Moving on they have a PEG of 0.98, which is a bullish indicator. Adding to this they have strong ROE and ROA of 31% and 23%. Plus Buckle insiders hold 43% of the company showing they have believe in its long-term growth potential.

Read the full stock report on The Buckle.

MicroPlace.com: The Real Solution to Alleviating Global Poverty

With the holiday season coming around many people are making their new years resolutions. Well one should be to give back to the world, this is a number one priority on my list. You might say how? By helping eliminate worldwide poverty within developing countries. So next questions, how is this even possible? Well actually its not that hard. Thanks to an innovative idea, MicroPlace we can now microfinance the third world. Let me describe.

MicroPlace.com

What is MicroPlace?

MicroPlace was founded in 2006. It is a broker-dealer registered with the SEC and it specializes in microfinance for retail investors. Started by Tracey Pettengill Turner it was bough by eBay in 2006.

What is the Goal of MicroPlace?

MicroPlace was founded when Tracey Turner realized that the microfinance industry needed over $250 billion to get capital to the entire world’s working poor who need it to fund their business ventures. The problem was at the time; roughly only $25 billion has been raised. The key distinction he noticed was that Americans give roughly around $300 billion to charity a year, however very little actually goes to microfinance. He believed that there were not enough charities to address all the worldwide poverty problems. As a result he founded MicroPlace to direct socially responsible investment capital to microfinance investments. Since 2006, American’s have loaned over $2.4 trillion to microfinance third world investments.

Why MicroPlace is Special?

MicroPlace allows the everyday investor the ability to make investments in the microfinance industry. You can give as little as $25 yet every dollar counts. Before MicroPlace it was very hard for ordinary investors to microfinance unless they had significant capital.

What is Micro Financing?

Microfinance tries to alleviate global poverty by offering small loans to entrepreneurs in developing countries who would otherwise not have access to credit.

Why I Support Micro financing?

I believe that Microfinance has been proven to be a highly effective poverty reduction tool in developing countries. I support it because instead of giving a handout to people such as charities it give people a hand-up and gives them the opportunity to get their career started and a new life. In developing nations around the world, many people have innovative ideas and the hard work ethic/determination to end their life of poverty. Problem is they have no foreseeable way out of this life. They have the lack of money to grow a business and do not have the ability to access banks/financial services to obtain the capital necessary to start off their venture. Fewer than 10 million of the 100 million people obtaining microfinance are able to obtain loans from a bank. As a result, they are stuck in a rut. Now with MicroPlace it gives them a feasible option to grow their business by receiving small loans, most of which are under $100. MicroPlace invites people in developed countries to invest in their company that in turn takes the money to local lending organizations. You can find an individual venture to loan the money by searching through geographical region. Then the entrepreneur is liable to pay back the loan and the interest, usually somewhere between 2%-6%. 97% of all loans are paid back.

What is my Goal?

Within the New Year, I will be creating my own MicroPlace account with the goal of helping to alleviate global poverty. The best part is you can wire your account easily via paypal/credit card and you are paid quarterly with both interest and part of the loan. It’s a win, win situation for both parities.

What attracted me to MicroPlace?

Last Christmas, my family and I made a trip to South Africa touring the countryside and visiting the fabulous sites. One of which was the shantytowns outside of Johannesburg. This is where I was first exposed to true poverty that exists within the world. These people lived in mud huts with no possessions or assets. They were all stuck in these situations and barely supported by the government. Problem was many had the work ethic, innovative ideas to make it in the business world yet lacked the access to the financial resources that we take for granted in the U.S. As a result, I looked into Micro Financing and found out about MicroPlace and the opportunities it give to these people. In addition, I love the fact that it incentives these people to work hard. The problem I have with charity is its only short-time fix; micro financing creates a long-time opportunity to allow these people to sufficiently support themselves. Like the famous quote:

“Give a man a fish; you have fed him for today.  Teach a man to fish; and you have fed him for a lifetime.”

As a result, this year instead of donating to charities, sign-up for a MicroPlace account and truly help out these people and help alleviate global poverty.

Historical Technical Indicators Point to a Bullish December: Believe it or Not BBD is Still a Buy

With December coming up around the corner many are speculating how the markets will end 2009. I am still questionable and cautious on how the year will end though if we think history usually tends to repeat itself then we could be heading into a bullish month and the best of 2009. Why read and find out?

