Intelligent Speculator » Free Stock Picks

How we’ve managed our 60%+ return (annualized) so far in 2010

IS — Mon, 19 Jul 2010 10:00:06 +0000

Again this week we do not have a stock pick to do because our 5 live trades have stayed clear of our stop limits for now. A few of them are now at +10% or better so the odds of closing a trade this week are much better. Fingers crossed!

Since we have already gone by the mid-year (it goes by sooo fast), we decided to take a look into how things have gone so far to see what we did right and what could have gone better. It is always a very useful exercise to learn from mistakes. We had learned a few things last year but this year decided to publish our thoughts on here as we always receive many questions regarding our trades, the reasons behind them, etc.

60% return

WOW! Honestly, our annualized return being over 60% at this point is far beyond expectations. Being long/short means that the general direction of the market has limited impact on our picks as we start trades “dollar neutral” so if stocks all moved down or up, there would be no impact. The return comes from the spread between the return of our long and short picks.

Just a recap to start off. We do not hold more than 5 trades at a time and have stops at +20% and -20% returns (except for very rare exceptions when we pick more volatile trades). Since the trades are only done at the opening, reaching the stops during the day has no impact as long as the trade moves back into that range. We have done 17 trades so far this year and considering the 5 trades at a time, that means our trades have. Last 2 months or so on average which is about what we’d expect for these trades.

The most important metric for us is the number of winning trades compared to losing trades. Since gains and losses are usually close to 20% (except for more violent intra-day trading before we can close out the trade), it is all about getting more trades right than wrong. And we have done that so far. While 4 of the 5 current live trades are winners, I will for now only look at the 12 closed trades:

Winners:

Jan 12 -PCLN/EXPE
Jan 18 –NFLX/NILE
Feb 8 –AAPL/AMZN
Feb 22 –EBAY/KNOT
March 8 –DHX/MWW
April 26 –NFLX/NILE
May 17 –PCLN/TZOO

Losers:

Jan 25 –GOOG/BIDU
March 2 –RIMM/YHOO
March 14 –GOOG/VCLK
March 22 –EBAY/IACI
June 8 –SNDA/KNOT

As you can see 7 winners and 5 losers, nothing incredible but more than enough in this case, especially when we also consider the live trades (11 winners & 6 losers). So we have generally been more right and that is thanks to a few trades that have been easier to trade.

Why are some stocks easier to trade?

I always consider that some stocks are easier because they do not trade at the right ratios. Many factors must be considered but all things being equal, stocks with high revenue and profit growth should trade at high Price/Earnings (P/E) ratios while stocks with little or no growth trade at smaller P/E’s. Some stocks fall outside of these rules for reasons beyond me:

-Priceline (PCLN): Priceline has displayed strong growth for many years now but because it is mature company and an industry leader, the online travel company often trades at what I consider low PE’s. I did two successful trades going long on Priceline this year.

-Blue Nile(NILE): it operates in an industry (online jewelers) with little competition but has struggled to get more consumers to buy their diamonds online. That and a slow economy have made Blue Nile show slow revenue growth in recent years. Yet, the company continues to trade at very high P/E’s. I’ve also enjoyed two successful trades on Blue Nile this year.

Obviously, stocks like Blue Nile and Priceline are not always good trades as they are fairly volatile but we have generally found good entry points for these stocks.

A big challenge

We have written about how we fell for Google, how it has stronger growth than many think but the stock continues to struggle and we have struggled with it causing us 2 big losses so far this year. At some point we will have to either give up on trading Google or the market will finally see what we see in the search company.

Logic behind our trades

To be honest, we consider many different factors when making our picks. If you want more information about these factors, our opinion about the stocks and which stocks we plan on trading next, your best bet is to join our Premium Newsletter, which is sent out every week! Basically, we consider mostly fundamentals but also look at momentum indicators and also “news momentum”.

New stock pick: Long Priceline (PCLN) & Short Travelzoo (TZOO)

IS — Mon, 05 Jul 2010 10:00:06 +0000

I might be getting some complaints about my lack of originality but honestly, why would I change something that is working. I have already done 2 successful trades on Priceline this year (+20,91% vs Expedia & +25,75% vs Priceline) but I still see an opportunity to trade the name against its competition. Priceline has by far the most efficient business model and while I can see more interesting aspects to Expedia, Travelzoo continues to look very expensive in my opinion. You will see a lot of the same arguments I used the last time but basically here it goes:

No matter what the size, Priceline is the growth stock among these two and has shown that for quarter after quarter. You can also take a quick look at the traffic stats of the two websites and easily see which one is rising and which one is losing traffic. So why Travelzoo is still trading at a higher P/E ratio is beyond me. There are some more worrying trends regarding online travel websites when you consider that Google looks set to offer its own services but that will affect both websites in different but fairly equal ways. Priceline is about much more than flight searches which is for now the main way that Google will get involved in the market.

I think that Travelzoo is similar to BlueNile in many different ways mostly because while they are good businesses, they always seem to trade way ahead of their actual value and represent good shorts because of that.

P.S: Since US markets are closed today (Independance day), this trade will be opened tomorrow.

Ticker	Name	Price	EPS	PE Ratio	PE Next Year	Return YTD	Sales Growth
PCLN	priceline.com Inc	176.41	11.54	24.04	14.08	(16.66)	24.06
TZOO	Travelzoo Inc	11.86	0.39	39.58	20.45	(0.16)	16.28

Top 100 Dividend Stocks – July 2010

IS — Thu, 01 Jul 2010 10:00:49 +0000

It is that time again, time to look at the top US dividend stocks. We’ve done this in past months and it’s been gaining popularity every time as many are like us, trying to build passive income through a dividend portfolio. Those who have been following this list know that we can probably expect the Communications sector to do very well here. They have been the highest yielding stocks for some time now. That being said, I think many other criteria need to be considered when picking dividend stocks and that is why I will be narrowing down the list later this week for our mailing list members. If you are interested in finding out what are top dividend stock picks are, simply join our mailing list it’s free! I expect to send it out Saturday or Sunday.

