Retirees are being lured by Ponzi schemes, unsuitable annuities and over-hyped investment returns.
Ed and Ruthann Wolfe just wanted a safe place for their retirement savings. During his 32 years at the Rubbermaid plant in Wooster, Ohio, Ed had amassed more than $320,000 in his 401(k), all of it invested in low-risk Fidelity mutual funds. Read the rest of this entry »
FTC Clears Google’s $3.1 Billion Purchase of DoubleClick; Deal Still Faces Scrutiny in Europe
With U.S. antitrust clearance for its DoubleClick purchase, Google’s focus now turns to European regulators, who are expected to be more critical of the top search engine linking up with a market leader in online advertising. Read the rest of this entry »
Stocks Fluctuate After Economic Reports Point to Slowing Economy; Oracle Results Lift Nasdaq
Stocks fluctuated Thursday as downbeat economic reports added to investor concerns but a strong earnings report from Oracle buoyed technology issues.
In a midday report, the Philadelphia Federal Reserve said its index of regional business conditions showed a reading of a negative 5.7, down sharply from a positive 8.2 in November. Read the rest of this entry »
With PowerRatings.net, you can create your own “Best Bets” for the coming year any day of the week.
At the beginning of the week, I showed investors how they can use the Advanced Screener at PowerRatings.net to find ideal stocks for an investment portfolio. By looking for stocks with a 9 or a 10 PowerRating, and then looking for industries that have a PowerRating of at least 7, investors can build a portfolio of stocks that historically have outperformed both the average stock and the market.
Of the six stocks introduced on Monday: Tim Hortons (NYSE:THI – News), Cablevision Systems (NYSE:CVC – News), Diebold (NYSE:DBD – News), Manor Care (NYSE:HCR – News), Medco Health Solutions (NYSE:MHS – News) and Alliance Data (NYSE:ADS – News), it looks like Blackstone Group, the powerhouse private equity group, agrees with us that at least one of these stocks will have a great 2008. Unfortunately for us, that stock, Alliance Data is one that Blackstone hopes to take private in a deal that looks to be delayed until next year.
So to make up for Alliance Data, here are another two stocks that investors should consider. Given their high PowerRatings and location in an industry that is in favor among investors, either of these stocks will likely be a holding that every investor will be glad to have in his or her portfolio one year from now.
With a 9 PowerRating, Hospira (NYSE:HSP – News) is one of the better stocks in the 7-rated Drug Delivery industry, and is a stock that investors can be confident is likely to be higher one year from now. Hospira is a specialty pharmaceutical and drug delivery company whose products are geared toward improving the efficiency, safety and productiveness of patient care. As a 9-rated stock, Hospira belongs to that class of stocks that historically has been higher one year later more than 79% of the time. 9-rated stocks also have gained, on average, more than 18% in a year’s time.
Compare this to the average stock which has been higher one year later less than 68% of the time. The performance of the average stock after a year is also significantly less than that of 9-rated stocks, with the average stock tending to gain between 12-13% a year since 1995.
Second is another candidate from the Drug Delivery industry, KV Pharmaceuticals. Based out of St. Louis, Missouri, KV Pharmaceuticals has earned a 9 PowerRating, making it among the better stocks for investors to consider for their portfolios. The company develops, manufacturers and markets generic and non-branded drug delivery technologies from tastemasking to oral controlled-release medicines.
A special report from Money Magazine on what to expect and where to put your money in the coming year. Plus: Full table of contents from the December issue.
In a jittery market like this, when the Dow plunges more than 300 points in a single trading day and then gains it all back in another, it’s anyone’s guess which way stocks are headed.
But if there’s one thing you can count on, it’s that Wall Street will try to find a way to capitalize on your uncertainty. Read the rest of this entry »
14-hour Korean Air flight on a non-stop Boeing 747 airliner from New York to Seoul took the polar route over Siberia and China right towards the South Korean capital. But when the plane approached North Korea, it turned sharply east to the Yellow Sea and then hugged the coast before veering west to land at Incheon, the sparkling new airport completed in 2001, a year before Korea hosted the World Cup.
The detour is mandated by North Korea which does not allow South Korean aircraft over their airspace, a restriction that adds nearly an hour to the flight. The north-south division has been a central feature of Korea over the past half century, influencing its politics and economics. But the country is now looking forward, seeking its place in Asia’s future amid the growing economic power of China.
I was invited to Seoul by Mr. Park Hyeon-Joo, Founder and Chairman of the Mirae Asset Group, one of Korea’s fastest growing financial companies. The firm was one of the sponsors of a conference honoring the 20th anniversary of the National Pension Service, Korea’s social security system. Korea, in contrast to the US, invests some of its massive $250 billion trust fund in equities and was considering the advantages of an even higher allocation.
An Asian Economic Success
South Korea is enormously successful. Its per capita income is more than 60% of that of the US, up from only 8% in the early 1960s. Seoul is the second most populated metropolitan area in the world (behind Tokyo), with over 22,000,000 residents. It is a modern Asian metropolis with little sign of poverty.
The country has come a long way from the 1998 Asian crisis that spread from South Asia to Korea. At the height of the crisis, the South Korea’s market index, the KOSPI, fell 74% from 1150 to 277. But lately the market has been surging and in October the index surpassed 2000 and Korean stocks now have a market value over $1 trillion.
Despite the recent bull market, the valuation of Korea’s stock market is still quite compelling. The KOSPI index is selling at only 15.5 times this year’s earnings, a valuation that compares favorably with 19 time earnings in Indonesia, 24 in India, and the 50s for the booming Chinese stock market.