-  In the past, years where the first 11 months have yielded good returns, December has been one of the strongest. The last few years have been a roller coaster on Wall Street however since March the S&P 500 is up over 67% boding well for good old December.

-   On Average December is one of the Strongest. Yes looking through the charts, graphs, and data over the past 35 years December has doubled the average return of the monthly average 1.7% vs. 0.8%. With the S&P monthly average at 2.2% for the year and 7.5% since March it points to an explosive December rally.

So yes these technical indicators point to a strong month but fundamentally where should you invest?

Sector wise Banks historically have always outperformed in December. Building on this I think retail will continue to exceed expectations along with Engineering and Construction stocks.

Want a stock specifically to invest in?

Check out Banco Bradesco SA ADR (BBD). It is a Brazilian Bank with loads of potential. Why? Tune in later this week and read the full report on BBD. Otherwise lets hope the technical indicators are right this time and we can end 2009 with a bang and some money in our pockets.

Asian Markets Tank: Expect U.S. Stocks to Tumble on Black Friday

Well while some of you are out shopping at 5 AM looking for great deals on Black Friday the stock market should be tumbling, yes taking a huge drop. With the new implications linked to Dubai’s debt global investors are scared and the sell-off began in the Asian markets along with the U.S. futures falling over 3% roughly around 300 points. In Japan they experienced the worst single day drop in over 8-months so don’t expect the U.S. markets to be any better as we have yet to here the full extent of the situation. Yes, unfortunately part of the sell-off is directly correlated to the little information we have about the whole situation and due to the religious holiday in the Middle East it will be a couple days before we learn more. Don’t want to worry you to much but expect a downfall and don’t try to sell as there is little you can do now as the futures have already dropped. A drop was expected however as I explained in this weeks article, Time to Take Profits: Too Much Government Involvement Will Ruin the Economy. Unless you sold off earlier this week on’t sweat it take the loss and bounce back next week. Remember there is always a Bull Market somewhere. Enjoy the weekend!

IPO Frenzy: Try to Jump on China’s GAME

The curtains finally can come up on Wall Street as we lead through the IPO markets busiest week in two years. This week 8 deals are going through with the expectancy to raise $3.5 billion dollars.  Out of the eight, one of them stands out the most for me and its the Chinese Online Gaming Giants Shanda Interactive.

Shanda Games (GAME)

Shanda’s (SNDA) IPO spin-off of their Gaming Business is poised to debut on Friday. This is in effort to focus on developing a more interactive platform with the goal top capture a larger part of the market share. Interactive online games account for 94% of Shanda’s total revenue and is highly profitable. The new company Shanda Games is the largest developer and operator of multiple online role-playing games. In China these games are massively popular similar to World of Warcraft in America. The reason Shanda has become so successful is they were the pioneer of online gaming in China and tapped into the market early. Plus they are looking to grow further with an expected growth rate of 17% through 2013.  In total Shanda Games holds a large portfolio of games, roughly around 30+ in operation. This makes them three times large than any other competitor. The shear size of the company has allowed them to dominate the market as they currently have a large gamer community of over 10 million paying accounts. This constant growth has resulted in a substantial amount of cash flow that helps them expand. Expansion plans include introducing 24 more titles along with a blockbuster title.

Why they will have a Strong Debut

In China this has been the year of online games. They have been on fire tearing up the markets for total gains of 95%. The most recent Chinese Gaming IPO was Sohu.com’s Changyou (CYOU), which has soared more than 139% since its IPO debut in April. Right now Shanda Games is going to be released at a discount to the keys peers on a P/E basis this should drive strong interest in the deal resulting in a momentum drive come Friday pushing the stock higher. Adding to this fundamental valuations favor the new stock as it has an array of long-term attractive growth prospects. Shares for GAME will be priced Thursday at somewhere between $10.50-$12.50. On Friday the stock will debut, I am going to try and jump in Friday and make a play on it. Looking at a long-term perspective I feel GAME is poised to succeed similar to Changyou as they are entering a Bull Market Industry at a time when the recession and financial failures are disappearing.

