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India’s New Finance Act

Fri, 22 Feb 2008 09:29:44 EST

India’s New Finance Act - by DMartel

This is a link for you to review only.

http://www.dlapiper.com/files/upload/GlobalEquity_Alert.html

Doreen

Mutual Fund Changes - down the road

Tue, 22 Jan 2008 09:40:33 EST

Mutual Fund Changes - down the road - by DMartel

There have been several changes in the Mutual Fund industry over the last several months with the changes and in light of the large jump in unemployment, we're liable to face more changes.

A shift in US small cap exposure to large cap exposure has occured in many funds, and before this all ends I suspect that this trend could continue, given that small caps have been the market sweethearts for a while as the blue chip companies have been declining.

Loomis Sayles for example has a solid bond fund (NASDAQ: LSBRX) which is well managed, and is currently offering a slightly more than 8% return on investments. While every investor understands that past performance isn't indicative of current performance, it is equally telling that Loomis Sayles Bond Fund is currently trading near their 52 week low and anyone who's a little skittish about the market might find some security in this fund versus investing in the open market.

There are other funds that can help you diversify your portfolio and offer some inflation protection, for instance, Pimco Commodity Real Return Strategy (and index) (DJI:^PCX)which invests in a variety of commodity futures and is backed by inflation-indexed securities. While the fund is volitile, historically when stocks and bonds are having a poor year, commodities generally offer strong returns. This also can help you avoid the stock market and invest in natural resources.

Mutual Funds are liable to have a difficult 2008 - increasing inflation, slow economy can create a very slow growth rate to most mutualfunds. There are some sectors that will do well, health care for instance - but it's becoming cheaper and because of that, there are a couple of funds who invest in this sector that might be worth watching. For instance T. Rowe Price Health Sciences (NASDAQ PRHSX) - focusing on cancer, diabetes, hepatitis B, HIV, Alzheimers - these underserved and undertrated diseases are coming more and more to the forefront, making funds like this more attractive in todays market. This fund is getting near it's 52 week low and might be worth taking a look at for a longer haul investor.

With savings levels declining in the face of rising everyday costs, chances are that not a lot of 'new' money will be coming into most mutual funds. Couple this with an increasingly aging (and nearing retirement) baby boomer group and the mutual fund outlook isn't all that positive unless you can find a niche product.

Signs of the Economy

Fri, 18 Jan 2008 09:16:43 EST

Signs of the Economy - by DMartel

I'm not too sure why this surprised anyone, but overall retail sales were down significantly and retailers are taking it on the chin. Dismal December sales were reported by almost all retailers, and some of them may have been a surprise. According to RetailMetrics (research company based out of Swampscott MA) "Overall the holiday season was dismal, consumers are definitely feeling the pain". Well no kidding. We're paying $3 plus a gallon for gas, unemployment rates are going up, adjustable mortages are going up, housing prices are declining, heating oil prices are out of control - so what in the world would one expect?

There were a few 'bright spots' - Costco showing an increase in sales of 7%, Walmart up a meager 2.7%, Saks up .8%. However, the opposing decreases were far in excess of this, with Target down 5%, JC Penny down 7.5%, Macy's down 7.9% and Nordstroms down 4%. What's interesting is the chains that survived the decreases. Overall in 2008 the Department Store sector isn't looking particularly strong and close attention should be paid to your portfolio if you are long any of the stocks that comprise this market.

TJX Inc (NYSE: TJX) bucked the sales trend and reported 3% gains in same store sales - along iwth other discount apparel and home goods shops, they said that inventory management and cost control helped them to gross higher profit margins. According to President of TJX "We achieved these results in a challenging consumer environment and over strong perfomance last year".

TJX is currently trading at about the middle of their high/low range so I don't necessarily see it as a buy at this point, but at least if this is one of the retail stocks that you're currently invested in it's probably safe to hold onto.

BJ's Wholesale Club (NYSE: BJ) also seems to have done a fair job in weathering the storm in spite of the significant snowstorms in the northeast during December, they said that food and gasoline sales help them support their results but sales none the less were down about 1% - though they did overall buck the trend.

BJ's is not far off their low, and perhaps if you're looking to sneak a small amount into this sector it might be something to watch. I would probably take a small long position in BJ's Wholesale, but I wouldn't sink a whole lot into it as I only see sales getting worse. BJ's does cater to those who prefer to buy in bulk and perhaps as consumer confidence continues to decline many will feel that this is a good option for 'stocking up' for lean times ahead.

Intel - What's happening!

Fri, 18 Jan 2008 09:00:57 EST

Intel - What's happening! - by DMartel

It appears that Intel (NASDAQ: INTC) has themselves in a small pickle. New Yorks AG recently opened an investigation of them for possible violations of state and federal antitrust laws.

It appear that Intel is suspected of using coercive techniques with their customers to exclude Advanced Micro Devices (NYSE: AMD) from specific computer processing units. Presumably, a preliminary review reflects a need for this investigation.

What's bothersome about this is that is Microsoft really doing much different with various software platforms?

But let's gloss over that for another report. Intel is what I really want to talk about. Recently the Intel reportedly the world's largest chip manufacturer reported a 51% profit, although they also reported a decline in sales. While first quarter forecasts are below the range of some expectations, it's none the less significant in this market that they show that significant an increase in profits.

Intel is down significantly since the new year began, (about 17%) and if the stock takes another downturn it might be a good play to purchase it. The 52 week low is 18.75 and todays trade is around 19.33 so if it gets back to 18.75 it might be worth the play.

More Great Mortgage news

Thu, 17 Jan 2008 09:24:12 EST

More Great Mortgage news - by DMartel

So I'm beating this subject to death aren't I? But the fact of the matter is I'm not sure we're anywhere near seeing the end of this issue and I think it's an important one as it affects so many various things.

As the housing market deteriorates and the economy continues it's downward spiral, Citigroup has joined the list of casualities in the ever growing bad news about mortgages. Citigroup Inc (NYSE: C) posted it's largest loss in 196 years! Stop and think about the actual cost of this: It was quoted by one newspaper (AP Business writer Madlen Read) that the loss is equivalent to 48,000 homes at today's prices. Very frightening! The loss is $10 billion dollars - yes 10 BILLION.

Citigroup has gone ahead and secured some foreign investors I'll grant you that, and perhaps that'll give them some wiggle room, but they're going to have to really begin heading upwards to stem the bleeding that this causes, and how do they do that with the economy in the condition it's in?

