Cam Hui submits: Imagine being on a bicycle. If you are moving forward, then you and the bike are stable. On the other hand, if you are stationary or barely moving, then you are apt to tip either to the right or left.That’s the analogy of Nassim Taleb’s concept of Extremistan, an unstable state where we may be moving from one extreme condition to another. Last Friday David Rosenberg provided more evidence that the world may be in that state when he analyzed the FOMC minutes:Complete Story »

  Stockerblog submits: It's amazing that there are over 25 stocks yielding more than 10% and selling for less than $10 a share. WallStreetNewsNetwork.com has a list of low priced stocks, with market caps over $250 million, and very high yields. Here are some examples: Hercules Technology (HTGC) forward P/E: 7.8 yield: 13.3%Complete Story »

  Value Expectations submits: Since 1996, The Applied Finance Group has excelled at identifying mispriced securities and helping our clients take advantage of such mispricings within the US markets. Over the last few years, AFG has been working on expanding our framework internationally to help our clients identify solid long-term equity investment opportunities on a global scale. Our global research site, AFGViewGlobal.com has coverage on over 30,000 companies with back-test results proving that the same group of variables that have proven successful on a domestic level are quite successful at identifying winners and losers all over the world. The key benefit of using The Applied Finance Group's (AFG’s) Economic Margin Framework is that it provides a systematic approach to converting as-reported accounting data into a performance metric that is comparable across time, peers, industries and even countries while eliminating many of the accounting distortions inherent in GAAP. The ability to understand the true economic profitability and the underlying intrinsic value of a company using one consistent method is why AFG expanded its framework internationally. Now investors all over the globe can take advantage of the same institutional quality research and investment tools that AFG’s U.S. clients have been using since 1996 to better understand the expectations embedded in security prices and take advantage of mispriced securities in the market.Complete Story »

  John Petersen submits:Last Tuesday a reader sent me a copy of "Ending the ICE Age," a new industry overview from Bank of America Merrill Lynch analyst Steven Milunovich on the future of plug-in vehicles, which the newly organized Electrification Coalition has christened grid enabled vehicles, or GEVs. After spending several hours studying the report I concluded that Mr. Milunovich has found the true religion of the new millennium while I'm still an unwashed pagan, or worse yet a heretic. The grim reality is that when you look at American energy policy as a faith-based initiative, a new religion with its own rigid doctrine, dogma and ritual, it begins to make sense. It explains why our Secretary of Energy feels comfortable with a public comment that he's agnostic about natural gas. It also explains why the coastal waters of California and Florida together with huge swaths of Alaska have been forever consecrated as holy ground. It even explains why climatologists, eco-clerics and the fanatic faithful feel justified suppressing facts and ostracizing skeptics that call their world-view into question. Complete Story »

  Trace Mayer submits: The ‘gold bugs’ assert that at all times and in all circumstances gold remains money. For some irrational reason the ‘paper bugs’ cling to their increasingly worthless colored coupons asserting their importance as currency.Complete Story »

  John Mauldin submits: I admit that of late my writings have had a rather dark tone. There are certainly a number of severe long-term problems that we must deal with, and they're going to serve up a lot of economic pain. But the Thanksgiving weekend with the kids has me in a reflective mood, and one that has only served to underscore my long-term optimism. This week we look at why 2007 will not be the good old days we will yearn for in 20 years, after we briefly visit Dubai and the latest unemployment numbers. Subprime Dubai While we in the US spent our Thursday eating turkey and watching football, the rest of the world's markets went into a downward spiral as Dubai announced it wanted its lenders to give the country a six-month moratorium on some $80-90 billion in debt. This has the potential to be the largest sovereign debt default since Argentina. Somehow this was a shocking development. (How can too much debt and real estate be a problem?) And by markets I mean gold, commodities, oil, stocks, and risk assets everywhere. They all went down. Friday the US markets experienced their own sell-off, though not as deeply as the rest of the world.Complete Story »

  David I. Templeton submits: Each week Better Investing details the most active stocks that its members are either buying or selling. Below is a list of the companies attracting the most interest of BI's members, according to their recent buy and sell decisions, as reported by a small, informal sampling of 213 transactions for the trailing 4-week period ended Friday, November 27, 2009.Click to enlarge:Complete Story »