Stop Shorting BIDU

Stop shorting Baidu (BIDU). A while back I wrote an article advising you to short BIDU, however it has not turned out that way. As a result I have lost 9% on Baidu and am cutting my losses. I still feel Baidu is a momentum based stock carrying solely on the rise of both the Stock Market and China’s improving economy. As a stock the numbers don’t add up, with a P/S of over 10 I classify this as a momentum based stock. To add to this the PEG ratio is well over 1 at 1.71. Strong companies usually have PEGs below 1 whereas Baidu shows quite the opposite. To add to this Baidu has seen the majority of its growth thanks to a large part of the Chinese Government. As I stated in my recent article about China’s Inflation worries, the loose lending policies supported by the government have allowed the Chinese economy to grow at a rapid pace. However, without more regulation enforced by the government, a huge inflation problem could be at hand leading to a sharp decline in Chinese markets. The problem is more regulation will tighten up credit and slow down the economic growth affecting Baidu’s earning power and continued growth. A weaker Chinese economy means a weaker Baidu. The only way for Baidu to maintain such growth is to aggressively increased spending on capital equipment, sales and marketing, etc. These increased costs will cut revenue forecasts however and lower overall valuations. To add to this, Baidu has some legal issues at hand as it was reported in October that they generated material revenues from medical firms selling unlicensed products. This time I was wrong however looking at my past history in my Stock Picks section the next one should be a winner.

Africa: The Next Bull Market

Emerging markets have been the talk for some time now. People go wild about the BRIC (Brazil, Russia, India, China) saying they are the bull markets and places to invest. However I think of the few we are missing out on the largest upcoming emerging market of them all. Africa, yes Africa this deprived nation has shown continuous growth and has become a continent filled with investment opportunities. Let me introduce you to BRICA and its new biggest player, Africa. So why do I like Africa so much? Read and find out.

Africa the next Bull Market

For a long-time now Africa has sustained continuous economic growth yet got little credit in which it deserves. In the past 6 years, Africa’s economic growth has sustained a 6% increase. It has grown much faster than Europe even throughout Europe’s boom years. It has strong capital standing. Governments have lower debts as big stimulus weren’t necessary, loans were not handed out free willing so there is very little consumer debt or much debt altogether. Corporations are growing at rapid paces using their leveraged balance sheets to promote further growth. The economic machine has just started to turn in Africa and when it does there is a huge bull market ahead. Basically everything in life comes down to supply and demand. When someone wants something and everyone else finds out it goes up. Well Africa has the supply, and the demand is on its way. Africa is a natural resources rich nation that is in demand for major infrastructure up hauls. Visiting South Africa last year I noticed that, as with the anticipation of the 2010 World Cup new construction projects are everywhere. They have invested billions in new infrastructure projects and are continuing to look to expand as they look to close the barriers between them and the outside world. China has taken a huge interest within Africa due to both the need for infrastructure and the natural resources. America to is expected to improve its relationship with the nation under the Obama administration and become business partners. I see a high economic ceiling for Africa in the following sectors: Commodities, Infrastructure, Real Estate, and Telecom. The countries I am going to focus my investments around are: Nigeria, Algeria, Kenya, Ivory Coast, South Africa, and Morocco. Africa is a goldmine waiting to be mined. Its obtains a plethora of opportunities waiting to be tapped into. Check back in soon for further research on which stocks within the African Nation to invest in.

Short Baidu (BIDU) ASAP

For those of you who have been riding this stock up it has been quite a joy. Baidu has been a great emerging market play and a Hot Stock on many people’s watch-list. Baidu (BIDU), is China’s version of Google and is up 165% on the year and has been a great investment and stock to own until now. Baidu has now gotten a little ahead of itself and become over-valued and this is why. For the past month or so Baidu has been a monentum based stock. With a P/S of over 10 I classify this as a monetum based company and only in strong markets to I like to invest in monetum based stocks. To add to this the PEG ratio is well over 1 at 1.71. Strong companies usually have PEGs below 1 whereas Baidu shows quite the opposite. To add to this Baidu has seen the majorirty of its growth thanks to a large part of the Chinese Government. As I stated in my recent article about China’s Inflation worries, the loose lending policies supported by the government have allowed the chinese economy to grow at a rapid pace. However, without more regulation enforced by the government, a huge inflation problem could be at hand leading to a sharp decline in Chinese markets. The problem is more regulation will tighten up credit and slow down the economic growth affecting Baidu’s earning power and continued growth. A weaker chinese economy means a weaker Baidu. The only way for Baidu to maintain such growth is to aggressively increased spending on capital equipment, sales and marketing, etc. These increased costs will cut revenue forecasts however and lower overall valuations. To add to this, Baidu has some legal issues at hand as it was reported in October that they generated material revenues from medical firms selling unlicensed products. Investors should consider shorting Baidu (BIDU) down from its current level of $350 to around $280. Once that time we can reanalyze Baidu’s financial standing and long-term growth but until then I’m not interested. Potentially Baidu could go to $400 at max yet the risks outnumber the gains and if you are willing to continue to invest within it at least Hedge it against something else to save your portfolio. We are starting to see the sellout begin so don’t hold on until its too late.