What to look for

Last month, the priority really was on finding a fairly reliable high dividend yield stock. This time however, we will be putting more emphasis on dividend growth as the impact it will have on your dividend portfolio is critical.

-Consistently increases its dividend payout over the years (over 1 year, 3 years & 5 years)
-Is profitable enough to keep paying the dividend
-Has strong financial statements (lots of cash and assets)
-Is trading over 5$ (to avoid having smaller stocks that can be very volatile)
-The return on Equity (ROE) should be high

In terms of dividend yield only, the top yield is still held by Frontiers Communications Corp which currently yields over 14%. Anytime you see a stock that yield that much higher than the others, you know there probably is something wrong! Here is the chart:

We will filtering out the top 100 list to find the ones that fit all of these criteria! In the meantime, here is the list!

Ticker	Name	Price	Dividend Yield	Return MTD	Ex-Dividend Date
FTR	Frontier Communications Corp	$7.11	14.06	-7.71	9/7/2010
WIN	Windstream Corp	$10.56	9.46	1.23	9/28/2010
CTL	CenturyLink Inc	$33.31	8.71	-0.89	9/7/2010
MO	Altria Group Inc	$20.04	6.99	0.49	9/13/2010
T	AT&T Inc	$24.19	6.95	-0.45	7/7/2010
RAI	Reynolds American Inc	$52.12	6.91	1.7	9/8/2010
POM	Pepco Holdings Inc	$15.68	6.89	-1.09	9/8/2010
VZ	Verizon Communications Inc	$28.02	6.78	1.82	7/7/2010
PBI	Pitney Bowes Inc	$21.96	6.65	-3	8/11/2010
AEE	Ameren Corp	$23.77	6.48	-2.06	9/7/2010
HCN	Health Care REIT Inc	$42.12	6.46	-2.23	8/6/2010
RRD	RR Donnelley & Sons Co	$16.37	6.36	-14.56	8/4/2010
NI	NiSource Inc	$14.50	6.34	-3.07	7/28/2010
PGN	Progress Energy Inc	$39.22	6.32	1.63	7/8/2010
FE	FirstEnergy Corp	$35.23	6.24	0.06	8/4/2010
TEG	Integrys Energy Group Inc	$43.74	6.22	-3.27	8/25/2010
DUK	Duke Energy Corp	$16.00	6.13	0.25	8/11/2010
CINF	Cincinnati Financial Corp	$25.87	6.11	-3.5	9/15/2010
Q	Qwest Communications International Inc	$5.25	6.1	0.19	8/18/2010
CNP	CenterPoint Energy Inc	$13.16	5.93	-3.38	8/11/2010
PLD	ProLogis	$10.13	5.92	-10.98	8/11/2010
LLY	Eli Lilly & Co	$33.50	5.85	2.17	8/11/2010
PNW	Pinnacle West Capital Corp	$36.36	5.78	3.56	7/29/2010
HCP	HCP Inc	$32.25	5.77	1.22	8/5/2010
PPL	PPL Corp	$24.95	5.61	-2	9/8/2010
LO	Lorillard Inc	$71.98	5.56	0.69	8/30/2010
EXC	Exelon Corp	$37.97	5.53	-1.63	8/11/2010
ED	Consolidated Edison Inc	$43.10	5.52	1.2	8/16/2010
SO	Southern Co	$33.28	5.47	1.77	7/29/2010
TE	TECO Energy Inc	$15.07	5.44	-3.09	8/11/2010
SCG	SCANA Corp	$35.76	5.31	-0.15	9/8/2010
AEP	American Electric Power Co Inc	$32.30	5.2	1.06	8/6/2010
LEG	Leggett & Platt Inc	$20.06	5.18	-12.85	9/13/2010
BMY	Bristol-Myers Squibb Co	$24.94	5.13	8.83	9/29/2010
PM	Philip Morris International Inc	$45.84	5.06	5.24	9/24/2010
PFE	Pfizer Inc	$14.26	5.05	-6.37	8/4/2010
SE	Spectra Energy Corp	$20.07	4.98	0.3	8/11/2010
MCHP	Microchip Technology Inc	$27.74	4.93	-0.39	8/17/2010
HCBK	Hudson City Bancorp Inc	$12.24	4.9	-2.93	8/4/2010
XEL	Xcel Energy Inc	$20.61	4.9	1.8	9/21/2010
PCL	Plum Creek Timber Co Inc	$34.53	4.87	-1.4	8/11/2010
PAYX	Paychex Inc	$25.97	4.77	-9	7/28/2010
KIM	Kimco Realty Corp	$13.44	4.76	-4.9	10/1/2010
DD	EI du Pont de Nemours & Co	$34.59	4.74	-4.37	8/11/2010
D	Dominion Resources Inc/VA	$38.74	4.72	-0.56	8/25/2010
DTE	DTE Energy Co	$45.61	4.65	1.32	9/16/2010
ETR	Entergy Corp	$71.62	4.64	-4.6	8/10/2010
FII	Federated Investors Inc	$20.71	4.64	-6.75	8/6/2010
PBCT	People's United Financial Inc	$13.50	4.59	-3.36	7/28/2010
GAS	Nicor Inc	$40.50	4.59	1.34	9/28/2010
VTR	Ventas Inc	$46.95	4.56	1.17	9/8/2010
COP	ConocoPhillips	$49.09	4.48	-5.34	7/29/2010
PCG	PG&E Corp	$41.10	4.43	0.11	9/28/2010
PEG	Public Service Enterprise Group Inc	$31.33	4.37	3.42	9/7/2010
KMB	Kimberly-Clark Corp	$60.63	4.35	0.96	9/1/2010
MRK	Merck & Co Inc	$34.97	4.35	4.93	9/1/2010
NYX	NYSE Euronext	$27.63	4.34	-2.62	9/10/2010
CVX	Chevron Corp	$67.86	4.24	-8.14	8/17/2010
HNZ	HJ Heinz Co	$43.22	4.16	-1.2	9/20/2010
GPC	Genuine Parts Co	$39.45	4.16	-1.84	9/1/2010
MWV	MeadWestvaco Corp	$22.20	4.14	-7.11	7/29/2010
KFT	Kraft Foods Inc	$28.00	4.14	-1.12	9/27/2010
NEE	NextEra Energy Inc	$48.76	4.1	-1.36	8/25/2010
CMS	CMS Energy Corp	$14.65	4.1	-0.2	8/4/2010
OKE	Oneok Inc	$43.25	4.07	-2.74	7/28/2010
WM	Waste Management Inc	$31.29	4.03	-3.75	9/2/2010
NU	Northeast Utilities	$25.48	4.02	-1.81	9/1/2010
EIX	Edison International	$31.72	3.97	-1.03	9/29/2010
HRB	H&R Block Inc	$15.69	3.82	-1.48	9/8/2010
AVB	AvalonBay Communities Inc	$93.37	3.82	-3.91	9/24/2010
ABT	Abbott Laboratories	$46.78	3.76	-1.64	7/13/2010
NUE	Nucor Corp	$38.28	3.76	-10.28	9/28/2010
JCP	JC Penney Co Inc	$21.48	3.72	-21.86	7/7/2010
JNJ	Johnson & Johnson	$59.06	3.66	1.3	8/20/2010
PSA	Public Storage	$87.91	3.64	-4.33	9/13/2010
PPG	PPG Industries Inc	$60.41	3.58	-5.71	8/6/2010
VNO	Vornado Realty Trust	$72.95	3.56	-6.09	8/9/2010
MMC	Marsh & McLennan Cos Inc	$22.55	3.55	3.39	7/7/2010
MAT	Mattel Inc	$21.16	3.54	-2.31	11/24/2010
CLX	Clorox Co	$62.16	3.54	-1.05	7/26/2010
KO	Coca-Cola Co/The	$50.12	3.51	-1.66	9/15/2010
SYY	Sysco Corp	$28.57	3.5	-3.32	10/5/2010
NOC	Northrop Grumman Corp	$54.44	3.45	-10	8/19/2010
CAG	ConAgra Foods Inc	$23.32	3.43	-3.56	7/28/2010
BMS	Bemis Co Inc	$27.00	3.41	-5.86	8/18/2010
LMT	Lockheed Martin Corp	$74.50	3.38	-6.78	8/30/2010
ADP	Automatic Data Processing Inc	$40.26	3.38	-0.7	9/8/2010
VFC	VF Corp	$71.18	3.37	-7.24	9/7/2010
HD	Home Depot Inc	$28.07	3.37	-16.52	8/31/2010
MOLX	Molex Inc	$18.24	3.34	-13.21	9/28/2010
MHP	McGraw-Hill Cos Inc/The	$28.14	3.34	1.22	8/23/2010
MCD	McDonald's Corp	$65.87	3.34	-1.5	8/26/2010
SRE	Sempra Energy	$46.79	3.33	2.52	9/21/2010
AVP	Avon Products Inc	$26.50	3.32	0.04	8/13/2010
LLTC	Linear Technology Corp	$27.81	3.31	-0.54	8/11/2010
UPS	United Parcel Service Inc	$56.89	3.3	-9.35	8/19/2010
EMN	Eastman Chemical Co	$53.36	3.3	-10.99	9/9/2010
MTB	M&T Bank Corp	$84.95	3.3	7.21	8/30/2010
DRI	Darden Restaurants Inc	$38.85	3.29	-9.44	7/7/2010
EQR	Equity Residential	$41.64	3.24	-7.05	9/16/2010

