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  • Getting A Healthy Bite Out Of Markets Best Plays During Bull Corrections

    Getting proper vibes of the markets are critical. The best vibes comes from a few sources. One source happens to be within Seeking Alpha. The other source comes with Todd Harrison of the Harrison has been critical on the markets moving forward. We are approaching the "Go away in May Mantra" per Harrison. He sees the storms moving in the markets much sooner then later.

    What do the Point & Figure (P&F) charting systems produced by Dorsey Wright and Associates say to market internals? Are they supporting or causing opposing opinion to Harrison and others thinking full retreat is on the table?

    We see the P&F signals opposing Harrison and others thinking its full retreat time. We are seeing levels of large dip buying programs being run by the professional institutional investors. Most seasoned pros know the best money is made on market corrections. The choice of which stocks and funds should be on your shopping list are our mission to uncover for you in this article.

    By using the P&F charts we have provided below. You should look for true conviction of large institutional supply side (shorting the market or position) or programs buying on demand (long the market or positions).

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    Currently, our P&F World BP (BPWORLD) shows investors retreating.

    The P&F World PT (PTWORLD) and DJ Corp Bond Index give a shift or move towards safety of investors buying on dips within emerging growth / value plays.

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    The Point & Figure charts of the Dow Jones Bond Index Fund give reason to defend safe money moving to corporate bonds.

    Remember, P&F charting uses signals of either Defense or Os are the team coming onto the field ie, supply. The Supply issue is supporting Harrison's current view. But the problem still remains why are the Os coming into Barclay Bond Fund (NYSE:ACG) and the Money Market Index Fund?

    Our real signals for the daily and short term P&F using the Barclay Bond Fund and Money Market Index DWA (MNYMKT) are saying the Offense is on the field with Os seen with Double Bottoms established within both charts giving the caution but buy on dip signal.

    The consistent move lower for these index's are quite spot on in calling equities over cash or vise versa. And right now they are saying buying equities over cash.

    What do our broader world averages tell us from the P&F charting systems? You can find the bullish or bearish price targets and how to position yourself in the prospective country's from what is green (Lower Risk) to red (Higher risk)as shown in the graph above.

    You want to be able to reveal where there is heavy demand, as seen with Xs, or heavy supply, with Os.

    This was stated in one of my prior published articles for your review "Watching For A Pullback, Finding Signs Of Hope".

    Taking a Long Bite of The Apple Getting Hit With Negative News

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    The recent news of (NASDAQ:CRUS) missing estimates has caused Apple to retreat on Wednesday, as low as $398.11 around 12:56 PM US Eastern time zone.

    The problem for all who want to jump off the Apple train is somewhat premature in our view. Buying on the dips is our suggestion. Best profits are bought on down markets and not up markets. We see Apple jumping back up above the $545.00 levels on the principal of many investors are waiting for the after earnings announcement to Buy Apple. If the news and future dividend announcements along with probable share repurchase programs will be the catalyst along with the fact that if they miss on estimates, it doesn't matter, because it has already been priced in. And don't forget Netflix purchase offer by Apple to shore up their lead on Amazon (NASDAQ:AMZN) and others in that space for replacing the old fashioned cable operators.

    Apples (NASDAQ:AAPL) last Reports Reflected Solid Top and Bottom Growth with total revenue of $164.35 billion in the 12 months ended last quarter, an outstanding increase of 291.64% from the same period ended three years earlier, in which it recorded $41.96 billion in total sales. Remember, Apple is reporting in just a few weeks that even if they miss estimates, their value of assets to book holds at $648.00 a share price point. Look at the Point & Figure chart above for true sense of buying on the dips call of why we are making it today.

    During more recent quarters the company has continued to grow its revenue at a similar rate, which suggests it might be taking market share from rivals. It booked total sales of $54.52 billion last quarter, 18.15% more than what it sold in the same quarter a year ago. It will important to monitor the company's next few quarterly results closely for signs of any slowdown in such remarkable top line growth and to determine if this sales momentum being carried through to the company's bottom line.

    The company's positive earnings surprise on January 24, 2013, 2.52% above the consensus view, failed to excite investors as the stock fell 14.42% following the announcement, suggesting the report offered poor guidance for future quarters. Despite investors' adverse reaction to this report, it continued a trend of beating earnings estimates, with an average 8.14% positive surprise over the last six quarters, which puts the stock's decline following this latest announcement in perspective given such strong record.