China’s Inflation Worries Build

Is China’s market still rallying or is it coming to a halt? Does anyone really want to be against China and miss out on the gains. I have been part of the rally taking gains from YGE and PTR yet can we continue to expect it to rise at such a rate?  If you are invested in Chinese Stock consider taking profits especially from YGE which I believe to have peaked at $16 and this is why. In 2009, the Chinese Stock Market is up 85% as a result of help from the banks loose lending and favorable foreign speculators. This has given the economy an enormous amount of cash and skyrocketed stocks over economic reality. Can it continue to support this? We have seen recent attempts by the China Securities Regulatory Commission and other government regulators to coo down the trading by tightening regulation yet do they want to disrupt China’s economic recovery? Any moves right now won’t stop China, as the Bulls will run wild. However come fourth quarter could the Chinese government have to shift its monetary policy to stop rising inflation? If so that could send a downfall in their economy and crash the markets. Many say any form of regulation such as raising requirements or interest rates is unlikely to happen because they fear it could hurt the recovery however what if inflation becomes a raging problem? How do they react? We will know when any form of monetary policy change is coming as in past experience usually the stock market reacts before the policy even has been enforced. Analysts expect that if the government were to step in, it could sent the Shanghai Composite Index down as much as 20%. It’s tough how to read this situation. Some are celebrating the recovery and the 8% growth rate. Others think quite the opposite as unregulated credit expansion contains the seeds of future financial problems. Should this pace of credit expansion continue for the rest of the year, China may be faced with a difficult road ahead. The economy won’t be the problem, as most of the debt is owed to investors and debtors. On the contrary, if inflation were to spike next year, the central government would have to choose between shutting off the credit line, which will cause and showcase a massive nonperforming loan problem or they could have an enormous inflation problem. China is in need for a leader, someone to step up and handle this growing problem. To me the danger of this situation is China could potentially create another stock bubble similar to 2006 and 2007. However during those times China’s growth in its economy was peaking and corporate earnings were at an all-time high. This time round the economy is just getting the wheels churning again and they expect another downturn and overall loss in corporate earnings for 2009 so it could be a whole lot worse. Personally I still think China has some Bulls left in it and if a leader steps up this situation could be all handled without a downfall in the markets. Though it is still something to watch out for so you don’t become a causality in the downfall.

Where To Invest?

Concerns on a short-term meltdown among Financial markets have been the recent scare to haunt Wall Street. We have already seen the effects on Wall Street with several down days yet in my opinion, more is still to come. For those of you who follow this blog on a daily basis, you know that I believe the Dow Jones will fall to 7,800 and maybe even lower. However, looking long-term I have come up with several industries that are great to invest in. Throughout the next two weeks I will do an expose on each one individually. Looking at a straight fiscal perspective in the next four years you have to invest in sectors that will be helped and supported by President Obama. This will lead straight into Health Care, Infrastructure, Energy, and Emerging Markets. For one Health Care should be poised to take off. Looking at a straight 3rd Grade economic perspective the fact that Obama wants to install a plan of Nationalization among Health Care is great for the whole industry. The fact that around 50 million Americans are uninsured is the biggest growth number among them all. If all goes well and Obama finds the cash to give everyone free Health Care then that is 50 million more Americans to sell prescriptions to, schedule doctors appointment for, plan surgeries, etc. Moving on to Infrastructure, I believe this is a mandatory necessity needed in the United States. Since the 1950s we have not revolutionized are infrastructure and just done the basics to get by. Frankly this is not cutting it; as a result we have fallen behind the curve on the newest forms of transportation compared to European nations. In fact, our public transportation system has now become one of the worst in the world, which has led us to our dependence on cars and oil. Though Obama supports this kind of change, most recently he granted federal aid to support the $50 billion+ California High Speed Rail project. Next we lead to Energy, which as we all know needs a revolution of it. Again Obama supports new forms of energy, yet he has not come to a decisive opinion on which one. Ultimately, its not one but a combination, Nuclear, Solar, Wind combined could be the solution to the growing problem yet also expect prices for oil/natural gas to rise as we go through the change in the way we operate. Finally, Emerging Markets will be some of the biggest gainers in the upcoming years due to their potential as they move into the Global Marketplace. If you are trying to invest in Emerging Markets stick with the BRIC countries, most notably India and Brazil. You can take a chance with the Middle East but due to their political instability your money is never safe. China to is a place where I don’t see having as many big gains like the past due to my great concerns in which I chronicled in my article, China’s Growing Concerns. Check back throughout the next two week’s to read more into detail about each individual industry.