Stock Picks competition (Q2 Update)

IS — Thu, 01 Jul 2010 02:36:47 +0000

Time to get to the results once more and things have not gone much better. It has certainly been a humbling year so far. After winning last year’s edition, things have been going terribly in the first half of the year. The only positive is that I did gain a spot in the rankings and now have some fellow bloggers (very slightly) behind me. When looking at the competition, it seems like almost everyone is having a difficult time apart from Dividend Growth Investor. There are 6 months left and hopefully more than one of us will be in positive territory when the year ends. Did we all go for broke? Some us did but I certainly don’t feel like my picks were that risky. Thankfully, my performance in the long/short stock picks on this blog have been much much better.

I guess one theme that has affected my portfolio a lot is China. I had no idea when 2010 started that China would have such an impact on Google’s performance. Had I known that, Sohu would not have been my 2nd pick. They are different plays on China but both have had difficult years.

Here is a more detailed review for all of my picks:

JJN -3.14% : This trade certainly looked the most promising when I reported Q1 results, the trade was actually the top pick among all bloggers. But like many commodities, it has been slammed as fears of international sovereign debt continues to spread across the system.

UNG -26.79% : Among all commodities, this has turned out to be one of the worst that could have been picked. Fundamentals for crude oil and natural gas continue to be difficult to evaluate but in general this pick has been a complete disaster

SOHU -29.71% : Like the whole Chinese market, Sohu has struggled so far this year. Apart from Baidu (BIDU), Chinese stocks have had a very difficult time and Sohu has been no exception.