Keep in mind the words of CEO Vikram Pandit - that the bank would weather the credit crisis and would be brused but not broken. Wake up - it's broken! This tumble in the stock price not only resulted in shares decreasing by 7% but the net result is that that about another $10 billion (yes that is the same number) in market value is lost on top of the $125 billion that was already lost during the year.

There's been some chatter that Citibank will consider divesting itself of some of their 'retail' business, so we'll have to wait and see what happens. But, if you're bearish on the banking industry I'd guess this is a good time to short Citibank and go for the tumble downwards - it's inevitable unless something very drastic happens very soon.

Now let's talk about Bank of America (NYSE: BAC) - as you'll recall a couple of days back I posted about the talks of them purchasing Countrywide Mortgage (NYSE: CFC) - Bank of America is headed for being the largest banking company in the United States (and I'm not really sure if that's a good thing or a bad thing). Recently Madlen Read and Joe Bel Bruno, AP Business Writers had this to say in an article entitled: Americans Pay for Housing Boom's Excess

Problems in the subprime mortgage market are rapidly spilling over into other areas of the economy. No matter what the experts call it -- a recession, slowdown or even the makings of a depression -- it's clear banks are under mounting pressure to be more cautious about lending.

"If consumption growth stagnates, the odds of a recession are incredibly high," said Andrew Bernard, director of the Center for International Business at the Tuck School of Business at Dartmouth. "All the pieces of household financial health are starting to be shakier, especially at the low end."

He and others are paying close attention to what top U.S. banks say about their customers' payment habits. Many view this as an early indicator about where the overall economy is headed, but there are other signs that are troublesome.

Now I ask you - where is Bank of America going to head from here? I certainly wouldn't be looking to invest in this stock especially with the uncertainty in the overall economy, their performance over the last six (6) months has been less than stellar:

Now of course onto Countrywide Financial (NYSE: CFC). They are making all sorts of deals with homeowners to lock rates in, fix rates, etc., (see http://loansafe.org/forum/showthread.php?s=3368a00dffd717ad222b71111194605b&p=3209#post3209)
which should make life very interesting for Bank of America when they discover that some of the loans they thought would 'gain' interest rate increases are in fact locked in at lower than anticipated rates.

Then of course the fact that Countrywides President was practically shamed out of attending the 12th annual Real Estate Conference at University of San Diego’s Burnham-Moores Center for Real Estate. Of course the reason he gave for that was “Due to unforeseen scheduling conflicts resulting from the proposed acquisition of Countrywide Financial Corp. by Bank of America, Angelo Mozilo, Countrywide’s Chairman and CEO, will not be able to participate in the conference.” But, the fact of the matter is there was a 'disinvite Mozilo' campaign ongoing (see this website). I am not too sure where Countrywide is heading, but I'd steer clear of this stock even with the upcoming BofA buyout. At the less than $6 per share it still doesn't look like a buy to me and it's so low that shorting it is frightening.

What is the difference between trading and investing?

Wed, 16 Jan 2008 08:25:26 EST

What is the difference between trading and investing? - by DMartel

Continuing on the goal of stimulating some conversation - here's another piece to gnaw on for a while!

Wikipedia defines investing as investment or investing is a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pockets.

While Trading is defined as In finance, a trader is someone who buys and sells financial instruments such as stocks, bonds and derivatives. Traders are professionals, casual investors or speculators in financial instruments traded in the stock markets, derivatives markets and commodity markets, comprising the stock exchanges, derivatives exchanges and the commodities exchanges.

Several categories and designations for diverse kinds of traders are found in finance, these may include:

* stock trader

* day trader

* floor trader

* paper trading

Typically, investing is done with long term goals in mind while trading is done with short term goals in mind. You wouldn’t for instance trade using your retirement account, though you would review your holdings in that account on a regular basis and review your assets to see whether other investment options might be right for your account. Stocks, bonds and mutual funds make up the investment portfolio in investment accounts.

Traders will generally have very short ‘windows’ that they might consider trading whether they are purchasing or selling. Typically, stocks, derivatives and options make up the typical portfolio of a trader. Bonds and mutual funds are not typically suitable instruments for short term sales due to the trading charges that are associated with them.

Where and investor will look for longer term yields, growth potential and stability of an asset, a trader is going to look for immediate yields, income potential and volatility. Because of the potential losses that are normally associated with trading (especially day trading) it is not a suitable investment program for most of us to consider when we are looking at portfolios that are intended for long term goals such as additional retirement income, college planning, etc.

Trading involves buying and selling securities on a regular basis to catch movements in the stock market (with a goal of short term profits). This could be as often as several times a day, a week or a month. Investing involves buying and selling securities with the expectations of longer term gains.

Normally people who are investing depend on advice from a stock broker, money manager or mutual fund manager. A trader on the other hand depends on only themselves for deciding what to trade and when. The goal of an investor is to benefit from long term gains in the underlying asset as well as the income that may be derived from that asset over time, while the goal of a trader is to benefit from short term market fluctuations.

In many cases, a trader derives their livelihood from the trading that they do, often not holding another full time job – while an investor goes on with their ‘normal’ lives and their portfolio is something that needs to be dealt with on a regular basis but not something that consumes their time on a daily basis.

What are your market routines?

Wed, 16 Jan 2008 08:22:37 EST

What are your market routines? - by DMartel

I thought instead of writing about a particular security today I'd play around with some different topics and see if we can generate some conversation! So, here's two articles I recently wrote as part of an SEO project I'm working on! Enjoy!

Developing Your Pre-Market Routine

Once you have developed a trading plan that you are comfortable with, you will need to move onto developing your trading routines. This is done in segments, first beginning with how you’ll start your day (pre-market) and how you’ll end your day (after-market). Both routines will help you gain an edge in your investment and trading goals, and developing these routines early on will allow you to be constantly in control of your portfolio.

Your routine should help you accomplish the following tasks:

Getting yourself up to date on the market;
Assessing your portfolio;
Getting ideas as to what stocks might be ‘hot’ that day;
Knowing if your positions have any new news that could cause volatility;
Being ready to trade when the market opens at 9:30 AM EST.

Initially you’ll want to start your pre-market routine by reviewing your portfolio positions and determining if there are positions you wish to change. There are many tools available to you to assess the strengths (or weaknesses) of your positions. You’ll want to do a ‘sector search’ to see if there is news that has broken in the overnight hours that may affect your positions, you’ll want to search for a current quote on the securities and you’ll perhaps want to check the Edgar database to see if there were any late filings which may affect the price of your positions. Once you’ve done your research you can determine if you will need to adjust any stop loss orders you may have placed.