  Mark McQueen (Wellington Financial) submits: The CVCA was working the halls of power in Ottawa Friday on behalf of Canada’s Innovation Economy, and we had the pleasure of meeting Bank of Canada Governor Mark Carney and his Governing Council. Let me tell you, our nation’s monetary policy appears to be in excellent hands with this team. Speaking of the Bank, they just released their monthly data regarding the quantum of outstanding Canadian commercial bank loans. The news was good. The total figure was remarkably stable between September and October, dropping merely $60 million for the month.Complete Story »

  Matthew Goldstein submits: Dubai World’s trouble paying its debt obligations may not be too surprising when you consider some of the dubious investments it has entered into over the past few years. A case in point is Dubai World’s ill-fated voyage into the business of building and selling submarines for recreational use. In September, Dubai World filed a lawsuit in federal court in Florida against one of its former executives, claiming Herve Jaubert caused more than $30 million in losses for the Middle Eastern-based company. Dubai World claims Jaubert used a Florida-based company he controls to “overcharge” Dubai World for submarines Jaubert either couldn’t manufacture or didn’t work.Complete Story »

  Stock markets around the world cracked on Friday with the Dow Jones industrial average down more than 150 points (Fig. 1), and commodities plunging as Dubai debt woes unnerved investors, and sent tremors of uncertainty throughout all markets.The crisis flared after Dubai, a part of the United Arab Emirates (UAE) federation, asked to delay interest payment for six months on $60 billion of debt issued by the state-run conglomerate Dubai World and its main property unit Nakheel.Complete Story »

  Kid Dynamite submits: I don't want to forget about this article from Clusterstock last week which quoted Raymond James' Strategist Jeff Saut. Over the past several months, Saut has been repeatedly bullish. What's interesting about Saut's view is that he hasn't been saying "buy stocks because they are cheap," he's been saying "buy stocks because everyone else is buying stocks." In other words, "Don't fight the tape." (note: none of those are direct quotes). This time, Saut elaborated on this phenomenon, explaining the concept of "career risk" for money managers: Nevertheless, we think the upside should continue to be driven by “game theory,” which suggests that the under-invested institutional portfolio managers have to buy stocks into year-end driven by their under-performance, their subsequent “bonus risk,” and ultimately their “job risk.” Verily, many of the portfolio managers we know remain under extreme pressure to commit their outsized cash positions in an attempt to “catch up” to their benchmarks between now and year-end Saut's point is an essential one: in the money management profession, for some accepted reason, it's one thing to lose 35% when the market is down 35% - you can write it off to a global clusterfuck - "hey - there was nothing I could do - did you SEE what happened to the S&P?!?!?" But if the market rallies 65% and you're not on board because you're acting rationally and saying "nothing has changed, the banks are still insolvent, we haven't fixed the problem," well, you're clients will tear your head off. Note - I'm in the latter camp here, trying to act prudent, and looking like a fool. Thankfully, I don't have to answer to any investors - just myself, and I can justify my decisions to my own second guessing conscience, even if I'm missing the rally. One thing this tells me is that I'm not a spectacular (and maybe not even a good) trader - a great trader has to be able to trade the market and make money even when it's not cooperating with his own thoughts about valuations. This is related to my anecdote last week on Return Free Risk - one explanation (although certainly not a valid one, in my opinion) for the behavior of merger arb fund managers who parked money in deals offering returns on par with riskless rates is that these fund managers are not paid to own treasury bills - they are paid to trade merger arb deals - so they buy the deals even if the risk/reward may not be adequately compensating them. Complete Story »

  The Baseline Scenario submits: By Simon JohnsonPresumably the rulers of Dubai and Abu Dhabi are currently locked in negotiations regarding the exact terms that will be attached to a “bailout” for Dubai World. We’ll never know the details but if, as seems likely, the final deal involves creditors taking some sort of hit (perhaps getting 75 cents in the dollar, at the end of the day), does that matter?Complete Story »

  All Things Forex submits: The U.S. Non-Farm Payrolls and the ISM Manufacturing and Services Industries Indexes coupled with two interest rate announcements from the Reserve Bank of Australia and the European Central Bank will kick-start the final trading month of the year. In preparation for the new trading week, here is a list of the Top 10 spotlight economic events that every currency trader should pay attention to. Complete Story »