GOOG -28.24% : Very difficult to imagine that Google could ever lose this much in a year, especially when nothing terrible has come out. It’s not as if an accounting scandal had come out. But there have been worries about China, about its lack of growth, about competition from Microsoft’s Bing and many others. I still think the stock is a great buy right now but clearly in this competition Google has not been my friend.

So is it over? Of course not. Catching up is very much a possibility, and while the #1 position looks far right now, a top 2 or top 3 rankings is very much a possibility thanks unfortunately to the difficult performances by all of us. Without further wait, here are the current standings:

Rank	Blog	Performance
1	DividendGrowthInvestor	6.40%
2	The Wild Investor	-7.60%
3	My Traders Journal	-11.90%
4	Wheredoesallmymoneygo	-14.16%
5	Zach Stock	-17.24%
6	IntelligentSpeculator	-19.06%
7	FourPillars	-20.11%
8	TheFinancialBlogger	-22.65%
9	Million Dollar Journey	-23.65%

Best and worst ETF’s in June 2010

IS — Mon, 28 Jun 2010 22:21:12 +0000

Just a very quick post, I thought it was interesting that among the top 3 ETF’s this month, only 1 of them is leveraged as the two others, Coffee and Sugar are not. Guess it was a good time to buy Coffee and Sugar ETF’s instead of stopping by Starbucks!

Here are the top 3 ETF’s so far this month:

Ticker	Name	Market Cap	Price	Fees	1Y Return	Return YTD	MTD Return
JO	iPath Dow Jones-UBS Coffee Subindex Total Return ETN	$15,293,300.00	$45.86	0.75	27.68	18.41	23.514
CZM	Direxion Daily China 3X Bull Shares	$31,329,040.00	$34.81	0.95	N/A	(5.12)	14.26
SGG	iPath Dow Jones-UBS Sugar Subindex Total Return ETN	$62,118,500.00	$43.90	0.75	-14.729	(38.93)	14.171

And now the 3 Worst Ones:

Ticker	Name	Market Cap	Price	Fees	1Y Return	Return YTD	MTD Return
CZI	Direxion Daily China 3X Bear Shares	$12,172,030.00	$30.43	0.95	N/A	(27.71)	-17.537
LHB	Direxion Daily Latin America Bear 3X Shares	$5,853,039.00	$39.02	0.95	N/A	(9.69)	-17.557
INDZ	Direxion Daily India Bear 2x Shares	$3,420,034.00	$34.20	0.95	N/A	N/A	-18.422

New Stock Pick: Long Research in Motion (RIMM) & Short Monster WorldWide (MWW)

IS — Mon, 28 Jun 2010 10:20:09 +0000

Counter-trend is surely one way to describe this trade. On Friday, Research in Motion (RIMM) dropped nearly 11% after announcing revenues and projections that came slightly below projections. How bad are things for Research in Motion? Not that bad actually. Profits did increase 20% to $769 million. But the dips and analyst downgrades (8 of them on Friday) were mostly based on revenues. How bad are revenues? They increased from $3.42 billion a year ago to $4.24 billion in the last quarter. Analysts were expecting $4.32 billions. Just seems incredible that a miss of such a small magnitude generated a 11% loss for the stock.

RIMM is still the leader

While Research in Motion might not have the momentum that other players like Apple and Google (through Android) have, it is still the leader in commercial smartphones and unchallenged in that regard. Go to your city’s downtown area and you will see tons of Blackberry users. Ask them what are the odds that one year from now they will be using another type of phone and they will tell you the odds are very slim. Which they are.

Just take a look at Friday’s bloody action:

And now a chart almost as scary, the year-to-date chart:

Where is Research in Motion failing?

Obviously, if the stock has performed so badly, it is because all is not well. Research in Motion has spent a considerable amount of energy trying to gain regular personal consumers to add to its strong “corporate” consumer base. That is where it is struggling against Apple and Android powered phones. But that is not where most of RIMM’s revenues and profits come from and it’s easy to put too much emphasis on the consumer part of RIMM’s business.

And now the short side

It is not the first time this year that I go short on Monster WorldWide (MWW) and the first time was very successful. The stock continues to look overvalued compared with other internet players. The continued slowdown in US employment as well as pressure from more specialized job websites (such as those from Dice Holdings – DHX) is not helping Monster’s numbers.

You can see Monster’s less than impressive traffic stats according to Compete here:

Closing Trade on Priceline (PCLN) & Travelzoo (TZOO)

IS — Tue, 22 Jun 2010 09:03:46 +0000

As you saw in the quick news post yesterday, Travelzoo’s (TZOO) got crushed in yesterday’s trading and that was enough for us to reach our stop as we were short the stock against Priceline (PCLN). The trade currently stands at +21,71% return and will be closed at today’s opening! That also means next Monday will feature a new post. Still trying to figure out why Travelzoo lost so much yesterday but I have to say that I’m not complaining, the stock was overvalued.

Tough year for commodities….Top 100 commodity ETF’s so far in 2010

IS — Tue, 15 Jun 2010 10:28:19 +0000

Commodities used to be owned by institutional investors and day traders and that was it. But in recent years, thanks mainly to ETF’s, they have became so popular that they have almost became an asset class. In fact, many do consider commodities as a separate asset class. The result of this of course has been that almost every investor, from the biggest to the smallest now has commodities in his portfolio, usually through ETF’s. Unfortunately, 2010 has been a very difficult year for commodity ETF’s.

Apart from a few exception, two simple strategies have worked in commodities so far this year:

1-Long Gold
2-Short everything else

There are a few exceptions, but not too many. To get an idea, take a look at the top 100 commodity ETF’s so far this year… just to make it even more clear, I’ve made it easy to see any funds that are “Short” or “Gold related”.

