Macau is designated a special administrative region of China, which means the area has the backing of the Chinese government for the purpose of casino development.

Attracted by abundant wealth and the appetite for risk and money in China and Asia, there has been a rapid move by the major casinos to establish and expand their presence on the island of Macau, China, which is the world's largest gambling market, known in the gambling world as the "Monte Carlo of the Orient."

I have visited this former Portuguese colony, which is located some 38 miles from Hong Kong, and there is an obvious push to build more high-end casinos, especially those integrated with hotel, retail, and casino operations. The market is primarily the China and Asia tourist market.

Much of the newer major development is along the Cotai strip in Macau, which will add to the original gambling establishments in the city.

The Cotai strip area is bustling with people armed with money to spend, and if the expansion plans are on target, it will inevitably make Vegas seem sedate in comparison.

In March, gross revenues in the Macau casino sector came in around $3.9 billion, up 25.4% year-over-year. (Source: Garlitos, K., "SLM Holdings Continue to Hold Top Revenue Spot in Macau," CalvinAyre.com, April 3, 2013, last accessed May 9, 2013.)

The prospects for Macau, China are enormous; I'm betting on that, and so are some of the world's largest casino operators.

Two of the major players expanding their presence in Macau are Las Vegas Sands Corp. (NYSE/LVS) and China-based Galaxy Entertainment Group Limited (OTC/GXYEY).

In the first quarter, Las Vegas Sands attributed its strong growth in part to its expansion in Macau, where the company's four Cotai strip properties attracted a record 14 million visitors. The company is a major player on the Cotai strip, which is attracting even more major players. The company's subsidiary Sands China Ltd. reported a 39.3% year-over-year jump in net revenues to $2.0 billion in the first quarter, while earnings surged 63.3% year-over-year.

(click to enlarge)

Chart courtesy of StockCharts.com

But the company that I feel has excellent prospects is Galaxy Entertainment because of the fact that it's an Asian-based company. The company is on an aggressive expansion path. Currently, it has two core properties-Galaxy Macau and StarWorld Hotel and Casino.

Galaxy Entertainment's expansion plans are aggressive. The current development includes doubling the size of Galaxy Macau by the middle of 2015, and there are plans to launch Phase 3 and 4 at Galaxy Macau, to be completed between 2016 and 2018.

Two smaller casino players in the Macau China casino scene are Wynn Resorts, Limited (NASDAQ/WYNN) and MGM Resorts International (NYSE/MGM).

Source - http://www.profitconfidential.com/stock-market/macau-is-hot-chinas-version-of-vegas-providing-excellent-prospects-for-these-entertainment-stocks/

Going against the stock market that just proved an asset is not attractive is not only risky, but it is counterintuitive to the emotional decision-making that takes place in financial markets.

I always scan the stock market for positions at their 52-week lows.

The reason for doing this is twofold: 1) to identify potentially attractive buy low/sell high assets; and 2) to assess what Wall Street dislikes for the purpose of honing my market view.

What you want to look for isn't a company that is going broke or whose business plans have failed, but a large-cap, brand-name company-a leader within its industry that is down on the stock market for its own specific set of reasons.

One company that exemplifies the scenario I'm describing is Barrick Gold Corporation (NYSE/ABX).

This blue-chip gold producer has been having a very tough time on the stock market. The position is down another 10 points since April and has been cut in half since last November.

Barrick Gold's stock chart is below:

(click to enlarge)

Chart courtesy of StockCharts.com

Barrick Gold looks like a good buy low/sell high trade candidate. But obviously, there are two immediate explanations as to why the position just bounced off a major low: weaker gold prices and rising production costs.

The company did particularly well on the stock market between the mid-1980s and mid-1990s. Then it took a break for a good 10 years, doing nothing except paying its dividends.

I would now keep a sharp eye on Barrick Gold for a buy low/sell high trade. But here's the thing: the company's fundamentals are not going to suddenly just improve and turn on a dime, even if gold spikes higher. The company does have structural operational issues related to costs and shareholders aren't happy.

With a four-percent dividend yield, a buy low/sell high trade on a position like Barrick Gold is becoming attractive.

Clearly, the gold bugs are taking a break, but practically speaking, the spot price of gold isn't down too much from its high.

The buy low/sell high investment strategy does take a lot of determination, forbearance, and luck. It is, after all, a risk capital trade.

It's worth scanning the stock market, if you're so inclined, simply to see what the rest of the stock market dislikes. (See "Unbelievable Stock Market Now Destined for Greatness?")

To buy low/sell high in large-cap, blue-chip companies, it really is more about getting the cycle right. And that cycle includes both fundamental economic factors and sentiment.

Bottom-fishing in the stock market is always a tough business to be in. But then again, you can land a really big trophy there.

Source - http://www.profitconfidential.com/stock-market/buy-lowsell-high-the-best-way-to-conquer-this-market/

But recently, the placid corporate environment of fishing equipment was shaken up, as privately held The Orvis Company Inc. from Manchester, Vermont announced it will acquire two corporations, Scientific Anglers and Ross Reels, from 3M Company (NYSE/MMM).

Both businesses will operate separately from the main Orvis business. They must not have been large enough to be meaningful to 3M's earnings results.

Apparently, as a corporation, Orvis is the longest-running mail-order business in the United States. Not only does the company sell good fly fishing equipment, but it also sells clothing, home furnishings, gifts, and even products for your dog.