Now you will want to review the overall market news. This can be done online or through television (stations such as CNBC) and determine what the overall market sentiment for the day is, find out how overseas markets finished, what currency rates are and other information that might be pertinent to the overall market; check for growing sectors, sectors that may be of particular interest or those that have lost some interest and finally check all of your current holdings for news, earnings, etc.

Now it’s time to develop your trades for the day (if you’re doing day trading) and you can do this by searching for possible opportunities that might include buyouts, takeovers, mergers or other types of events that can affect a particular position. There are many avenues that you can use for this including websites who track SEC filings or even by reviewing SECFilings.com which sent out notifications as soon as a new filing occurs. The other analysis you will want to review using a reputable financial website is which sectors might be performing well and might be prudent for trading.

You’ll want to check pre-market quotes since pre-market trading takes place from 8:00 am to 9:30 am (EST) to get an idea of what stocks might be moving on early trading. NASDAQ Pre Market Indicator is typically a good source for this information.

Your pre-market routine will be critical to your success as a trader. Pre-Market routines help you locate trading opportunities and plan your day so that you are not spending market hours devising new plans but rather using your resources and following through with proper planning.

Developing your After-Market Routine

Just as your pre-market routine is critical to your trading success, your after-market routine plays an equally important role. Although after hours trading isn’t as common (due to lack of liquidity), the most important thing you will do is evaluate the days performance. This will allow you to record all of your trades for performance evaluation (and tax records) and identify positions that might need further review.

Your after market routine will not only consist of determining your successes of the day, but your early preparations for the following days trades. You’ll want to pay attention to any after hours announcements (especially earnings) to determine if they will impact your trading strategies for the following trading day, you will want to take time to review your newsletters (free and fee based subscriptions) and see if there are securities you should be considering adding to or dropping from your portfolio.

After reviewing all of the information that you need, you will want to review your trade plan and see if any adjustments need to be made or if your current strategies are still valid. Recalculate your portfolio and see if any of your positions have gone outside of your trading plan boundaries, prepare your buys/sell, and tactics that are outlined in your trade plan.

If you are satisfied with your positions, there is no need to modify your trade plan, however if you feel that different sectors need to be explored this is a good time to decide what moves will improve your overall trading position.

Keep in mind that a solid foundation that you develop for both pre and after market routines will help you reach your trading objectives whether you are a seasoned day trader or brand new to trading.

What are Candlesticks?

Wed, 16 Jan 2008 08:19:03 EST

What are Candlesticks? - by DMartel

Since some people who visit the site may not be aware of what Candlesticks are, I thought I'd post this which is a very abbreviated description:

Some people believe that Candlesticks are simply ornaments meant for burning candles, but when Candlesticks are referred to in discussions about the stock market, they are referring to “Candlestick Charts” which are a visual aid for those who trade in the stock market.

Candlestick Charts are said to have been invented by a Japanese rice trader sometime during the 18^th century. Today, Candlestick Charts are the most commonly used forms of display for stock market pricing due to their flexibility (versus bar charts or line charts).

There are multiple forms of candlestick chart patterns here is an overview of just a few of them:

To signal an uptrend in pricing, there would be a 'white candlestick' which may occur in different lengths with the longer body being a more significant price increase.

To signal a downward trend in pricing, there would be a 'black candlestick' which may occur in different lengths and the longer the body the more significant the price decrease.

A bullish pattern in the stock market during a downtrend in overall pricing would produce a long lower wick and a small or bodiless candlestick known as a hammer, while an inverted hammer would signal a possible reversal in a price that has been dropping.

You can obtain additional information or see what some of the various patterns look like by visiting our website at http://www.accendotraders.com. There you will find a full description of the variety of candlestick charts that you may become familiar with as you begin trading.

Various types of Candlestick Charts:

Currency Candlestick Chart:

Forex Candlestick Chart:

Sample Candlestick Chart:

Japanese Candlestick Chart:

Elixir Pharmaceuticals

Mon, 14 Jan 2008 08:55:22 EST

Elixir Pharmaceuticals - by DMartel

It appears that the list of pharmaceutical stocks is about to grow again. Proposed IPO of 5 million share of Elixir Pharmaceuticals, Inc. a Cambridge Massachusetts based firm is due to hit the markets this week. The proposed stock symbol will be ELXR (NASDAQ) and prices are expected to be between $14 and $16 per share. The company develops treatments for diseases such as diabetes and obesit.

Here's my problem with this. The competition out there is steep, and in spite of the growing trend of treating these types of diseases early, there are still many steps to be taken before a new company can possibly break into this market.

From the company website:

Company History

Elixir was founded in 1999 based on seminal discoveries of founders Cynthia Kenyon (UCSF) and Lenny Guarente (MIT) who studied the genetics and molecular biology of aging in laboratory animals. They discovered that modulating the evolutionary-conserved anti-aging genes and pathways in mammals not only increased lifespan, but also promoted weight loss and increased insulin sensitivity. Accordingly, the Company's understanding of these pathways has been converted into a platform for the discovery, development of and commercialization of novel pharmaceuticals for the treatment of metabolic diseases such as diabetes and obesity.
The Company has been financed by premier venture groups in the healthcare industry including MPM Capital, Oxford Biosciences Partners, ARCH Venture Partners and Physic Ventures.

Other notable history - the following companies have formed alliances with Elixir

Bristol-Myers Squibb

In April 2005, Elixir entered into a license agreement with BMS to obtain the exclusive worldwide right to develop and commercialize BMS' lead ghrelin agonist product candidate and several backup compounds for all therapeutic indications.

Kissei Pharmaceuticals

In March 2006, Elixir entered into a license agreement with Kissei Pharmaceuticals to obtain the exclusive right to develop and commercialize mitiglinide and related combination products in the Americas.

Siena Biotech S.p.A.

In February 2007, Elixir entered into a collaboration agreement with SienaBiotech S.p.A. in which Siena licensed the right to explore the use of the Company's proprietary SIRT1 inhibitors as therapeutic agents to treat Huntington's disease, and maintains an option to enter into a definitive license agreement for any such compound.

Novartis Pharmaceuticals

In September 2007, they initiated a strategic relationship with Novartis International Pharmaceuticals and at that time Novartis invested $10.0 million in the Company's private, series D financing. Simultaneously, we entered into an agreement, under which Novartis paid us a fee and has the right to negotiate to obtain rights to develop and commercialize one of their product candidates.

Previous Financing:

I think what I find more concerning is the prior financing: The Company has been financed by premier venture groups in the healthcare industry including MPM Capital, Oxford Biosciences Partners, ARCH Venture Partners and Physic Ventures. You have to wonder how much equity these firms have taken in the overall scheme of things.