Ticker	Name	Market Cap	Price	Return YTD	1Y Return	Fees
AGA	PowerShares DB Agriculture Double Short ETN	$10,334,000.00	$51.67	52.75	46.962	0.75
BOM	PowerShares DB Base Metals Double Short ETN	$9,513,451.00	$21.38	37.99	-33.915	0.75
ADZ	PowerShares DB Agriculture Short ETN	$3,832,000.00	$38.32	24.34	23.863	0.75
DGP	PowerShares DB Gold Double Long ETN	$466,704,000.00	$32.58	24.02	56.89	0.75
UGL	ProShares Ultra Gold	$202,050,800.00	$54.13	21.82	54.631	0.95
BOS	PowerShares DB Base Metals Short ETN	$8,925,000.00	$25.50	21.02	-14.461	0.75
GRN	iPath Global Carbon ETN	$3,023,040.00	$29.85	20.46	12.698	0.75
DEE	PowerShares DB Commodity Double Short ETN	$11,743,800.00	$58.80	18.99	14.577	0.75
CMD	ProShares UltraShort DJ-UBS Commodity	$5,855,734.00	$16.64	17.00	-7.737	0.95
DTO	PowerShares DB Crude Oil Double Short ETN	$48,269,000.00	$74.91	12.72	13.126	0.75
IAU	iShares COMEX Gold Trust	$3,333,771,000.00	$119.70	11.88	28.114	0.4
SGOL	ETFS Gold Trust	$541,547,200.00	$121.95	11.86	N/A	0.39
GLD	SPDR Gold Trust	$51,235,020,000.00	$119.60	11.84	28.079	0.4
DGL	PowerShares DB Gold Fund	$208,796,900.00	$43.64	11.75	27.117	0.75
UBG	E-TRACS UBS Bloomberg CMCI Gold ETN	$5,324,000.00	$33.28	11.65	25.849	0.3
DDP	PowerShares DB Commodity Short ETN	$6,292,500.00	$41.65	10.82	7.841	0.75
DBP	PowerShares DB Precious Metals Fund	$273,901,700.00	$41.57	10.75	24.612	0.75
JJP	iPath Dow Jones-UBS Precious Metals Subindex Total Return ETN	$9,514,304.00	$63.26	10.38	24.05	0.75
GDX	Market Vectors - Gold Miners ETF	$7,147,983,000.00	$49.90	9.91	24.414	0.54
SZO	PowerShares DB Crude Oil Short ETN	$18,116,000.00	$51.76	9.67	9.667	0.75
SCO	ProShares UltraShort DJ-UBS Crude Oil	$39,299,710.00	$14.93	9.45	-5.383	0.95
DNO	United States Short Oil Fund LP	$23,890,000.00	$47.90	9.36	N/A	0.96
GDXJ	Market Vectors Junior Gold Miners ETF	$1,205,900,000.00	$27.50	8.97	N/A	0.59
SLV	iShares Silver Trust	$5,413,018,000.00	$17.86	7.93	17.978	0.5
DBS	PowerShares DB Silver Fund	$64,885,090.00	$32.56	7.90	17.723	0.75
AGQ	ProShares Ultra Silver	$176,842,800.00	$60.70	7.77	15.867	0.95
SIVR	ETFS Silver Trust	$158,601,900.00	$18.18	7.77	N/A	0.3
PXE	PowerShares Dynamic Energy Exploration & Production Portfolio	$54,656,000.00	$17.92	7.30	16.325	0.63
USV	E-TRACS UBS Bloomberg CMCI Silver ETN	$4,164,816.00	$26.03	6.80	21.127	0.4
PSAU	PowerShares Global Gold and Precious Metals Portfolio	$46,184,000.00	$40.17	5.94	25.633	0.75
FXZ	First Trust Materials AlphaDEX Fund	$126,873,000.00	$19.84	5.36	31.764	0.7
JJN	iPath Dow Jones-UBS Nickel Subindex Total Return ETN	$18,151,490.00	$29.62	4.04	20.854	0.75
JO	iPath Dow Jones-UBS Coffee Subindex Total Return ETN	$13,805,950.00	$41.18	3.14	0.06	0.75
DDG	ProShares Short Oil & Gas	$11,721,560.00	$52.42	2.67	-6.232	0.95
RKH	Regional Bank HOLDRs Trust	$157,998,800.00	$77.09	2.65	15.646	0
DUG	ProShares UltraShort Oil & Gas	$127,287,800.00	$64.82	0.80	-16.837	0.95
COW	iPath Dow Jones-UBS Livestock Subindex Total Return ETN	$83,927,650.00	$28.62	0.28	0.427	0.75
PTD	E-TRACS UBS Short Platinum ETN	$5,136,000.00	$32.10	(0.12)	-7.187	0.65
JJT	iPath Dow Jones-UBS Tin Subindex Total Return ETN	$7,742,744.00	$39.79	(0.36)	9.543	0.75
FCG	First Trust ISE-Revere Natural Gas Index Fund	$409,897,600.00	$17.49	(0.40)	15.54	0.6
WOOD	iShares S&P Global Timber & Forestry Index Fund	$56,658,030.00	$40.14	(0.50)	28.161	0.48
IEO	iShares Dow Jones US Oil & Gas Exploration & Production Index Fund	$370,516,500.00	$53.62	(0.58)	13.116	0.48
PTM	E-TRACS UBS Long Platinum ETN	$81,659,100.00	$18.58	(0.60)	18.459	0.65
PYZ	PowerShares Dynamic Basic Materials Sector Portfolio	$43,979,700.00	$28.19	(0.83)	25.188	0.65
XME	SPDR S&P Metals & Mining ETF	$1,043,026,000.00	$50.98	(1.45)	19.184	0.35
ELG	SPDR Dow Jones Large Cap Growth ETF	$174,769,000.00	$48.54	(1.78)	19.531	0.2
FIW	First Trust ISE Water Index Fund	$40,960,740.00	$18.41	(1.83)	10.364	0.6
PSP	PowerShares Global Listed Private Equity Portfolio	$219,112,200.00	$8.87	(2.44)	20.821	0.7
VOX	Vanguard Telecommunication Services ETF	$204,062,900.00	$54.91	(2.71)	13.485	0.25
PUW	PowerShares WilderHill Progressive Energy Portfolio	$54,549,610.00	$23.16	(2.72)	15.482	0.7
IYM	iShares Dow Jones US Basic Materials Sector Index Fund	$673,612,000.00	$57.63	(3.06)	21.625	0.47
VAW	Vanguard Materials ETF	$442,711,000.00	$64.21	(4.53)	15.482	0.25
