Search

ISHARES MSCI CHILE INVESTABLE MARKET INDEX FUND $51.79 (New York Exchange symbol ECH; buy or sell through brokers), is an ETF that aims to track the MSCI Chile Investable Market Index. This index consists of stocks that are mainly traded on the Santiago Stock Exchange. The fund’s top holdings are Empresas Copec SA (conglomerate), 12.9%; Empresa Nacional de Electricidad (electric power), 10.6%; Sociedad Quimiday Minera de Chile (mining), 7.3%; Empresas CMPC (pulp and paper), 7.2%; Cencosud SA (retailer), 5.2%; Banco Santander Chile (banking), 4.7%; CAP SA (iron-ore mining and steel), 4.3%; Lan Airlines SA (Chilean national airline), 4.2%; and Colbun SA (electric power), 3.9%. The fund’s industry breakdown is as follows: Utilities, 28.4%; Materials, 20.1%; Industrials, 19.3%; Consumer Staples, 9.9%; Financials, 8.9%; Consumer Discretionary, 7.8%; Telecommunication Services, 4.3%; Information Technology, 1.0%; and Health Care, 0.3%....

ISHARES MSCI GERMANY FUND $22.95 (New York Exchange symbol EWG; buy or sell through brokers) is an ETF that aims to track the MSCI Germany Index. This index aims to capture 85% of the total market capitalization of the German stock market. The remaining 15% is unavailable for investment, partly because of limitations on foreign ownership. The fund’s top holdings are Siemens AG (engineering conglomerate), 9.6%; E.ON AG (energy), 9.6%; Bayer AG (diversified chemicals), 6.9%; Allianz (insurance), 6.7%; BASF (chemicals), 6.3%; Daimler AG (automobiles), 5.6%; Deutsche Bank AG, 5.0%; Deutsche Telekom AG, 4.9%; SAP AG (software), 4.8%; and RWE AG (energy and waste disposal), 4.4%. The fund’s industry breakdown is as follows: Financials, 19.9%; Industrials, 14.6%; Utilities, 14.2%; Consumer Discretionary, 13.6%; Materials, 12.6%; Health Care, 10.7%; Information Technology, 5.7%; Telecommunication Services, 4.9%; and Consumer Staples, 3.7%....

ISHARES MSCI SOUTH KOREA INDEX FUND $46.06 (New York Exchange symbol EWY; buy or sell through brokers), is an ETF that aims to track the MSCI Korea Index. The index aims to capture 85% of the total market capitalization of the South Korean stock market. The other 15% is unavailable for investment, partly due to limitations on foreign ownership. The fund’s top holdings are Samsung Electronics at 18.0%; Posco (steel), 7.4%; KB Financial Group, 4.3%; Shinhan Financial, 4.2%; Hyundai Motor Co., 3.8%; LG Electronics, 2.4%; Hyundai Mobis (Hyundai auto parts and service), 2.3%; Samsung Electronics preferred shares, 2.2%; LG Chemical, 2.2%; and Korea Electric Power, 2.0%. The fund’s industry breakdown is as follows: Information Technology, 28.1%; Financials, 18.3%; Industrials, 14.7%; Materials, 13.3%; Consumer Discretionary, 12.0%; Consumer Staples, 5.1%; Telecommunication Services, 3.3%; Energy, 2.4%; Utilities, 2.2%; and Health Care, 0.6%....

ISHARES MSCI EMERGING MARKETS INDEX FUND $41.85 (New York Exchange symbol EEM; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Index. The fund’s geographic breakdown includes: Brazil, 14.8%; South Korea, 12.4%; China, 11.2%; Taiwan, 10.4%; South Africa, 8.1%: Hong Kong, 6.8%; Russia, 6.3%; India, 6.0%; Mexico, 4.6%; and Israel, 3.3%. iShares MSCI Emerging Markets Index Fund’s top holdings are Samsung Electronics, 3.9%; Taiwan Semiconductor (Taiwan: computer chips), 2.7%; Petrobras (Brazil: energy), 2.6%; Banco Itau Holding Finance (Brazil: banking), 2.5%; Posco (steel), 2.2%; China Mobile (China: wireless), 1.9%; Gazprom (Russia: gas utility), 1.8%; KB Financial Group Inc. (South Korea: banking), 1.8%; and Banco Brandesco (Brazil: banking), 1.7%....

Some investors rely on chart reading (or technical analysis), when they’re aiming to add hot stock picks to their portfolios. That’s because relying on charts seems much simpler than delving into and weighing a company’s fundamentals. We always look at charts when we select stocks to recommend in our newsletters, including Stock Pickers Digest, which focuses on more aggressive investments. And some successful investors find it helps to know a little about charts. But if you rely on charts at all, you should view them as just one of many things to consider when you make investment decisions. ...

Smartphones have become increasingly popular in recent years. Aside from functioning as mobile phones, these devices have many computer-like functions, including Internet access and email. The smartphone market is highly competitive. Two large cap stocks, Apple and Research in Motion, are the dominant players. However, other firms, such as Motorola, Palm and Garmin, have introduced new smartphones in recent months, as well. ...