Top Competition:

* Abbott Labs (NYSE: ABT) - It's been a great 12 months for Abbott, they are currently priced just slightly under their 52 week high, and this stock is probably ripe for selling any long positions.

* Amgen (NASDAQ: AMGN) -Amgen is trading only slightly above it's 52 week low and this could be a good time to go long this position, even with a 'new guy' on the block. There's a tendency when a new stock hits for others in that sector to rise.

* Novo Nordisk (NYSE: NVO) - Not holding up as well as the others, they are trading about $4 below the highest price for the last 52 weeks. I'd watch for an uptick in this stock and get it out of my portfolio!

My guess is Elixir will enjoy a bit of a honeymoon once the stock hits the open market and for those who are looking for a quick gain might consider an investment.

Options Trading Information

Fri, 11 Jan 2008 13:02:39 EST

Options Trading Information - by DMartel

More Sub Prime Mortgage Fallout (or is it?)

Fri, 11 Jan 2008 12:57:23 EST

More Sub Prime Mortgage Fallout (or is it?) - by DMartel

A few days back we heard rumors that Countrywide Financial Corp. (NYSE: CFC) was going to file for bankruptcy protection. Some of us (me included) believed that would happen given that Countrywide's mortgage portfolio leaves something to be desired. The company reported in December that it had funded only $23.5 billion in loans compared with $42.8 billion for the prior year, a significant drop when that's your line of business. This seems to be a fundamental problem for Countrywide who also showed a loss in their stock price on Tuesday of $2.17 (28.4%) and the expectation was that the stock would remain volatile until they were able to report forth quarter results. Countrywide was estimating that nearly 7% of their mortgages ewre delinquent in December, a nearly 2% increase over November. As a percentage of unpaid balances this represented about 1/2% increase. Countrywide also estimated that slighly more than 1% of their mortgages were pending foreclosure proceedings, a bad deal for any mortgage company, but what made this number so frightening to them (and others) was that these are not even Sub-Primes indicating that many borrowers are continuing to struggle despite the efforts of Countrywide to assist them.

In comes Bank of America (NYSE: BAC) to the rescue. Bank of America announced today (January 11th) their intention to buy Countrywide Financial for $4.1 billion in stock, a deal that rescues the country's biggest mortgage lender and expands Bank of America's base.

Reportedly the mortgage business will continue running under the name Countrywide for the time being, but by the time 2009 is over, Countrywide Mortgage will be a thing of the past, becoming some name or another of Bank of America (much like what happened to Fleet Banks).

According to AP Countrywide's troubles have allowed Lewis to sweep in and add a major business line to his supermarket of financial products on the cheap.

"Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation's premier lender to consumers," Lewis said in a statement.

Just take a look at the break he's given to those who were going to have to step up and clean up the mess Countrywide is in. Regulators must love Bank of America right now, they've saved them the work of figuring out who's going to do all the collections on the mortgages that Countrywide has in their portfolio!

Another frightening aspect of this: What about the 15,000 employees of Countrywide? While maybe no plans are in the works today to begin laying any of them off, you can rest assured that some of them will be let go. And let's hope that they don't have mortgages that they can't pay!

Credit card companies are also talking about slower spending and more delinquencies on credit card payments. Same thing for retail stores who are now talking about lower than expected earnings.

The consumer confidence report hit this morning and consumer confidence fell to an all-time low as worries about jobs, energy bills and home foreclosures darkened people's feelings about the country's economic health and their own financial well-being.

So, Countrywide and Bank of America are now the 'stocks to watch'. I'd resist the urge to purchase either of them, since in 2007 Countrywide had $408 billion in mortgage originations and has a servicing portfolio of about $1.5 trillion with 9 million loans. Who knows what the fallout might be?

Countrywide Financial One Year Chart:

Bank of America - One Year Chart

More Technology News from the International Electronics Show

Thu, 10 Jan 2008 12:29:22 EST

More Technology News from the International Electronics Show - by DMartel

So, first things first. The Consumer Electronics show offers us an opportunity to take a look at what's up and coming, but it also gives us an opportunity to see if there are stocks to watch! I found a couple of more of them as a result of the show.

First: Garmin, LTD (NASDAQ: GRMN) which is currently trading about half way between it's year end high and low (see chart below). GPS systems have become so popular that the price has plunged far enough on these units that most consumers now own them. Garmen announced their newest product, NUVI880 which is expected to hit the markets sometime during the 2nd quarter. Interestingly enough they announced at the same time that during that quarter the unit will sell for $1,000 they also announced that the NUVI780 would be rolling out sometime in February for about $800. Both units do however require subscriptions which will cost about $130 per year (Microsoft (NASDAQ: MSFT) strikes again), but still allows it to be affordable for most. Take a look at Garmin for a short uptick during this quarter for these new products.

Another fun development at the show as the manufacturers of High Definition televisions who are trying to differentiate themselves from each other (while remaining price competitive). Since consumers are focusing on price (sometimes sacrificing size) of units, the manufacturers were looking at cosmetics as a way of gaining consumer dollars.

What's happening is that the theory is that HDTV's can be thinner. Yes, thinner and companies such as Sony, Pioneer, etc., who are doing their best to make sure that they don't lose sales (as happened with DVD players) to unkown manufacturers are trying to break out.

Pioneer Corp. demonstrated a plasma tv that is 3/8" thick! It is a prototype though it's expected to be on the market sometime in 2009. Hitachi Ltd (NYSE: HIT) currently has a prototype that's 3/4" thick. Hitachi does in fact have a 1.5" unit that it will be lauching in the 2nd quarter - they were launched in Japan in December.

Hitachi probably has little room for swing in their stock price unless something really big hits as far as news. Here's the one year chart:

Sony Corporation (NYSE: SNE) is probably not going to see a big uptick in sales with the rollout of their newest product the OLED screen - which will start selling soon in the US. The unit is just 1/8" thick - but it offers only an 11" diagonal screen area and a substantial price tag: $2500 which is going to not gain many consumers in this market. Unless Sony stock starts declining it's probably not a good time to buy. Here's the one year chart:

Elliotts Wave

Wed, 09 Jan 2008 09:02:28 EST

Elliotts Wave - by DMartel

Options Trading

Wed, 09 Jan 2008 09:01:32 EST

Options Trading - by DMartel

Technology Show Results

Wed, 09 Jan 2008 08:52:05 EST

Technology Show Results - by DMartel

The International Consumer Electronics Show wrapped up this weekend in Las Vegas and some interesting 'to watch' items came about as a result of that!