FXN	First Trust Energy AlphaDEX Fund	$43,862,810.00	$15.90	(4.79)	10.346	0.7
PGM	iPath Dow Jones-UBS Platinum Subindex Total Return ETN	$106,492,000.00	$37.13	(4.93)	18.884	0.75
VDE	Vanguard Energy ETF	$1,107,253,000.00	$78.77	(5.18)	2.256	0.25
XES	SPDR S&P Oil & Gas Equipment & Services ETF	$265,162,000.00	$26.72	(5.47)	6.268	0.35
IYE	iShares Dow Jones US Energy Sector Index Fund	$636,608,000.00	$31.08	(5.83)	-0.97	0.47
SLX	Market Vectors - Steel Index Fund	$309,096,000.00	$57.88	(6.05)	20.882	0.55
ERY	Direxion Daily Energy Bear 3X Shares	$31,903,180.00	$10.70	(6.12)	-37.3	0.95
GCC	GreenHaven Continous Commodity Index Fund	$238,329,800.00	$24.91	(6.42)	0.081	0.85
PKN	PowerShares Global Nuclear Energy Portfolio	$35,500,000.00	$17.73	(6.79)	-3.195	0.75
USL	United States 12 Month Oil Fund LP	$154,324,400.00	$37.53	(7.07)	-4.689	0.6
IEZ	iShares Dow Jones US Oil Equipment & Services Index Fund	$353,115,000.00	$39.50	(7.27)	3.225	0.47
UGA	United States Gasoline Fund LP	$78,269,000.00	$33.93	(7.71)	-3.515	0.6
UBN	E-TRACS UBS Bloomberg CMCI Energy ETN	$4,075,812.00	$14.28	(7.71)	-11.528	0.65
SMN	ProShares UltraShort Basic Materials	$141,050,200.00	$39.55	(7.92)	-50.362	0.95
PIO	PowerShares Global Water Portfolio	$308,280,000.00	$16.69	(8.76)	9.786	0.75
UHN	United States Heating Oil Fund LP	$10,120,000.00	$25.34	(8.77)	-7.478	0.69
CGW	Claymore S&P Global Water Index ETF/USA	$206,004,400.00	$16.99	(8.80)	6.501	0.7
PXJ	PowerShares Dynamic Oil & Gas Services Portfolio	$139,913,000.00	$15.30	(9.38)	-3.042	0.61
DBE	PowerShares DB Energy Fund	$334,041,000.00	$23.76	(9.58)	-7.428	0.75
RJZ	ELEMENTS Linked to the Rogers International Commodity Index - Metals Tot Return	$47,827,500.00	$9.10	(9.60)	13.291	0.75
RJN	ELEMENTS Linked to the Rogers International Commodity Index - Energy To Return	$46,445,400.00	$5.72	(10.08)	-11.198	0.75
UYM	ProShares Ultra Basic Materials	$336,892,500.00	$28.54	(10.12)	31.767	0.95
IXC	iShares S&P Global Energy Sector Index Fund	$988,861,600.00	$31.86	(10.17)	-4.142	0.48
MXI	iShares S&P Global Materials Sector Index Fund	$757,066,500.00	$55.87	(10.40)	9.525	0.48
OLO	PowerShares DB Crude Oil Long ETN	$15,691,130.00	$12.09	(10.68)	-6.505	0.75
DJP	iPath Dow Jones-UBS Commodity Index Total Return ETN/United States	$2,046,754,000.00	$38.17	(10.77)	-4.989	0.75
DBO	PowerShares DB Oil Fund	$512,307,100.00	$24.52	(10.81)	-6.679	0.75
DBC	PowerShares DB Commodity Index Tracking Fund	$4,402,753,000.00	$22.01	(10.85)	-9.26	0.85
KOL	Market Vectors - Coal ETF	$269,708,500.00	$32.24	(10.88)	21.638	0.63
DBA	PowerShares DB Agriculture Fund	$1,858,741,000.00	$23.79	(10.93)	-14.89	0.85
DGZ	PowerShares DB Gold Short ETN	$17,820,000.00	$17.79	(11.32)	-25.095	0.75
DPU	PowerShares DB Commodity Long ETN	$5,437,500.00	$14.50	(11.48)	-9.488	0.75
PZD	PowerShares Cleantech Portfolio	$139,187,500.00	$22.12	(11.61)	-0.692	0.67
PKOL	PowerShares Global Coal Portfolio	$14,239,500.00	$25.88	(11.65)	16.216	0.75
DJCI	E-TRACS UBS AG Dow Jones-UBS Commodity Index Total Return ETN	$12,510,430.00	$23.53	(11.67)	N/A	0.5
NIB	iPath Dow Jones-UBS Cocoa Subindex Total Return ETN	$8,702,000.00	$43.51	(11.93)	-1.892	0.75
MOO	Market Vectors - Agribusiness ETF	$1,493,821,000.00	$38.23	(12.13)	1.198	0.59
GSG	iShares S&P GSCI Commodity Indexed Trust	$1,504,951,000.00	$28.18	(12.48)	-13.05	0.75
DBN	WisdomTree International Basic Materials Sector Fund	$38,442,790.00	$24.76	(12.77)	8.538	0.58
USO	United States Oil Fund LP	$2,237,752,000.00	$34.33	(12.86)	-13.735	0.45
JJE	iPath Dow Jones-UBS Energy Subindex Total Return ETN	$23,786,400.00	$23.32	(12.89)	-18.711	0.75
CRBQ	Jefferies TR/J CRB Global Commodity Equity Index Fund	$69,615,500.00	$37.08	(13.11)	N/A	0.65
RJA	ELEMENTS Linked to the Rogers International Commodity Index - Agri Tot Return	$265,802,000.00	$6.93	(13.60)	-13.075	0.75
DIG	ProShares Ultra Oil & Gas	$418,779,000.00	$29.56	(13.65)	-9.254	0.95
JJC	iPath Dow Jones-UBS Copper Subindex Total Return ETN	$95,201,260.00	$39.98	(13.85)	15.951	0.75
OIL	iPath Goldman Sachs Crude Oil Total Return Index ETN	$630,684,900.00	$22.33	(13.91)	-14.929	0.75
NLR	Market Vectors - Nuclear Energy ETF	$162,525,000.00	$19.62	(13.95)	-17.827	0.63
QCLN	First Trust NASDAQ Clean Edge Green Energy Index Fund	$33,696,030.00	$13.87	(14.50)	-9.484	0.6