    The Stock's Valuation is Attractive Based on the Company's Overall Financial Strength Trading currently at 9.75 times trailing 12-month earnings per share, Apple's stock is priced inexpensively relative to its EPS growth rate in the last two years. Our indicator looks at the 12-month period ended in each quarter within the last two years and calculates the company's annualized growth rate, which is then used to compute the stock's "optimum" P/E. Based on this analysis, Apple's earnings per share have grown strongly at an annualized rate of 56.92%. which translates into an optimum P/E ratio of 49.96, 80.82% higher than where the stock trades now.

    This growth has resulted in strong financial performance, evidenced by the company's Profitability grade. For this to continue, it must reverse its recent margin slide soon. The stock also trades at 8.42 times forward earnings estimates for the next four quarters, lower than its trailing P/E and the S&P 500 index's forward P/E of 15.20. By placing a lower multiple on the company's future earnings than it does on the market as a whole, investors may see the company as financially strong but with relatively poor growth prospects. This may offer a valuable opportunity for patient investors willing to wait for future earnings reports.

    Apple's current market value is 3.27 times its tangible book value, which excludes intangible assets such as goodwill; this valuation seems attractive, especially considering that only 4.59% of the company's total stockholders' equity is based on intangible assets. When the value of those assets is added back into total book value, the price to book ratio is an even lower 3.12. Based on the $59.89 in cash flow per share generated by the company in the last twelve months, at the current price of $419.85 the stock trades at 7.01 times cash flow, an attractive valuation considering the strength of its overall fundamentals. Its shares also trade at 2.40 times its trailing 12-month sales, a small 26.90% discount to the Computer Processing Hardware industry average price to sales ratio of 1.89. Our final value indicator looks at the relationship between the company's current market capitalization and its operating profits after deducting taxes. Based on this measure Apple's $407.86 billion market cap is an acceptable valuation, representing a modest multiple of 27.81 times its latest quarterly net income plus depreciation.

    The company has no debt, which gives it plenty of room to find capital if necessary in light of the recent downturn in its numbers. However, it is still very profitable and nothing currently indicates it would need to take such a step. Apple's $60.07 billion in twelve month trailing core earnings, or EBITDA, shows a remarkable increase of 30.14% from the twelve months ended a year earlier, in which its core operations generated $46.16 billion. EBITDA is used to measure the company's true earnings power by including interest costs, income taxes, depreciation and amortization, all non-operating charges, which are nevertheless accounted for in several EPS and net income measures of our fundamental analysis.

    Apple, reported a 33.45% growth in cash flow during the latest quarter to $23.43 billion, an impressive increase from the $17.55 billion in the same period last year. This represents a faster growth pace than when measured on a trailing twelve month basis considering cash flow rose 25.20% over this period compared to the twelve months ended a year earlier. This continued improvement should benefit the company's margins and provide a boost to the bottom line. The company clearly has very strong liquidity having no debt to finance, $39.82 billion in cash on hand as of last quarter and a business that generated $30.60 billion in earnings before interest, taxes, depreciation and amortization in the same period. This affords it significant flexibility to take on debt if it wanted to pursue new growth opportunities such as an acquisition. The company had $39.82 billion in cash on hand last quarter compared to $30.60 billion a year earlier, a 30.13% increase. It continues to have no debt.

    Where do the charts put Apple in target price from actual fair value, even if they miss on this upcoming earnings report. We have value near $648.00 with giving a huge undervalued play. Morningstar has a narrow moat established, but they give a fair value estimate at $600.00 with consider selling at price target of $930.00 over the next 12 or more months.

    Why Then Gold Makes Sense for Hedging Moving Forward

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    Forget about Larry Kudlow out of CNBC statements of Gold is out. Economic stability of the G-20, and the investors reaction to why commodities want to move lower, is best looked at from two points.

    If you are forced to sell your reserves, or to fend off debt collapse, then Cyprus is our example; as you have the extra supply hitting the open markets. Supply of Os as seen in the (NYSEARCA:GLD). The other side of the gold coin comes with the need to buy up and bolster gold reserves for a world about ready to experience "Global Meltdown" in 2014 - 2020. A meltdown through systematic debt collapses on the radar of other nations. Why is there possibility of a meltdown on the horizon moving into 2014 to 2020?