First Intel (NASDAQ: INTC) announced plans to being shipping processors and other chipsets which are smaller than the standard PC processors to allow them to be inserted into smaller devices. The expectation is to create a product that is smaller than a laptop and larger than a cell phone for those people who are looking for something in between. The concern of course is will buyers be in any hurry to trade up or down (depending on what they're currently using) - and the driving factor will most likely be the cost of the device.

Intel is currently trading around $22 per share, which is somewhere just in the middle of their 52 week high and low. Might be time to consider going long this stock to see where it might head.

In other revelations at the trade show, TiVo, Inc (NASDAQ TIVO) announced that they will make video playback to subscribers televisions from the web through their recording service. Users wil have the option to apply for a season pass, or use RSS feeds. It is expected that such things as nightly newscasts and information from sites such as DiggNation or Ask A Ninja might be included in this offering.

Subscribers would need to get TiVo Software in order to make this fature work, and it's expected to cost just under $25 for new users though it will be given free to those who already subscribe to TiVo services. It is anticipated that this will be available sometime in March.

The rollout of this product could result in a slight uptick on TiVo stock so it'll be one to watch in the coming weeks.

Comcast (NASDAQ: CMCSA) who has been under pressure from regulators recently is promising to standardize their technology for video on demand and other interactive services. The nations largest provider of cable services intends to roll out this platform by the end of 2008 according to their CEO Brian Roberts.

Since Comcast stock is currently trading at their nearly 52 week low this might be a good opportunity if you're looking for a longer term investment (a year at least) to pick up shares and see where they take you!

Happy Trading folks!

Can Motorola end their Slump?

Tue, 08 Jan 2008 12:42:58 EST

Can Motorola end their Slump? - by DMartel

Motorola Inc. (NYSE:MOT) has recently hired a new CEO – Greg Brown who doesn’t have the tools available that Ed Zander did when he arrived at Motorola, namely the Razr.

Brown who took over on Tuesday as Chief Executive feels that’s ok with him as he feels that this proved to be the undoing of his predecessor. Sales levels at Motorola soared to levels that couldn’t possibly continue without aggressive price cutting and that decision cost the company 7500 jobs and a possible free fall in the stock market.

Neil Strother, a wireless analyst in Seattle for Jupiter Research said ‘people might think Motorola’s out of the game entirely, they’re not out of the game, and they’ve just had a few bad quarters.’ While the Razr is still selling well, there are many newer phones that have begun to undertake it, and Motorola doesn’t seem to have a new product to take its place which might replace its popularity.

Motorola needs to not only put their financial house back in some order, but they must also find a way to make up some of the ground they’ve lost to their competitors Nokia Corp and Samsung Electronics who have taken over as the number two cell phone manufacturer.

At the end of 2006, Motorola had 23 percent of the mobile devices market and in June of 2007, that had dropped to 13 percent of the market. Unfortunately for Motorola, these devices account for more than 50% of their sales.

Motorola’s high end phone the Motorola Smart Q is weak as are their low end phones, their mid priced lines (including the revamped Razr and new multimedia phones) are fairly strong, but Brown needs to consider a new product fairly soon.

While shareholders may be prepared to wait for the dust to settle a little and allow Brown some time to get his feet wet, they’re still mainly unhappy about the nearly 40% drop in the value of the stock. As the market continues to evolve, Brown will have probably 3 quarters where he will be able to show a new and improved way of doing business otherwise he will be judged negatively.

Warner Music Group Corp …. Can the recording industry keep up?

Tue, 08 Jan 2008 11:31:14 EST

Warner Music Group Corp …. Can the recording industry keep up? - by DMartel

Just think – with sales of CD’s getting lower and more music subscriptions being bundled with internet service, and other online services offering free music downloads, major recording labels are being forced to explore new ways to get fans to pay for musing and allowing more and more choices for the consumer.

In 2007, many recording industry biggies took steps to agree to license music for sale online as unprotected MP3 files, and analysts say that Sony MBG Music Entertainment may follow suit later this year.

This is critical for music lovers because too often songs might be available only for a specific device (such as Apple’s IPod) which can only be bought in the Apple ITune store.

Eric Garland, CE at BigChampagne Online Media Measurement who tracks online entertainment said “It seems clear there’s an accelerated pace of change that comes hand in glove with accelerated decline in traditional business”.

Major labels, Sony BMG, Warner Music Group Corp (NYSE:WMG) , Britain’s EMI Group PLC and Vivendi SA’s universal Music group have been slow to comment on this, but in a recent memo to employees Warner Music Chairman Edgard Bronfman Jr. did touch on the importance of developing new arenas of digital music, especially given that the stock prices have declined more than 75% during this past year.

There is no doubt that the industry as a whole has been declining for almost a decade and there are many opportunities as well as challenges that face this industry in cyberspace.

There may be a push this year for CD singles (‘ringles”) and some labels including Sony and Bertelsmann AG have plans to release some. Many albums may be released in multiple versions including limited editions, or deluxe editions and some may come preloaded onto thumb drives.

Today it is estimated that some 1.1 billion songs are being downloaded through file sharing networks every month. The music industry’s success may be limited if people see little value in music that isn’t free of copy protection strings or worse yet, service offers that feel like free music.

Digital tracks at ITunes and others like it jumped 45% last year but digital music still accounts for only a small portion of overall music sales even though sales of CD’s and albums dropped 15%. Overall the combined albums sales dropped 9.5% and it’s likely that due to this trend that overall floor space in many retailers will drop this year as sales continue to decline.

Syntax-Brillian Corp. – upwards momentum?

Fri, 04 Jan 2008 07:53:59 EST

Syntax-Brillian Corp. – upwards momentum? - by DMartel

It appears that the shareholders who were purchasing stock of Syntax Brillian Corp (NasdaqGM:BRLC) were taken for a brief ride by the companies management in hopes of driving up their stock price – very effectively I might add.

This has resulted in a class action lawsuit which charges that Syntax-Brillian Corp., a designer, developer and distributor of high definition televisions (HDTVs) in liquid crystal display (LCD) and liquid crystal silicon (LCoS) formats, has reported explosive growth due largely to reportedly increased sales to a Chinese distributor South China House of Technology (“SCHOT''). Did someone overlook the fact that BRLC was unable to factor receivables from SCHOT because Chinese banks require a five year history and that banks will only lend against receivables versus purchasing them outright? It’s important to note that these collectibles were about 92 million dollars in September, and SCHOT has a history of holding receivables longer than 120 days – but they always get collected.