As you can see, it’s a very recurring theme isn’t it? Just to make things a bit easier, here are top commodity ETF’s that do not follow the two strategies we just mentionned:

Ticker	Name	Market Cap	Price	Return YTD	1Y Return	Fees
GRN	iPath Global Carbon ETN	$3,023,040.00	$29.85	20.46	12.698	0.75
DBP	PowerShares DB Precious Metals Fund	$273,901,700.00	$41.57	10.75	24.612	0.75
JJP	iPath Dow Jones-UBS Precious Metals Subindex Total Return ETN	$9,514,304.00	$63.26	10.38	24.05	0.75
SLV	iShares Silver Trust	$5,413,018,000.00	$17.86	7.93	17.978	0.5
DBS	PowerShares DB Silver Fund	$64,885,090.00	$32.56	7.90	17.723	0.75
AGQ	ProShares Ultra Silver	$176,842,800.00	$60.70	7.77	15.867	0.95
SIVR	ETFS Silver Trust	$158,601,900.00	$18.18	7.77	#N/A N/A	0.3
PXE	PowerShares Dynamic Energy Exploration & Production Portfolio	$54,656,000.00	$17.92	7.30	16.325	0.63
USV	E-TRACS UBS Bloomberg CMCI Silver ETN	$4,164,816.00	$26.03	6.80	21.127	0.4
FXZ	First Trust Materials AlphaDEX Fund	$126,873,000.00	$19.84	5.36	31.764	0.7
JJN	iPath Dow Jones-UBS Nickel Subindex Total Return ETN	$18,151,490.00	$29.62	4.04	20.854	0.75
JO	iPath Dow Jones-UBS Coffee Subindex Total Return ETN	$13,805,950.00	$41.18	3.14	0.06	0.75

So what explains these strange movements? First off, Gold has been doing well because of all of the uncertainty in the world. Investors all around the world have been buying gold especially because of all of the uncertainty in the world economy. Events like yesterday’s downgrade of Greece debt to Junk status is nothing to help reassure those who are worried. Just take a look at this chart of Gold for 2010.

Last year, many had expected that the economic recovery would be much higher and had pushed commodities such as Oil in anticipation. Obviously, with things being much worse now, those commodities have looked overvalued. Demand has simply not been up to par. Even a strong performance by China has not been enough to compensate for all of the European problems.

Are you surprised by the overall poor performance of commodity ETF’s so far this year?

New Stock Pick: Long Rosetta Stone (RST) & Short IAC Interactive (IACI)

IS — Mon, 14 Jun 2010 10:23:35 +0000

In last week’s premium newsletter, I had discussed Rosetta Stone and have been gaining interest in the recent IPO. To those who do not know the company, it helps students learn languages and is probably the best out there. The company does spend a lot on advertising which seems to drive most of the sales and those have been growing quickly in recent quarters. Can Rosetta Stone keep it going? I’d say yes. They still have many possible sell avenues out there including the very quickly growing mobile market. It is stunning to me to not see a Rosetta Stone Iphone app where it would almost certainly be a major hit. The official reason is that Rosetta’s software is built with Flash which is not supported by the Iphone. That sounds like a bogus explanation. There is no doubt that the costs incurred to develop the software would be worth it and many many potential customers have been asking for it. Hopefully it is in the works and once that is released it will certainly help sales.

Valuations out of whack

Rosetta currently trades on a P/E ratio of 21,84 which does not seem unreasonable but when I see a company like IAC Interactive trading at a ratio of 29,32, I feel like there is a major mismatch. I just do not see any way that IAC could match growth from Rosetta Stone so seeing it trade at a higher ratio is odd to me. IAC has actually experienced a decline in sales in recent months so why it would trade there is beyond me. The company has lots of potential but that has always been the case and it has never come to reality, I see no reason for that to change.