    First reason is with G-20s debt-cutting pact struck in Toronto in 2010. But this pact will expire this year. Wow, if leaders fail to agree to extend it at a G20 summit in St Petersburg, September of 2013 then all bets are off and Gold will go through the roof.

    Brushing up on recent G-20 notes brings European Economic and Monetary Affairs Commissioner Olli Rehn said "he expected concrete debt targets to be agreed at the September meeting".

    The United States says it is on track to meet its Toronto pledge, but argues that the pace of future fiscal restraints by "consolidation must not snuff out demand". Germany and others are pressing for another round of binding debt-cutting goals as seen in the EU constraints over the past several months of dealing within their debtor EU partners.

    Backing all of these activities come with unprecedented QE printing of dollars and other central banks following suit around the world. These central banks use of domestic monetary policy to support economic recovery in a world experiment never seen in anyone's lifetime. An extremely risky economics experiment taking place on the worlds stage. And clearly, the US Federal Reserves commitment to monetary stimulus through quantitative easing, or QE, to promote recovery and jobs sets the standard for our arguments full support.

    A quick review of QE entails large-scale bond buying -- 85 billion a month in the Fed's case -- that helps economic growth but creates money, much of which has leaked into emerging markets, threatening to destabilize them causing the Gold Hedge to come into view.

    That was offset in the communique by a commitment to minimize "negative spillovers" of the resulting financial flows that emerging markets fear may pump up asset bubbles and ruin their export competitiveness.

    "Major developed nations (should) pay attention to their monetary policy spillovers," Vice Finance Minister Zhu Guangyao was quoted by state news agency Xinhua as saying in Moscow. Major developed countries' implementation of excessively relaxed currency policy has an influence on the world economy."

    The G20 put together a huge financial backstop to halt a market meltdown in 2009, but has failed to reach those heights since. These concerns pin the precious metals to be important to hedge debt collapse of emerging growth countries and G-20 nations.

    At successive meetings, Germany has pressed the United States and others to do more to tackle their by debts. Washington in turn has urged Berlin to do more to increase demand. This is the story meeting headline after headline daily.

    On currencies, the G20 text reiterated its commitment last November, "to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments". It said disorderly exchange rate movements and excess volatility in financial flows could harm economic and financial stability.

    Reviewing who makes up the G20 is a forum of 19 countries and the European Union, which was established on the wake of the 2008 global economic meltdown to work out a road map for crisis management and to establish the comprehensive mechanism for joint efforts by the Western and major Asia-Pacific powers as well as South America's and Africa rising economic giants.

    G20 members' record is impressive as it accounts for 90 percent of the global GDP, 80 percent of world trade and two-thirds of the world's population. "The G-20 is not the G-8. It possesses greater legitimacy because of its broader representation of different countries," explains Fyodor Lukyanov, the Head of Russians Council on Foreign and Defense Policy and the editor-in-chief of the journal Russia in Global Affairs.

    The basic understanding of many topical issues of global economy by Russia and her BRICS partners is quite different from the understanding, voiced at the West. There are different views on how to stimulate growth, by "reduce debt, etc, those views often clash. We have not yet agreed even on the definitions of key terms, like "investment incentives", "trust and transparency in markets", "effective regulation". This supports US Equities moving forward by seeing the bullish objective for the S&P 500.

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    The Point & Figure reveals many nations still coming to the US S&P 500 to hedge their emerging exposure to inflation and even worse; deflation. So, it is to be seen whose ideas and vision would finally prevail and dominate during Russian's year term as G20 President. The question is up in the air. The problem is explained by Gennady Chufrin, a professor with the Institute of International Economy and International Relations (IMEMO): "At present, we see an obvious pro-Western tilt in the activities of the IMF and the World Bank. That tilt needs to be corrected in favor of the developing countries and BRICS, and Russia as president of the G20 has such a chance".

    Obviously, Russia would try to articulate her vision of the global economy with the support of BRICS partners. And this is the reason why BRICS summit in St-Petersburg is to be held on the sidelines of G20 forum. Russia needs BRICS to fully throw its weight behind her, so that her G20 presidency would be a success. On the other hand, BRICS partners would also try to capitalize on Russian's G20 chairmanship to articulate their own agendas.

    So, all in all, the main theme of the Moscow G20 chairmanship looks like expanding Russian and BRICS agenda of crisis prevention, promoting growth and the restructuring of the global economy. You can see by the Russell 2000 (RUT) P&F it has become a supply over Demand play for the next few months.