The current market is actually favoring BRLC over other manufacturers, as they have had a number of ‘best in class’ accolades by various consumer reporting agencies and given their current price around 2.50 per share, they have an estimated book value of around 5.00 a share making this a definite buy. Currently trading at five times earnings and only forty five percent of book value, it appears that this stock has hit the bottom and this could be a good time to take a closer look at the real value and see if it’s time to take a long position.

Abbot Laboratories – Intrinsic Value?

Fri, 04 Jan 2008 07:17:38 EST

Abbot Laboratories – Intrinsic Value? - by DMartel

If you’re looking for a stock that produces high highs and low lows, Abbot Laboratories (NYSE: ABT) is probably not the stock you’re looking for. However, if you’re looking for some consistency in a stock Abbot might be the right stock for you!

Trading at about 55.50 per share, the real value of Abbot is around 52 dollars per share (historically that’s the intrinsic value) – but Abbot is one of the quiet sleepers that we never hear much about, they’ve been around forever (established in 1888) and they consistently grow about 9% annually. Abbot Labs consistently averages sixteen and a half cents on every dollar invested – very predictable.

Even Abbott’s upgrade and downgrade history shows little room for change – most of the analysts seem to be yawning when they’re reading over Abbott’s data and it’s clearly reflected in the last couple of year’s history:

UPGRADES & DOWNGRADES HISTORY

Date	Research Firm	Action	From	To
11-Oct-07	Wachovia	Downgrade	Outperform	Mkt Perform
9-Oct-07	Stanford Research	Initiated		Buy
11-Jul-07	Wachovia	Initiated		Outperform
7-May-07	Lehman Brothers	Upgrade	Equal-weight	Overweight
1-Mar-07	Matrix Research	Upgrade	Hold	Buy
19-Jan-07	UBS	Upgrade	Reduce	Neutral
15-Nov-06	Morgan Stanley	Upgrade	Equal-weight	Overweight
11-Sep-06	UBS	Downgrade	Neutral	Reduce
7-Aug-06	Credit Suisse	Initiated		Neutral
21-Jun-06	Hilliard Lyons	Initiated		Long-term Buy

Abbots Business summary looks like this: Abbott Laboratories engages in the development, manufacture, and sale of health care products worldwide. It operates in four segments: Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products. The Pharmaceutical Products segment offers adult and pediatric pharmaceuticals for the treatment of dyslipidemia, cholesterol, rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, hypothyroidism, obesity, HIV infection, epilepsy and bipolar disorder, migraines, hyperparathyroidism, endometriosis and central precocious puberty, anemia, duodenal ulcers, gastric ulcers, erosive esophagitis, and hypertension. The Diagnostic Products segment provides diagnostic systems and tests for blood banks, hospitals, commercial laboratories, physician's offices, alternate-care testing sites, plasma protein therapeutic companies, and consumers. This segment's products include immunoassay systems; chemistry systems; assays for screening and diagnosis for drugs of abuse, cancer, therapeutic drug monitoring, fertility, physiological diseases, and infectious diseases, such as hepatitis and HIV; genomic-based tests; hematology systems and reagents; blood glucose monitoring meters, test strips, data management software, and accessories for people with diabetes; and point-of-care diagnostic systems and tests for blood analysis. The Nutritional Products segment offers pediatric and adult nutritionals, through its own distribution centers or public warehouses to retailers, wholesalers, health care facilities, physician's offices, and government agencies. The Vascular Products segment provides a line of coronary, endovascular, and vessel closure devices for the treatment of vascular diseases. Abbott has a 50% owned joint venture with TAP Pharmaceutical Products, Inc.; a strategic alliance with Celera Diagnostics; and a collaboration with Genentech, Inc. to develop anti-cancer compounds.

In comparison to it’s nearest competitors Merck & Sanofi Aventis, Abbot is probably slightly overstaffed. They show 66,663 employees while Merck with nearly the same revenue (around 24B) has 60,000 – however Sanofi-Aventis is more conservative with revenue in excess of 43B and just slightly over 100,000 employees. Abbott Labs financials reflect a net income significantly lower than these competitors – though a better operating margin. Their fundamentals remain sound, and of the 8 top drug makers they rank sixth in sales. They seem to do a decent job keeping their ‘upper management’ salaries within reasonable boundaries – so I don’t see any shockers as far as earnings changes or price changes over time.

Abbott may be considered a boring blue chip – showing about 9% growth over a 10 year period – it’s a conservative investment for those who are interested in long term returns. Don’t overpay at these levels, but perhaps watch for Abbott Labs to move downward and consider an investment in the stock.

Bank of America

Thu, 03 Jan 2008 18:02:27 EST

Bank of America - by DMartel

With all of the talk about banks and the open issues with sub-prime mortgages, we should turn our attention to the heavily debt laden consumer – who not only may have an adjustable rate mortgage (sub prime or prime) - but may also carry record amounts of credit card debt. Once everyone begins realizing how much of an impact slowing job rates, rising interest rates (yes, I know the Fed is still cutting rates) on adjustable mortgages, rising heating costs – and fuel for driving, and increased expenses at the grocery store – something’s going to give!

Could it be our bank stocks (and none currently have as high a market cap as Bank of America (NYSE: BAC) at 178.86B) are going to begin taking a nosedive? While some of the banks have been hard hit by the current mortgage crisis, what’s going to happen when the credit card crisis falls and then the student loan default rates start heading north again?

The company's Global Consumer and Small Business Banking segment offers savings accounts, money market savings accounts, certificate of deposits, individual retirement accounts, and regular and interest-checking accounts; consumer cards, business cards, debit cards, international cards, and merchant services; mortgage products for home purchase and refinancing needs; insurance services; and lines of credit and home equity loans. Bank of America's Global Corporate and Investment Banking segment provides commercial and corporate bank loans, indirect consumer loans, commitment facilities, real estate lending products, and leasing and asset-based lending products for banking clients, middle market commercial clients, multinational corporate clients, public and private developers, homebuilders, and commercial real estate firms; advisory services, financing, and related products for institutional investor clients in support of their investing and trading activities; debt and equity underwriting, merger-related advisory services, and risk management solutions; and treasury management, trade finance, foreign exchange, short-term credit facilities, and short-term investing options for correspondent banks, commercial real estate firms, and governments. The company's Global Wealth and Investment Management segment offers investment and brokerage services, estate management, financial planning services, fiduciary management, credit and banking expertise, and diversified asset management products to institutional clients and high-net-worth individuals. As of September 26, 2007, the company operated approximately 5,700 retail banking offices and 17,000 automated teller machines.