Past Research Reports

As I was writing the newest research report, I thought I would update readers on how the rest of the Research Reports have performed to date so far. Back on February 20th I wrote my first research report about the thriving Mongolian Mining company, Ivanhoe Mines (IVN). Since the recommendation of IVN the stock has soared a whopping 32%. I continue to believe IVN has potential as merger talks heaten up yet have moved on myself to other commodity stocks that have yet to peak. In my second research report on April 2nd, I recommended the database management providor, Oracle (ORCL), and since then it has produced a nice return of 15%. Oracle I believe still has a lot left in the tank and will surge in the fall as the Technology sector heats up. In the third report, I analyzed China Life Insurance (LFC) who is the leader provider of insurance products in mainland China. Since the recommendation on April 4th, the stock has produced modest gains of 5% and I still see the growth potential as a higher percentage of the chinese population resort to purchasing insurance products. Continuing with the research reports, on April 23rd I recommended the Brazillian Oil Giant, Petrobras (PBR),  which has delivered a solid return of 14%. As you read throughout my other posts I am Bullish Oil Long-Term with PBR being one of my top picks. Moving on I recommend the sports apparel company Under Armor (UA) on May 26th and in the short time it has returned modest gains of 4%. I foresee Under Amor as a great long-term option with its great exposure both internationally and domestically. Look for it to soar once consumer spending starts to pick up. Next we have another oil and gas play in Noble (NE) which despite dropping 7% since has the fundamentals for long-term success. Lastly, I recommended AT&T (T) which has been up 4% since June 21st though has potential due to the large growth expectation expected in 2009 and on. Will keep you updated on all future research reports and check back soon to find out more market updates.

China’s Growing Concerns

BRIC nations are expanding faster and faster around the world coming closer and closer to the same similarities as first world nations. The big news has all been surrounding China yet finally they have had there slip up. Despite months of large spending accounts and huge bulk orders of commodities China has finally fallen. With falling revenue streams and rising expenditures costs projections predict that China’s fiscal deficit will rise to almost 5 percent of their GDP. This is a big shocker as many people projected only a deficit of 3 percent of the GDP. This rising debt is coming at a bad time as currently China has become the only spending nation buying up surpluses of commodities. So what does this mean for the fast growing nation? One word, stimulus. They might as well join the club with the government financing operations to help cover the rising deficit. In China, I expect market-based investment and consumption unlikely to rebound until the rest of the world, mainly the U.S., starts to recover convincingly. China also is dependent on these other nations due to the high amounts of exports this company relies on in a yearly basis. Nearly 50% of China’s GDP comes from exports and frankly the U.S. and European Nations are looking for solutions within not from exporting, dramtically effecting China’s economy. Chinese exports fell by around one quarter in the first five months of the year from the same period a year earlier. The problem is long-term I believe that China’s exporting business will never fully revive to what it once was. Barack Obama is a strong propent of U.S. based everything, meaning he wants to offer tax incentives to U.S. based companies shifting American companies away from the fad of outsorucing. If your interest in what Obama will do to combat this check out Global Trade under Obama. With this dramatic decrease, China will have to look within on solutions to the state of their economy. Already they are seeing the slowdown in the economy, in the first quarter alone China’s economy slipped up growing only 6.1% missing the 8% target the government had set. A sustainable recovery is not yet assured in China despite the government’s large fiscal stimulus package and Beijing may have little room for additional measures this year. I project government investments to greatly influence and support growth within the country in 2009. Though there are limits to how much and how long China’s growth can diverge from global growth based on government influenced spending. I mean when it comes down to it China’s economy is set up to rely on other countries to buy there exports and if these suitors are no longer there, China has problems. All forecasts are now lowering China’s projected GDP growth for the next several years due to recent news so factor this into your portfolio for those of you who are heavily invested within China as the gains might now be as high as you expect. Currently the government stimulus package has largely been directed towards brand new infrastructure projects and other fixed asset investments, raising the already very high proportion of China’s growth generated in those areas. China’s goal is to incorporate a larger amount of the nation into society not allowing them to be secluded from the outside world and raising the percentage of middle class within the country. In recent years, China has been trying to shift its growth model away from investment towards a more consumption-driven economy reducing there depending on exports. Problem is they have struggled to make progress as for better or worse unlike the U.S., China has failed to offer  social welfare which convinces households to save a high proportion of their income rather than spending money on consumer goods. I believe there are limits however on how far these infrastructure based investments can impact the country. At some point China will have to offer more of an array of social welfare to help accommodate the needs of their growing population. Through media and the internet more and more Chinese people are being exposed to the plethora of resources and opportunities the U.S. government offers to its citizens and at some point they will want the same. For only so long will China be able to block out and control there population from the outside world. An example of this was in the recent blocking of the popular micro-blog site Twitter. Another growing concern is how to accommodate the growing needs of the Chinese population. Year in year out, 10 million Chinese people move from the level of poverty, where a bowl of rice daily, is acceptable to middle class where they are going out to movies, buying cars, and going out to dinner. So will they be able to feed and support the populations growing demands? Who knows but China has a lot of growing problems on the rise so even though it might seem as such a bullish market they still have their share of growing concerns. I still believe China to be a high-growth nation I just wanted to raise the concerns to investors and potential investors.