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    A great article piece from Sean Williams was published out of the Motley Fool titled "5 Reasons Why Gold Is a screaming Buy Right Now". It gives critical arguments supporting why we suggest still keeping some of the shiny stuff as part of your diversified portfolio.

    1. Follow Warren Buffett's advice

    2. Record-low lending rates will spur gold buying

    3. World economies are still weak as gathered from G-20 and G-8 on going concerns to avoid market meltdowns.

    4. Retirement savings caps present an opportunity for upper-income earners

    5. Trends are your friend

    Williams delivers great arguments for the trend that the U.S. is going to infinitely expand the U.S. money supply. The Fed's $85 billion monthly bond purchases has done well to keep lending rates and inflation under control, but a constantly expansive money supply is going to eventually push the inflation rate higher and provide yet another reason for investors to buy into gold, the ultimate inflation hedge.

    Where to invest?

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    Now that you understand why we are so excited about gold, let me share with you a few of the ways you can buy the yellow metal with varying levels of risk Williams conveyed.

    The first method is by purchasing an ETF that closely tracks the underlying price of gold. The iShares Gold Trust (NYSEMKT IAU ) and SPDR Gold Shares (NYSEMKT) are two easy ways of buying into an ETF that holds physical gold without having to go through a physical gold dealer and taking delivery of the product. Also, both ETFs are extremely liquid, which means that you can access your money through your favorite brokerage by buying or selling anytime you need. The downside, of course, is that physical gold offers no dividend yield, so it's all about the price appreciation potential here.

    If you're willing to take on a bit more risk in exchange for a dividend, I'd suggest a basket ETF like the Market Vectors Gold Miners ETF (NYSEMKT: GDX ) which has 31 different holdings in its portfolio and a net expense ratio of just 0.52% while yielding 1.2%. You'll get good exposure to plenty of North American gold miners as well as plenty of global gold mining leaders.

    What is are other current play?

    Other good plays for your portfolio comes with Ford Motor Company (NYSE:F). The Point & Figure charts give a great Price Target and with a lot of the good news piling in, it's a good buy on the dip candidate.

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    Stay tuned for more of our plays during the next few weeks and months. As always, keep your trades safe as we move forward in this Bull Correction.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Apr 18 7:39 AM | Link | Comment!


    Getting it right for the rest of January into Aprils next earnings reports challenges all money managers. There is no such thing as a perfect portfolio. The proper bond and stock balancing have never been as difficult until this current time of DEBT CEILING managing. History states stocks beat bonds over the long run. But bonds belong in everyone's portfolio. You're not a wimp if you own bonds, no matter what your team tells you. Mix of bringing good-quality bonds offer a steady rate of return and, if held to maturity, don't bite you with losses. In bad markets, in down cycles, in times of recession and depression, they are investment of choice.

    The answer comes to preserving capital for buying on significant dips, but diversifying only to a point, but not too much. Remember, too, that diversification comes at a price. The more you diversify, the more your odds of beating the market go down. You need to concentrate on the big decision, not the small one, which spells the difference between investment success and failure. Get the big picture right and the small things take care of themselves. This is the best description of managing the fiscal cliff investment choices.

    The statement for active traders comes with "Sell into a correction, but Buy the Bear Markets". Investors in a bull market often wonder why it pays to be cautious. A simple example will explain it all: A strong market gives you three to four years of positive 20-30 percent per year returns. After 36-48 months, your portfolio has increased from $200,000 to $375,000 (for simplicity's sake, we'll ignore compounding).


    The predictions of Harry S. Dent keep playing out through the media recently. Dent was on CNBC for sending a rough Bear Market on the near horizon being the message. We feel Dent is off about one year or too possibly two years; if the central banks keep floating the illusion as we wrote about in the past "Taking Lessons from Harry Houdini".

    We keep the mantra that all prudent investors follow the money. We keep a close watch on block trades revealing the real intent of institutional investors. Wynn Resorts (NASDAQ:WYNN) along with Ford (NYSE:F) and Caterpillar (NYSE:CAT). Look also at Close End Funds like Alpine (NYSE:AOD) for dividend verse return for positive portfolio choices.