Once the rest of the issues come to light with a tighter economy how long will it be before it starts impacting our banks? And in my opinion, none will be immediately as hard hit as Bank of America – the bright side for them is that they do have subsidiaries worldwide – in fact in June of 2006 India Daily ran an article that ran this quote - Bank of America's India operations have reported a 80 per cent jump in net profit at Rs 144.6 crore for the year ended March 31, 2006 as against Rs 80.5 crore last year – whether Bank of America continues to buck the trend none of us can foresee at this moment, but if things continue the way they are I’d run – not walk to my nearest friendly rep and dump any Bank of America shares I owned!

Chevron Corp.

Thu, 03 Jan 2008 17:31:10 EST

Chevron Corp. - by DMartel

Chevron Corporation (NYSE: CVX) is the world's fifth largest global energy companies. Headquartered in San Ramon, California, USA and active in more than 180 countries, it is engaged in every aspect of the oil and gas industry, including exploration and production; refining, marketing and transport; chemicals manufacturing and sales; and power generation. Chevron is one of the world's six "super-major" oil companies.

Chevron employs 62,500 people (less than their competitors) and enjoys almost 8.187 earnings per share (a P/E of 11.56) which is very close to their competitors (BP at 5.98 and Exxon Mobil at 6.95 with P/E of 12.5 and 13.57 respectively). In the last three months, the upgrades and downgrades for this stock have added to the already volatile market (upgraded twice in November by both Bear Stearns and Deutsche Securities) – they are still showing a high target price of 115 and are currently trading at just under 95 per share.

Chevron also develops, and commercializes advanced energy technologies, including fuel cells, photovoltaics, and advanced batteries, and has said it is active in research and development efforts to utilize hydrogen as a fuel for transport and power and is currently investing $300M a year into alternative fuel sources, and has created a bio-fuels business unit.

Their Marketing Brands are:

Fuel

* Chevron

* Standard Oil (in limited circumstances)

* Texaco

* Caltex

* Gulf

* Unocal

Convenience Stores

* Star Mart

* Extra Mile

Lubricants

* Delo (sold by Caltex and Chevron)

* Havoline (sold by Caltex and Texaco)

* Revtex (sold by Caltex)

* Ursa (sold by Texaco)

Fuel Additives

* Techron - Chevron, Texaco (phased in during 2005), Caltex (phased in during 2006 and later)

* Clean System 3 - Texaco (phased out during 2005 in favor of Techron)

The company, which is restructuring its refinery and retail businesses, owns or has stakes in 25,800 gas stations operating under the Chevron, Texaco, and Caltex brands.

In reality, for those interested in the Oil and Gas industry, or basic materials sector, Chevron is probably a better investment today than many of their competitors. With rising fuel prices the chances are that these integrated oil and gas stocks will continue to have some upward momentum.

Sub Prime Morgage Crisis - Impact on Banks an d Financial Institutions

Thu, 03 Jan 2008 07:47:59 EST

Sub Prime Morgage Crisis - Impact on Banks an d Financial Institutions - by DMartel

How can someone even think that the mortgage crisis isn’t as bad as we think it is – what about all of the financial institutions that have been plagued with problems and are now in dire financial straits (or have filed for bankruptcy)? Just take a look at the names – we’re not talking little tiny banks here folks, these are some substantial names – with some very substantial financial problems.

Businesses filing for bankruptcy

New Century Financial subprime lender April 2, 2007

American Home Mortgage mortgage lender August 6, 2007

Sentinel Management Group investment fund August 17, 2007

Ameriquest subprime lender August 31, 2007

NetBank on-line bank September 30, 2007

Terra Securities securities November 28, 2007

Writedowns on the value of loans, MBS and CDOs

Citigroup investment bank $17,500,000,000

Merrill Lynch investment bank $8,400,000,000

Barclays Capital investment bank $2,700,000,000

HSBC bank $3,400,000,000

Swiss Re re-insurance $1,070,000,000

UBS AG investment bank $13,700,000,000

Deutsche Bank bank $3,100,000,000

Bear Stearns investment bank $1,900,000,000

Morgan Stanley investment bank $10,300,000,000

Lehman Brothers investment bank $2,100,000,000

LBBW bank $1,100,000,000

JP Morgan Chase investment bank $1,600,000,000

Goldman Sachs investment bank $1,500,000,000

Crédit Agricole bank $4,800,000,000

Freddie Mac mortgage GSE $3,600,000,000

Credit Suisse bank $1,900,000,000

Wells Fargo bank $1,400,000,000

Wachovia bank $1,100,000,000

RBC bank $360,000,000

Bank of America bank $3,300,000,000

Fannie Mae mortgage GSE $896,000,000

CIBC bank $750,000,000

RBS bank $2,600,000,000

Washington Mutual savings and loan $2,400,000,000

The latest victim is the planned $1.8b merger between PHH, a mortgage and vehicle fleet management firm, and a subsidiary of General Electric Capital.

However, the deal, which was due to be completed by the end of last year, was dependent on the subsequent sale of PHH's mortgage business to Pearl Mortgage Acquisition, an affiliate of the private equity group Blackstone.

PHH said yesterday: "The company has been informed that Pearl Acquisition was not able to obtain the requisite debt financing."

Buzzy Krongard, the PHH chairman, said: "I am disappointed that we could not conclude the transactions contemplated by the merger agreement." The company will now be seeking a $50m termination fee from the Blackstone affiliate.

Let’s not forget the other impact that we’re not currently seeing (but I’m certain that we will) is the impact on employment. As these banks lose assets they’re going to be looking to cut costs in other areas and when they do one of the things they’re going to look at is cutting jobs.

I believe with interest rates that are due to increase over the next 12 months, we’re far from seeing the tip of this iceberg.

optionsXpress Holdings, Inc. (OXPS)

Wed, 02 Jan 2008 11:30:37 EST

optionsXpress Holdings, Inc. (OXPS) - by DMartel

An entirely web-based trading company, Options Xpress (NASDAQ: OXPS) shows all the signs of being a fairly good buy for those who are interested in this sector. As more and more of investors turn to the internet as a way to not only research stocks, but more and more are determined to not line the pockets of brokers to invest, OXPS offers the investor forthright information all available online and if you need it immediate assistance.

Most of their fees are substantially lower than their competitors (TD Ameritrade, Schwab, ETrade, Fidelity and ScottTrade) and they’re not afraid to let you know where their higher too. What’s interesting is this company acquired Xpress Trade in January of 12007 to enable their customers to trade on an additional 25 exchanges and began offering futures products worldwide. They tout their ability to service not only the experienced futures investor, but the novice ones too.