New Ways of Trading

Hey guys just checking in on everyone and updating you on my status. Current projects I am working on is a huge research project on India. I am viewing and analyzing each sector individually in India in the process of writing a large paper on what are the bullish plays within one of the fastest growing BRIC nations. Will publish this in the first ever Stocks on Wall Street newsletter so register soon to gain access. On another note, personally I have started up another brokerage account with Interactive Brokers and my goal is to make 50% or more in the next 12 months. Since I began trading I have become much more experienced adapting to the markets and learning how to leverage profits and when to cut my losses. With these new fundamentals I don’t think 50% is at all out of the question, in 2007 alone I accumulated gains of 78%. Along the way I will share my trades with readers to allow you guys to follow the journey and what I hope becomes a great success leading to great fortunes. Some of my fundamentals are posted in the Rules of Trading section which will be updated soon with new risk assessment process to help cover investors even during troubled economic times. So I plan on Monday June 30th, 2009 being the first day of trading starting with $3,000 in which I plan on turning into $4,500 by June 30th, 2010. Will keep you all in the loop of how the portfolio goes and keep following the site for updated stocks and finance news/info.

Who saves us from the Recession?

With the concerns swelling around the health of the global economy who is going to be the leader to take us out of these dire times? Many people believe China can be the world’s savior and lead us to better economic times. Frankly, this is nearly impossible due to the basis that China’s economy is focused around exporting. In 2000, 32% of China’s GDP came from Exports, now its up to 48%. Its not logical to believe that an export based economy can take us out of the recession when global demand continues to fall. So I revert back to the United States being the only logical country to take the reign. The problem we have is how to stimulate the U.S. in a way to help the world. We are starting to see signs of progression as American consumers start to spend more and more yet still many are scared due to the huge hits there assets took in the past year. What is the main asset in American’s portfolios? There houses, some of which are down up to 30%. If the United States government can use remaining stimulus money to lead a resurgence in the Housing Market it could help speed up the whole process of the economy’s revival. I haven’t thought of a solid plan on how to stimulate the Housing Market though when I do I will make sure to post solution.

Petrobras Strong Buy

Petroleo Brasileiro SA (PBR)

- This stock has soared in the past month and I still see it going much further. I recommended it back on April 13th at $35.90 and now I am saying its still a strong buy at $43.26. Make sure to pick up soon before you miss out on the huge oil rally. For those of you who don’t know about Petrobras, it is a Brazil-based holding company engaged in the oil and gas exploration and marketing. You might be wondering why it is such a good buy, here it is. I foresee PBR rapidly expanding.  This is a company waiting to take off and I might have caught another huge break. The company has been granted much as $10 billion by China Development Bank to explore recently discovered deep-water oil reserves. Take into consideration it was only a couple months ago when the Brazilian government loaned the company $30 billion to help with the companies $174 billion investing strategy aimed at finding the Americas’ largest discovery in three decades. While most oil companies are cutting costs PBR is increasing investments by 50%. Something big is soon to happen and when it does make sure to be an investor. The government backed money will help pay for the immense oil and gas discoveries they have found off Brazil’s coast, which could turn Brazil into the world’s major oil exporter pushing out the Middle East. These oil fields are abundant yet deep underwater needing many resources in order to exploit. That is where China’s help will come in. More good news for PBR who signed a separate agreement a couple months ago to sell 60 to 100 thousand barrels of crude oil a day, 5% of total production, to a Chinese Petroleum and Chemical Company known as Sinopec. Another memorandum from China National Petroleum (CNPC) could add another 60,000 barrels a day. Latin America loves this company and governments across the continent are injecting capital in hope that it will succeed. With plans to increase production levels by 10 times the sky is the limit for PBR. The reason that PBR is such a strong play is one it is international/emerging markets which allows it to drill offshore and do whatever it wants something U.S. companies are restricted at doing. Secondly the backing of Latin American governments will provide funding to make sure that it falters. Thirdly if these discoveries are true they will have an abundant amount of crude to supply the world when the Middle East dries up.