    Watch for rising commodity prices, they are bad for stock prices. We love inverted yield curves as they signal bullish runs for utility and other interest-sensitive stocks. Keep in mind the Federal Reserve, through interest rate policy, has a lot to say about the direction of the economy. Generally speaking, when the news is bad as all the news circling with the Debt Cliff looming, and the Fed is continuing their easing on interest rates, it's not a bad time to continue to buy and build the next profits for your portfolio management.


    Look closely at yesterday's winners that have turned negative, but without the full force of loss of institutional support, the overwhelming mass of opinion has come to believe that something is true. To determine whether or not there is cause for being a contrarian in any given situation, you must first find out whether or not that opinion is universally held.

    The stock issue making it to the top of this list is Zynga, Inc. They don't have a full consensus of opinion of abandon and sell all your shares or short the issue. The chances for this issue to get back up as Facebook (NASDAQ:FB) or Google (NASDAQ:GOOG) has recovered close to their original IPO price brings the risk to reward in focus for Zynga (NASDAQ:ZNGA). We see Zynga either becoming acquired due to their ownership of over 36 patents dealing with the gambling on-line arena or beating many earning projections moving forward. We make this assumption based on their move into the real money transfer of gambling and finding full dollar receivables from gaining advertising dollars from their separation with Facebook.

    Another issue we have been following closely comes with American Capital Agency Corporation (NASDAQ:AGNC) with the (NYSEARCA:XLF) Apple (NASDAQ:AAPL). American Capital brings real dividend boost to clients portfolios. The 91 percent of American Tax Payers are protected by the deal in Washington. All these tax payers still demand good dividend return on their investment.

    We always believe in buying what recovers after a market break, such as Goldman Sachs (NYSE:GS), but once the market begins to recover from the decline, the best stocks lead the way, being the first to move your portfolios in a positive direction. This is the time to invest when more are uncertain of the larger picture moving forward for the global markets. The upside leaders are the ones we look for and move on. We like the stock issues as we mentioned above just for these reasons alone.


    The final comment comes with not allowing greed to get in the way of your profits being real and not paper bound only to evaporate. Take the window of 8-15 percent first profit selling mark as the guide to safety. Leave the last 25 percent of your stock holdings for a second profit target to completely sell out the shares owned. This would not be true always for great dividend paying issues, only if you play the ex-dividend date and run with the issue selling on the top of the highs and buying again on the lows. The skill of making winning trades comes with great insurance using options to hedge your longs. Remember, this insurance is cheap in the long run.

    Keep your trades always on the right side of getting them through watching out for the big picture. Keep watching our instablog area for quick changes to our opinion on dynamic market changes.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Jan 10 9:33 AM | Link | Comment!
  • The Cliffs Surprise Market Messages - Houdini Illusion Still Alive! Updated Nov 21 2012

    World Markets Trying The Great Escape Are Taking Lessons From Harry Houdini - Part Two

    How true this prior article predicted the current events of today. Readers found we were witnesses of a market clearly setting up for runs to new market highs. The ECB through Mario Draghi continued finding the same policies workable as in acted by Ben Bernanke of the Federal Reserve. Actions set in motion had launched QE3 by the US and super supports in acted by Draghi of the ECB.

    Can the Dow make a run at 15,000 to 20,000 thousand before a more enduring correction occurs? We think YES, as based upon true Progressivism and TARP like atmosphere worldwide.

    New forms of radical politics are at play tackling inequality without hurting economic growth. Here is our suggestion for those holding elected offices, which steals ideas from both left and right to tackle inequality in three ways: Compete, Target, and Reform that does not harm growth.

    These thoughts are based upon the reelection of President Barack Obama 4 more years of holding the CEOs position for the United States of America following Tuesday's election results.


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    The quick bipartisan for Obama crossing the isle to work with one another is the $60 - $120 trillion dollar question. He must, if he's going to save both his party and the republicans as well.

    To get a sense of scale, consider that the president's 2012 budget projected a $1.65 trillion deficit. That staggering number is obviously unnerving to ordinary American investors who try to live within their own family budget. Unfortunately, the way that official Washington calculates deficits dramatically understates the magnitude of the problem of the fiscal cliff. Many feel they are willing to jump out of the market and put their money into a mattress.

    The current approach in the presidents budget formula used by all presidents since Lyndon Johnson was devised too hide the cost of his Great Society programs and the Vietnam War.