Taking a look around their website http://www.optionsxpress.com/ you’ll find some great information, they don’t seem to be afraid to teach their clients, and they also remain unconcerned about competitors, they seem to be a step ahead of them. In fact, they blatantly courted ETrade clients with targeted advertising when ETrade was downgraded last year.

Currently trading a couple of dollars lower than their 52 week high, this stock does bear some watching, and if you’re interested in this sector it may be a good buy for a small amount of capital. Their earnings make it a stock that should still have some potential upside and if you currently hold it I probably wouldn’t jump out of it in spite of the downgrade this morning by BMO Capital.

Chipotle Mexican Grill (NYSE: CMG) (NYSE: CMG -B)

Wed, 02 Jan 2008 10:46:52 EST

Chipotle Mexican Grill (NYSE: CMG) (NYSE: CMG -B) - by DMartel

What is the future growth potential for Chipotle Mexican Grill? Seems to be that it’s nothing short of spectacular!! Many people jump for the chance to eat Mexican food is an environment that is a step above the ‘fast food’ feeling at Taco Bell but slightly below the Mexican restaurant that requires a full wait staff!

The problem here is that there have been months of media hype and analyst upgrades, driving the stock up to a valuation of about 145 per share (just shy of their 52 week range of 155.59) I’m not so sure that buying into this stock is a great idea.

While the company may continue to expand (and no doubt they will) the expansion may already be figured into their overpriced stock! Their low price (54.61) over the last twelve months might have been the price to buy into this stock (resulting in a very nice profit even if you sell today), but I’m not so sure that I’m prepared to buy into this phenomenon at 145 a share!

The problems come in when you realize that Chipotle showed 41 million dollars in net income in 2006, (up 10% from 2005) and if you look at earnings to date, they’re on target for about 70 million in 2007 (clearly up substantially). Giving them the benefit of the doubt, their net income could go as high as 200 million, but that’s a best case scenario, and still reflects a share value of about 145 (sound familiar?). That could mean that any bad earnings news could drive the shares down very quickly!

Looking to new locations, CMG opened an additional 28 new stores with the majority being placed in markets the company already has a presence in. New stores in existing markets should benefit from existing customer knowledge and loyalty and need fewer promotional resources to drive sales. As far as new markets are concerned, the company has targeted Salt Lake City, Birmingham and Philadelphia as the newest additions to cities it serves.

The company operates restaurants within the US and believes the potential for their stores is about 3,000 locations. Since they currently have only a quarter of that level, there is room for growth before they finish. Management says there is an expectation 130-140 new stores in 2008 and that is on top of the 110-120 locations they predicted for 2007. While growth in the United States remains their primary focus, the company will open its first non US store in Toronto, Canada in 2008.

Amtrust Financial Services Inc (NY) (AFSI)

Wed, 02 Jan 2008 10:27:58 EST

Amtrust Financial Services Inc (NY) (AFSI) - by DMartel

Amtrust Financial Services (NASDAQ: AFSI) has consistently performed better than their competitors, Allstate, AIG, and Hartford. They’re currently showing slightly better than 40% quarterly growth versus the overall industry growth of a mere 7.10% growth.

They provide property and casualty insurance primarily in the United States, but also in the United Kingdom and certain European Union countries. Their main focus is Small Business Workers' Compensation, Specialty Risk & Extended Warranty and Specialty Mid-Market Property and Casualty. They sell through independent wholesale and retain agents and through 3rd party warranty administrators and brokers.

Their recent acquisition of Unitrin Business Insurance Union which writes commercial coverage for small businesses in 30 states focusing primarily in the South, Northwest and Mid-West offers Amtrust Financial Services an opportunity to expand their business and complement and expand their products. This transaction is anticipated to be completed sometime in April of 2008 according to a 12/10 memo that was sent to AmTrust Financial to the Unitrin Business agents.

View the Chart of the last 52 weeks of trading

The stock is still trading more than 20% of their high price (reached in July) and they’ve shown a doubling of investments from Mutual Funds (32 from 12 over 2 quarters). They’re overall technical ranking remains high, 3 of 116 stocks, and their attractiveness as an investment ranks high as well, 15 out of 116 stocks (Insurance/Property Group). With a price/earning ratio of 14, this stock should be worth investing in for the longer haul for those who are interested in this sector, with a careful eye to the acquisition in April – this will be a good indication of how the stock will fare under the combined leadership of the two companies – and the merging of their goals and ideas for their sales forces.

Eaton Vance Greater India A (ETGIX)

Wed, 02 Jan 2008 09:39:16 EST

Eaton Vance Greater India A (ETGIX) - by DMartel

This fund states that its goal is long-term capital appreciation. Normally investing 80% or more of their assets in equities of companies in India and surrounding countries, they also invest in companies with a broad range of capitalization.

They consistently invest more than 90% of their assets in some form of stocks, making their return of nearly 50% very impressive indeed. They have not been as affected by certain news such as financials, since they have diversified their investments so thoroughly that their largest holding is in industrial materials followed by consumer goods.

SECTOR WEIGHTINGS (%)

Sector

ETGIX

Category Avg

Utilities

2.09

1.79

Business services

10.72

11.54

Financials

10.35

26.54

Telecommunications

10.18

8.94

Media

5.67

0.76

Consumer goods

16.79

7.74

Energy

1.08

9.53

Hardware

0.00

5.56

Health

4.65

2.34

Software

6.43

0.79

Consumer services

3.51

6.38

Industrial materials

28.53

18.08

Nearly 45% of their assets are held in their top ten holdings, and those range from an investment of 3.67% of assets to 7.45% of assets, a nice spread when you consider how little they’ve been impacted by so many of the market issues we’ve had this year. It’s interesting to note that 2 banks (HDFC Bank Ltd & ICICI Bank Ltd) comprise nearly 9% of their ‘top ten’ holdings, - indicating Indian banks are not suffering as we are currently with portfolio issues. Then of course there is their nearly 5% holding in Bharti Airtel Ltd., which is the leading telecom provider in India.

Overall this portfolio is very impressive and there is no doubt that the returns are equally as impressive. This might be a good investment – provided that you watch carefully what is going on overall in the India markets. With returns like these even a minimal investment (their minimum is $1,000), could offer a substantial return. The caution here is that any issues in the overall Indian markets will substantially impact this fund. They have a great track record so far – if you currently own it – keep your eyes open! For those who are considering emerging markets, this might be a good spot for some small amounts of cash.