Investors looking to invest in the country can buy the iShares MSCI South Korea Index ETF (EWY), which trades on the New York Stock Exchange.
The Korean won is also strong, rising from 2000 to the dollar at the height of the crisis to 900 today, about the same rate it was before the Asian turmoil began. In dollar terms, the Korean stock market has increased more than ten-fold over the past decade.
But despite this recovery, the country is at a crossroads. It is aging more rapidly than the US, and its fertility rate of 1.2 rivals Japan as one of the lowest in the world. Geopolitical risks abound as the division between the North and the South hangs over the country.
Koreans constantly debate the pros and cons of an eventual merger with the North. They are acutely aware of the cost that West Germany incurred in the absorption of East Germany. They rightfully argue that if the South absorbed the North, the cost to South Korea would be greater since North Korea is so much poorer than East Germany was when the Berlin Wall fell. Yet many feel that eventually the two countries will be united.
But there are more immediate challenges. Korea’s manufacturing is being squeezed by cheap labor from China and its electronics giant, Samsung, has been floundering of late. Increased competition is everywhere. For example, the Koreans once dominated the computer game market in China, but are now feeling stiff competition from the Chinese themselves.
Blueprint for the Future
Mr. Park, the far-sighted chairman of Mirae Asset Management, believes that Seoulcan make its mark in financial services and become the financial center of East Asia. The financial industry is growing and clearly has an important place in Korea’s future. But to insure future growth Seoul would have to reduce regulation and foster an innovative and dynamic image. Today there are far too many restrictions on short selling, hedge funds, and its financial institutions are small by today’s international standards.
Yet Korea has some decided advantages. Its people are highly educated and the country sends more students to the US than any other Asian nation, including China and India. Recent political trends have turned more conservative and economic growth is being giving top priority. The five year rule of Roh Moo-hyun, a populist who promised to redress the inequalities of wealth and break up monopolies, has not been successful. As a result, Lee Myung-bak, the former Hyundai executive and mayor of Seoul, enjoys a strong lead in the polls for the upcoming presidential election.
A pro-business government is important, but Korea must do more. To achieve economic success, Seoul must retain its foreign-educated students and entice others to make their mark in Korea. Mr. Park’s presentation at the conference emphasized the importance of being a magnet for top talent. His slides showed the vibrant and colorful skyline of Pudong area of Shanghai and compared it to the clean, white, but uninteresting skyline of Seoul.
He is right: Seoul, like other Asian capitals, must compete with Hong Kong, Singapore, Shanghai, and others cities to attract the best people. We Americans should also not become complacent, as many rightfully claim that the world’s financial center is moving from New York to London and the Far East. All cities now compete in the global marketplace.
Korea’s greatest resource is its people as it has a highly educated and motivated workforce. The country rose from poverty to become one of the richest nations in Asia in a few short decades. As long as it stays focused on the future, I see no reasons why Korea cannot continue to be a leader in Asia.
Now that I have your attention, here’s another installment in our periodic lists of thought-provoking fund statistics.
153
The number of diversified domestic-equity funds with more than a fourth of their assets in overseas stocks. That’s not a huge number relative to the domestic-equity universe, but the fact that the group includes widely held names like American Funds Fundamental Investors (NASDAQ:ANCFX – News), American Funds New Economy (NASDAQ:ANEFX – News), Fidelity Low-Priced Stock (NASDAQ:FLPSX – News), and Hartford Capital Appreciation (NASDAQ:ITHAX – News) provides a healthy reminder to check up on your portfolio’s current international stake before adding an additional international fund at this juncture. (Morningstar’s Instant X-Ray tool can help you see your portfolio’s overall exposure to foreign stocks.) Read the rest of this entry »
It’s been a rocky year for investors of the shoemaker Skechers. At Wednesday’s closing price of $22.31, the stock is up 29% from its August lows, but still down some 33% year to date.
Skechers shares sank this summer after the company warned of a 15% year-over-year decline in second-quarter profits, as management was hit with higher costs to open new stores, a distribution center and launch its new Cali Gear footwear line. The company operates about 150 outlets, and also sells its casual shoes and accessories through many other department store retailers. Read the rest of this entry »
US Currency Sinks With Federal Reserve Rate-Cut Expected Tuesday
The dollar slid against most major currencies Monday with markets awaiting a decision by the U.S. Federal Reserve about a possible third interest rate cut this year.
The 13-nation euro bought $1.4712 in late New York trading, up from $1.4655 late Friday.
The British pound was a little higher, climbing to $2.0462 from $2.0315. The dollar fell to 111.67 Japanese yen from 111.69 yen Friday.
The Fed meets Tuesday to discuss interest rates, with analysts expecting the U.S. central bank to trim its key rate, now at 4.5 percent, by a quarter of a percentage point. Some have speculated about the possibility of a half-point cut.
The expected cut would be the third amid mortgage problems in the U.S. that have tripped up borrowers and caused a credit crisis among banks — fueling wider fears about the health of the U.S. economy.
Lower interest rates can jump-start an economy, but they can also weaken a currency as investors transfer funds to countries where they can earn higher returns.
If the U.S. does cut rates, it will follow in the footsteps of the Bank of England, which last week cut its benchmark rate to 5.5 percent from 5.75 percent. Canada’s central bank also cut its rate to 4.25 percent.
The European Central Bank kept its rate unchanged at 4 percent last week but appeared to set the stage for a possible rate decrease sometime in early 2008.
The dollar fell to 1.1282 Swiss francs late Monday from 1.1292 francs. The U.S. currency rose to 1.0073 Canadian dollars, up from 1.0045 Friday.
