Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.
"Crazy" isn’t even the right word to describe this market…
That’s because people are spooked. They’re looking for any reason to sell. They’re ignoring great earnings reports, opting to sell on fears that Obama is anti-business; or that inflationary fears are growing; or that the "recovery" isn’t real after all; or that job growth is going to be tougher than expected.
Even reports that GDP grew at a 5.7% pace weren’t even to spur a buying stampede.
There’s also the question of why there’s all this emphasis on jobs now. Why didn’t this happen a year ago when millions of people lost their jobs?
It’s because Congress thought they defeated the problem. Just take a look at the proposed budget for 2010 with the assumption — according to reports — that the unemployment rate would peak at 8.1% in 2009, then fall to 7.2% in 2010.
And some of this week’s insanity in particular is understandable when you’re waiting on:
Bernanke’s confirmation hearing (he was confirmed Thursday);
Tim Geithner’s skewering before Congress;
The FOMC meeting (rates were left unchanged);
The State of the Union address (which didn’t exactly spur market bullishness)…
So, how do you make money?
By knowing this: It’s not about being a bear or bull in this market. It’s about being where the profit opportunities are — whether long or short.
Here are some ideas to chew on:
The rumors have ended. Apple finally announced its latest product — the iPad — and was greeted with mixed reviews. Consumers went as far as to nickname the e-reader "the iTampon." While some peg Apple with an eventual price tag of $300 with the iPad, others are a bit more skeptical. Wealth Daily‘s Adam Sharp provides five reasons why iPad could fail. Those who like the product’s new chances, however, think the touch-screen device could be a challenge to net-books and e-readers. Critics, on the other hand, though they believe the unit could sell well, still see it as a larger version of the iPod. They don’t think it has a real chance.
Sure, Apple has created a great product with a great price point. But will many people buy it? People that are already "tech overloaded" and have an iPod, iPhone, and iMac? If that’s the thinking, the hype and demand for such a product may last near term. Long term, though, the company has created a product far beyond an e-reader… they’ve created an e-entertainment device.
If you’re a buyer, plan to hold long term. But why pay $200 for a share of Apple? Why not find a smaller company that sells parts to Apple? Apple’s growth could mean big money in the bank. Options Trading Pit, for one, is hunting down such companies.
Keep an eye on the short side of the telecom industry, too. It seems investors are starting to worry about price wars among carriers and handset companies that are fighting over market share in a market where there’s an increase in the number of products and new operating systems. According to recent reports, Motorola saw short interest rise 52% to about 58 million shares; Qwest short interest was up 15% to 76 million; and short interest was up 14% to 64 million for AT&T. Consider buying put options on these, though. The max gain you can make short-selling is 100%.
Also, keep an eye on foreclosures — and the companies that benefit from them. Options Trading Pit just unveiled the two to own in a new special report. To say the end to our foreclosure woes is in sight is as premature as saying terrorism is under control. Unemployment will continue to climb. Consumer spending will suffer. And housing is only expected to worsen, as more resets rear their ugly heads. There is no recovery in housing. The crash is far from over. Even Moody’s doesn’t see an end to the housing meltdown, believing that home prices will soon start moving back down because of coming foreclosures.
But the most devastating of all could be the coming Option ARM (adjustable rate mortgage) resets of 2010 and beyond. It could easily lead to higher unemployment, housing glut, decreased home values, and the death of the cash-strapped consumer. What do you think will happen when monthly payments on a $400,000 mortgage jumps from $1,287 to $2,593?
With Apple, the telecom industry, and coming foreclosures… the max you can make with a short is 100%.
Stay Ahead of the Curve,
Ian L. Cooper
In case you missed any of the week’s top-read articles from Wealth Daily and our sister publications, you can catch up on them now:
"China’s Pantry": The Asian Nation Soon to be Beijing’s Top Growth Partner
Wealth Daily reports as our insiders feed us the 24 resources deals that will make this tiny nation on China’s northwest border the world’s last mega-boom profit opportunity.
2010 Commercial Real Estate Forecast: No Spin Zone – CRE Plunge is Inevitable
Wealth Daily Editor Steve Christ takes a look at the commercial real estate forecast and explains why the sector will sink into 2012.
China’s Huge Oil Demand: The Middle Kingdom Secures Future Energy Needs while U.S. Sits on the Sidelines
Editor Christian DeHaemer describes China’s buying up of global oil assets while Obama watches from the sidelines, and reveals what the Middle Kingdom will buy next…
Spain’s Solar Power Market Meets Morocco: Europe Looks South for Clean Energy Growth
International Editor Sam Hopkins highlights Morocco’s role in reinvigorating the Spanish solar power market and generating more local energy for North Africa.
Buy Gold at Just 2% of Today’s Spot Price: You Heard it Here First
It’s all thanks to one of North America’s greatest gold secrets: the Boise Basin. Wealth Daily reports on the company whose $27 million in assets now exceed $727 million.
The Next "Peak" Trade: China Has the Next Move
Wealth Daily‘s Ian Cooper tells readers about China’s plans to stop exporting these elements to the rest of the world by 2012… and how this move could cripple the rest of the world via the coming collapse of available rare earth metals.
We Made a Bakken Boo Boo: And We’re the First to Admit It…
After 28 straight months of research, interviews, site visits, number crunching — and answering to critics — Wealth Daily analysts have swallowed the jagged pill that is our mistake regarding the Bakken oil formation: We missed the mark. But our error could mean your benefit… and money in your pocket.
How to Profit from Energy Efficiency: The NYSE Itself is Bullish on this Tech
Energy & Capital Editor Nick Hodge discusses the business of energy efficiency and how investors can profit as global companies optimize their operations.
Reduce Your Monthly Energy Bill by 44%: How You Can Stick it to Your Power Company
The tech behind this little company is a foolproof winner. It makes so much sense, for so many reasons, that Alternative Energy Guru Nick Hodge has no doubt everyone will be using it within the next decade.