    If the government used the same Generally Accepted Accounting Principles it requires companies to use, the annual deficit is actually about $5 trillion a year. That's three times higher than the official figure and means the government is consuming a much larger share of our national income than anybody wants to think about. Bottom line; it affects our ultimate GDP and corporation's ability to beat expectations and clearly registering the misses' log for this past 3rd Quarter reporting period. This opens the door to plan your buying points for reentry for market corrections post-election trading bringing significant gains on the near horizon.

    We found most of the differences between the official figures and the real deficit comes from acknowledging the unfunded liabilities for Social Security, Medicare, veterans' benefits, and other retirement programs.

    The gap between official government figures and reality is especially noticeable once you move beyond annual deficits and take a look at total debt. We have had congress raise the official debt ceiling. That's the total amount of money the government is formally allowed to borrow. We call this the Bernanke and Timothy F. Geithner "Extraordinary Measure Effect."

    The litmus test for our argument comes in the summer of 2011, following a high level of partisan bickering and theatrics that made everyone involved look bad, the debt ceiling was raised a couple of trillion dollars from $14 trillion to $16 trillion. While those are big numbers, the actual total debt of the US government is up to eight times higher-somewhere between $60 and $120 trillion. These figures reflect the future of keeping with all federal entitlement programs and infrastructural support of our national defense.

    The markets are setting to roar ahead! The Obama reelection surprise effect brings a bipartisan agreement. An agreement will occur between motivated actions for the president to pull off what former presidential candidate Mitt Romney proposed on the first day he would cross party lines to get a deal passed for getting America to avoid the immediate fiscal cliff concerns. Obama and his historical bipartisan shake with both houses of our legislative lawmakers is the immediate surprise the market is not pricing in a Santa Claus Rally ending 2012 and moving into 2013.

    Recently, John A. Boehner (bay-ner) the speaker of the House of Representatives. The morning after the election results this video sets the stage of avoiding the "Fiscal Cliff" concerns plaguing our markets moving forward.

    In remarks today on averting the president's "fiscal cliff," Speaker John Boehner cited the bipartisan Tax Reform Act of 1986 as a model for how Republicans and Democrats can work together to pave the way for long-term economic growth, help bring jobs home, and rein in our national debt:

    "There is an alternative to going over the fiscal cliff, in whole or in part. It involves making real changes to the financial structure of entitlement programs, and reforming our tax code to curb special-interest loopholes and deductions. By working together and creating a fairer, simpler, cleaner tax code, we can give our country a stronger, healthier economy. A stronger economy means more revenue, which is what the president seeks. … There's a model for tax reform that supports economic growth. It happened in 1986, with a Democratic House run by Tip O'Neill, and a Republican president named Ronald Reagan." -Speaker John Boehner, November 7, 2012

    Boehner says there were skeptics who doubted the benefits of tax reform in 1986. But "those skeptics were wrong."

    We see priority should be a Rooseveltian attack on monopolies and vested interests be they state-owned enterprises in China or big banks on Wall Street. Only a fraction of the European Union's economy is a genuine single market. Both the US and Europe need School reform and introducing through voucher choice for K-12 education for use of tax dollars to support both the private and public sector education systems are crucial.

    Getting rid of distortions, such as labour laws in Europe or the remnants of China's hukou system of household registration, would also make a huge difference.

    If you remember, "The illusion becomes reality when the masses no longer can tell the two apart." This is why many will be on the wrong side of the trade and miss another market run for even new highs within all the indices. These predictions come from target government spending on the poor and the young. In the emerging world too much cash goes to universal fuel subsidies that disproportionately favor the wealthy (in Asia) and unaffordable pensions that favor the relatively affluent (in Latin America). But the biggest target for reform is the welfare states of the rich world. Given their ageing societies, governments cannot hope to spend less on the elderly, but they can reduce the pace of increase-for instance, raising retirement ages more dramatically and means-testing the goodies on offer.

    The last reform Boehner has brought to the spotlight is reform of taxes: not to punish the rich but to raise money more efficiently and progressively. In poorer economies, where tax avoidance is rife, the focus should be on lower rates and better enforcement. In rich ones the gains should come from eliminating deductions that particularly benefit the wealthy (such as America's mortgage-interest deduction); narrowing the gap between tax rates on wages and capital income; and relying more on efficient taxes that are paid disproportionately by the rich, such as some property taxes. The passing of tax laws giving the middle class a reward to invest are critical for markets moving forward. Giving an investor within the middle class tax range to have zero (0) % Capital gains on long-term and short-term income.