2010 Stock Picks: World Cup Special!!!!

IS — Thu, 10 Jun 2010 10:22:36 +0000

Until recently, the World Cup was the biggest event in the world, but was almost ignored in the biggest economy. As years go by, that is less and less the case. The US has become a much more important player since hosting the World Cup in 1994. It’s probably very related that the US team has also improved its general level since then and even reached the quarterfinals. That being said, you could argue that the World Cup is the biggest Sports event from a business perspective in the world, perhaps the biggest event in any sphere in fact.

The numbers are staggering and there are many. The predicted $21.3 billion economic impact as well as the estimated 159,000 jobs created for Africa is incredible and something that will have a long term impact in many ways. Tourism is one obvious but many of the jobs created and dollars spent will have a lasting impact in Africa. Around the world, with audiences glued to their television, it is a golden opportunity for advertisers, pub and bar owners, betting & gambling institutions, etc.

International Stocks/Companies

Like the World Cup, stocks that compete in this major event are the biggest in the world. Companies that consider it a good investment to be seen around the planet are the biggest in the world. Most of them, even when headquartered outside of the US, are still traded on US exchanges. There are however a few exceptions that you will see here.

There might only be 1 World Cup winner but the fact is that many many others will come out as winners and we decided to take a look at some stock picks or companies that could do well. So by category, here they are:

Gambling

-Unfortunately, Americans are more limited in terms of gambling on the World Cup. If you live near a casino, you can of course go place your bets here. I wrote about how sports gambling on the internet might become legal soon in the US . In the meantime, non-US users can flow to either private companies such as Betfair or public ones which can be traded on European exchanges. Betfair is very transparent about everything going on and I just checked and saw that over $50 millions has been bet on Betfair alone for the overall winner. There will be many times that bet on individual games, groups, special bets, etc. This is a billion dollar business for such a big event and it is needless to say

Ticker	Exchange	Name	Market Cap	Price	Return YTD	1Y Return	Dividend Yield
PRTY	London	PartyGaming PLC	$1,037,357,000.00	$256.00	(2.31)	5.83	0
WMH	London	William Hill PLC	$1,225,619,000.00	$175.40	(3.43)	-15.1458	4.77
BWIN	Austria	bwin Interactive Entertainment AG	$1,194,043,000.00	$35.09	(18.67)	19.07	1.87

TV

I don’t think I need to explain this one very much. It is when such big events occur that consumers around the world think about upgrading their electronics, mainly their tv. Watching a soccer/football game on a 50″ screen instead of a small tv makes a big difference. Not only will consumers be thinking about buying a big TV, but they will be very interested in hearing about the different brands out there. Sony is an official sponsor of the World Cup but there are others that could be solid investments too. Here are the main TV/electronic companies to consider:

Ticker	Exchange	Name	Market Cap	Price	Return YTD	1Y Return	Dividend Yield
SNE	US	Sony Corp	$28,319,210,000.00	$28.62	(2.45)	3.19	0.99
PC	US	Panasonic Corp	$30,687,700,000.00	$12.69	(12.51)	-6.92	0.9
PHG	US	Koninklijke Philips Electronics NV	$27,284,040,000.00	$28.50	(1.90)	50.11	3.32
SMSN	London	Samsung Electronics Co Ltd	92651280000	314.25	-10.14286	38.99	1.13

Beer

Maybe even more obvious than TV is the beer battle as In Bev (which owns the Budweiser brand, official sponsor of the World Cup) takes on huge brands such as Heineken and Molson Coors. Surely no event will generate as much beer sales as the World Cup as Stadiums, Pubs and Private Parties all have a good time.

Ticker	Exchange	Name	Market Cap	Price	Return YTD	1Y Return	Dividend Yield
TAP	US	Molson Coors Brewing Co	$7,838,823,000.00	$42.95	(5.13)	-4.5	2.36
BUD	US	Anheuser-Busch InBev NV	$74,661,310,000.00	$47.52	(9.57)	NA	1.06
HINKY	US	Heineken NV	$23,846,510,000.00	$20.80	(12.12)	19.82	2.14
SBMRY	US	SABMiller PLC	42740810000	27.23	-8.629439	32.37	2.15

Sports Apparel

The other big battle, with very few very important players is for sports apparel. Adidas is the official sponsor, and also probably the most important sports apparel company in the world in the sport. But Nike has been making progress and continues to pour huge amounts to sponsor individuals, teams, etc. Just take a look at this incredible video that Nike set loose on the internet, which has been viewed by millions now.

Ticker	Exchange	Name	Market Cap	Price	Return YTD	1Y Return	Dividend Yield
NKE	US	NIKE Inc	$33,649,330,000.00	$70.26	5.66	21.43	1.53
ADDYY	US	Adidas AG	$10,448,260,000.00	$24.95	(7.30)	39.52	0.89
UA	US	Under Armour Inc	$1,553,648,000.00	$32.06	12.39	27.38	0

Camera

Finally, camera producers are always major sponsors in such big events. You can bet that we will see a lot of ads for Nikon, Canon, Olympus even though they are not official sponsors. Here are the main players:

Ticker	Exchange	Name	Market Cap	Price	Return YTD	1Y Return	Dividend Yield
NINOY	US	Nikon Corp	$7,005,359,000.00	$174.75	(10.90)	10.32	0.26
CAJ	US	Canon Inc	$53,283,850,000.00	$40.45	(5.60)	21.24	2.94
PCPNY	US	Olympus Corp	$6,725,121,000.00	$24.79	(22.26)	17.64	1.33
SNE	US	Sony Corp	28319210000	28.62	-2.448012	3.19	0.99

Those are main battles that will take place although many others will be played out either in local markets or across the internet. You can also think of the airlines that will try to generate business towards South Africa, Safari tour operators and so many more. We are now just a couple of days away so if you have not done so, get your big tv, a few beers in the frige and get ready to enjoy the games!