Yingli Green Energy and Peabody Energy Corporation

Yingli Green Energy Holdings (YGE) I would get back in on a down day but wait don’t jump in to soon. Yes you missed a bump but this stock has long-term potential with the green plays in China. For the next couple months I don’t see huge growth numbers yet when you factor it to the industry it is underperforming which leaves room for improvement. Realisitic cap for 2009 would be $17.50-$18.50. The other stock was Peabody Energy Corporation (BTU) which I would avoid buying. As of right now the stock is overvalued quite a bit when you compare it to the average peer multiple, mainly comparing it to other companies within the same sector. I also believe coal prices will lower to go along with lower demand which will weaken revenue. Lower nautral-gas prices also hurt coals overall appeal. Stay away it should see quite a dip then I will revalue you it and maybe consider purchasing.

Bearish Update

Updating the Bearish List numerous amounts of companies joined the list. To start off to my dislike I added Companhia de Vale Rio Doce (VALE) to the list as my once beloved stock is now bearish as projected sales revenue is to decrease 31% in 2009 after a 16% increase in 2008. These kind of numbers will create problems for a company already struggling with capital issues. To add to the list carmakers Toyota (TM) and Honda (HMC) were added for the weakness in long-term projected earnings numbers due to the weakness in the global economy. Other companies overall sales affected by the weak economy are Garmin (GRMN), Electronic Arts (ERTS), Dish Network (DISH), Marriott International (MAR), P.F. Changs (PFCB), Ameritrade Holding (AMTD) and Barnes and Noble (BKS). Finally two more stock were mentioned, Baidu.com (BIDU) and Nuecor (NUE), due to the fact that they have become overvalued in recent months as the share price has soared. As a result, I believe they will not have as much room to grow in upcoming months. Check back in for future Bearish Updates.

Pick of the Year: IVN

Looking back on my self-owned portfolio I have been searching through my picks of 2009 and come across a clear winner, Ivanhoe Mines (IVN). This stock has performed miracles since I first purchased it back on February 20th at $4.45. After jumping 10% today the stock is hovering at $7.35 a 65% gain so far for myself. I am just mad that I joined the party midway through as back in October the share price was $1.55. What I love about the company is
the mass amount of potential. Depending on which root the company takes will decide whether or not you will have a short-term investment or long-term. If the talks with Vale (RIO), Rio Tinto (RTP), Xtrada (XTA), & BHP heat up then this could become a bidding war which will end well for IVN. With talks of Chinese, Russian, and Korean Firms entering the bidding war this company could name its price and see who has the most cash. As of right now this Prized Mongolian Coal Company is estimated worth around $2 billion yet that number could rise to $2.2 billion when the company’s potential is considered and if commodity prices rebound. Another route the company could take is borrowing capital from Mongolian Investors to help expand and become a Large World Coal Producer. The more likely route is a buy-out agreement, which will help the shareholders stock rise rapidly in the short-term. If the deal falls through the stock-still has a strong long-term outlook based on Assets and support it has from local governments along with the expected potential growth among commodities/natural resources. Take a look at this company as I see it still going up towards $10 before the end of the year.

Petroleo Brasileiro SA (PBR)

Petroleo Brasileiro SA (PBR)

Petrobras is a Brazil-based holding company engaged in the oil and gas exploration and marketing.