    There is nothing quite like a market break to show you where to find the strongest investments. This has been the case over the past four weeks.

    Good investments will recover quickly, and poor ones stay pinned to the mat. After a market decline, when deciding what to buy, look to the upside leaders. You will hesitate because you'd like to get the lower, bottom price of a few days earlier. But, in waiting, you'll miss the easiest profits that are possible at the bottom. Strong stocks are usually the first to rise and the last to fall. We are telling you to make this work to your advantage.

    Knowing what the voters gave a mandate for opens the doors for stock picking the names on our buy long positions list that should also be on yours. Look closely toward Caterpillar (NYSE:CAT) giving exposure to world recoveries. Some investments traders' on CNBC thought Caterpillar was an "Ultimate Value Trap''. The foundations to emerging growth and mining for precious metals makes it a bellwether to keep in your clients portfolio. Keeping a near 5% dividend ensures overall stability to clients asset diversification moving forward.

    The other prominent emerging growth stock comes with Wynn Resorts LTD (NASDAQ:WYNN) that has exposure emerging and within the local US. The wild card corporation is in the name of Zynga Inc. (NASDAQ:ZNGA) having a Google type engine for e-commerce by being the top projected for linking on-line gambling that they already are first in line in the UK.

    If you are looking to acquire a long-term holding that has a true momentum; it comes with Ford Motor Company (NYSE:F). Ford keeps doing it right with plenty of pipeline of new and innovative products. The other stock issue comes with the known fact that low interest rates will remain enforce by the programmed policies of Bernanke giving American Capital Agency Corporation (NASDAQ:AGNC) that is the best in breed for portfolio diversity.

    The thought of what can CEFs bring to a Simple IRA or a retirement advisory account has been bantered about over the past several months. We think they still have a place within the IRA type of accounts. We like names that are reasonably priced, but offer yields worth your attention. Alpine Total Dynamic Dividend Fund (NYSE:AOD) and other such types of MLPs should be on your radar. Alpine Funds can see a return back to the levels of $5.00 to $6.00 dollar a share NAV.


    We see Caterpillar getting to an area around $95-$116 a share strike price. Look for Wynn Resorts LTD to see in the near-term Santa Claus Rally of $126.00-$134.00 share strike price. Don't think Ford is trapped in a trading range. Ford will find a return to their 52 week highs of $14.50-$17.75 share strike price.

    Why should I buy Zynga Inc.? The answer comes that it holds the best Risk to Reward metrics. We see to get back between $7.50-$10 dollars a share. They have many exposures and well positioned to be an M&A pickup.

    The REITs side of the market environment is based upon keeping a lower interest rate. These rates are projected to maintain for near-term 2013-2014. These low rates are the policies driven by both the ECB and the US; not to mention other emerging growth nations.

    American Capital Agency Corporation most recent 3rd Quarter conference call reflected a strong couple quarters moving into 2013. Getting the income from dividend is a good addition to one's portfolio. We see getting back over their most recent 52 week high and may see $48-$50 dollar a share because portfolios need performance.

    We have kept our eye on the oil plays. Seadrill LTD (NYSE:SDRL) and others are in play. We see Seadrill to move back down into the low $30s, but give a great opening for reentry for the $.84 dividend and growth potential for this issue moving forward.

    Remember; always keep tight stops on all your investments. Watch closely, your bond income fund choices or individual purchase of bonds or Bunds for your income driving side in diversified portfolio management theory. We feel there are great ways to make money and the spreads of corporate bond issues for the 3-5 year ranges and moving into 15 years as the furthest out we recommend to any investor looking for secure in and out income.

    Knowing that God must be kept in your equation, we all need to keep the effort of this mindset for moving a society back within a social order that will work and upright many nations that adopt this critical concept in new oppression or austerity measures throughout our worlds nations.

    Keep looking for our next article series based upon the illusion the markets keep presenting. Best of luck in all your investment bringing higher returns based upon safe stock picks that make sense to own in the near-term and long-term.

    Please help my brother who is battling his cancer of Non Hodgkin Lymphoma. He received a Bone Marrow-Stem Cell transplant out of Loyola in Chicago August 2012. The costs have overwhelmed his family. We have setup a co-fundraiser with The National Marrow Donor Program (NMDP) Be The Match. You can help by going to "Help Perry Gornick". Thank you, and God bless.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Nov 21 8:01 AM | Link | 1 Comment
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