3M reported first-quarter earnings that could only be described as mediocre. But on the stock market, 3M is trading at an all-time record high with a 2.4% dividend yield and a price-to-earnings (P/E) ratio of approximately 17.

While not expensively priced, earnings for 3M came in at $1.129 billion, or $1.61 diluted earnings per share. This was flat compared to the $1.125 billion, or $1.59 diluted earnings per share, generated in the first quarter of 2012.

3M's first-quarter 2013 sales grew two percent to $7.6 billion.

In February, the corporation authorized another dividend increase of 7.6%, marking the 55th consecutive year of increased dividends.

It also authorized another share buyback program of up to $7.5 billion to pay for its dividends and to keep shareholders happy.

The company's cash and marketable securities position grew to $4.4 billion, up from $3.7 billion. The gain was not as big as those of other corporations, but it was still significant.

3M reduced its full-year earnings outlook just slightly. Top-line growth certainly is an issue for the company, but it's doing all it can to keep shareholders happy-increasing its dividends and buying back shares.

In a more normal environment for stocks, a corporation like 3M would've sold off after such a lackluster earnings report.

If there remains a lack of certainty on the part of consumers, I think it's fair to say that there has been an improvement in certainty among institutional investors. (Read "Make Money in Homebuilders Without Building Homes.")

The numbers from large corporations reveal an improvement in their overall financial health as balance sheets improve. Cash positions are rising, and the costs of interest rates on debt are extremely low.

The improved health of large corporations offers more certainty, and institutional investors are buying it.

The fact that a stable, but slow-growth corporation like 3M is trading at an all-time record high on the stock market illustrates the continued appetite institutional investors have to be buyers.

I view investment risk as going up because of all the new highs, but regardless of this, the fact still remains that big investors are buying.

The monetary party continues until there's a shock.

Read original article at http://www.profitconfidential.com/stock-market/fly-fishing-shaken-up-orvis-acquires-corporations-from-struggling-3m/

The beginning of the year was excellent for small-cap stocks as the Russell 2000 led the way with a 12% advance in the first quarter, including a 6.2% move in January.

We have been seeing some flight to safety in the risk preference of investors.

April has seen some profit-taking emerging in small-caps, as the Russell 2000 is down 2.3% as of Tuesday's close and is currently trailing the blue chips and the S&P 500. (Read "Investors Down-Shift Risk, Search for Safety Ongoing Theme for 2013.")

And with the economy continuing to strengthen in housing, manufacturing, and retail sales, small-caps will continue to have good upside potential.

The chart of the Russell 2000 below shows the upward break from the bullish ascending triangle. There's some stalling and some potential for a relapse to back below 900, based on my technical analysis.

(click to enlarge)

Chart courtesy of StockCharts.com

As we move forward, a lot of what happens to small-caps will be dependent on the ongoing strength of the economic recovery.

The key to investing in small-cap stocks is diversification and risk management.

Simply the risk is much higher when buying small-cap stocks. For instance, the emergence of bad news could drive small-cap stocks down 40%, while for a large-cap such a The Procter & Gamble Company (NYSE/PG), we would likely only see a decline of a few percentage points.

You should be sure to never load up on a sector and diversify across market caps and risk. In this way, you can achieve higher overall portfolio returns by adding small-cap stocks.

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Looking at all this, you have to ask: why are the key stock indices rising when the underlying reasons for their rise (corporate earnings and growth) are diminishing?

The key stock indices aren't climbing because of fundamental reasons. The harsh reality is that the yields from other investments are too low, so investors are forced to take higher risks to earn a decent rate of return. Just look at the yields on bonds of stronger governments around the world-most are barely beating inflation.

Even the most conservative investors, central banks, are rushing toward the stock market. According to a survey done by Central Banking Publication and Royal Bank of Scotland Group PLC of 60 central banks, 23% of them said they either own equities or plan to purchase them in the future. (Source: Bloomberg Businessweek, April 25, 2013.)

The central bank of Israel bought stocks for the first time last year. Similarly, the central bank of Switzerland and the Czech National bank have increased their stock holdings to at least 10% of their reserves.

The Japanese central bank has done the same. The Bank of Japan, the central bank with the second most reserves, expects to boost its holdings of equity exchange-traded funds (ETFs) to 3.5 trillion yen (about US$35.2 billion) by 2014.

Dear reader, central banks around the world usually hold safer asset classes in their reserves, such as gold, and government bonds, which they can sell in order to intervene in any major currency move (or to implement their monetary policy).

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On the stock market, A. O. Smith Corporation (NYSE/AOS) is one of the leading manufacturers of residential and commercial water heaters and boilers. The company actually started as a small machine shop in 1874 in Milwaukee, Wisconsin.

What I like about this business is its consistency, both in terms of its operations and its performance on the stock market.

In its latest earnings report, company management said that business is getting better. First-quarter revenues grew nine percent to a record $509.6 million. The company's CEO said that business in the U.S. market is improving with new residential construction showing some life after five years.

A. O. Smith's first-quarter 2013 earnings were down to $39.0 million, as compared to earnings of $47.5 million on one-time charges related to the closure of a plant.

A. O. Smith upped its full-year guidance, recently announced a two-for-one stock split, and boosted its quarterly dividend by 20%. The company's stock chart is featured below:

(click to enlarge)

Chart courtesy of StockCharts.com

There is good news on the earnings front, and in many situations, it's with old economy stocks. (See "Great Old Economy Businesses That Isn't Full of Hot Air.")

As is always the case in the stock market, the business cycle exists, and some companies are much better at managing their business than others.

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