Back in April 2009, I became interested in Nordic American Tanker Shipping LTD. (NAT) due to their potential to ship and store crude oil on their tankers. One main factor that caught my eye was their dividend that previously yielded over 10%. That was a factor that didn't last, however, since they lowered the divy to .40 a share. Although I was disappointed that the hefty dividend of over $1 per share wouldn't last, I knew in the back of my mind that it was eventually going to be lowered. The reason why I wasn't alarmed by the lowering of the dividend was because I knew this small cap company of 1.13 billion in market cap was just realigning its funds for growth. By keeping more of their cash, NAT will be better positioned to add more tankers to their fleet and maintain the existing ones.

With zero debt and 88 million in cash on their balance sheet, NAT is in a good position to benefit from the contango in the oil market. In the current environment, the oil futures prices are continually higher than the spot price (or closest available expiration month). Therefore, investors who are able to buy the physical crude at the current spot price of $71 and store it until Jan 2011's price of $83 can make a nice 17% profit by buying the crude now and storing it for a year. NAT will benefit from this situation as investors look to tankers to store the oil inventory. The increased demand for tanker storage will result in higher storage prices and higher revenue for the tanker companies. So, those of us who cannot afford to take delivery of the physical crude would still be able to benefit by buying a tanker company such as Nordic.

This masterpiece from the Princeton University Press is an amalgamation of some of the most intelligent minds in economics. The contributors include: Eytan Sheshinski, Robert J. Strom, William J. Baumol, Robert M. Solow, Kenneth J. Arrow, Michael M Weinstein, Melissa A. Shilling, Corey Phelps, Sylvia Nasar, Boyan Jovanovic, Peter Rousseau, Edward N. Wolff, Deepak Somaya, David J. Teece, Naomi R. Lamoreaux, Kenneth L. Sokoloff, Yochanan Shachmurove, Ralph E. Gomory, Jonathan Eaton, Samuel S. Kortum, Alan S. Blinder, Robert J. Shiller, Burton G. Malkiel, and Edmund S. Phelps. These brilliant minds address the micro- and macroeconomics of growth, the importance of independent and corporate entrepreneurs and innovators, the employment of technology and the patent system, innovation and trade, and the relationship between innovation and finance.

Arrow and Solow provide the foundation for the remainder of the book by explaining the micro and macro conditions that are conducive to growth. They explain how particular markets and knowledge influence micro and macroeconomics and that the legal system of licensing and patents is the major institution of property rights. Competition is discussed as an incentive to create further innovations which lead to an “optimal portfolio of innovations”.

After the recent run in the stock market from March 2009 to August 2009, many investors are taking some profits and waiting to see if the leading indicators continue to improve or if they slide to the downside. Will manufacturing, retail, housing, and financials continue to see improvements? It looks like the economy and the stock market could go either way in the near term. So, if you’re a trader or a long term investor, what looks promising right now? How about the low priced commodity, silver.

I would choose silver over gold for the simple reason that it’s much cheaper than gold. Furthermore as silver rises along with gold, the percentage gains are significantly higher with silver. For example, when gold rose from $900 to $1000 investors enjoyed a nice 11% gain while silver investors enjoyed a nicer 23% gain with just a 3 dollar rise $13 to $16.

The correction from August the 14th & the 17th was only 3.4%, a mild and healthy pullback (not a bloodbath) for the S & P index. That pullback was followed by four positive days, with Friday August 21 making a new high for 2009 at 1026.

Chart here.

Hedge Funds: An Analytic Perspective by Andrew W. Lo is a highly technical and intellectual analysis of hedge funds. Mr. Lo has filled his book with many advanced, detailed concepts and statistics about the hedge fund industry. The book is so technical that it reminded me of one of my old college statistics textbooks, filled with complex formulas and mathematical terms.

Warning: This book is not for the average investor (including me). This was the book that I chose to bring with me on vacation. Phrases such as: "Filtered and constrained Sharpe ratio trajectories of tangency portfolios for filtered and constrained mean-variance-liquidity efficient frontiers for 13 CSFB/Tremont hedge fund indexes" is not what I had in mind to read while I sat on the beaches of Long Beach Island, NJ with waves crashing in the background.

There are many analysts who believe that the rally we have been experiencing for the past four weeks is merely a bear market rally. However, to accurately assess where the market is heading, we need to look at how current macro conditions will shape the future economy. Therefore, I have compiled a list of seven reasons why I believe that the market bottomed in early March.

1. Attractive House Prices

Ouch. These constant daily painful sell-offs are brutal. Negativity in the markets has hit extreme highs, job losses are piling up, and we are 53% below the highs of 14k in the DJIA. There appeared to be no end in sight for the market selling until now: China has announced their stimulus plan. China is spending the equivalent of 724.5 billion dollars in an aggressive stimulus to promote employment, scientific innovation, tax reform, and industrial restructuring.

Although China is not growing their economy at double digits as they have in recent years, they are confident that they can maintain an 8% growth rate with their stimulus policies. I believe that China will lead the world out of this DECESSION, with the United States and then the rest of the world following China's lead.

The recent mayhem in the stock market is making many people pull their hair out.  We're all wondering how soon the market will return to a healthy bull market so that our 401k and IRA statements will grow quarter to quarter rather than shrink.  I believe we can gain some objective perspective by studying the following chart (click to enlarge):

We all remember the internet stock boom in 1999. Investors made a lot of money and there was no end in sight for stock prices that year. Euphoric feelings had the bulls on parade on Wall Street. Recently, the energy bull market has created a similar euphoric feeling for investors of coal stocks.

Coal stocks such as Massey Energy (MEE), Peabody (BTU), Arch Coal (ACI), Alpha Natural Resources (ANR), and Patriot Coal (PCX) saw their stock price double or in some cases triple in the last year. The dirty, filthy, black stuff has coal investors dancing the funky-COAL-medina. Good old coal is cheaper to run a power plant than oil or natural gas, so utility companies throughout the world love using it. Coal miners in Pennsylvania can earn over $70,000 a year to keep up with the demand. Recently, every time these stocks dip in price, a buying opportunity is created.

I have been looking for an alternative energy stock that looks promising for the future. Renewable resources such as solar and wind are investments that we can feel good about.

Recently, I have been intrigued with wind power. Wind power is the cheapest form of renewable energy. It is significantly cheaper for a utility company to build a wind plant than a solar plant. Although natural gas and coal plants are cheaper to build, they are not renewable sources of energy. Now and in the future, I think that utility companies will be pressured through laws and/or subsidies to produce more renewable energy such as wind power.

With gas and food prices skyrocketing, I have found a way to pay for my gasoline, utilities and food by buying the stocks of energy/agriculture companies.