Stock Upgrades

Recently upgrade quite a few companies to Bullish with a strong long-term outlook. The list includes McDonalds (MCD) who has delivered with strong earnings and increased dividend. Hersheys (HSY) who has reduced cost and is poised for a 15-20% increase in profits. International Business Machines (IBM) whos strong consulting business is picking up with a lot of contracts. Agrium (AGU) who like Potash (POT) is set to ride the agriculture rally. Amazon (AMZN) who has seen an increase in sales as we head into the summer months. Lastly, Transocean (RIG) whos ships are busy now as commodities are becoming a necessity. On the other side, I downgraded Las Vegas Sands (LVS) as airport numbers and summer travel projections show that Las Vegas is in for a tough summer. Stay tuned and I will keep you posted.

If you would like to further discuss this topic check out the link below which will direct you to my new discussion board. Click Here

Petrobras ready to Explode

Check out the research reports section for a new analyst report on Petrobras (PBR), the Brazilian Holding company who has made major advancements in some of the worlds largest oil discoveries.  This is a stock on the verge of exploding so read the report and follow this stock.

China Life Insurance (LFC)

China Life Insurance Co. Ltd. (LFC)

China Life Insurance is a leading provider of individual life insurance products in China.

What I Like

With LFC share price currently at $53.05 its shows the company is on an uptrend when valued against the 50-Day Moving Average, which is $45.72. With a 52-Week High of $69.25 (May 08) and a 52-Week Low $33.45 the stock has seen the share of volatility that the markets have experienced. I foresee LFC rapidly expanding much like China is and grasping a larger portion of the market share as more Chinese individuals begin to purchase Life Insurance. With the increase of China’s individual GDP the amount of individuals who will be in need of Life Insurance will double offering LFC a golden opportunity. One thing China has is money right now, which they are willing to spend and boost the Chinese economy. Look for LFC to be a player and take in large amounts of capital as they continue to expand. Daily Volume is above 100,000, which is the threshold in which I set. The thing I like about LFC is it is still quite unknown and sheltered which makes it a great time to buy. As China continues its economic dominance more and more investors will be pursuing Chinese stocks and LFC will be one to benefit. It is only 6% institutionally held. Wait until the Hedge Funds find out about this stock, the share price will soar.

What I Don’t Like

Return on Assets 1.76% and Return on Equity 15.88% are lacking yet as Individual Insurance Sales begin to normalize with the strengthening of the overall global economy I look for these numbers to rise.

Overview

Overall LFC is a strong Chinese company with mass potential. There still have a large untapped market among the Chinese population, which makes it a very dangerous stock. LFC gets my BUY rating all the way up to $55. I foresee the stock ending the year at around $62-$64. Make sure you don’t miss your chance to ride the Chinese markets.

G20 Roundup

Success.  This is a word we can derive from the G20 meetings.  Going in I had my concerns with whether or not anything would be initated as summits usually are not the place for Financial Regulations to be set.  Times started off turbluent with the French President Nicolas Sarkozy threatening to walk out of the summit if his plan for tighter global regulations wasn’t adopted.  For Sarkozy ultimatums are not the smartest way to go especially when he is going up against the heads of much larger nations. In the end, however Sarkozy left satisfied with the G20 taking a step in his direction.  Going back on the idea of what was accomplished I think the big winners from the Summit where the smaller nations.  The $1 trillion dollars will help credit flow and revive the economies of these small nations who are unable to create their own money supply by printing money.  This contribution will help global liquidity and help the currency-crisis countries trade credit.  As for the U.S., I believe there was much anger directed towards us, since we are the one who created this problem.  The U.S. will not benefit as much from the money as we are such a large nation with so many needs yet every penny helps.  I agree with tighter global regulations as long as it doesn’t come at the expense of a list of restrictions on the U.S.  We need to regulate the economy and watch over it, but not control it and pave the path it shall follow. The worst thing that could have come would have been global restrictions on the economy especially for the U.S.  Plus Foreign nations need to stop blaming the U.S. for this crisis. Yes we started it, however if you had an independednt economy that did not rely on the help of the U.S. it should have never affected you. A key note is the outlook from the general population after the summit.  I feel a sense of optimism and positive attitude towards the strength of the economy, something that did not exist a short while ago.  Times are still going to be tough with the unemployment rate at a 25 year high, major holes among the Financial and Auto Industries yet we have managed four straight weeks of Wall Street reporting positive gains.  Never has Wall Street seen such success since 1938.  Its crazy, idiocracy, the ups and downs we are seeing.  So reffering back to the word success I wold classify the G20 as a success.  The set of changes which are poised to happen will make a big impact on strengthing the global economy.  

Below is a interactive chart breaking down how the G20 nations stack up.

Click Here