Signup for our free newsletter:

How To Profit as Foreclosures Worsen

Written By Brian Hicks

Posted January 23, 2010

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.

One day, we’re rallying on the idea that Massachusetts could elect a Republican.

The next, we’re selling off on the news that Massachusetts elected a Republican, threatening to disrupt any progress made on the health care bill.

And the day after that, Obama comes out with plans for the banking industry — plans that could curb the size of banks and limit some investment strategies. 

Needless to say, the market didn’t take the news too well…

Nor does it help that the Senate is proposing to allow the federal government to borrow another $1.9 trillion to pay bills — an increase that would allow our national debt to reach $14.3 trillion. Our great-, great-, great-grandchildren will be thanking us for this bill.

But there was still plenty of good news to go around…

eBay delivered a solid Q4 and guidance report. Starbucks shocked the street with a Q1 profit that nearly quadrupled what the company posted last year. And while most of the financial sector was out with disappointing Q4 2009 reports, Goldman Sachs crushed that number with Q4 earnings of $8.20 a share — $3.00 ahead of $5.20 estimates. It even quieted our favorite analyst, Meredith Whitney, who called for $5.50.

But what do you expect? It’s Goldman Sachs.

Here’s where the other bull markets were this week:

  • Believe it or not, there’s great news on the foreclosure front… well, great news for smart traders. Foreclosures are only expected to get worse, as unemployment rises and Option ARM resets begin to hit hard. And — get this — in the U.S. alone, we could see another three million foreclosures this year. These come after the 2.8 million in 2009.

Plus, what do you think will happen to housing when the resets happen? What do you think will happen when monthly payments on a $400,000 mortgage jumps from $1,287 to $2,593? We’re not trying to scare you… this is reality. And you have to play it smart. We’ll be talking about the two stocks you should own on this foreclosure crisis in this Tuesday’s Wealth Daily— look for that in your inbox.
  • Proving that it pays to read the Wealth Daily "Weekend Edition," take a look at Interoil (IOC) — a stock we recommended picking up in the December 12’s "Weekend Edition." The last time we played this company, in Options Trading Pit, we walked with 34%, 83%, and 60% gains in less than a month. This time, however, as the stock nearly doubled in months, the bulls aren’t done; Papua New Guinea approved the company’s project agreement for the construction of a liquefied natural gas plant. Despite the news, the stock is still thinly covered by analysts. But it’s showing marked improvements — and is still a steal. Ever since that mention, the stock jumped from $65 to nearly $80. And as for the options, calls across the board are up by triple digits.

  • That also proves that if you’re not yet familiar with options, you need to be — and fast — because opportunities like IOC are becoming increasingly common. 

Here in the Baltimore office, we field a lot of questions regarding options… which is why we just began teaching the ins and outs with our newly launched Options Trading CoachWe’ll even give you hands-on education, plus 1-2 picks every month. Our last recommendation is already up 14% in less than two days.

Stay Ahead of the Curve,

Ian L. Cooper

Wealth Daily

P.S. In case you missed any of the week’s top-read stories from
Wealth Daily and our sister publications, you can catch up on them now:

The China Bubble Debate: Stock Valuations and Growth Projections
Wealth Daily contributor Adam Sharp ponders the case for China from both bear and bull perspectives, and explains why the Middle Kingdom has the potential to be a bubble.

Rare Earth Exports: How to Profit as China Clamps Down on Exports
Wealth Daily reports: Countries risk running out of supplies of certain rare earth metals vital to green technologies amid growing fears that China, which has a monopoly on global production, is about to choke off exports of the much-need metals. But let them… Greenland has $273 billion worth — and one company is already benefiting from the find.

Peru Wind Energy:  The Profits from this Energy Armada Are Coming Soon
International Editor Sam Hopkins files this report from Peru on the clean energy auctions going on right now in Lima, Peru…and how you can profit from it.

A Look At Energy Management Stocks: How Saving Energy is Returning Billions
Energy & Capital Editor Nick Hodge describes how blue chip companies are adding billions to their bottom line by saving energy… and how investors are profiting, as well.

How to Buy Gold at Just 2% of Today’s Spot Price: For the Next 48-72 hours, It’s a Reality…
And it’s all thanks to one of North America’s greatest gold secrets: the Boise Basin. Wealth Daily reports on what ABC News is calling "Idaho’s new gold rush."

Energy Efficient Technology: How to Profit from the "Fifth Fuel"
Wealth Daily Editor Nick Hodge discusses energy efficiency, government incentives, and how you can profit.

T. Boone Pickens Touts Natural Gas: Great News for the Largest Gas Find in U.S. History
More than 1,000 feet beneath the surface is the single largest natural gas deposit in U.S. history; so far, it’s the fourth largest ever found on earth. One CEO responsible for the find just reported, "We’ve probably doubled America’s reserves with this play." And already, early estimates peg this giant find at 251-trillion cubic feet of recoverable gas.
Wealth Daily reveals what you need to know about the deposit with enough gas to support America’s gas needs for the next 12 years.

U.S. Natural Gas: The Shale Basins: The New Leader in Natural Gas
Publisher Brian Hicks shares two "unconventional" energy sectors and why they’re quickly becoming conventional — and profitable.