A good stock broker can help you manage your investments if you don’t want to do it yourself. However, good stock brokers have always been hard to find. And, as any good stock broker or experienced investor can tell you, bad brokers are all too common. By “bad brokers,” we mean those who put their own interests above their clients’. Keep in mind, however, that a bad stock broker can do this in a perfectly legal fashion, by catering to their clients’ whims and weaknesses. Here are four ways to tell if brokers are putting their interests ahead of yours:...

Last week, the Persian Gulf nation of Dubai asked creditors of state-owned conglomerate Dubai World for a stay in payments on its roughly $60 billion U.S. of debt. The news raised fears that the country could eventually default on its debt, and caused a drop in world stock markets. Asian and U.S. banks were particularly hard hit. Like their international counterparts, Canadian bank stocks initially declined when the story of Dubai’s debt problems broke. But they quickly recovered, mainly because investors realized that the big-five Canadian banks are much better insulated from the problems in Dubai than many of their Asian, European and U.S. counterparts....

AGILENT TECHNOLOGIES INC. $30 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 346.0 million; Market cap: $10.4 billion; Price-to-sales ratio: 2.3; WSSF Rating: Average) makes testing systems that help improve the quality of electronic products, such as cellphones, set-top boxes and high-speed Internet equipment. The company gets 50% of its revenue from these systems, which it sells to over 30,000 contract manufacturers, as well as research and development labs. It also provides associated services. Agilent recently separated its circuit-board testing operations into a stand-alone division. This business, which accounts for about 5% of Agilent’s revenue, makes equipment that helps its customers find and repair defects in circuit boards....

WEYERHAEUSER CO. $39 (New York symbol WY; Conservative Growth Portfolio, Resources sector; Shares outstanding: 211.4 million; Market cap: $8.2 billion; Price-to-sales ratio: 1.4; WSSF Rating: Extra Risk) is a major North American lumber and paper producer. It owns or leases over 37 million acres of timberland in the U.S. and Canada. Slow housing markets continue to weigh on lumber demand. In the three months ended September 30, 2009, Weyerhaeuser’s revenue fell 33.2%, to $1.4 billion from $2.1 billion a year earlier. Its losses ballooned to $56 million, or $0.26 a share, from $3 million, or $0.01 a share. These figures exclude several non-recurring items, including gains on sales of excess land and operations, writedowns and costs to close sawmills and other facilities. So far, these moves have helped cut the company’s annual expenses by $450 million. Weyerhaeuser is still looking at converting to a real estate investment trust (REIT), which would lower its income taxes. Many of its rivals operate as REITs, and enjoy a tax advantage over the company....

NEWMONT MINING CORP. $55 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 490.2 million; Market cap: $27.0 billion; Price-to-sales ratio: 4.0; WSSF Rating: Average) is one of the world’s largest gold-mining companies. Newmont has major mines in the U.S., Canada, Australia, New Zealand, Peru and Ghana. It gets about 80% of its revenue from gold. The remaining 20% comes from copper, zinc and other metals. Most of Newmont’s copper comes from the large Batu Hijau gold/copper mining complex in Indonesia. As part of its original 1986 deal to develop Batu Hijau, Newmont and its partners agreed to lower their stakes in the mine, in stages, by selling them to the Indonesian government. As a result, the company recently reduced its stake in Batu Hijau to 31.5% from 45%. In exchange, Newmont received roughly $669 million. The company expects to sell more of its stake in Batu Hijau over the next few months. Meanwhile, Newmont earned $388 million in the three months ended September 30, 2009. That’s 113.2% higher than the $182 million it earned a year earlier. Per-share earnings jumped 97.5%, to $0.79 from $0.40, on more shares outstanding. Cash flow per share gained 94.8%, to $1.85 from $0.95. Revenue climbed 49.5%, to $2.05 billion from $1.4 billion. The gains were mainly caused by higher average gold prices (up 11%), and higher gold sales (up 16%). Newmont also cut its operating costs and benefited from higher copper prices and production....

APACHE CORP. $98 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 336.2 million; Market cap: $32.9 billion; Price-to-sales ratio: 4.1: WSSF Rating: Average) produces oil and natural gas from properties in the U.S., Canada, the U.K., Australia, Egypt and Argentina. The company gets roughly 50% of its production from oil, and 50% from natural gas. This balance has helped shield the company from falling gas prices, which are down over 50% from a year ago. Oil prices, by comparison, are down roughly 35%. Despite the lower prices, Apache increased its daily production to a record 607,118 barrels (including oil and natural gas) in the third quarter of 2009. That’s up 3.4% from the previous quarter, and 19% from a year earlier....

ENCANA CORP. $55 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 751.2 million; Market cap: $41.3 billion; Price-to-sales ratio: 2.1: WSSF Rating: Average) will split itself into two separate companies in December, now that shareholders have approved the plan. Break-ups like this help unlock hidden value, and generally lead to above-average results for a period of years. One company will keep the EnCana name, and will focus on unconventional natural gas. The other will operate as Cenovus Energy Inc. (New York symbol CVE), and will specialize in oil-sands projects, oil refineries and conventional natural gas. The new EnCana will account for about two-thirds of the company’s current production and reserves. Cenovus will account for the remaining third. EnCana will give its shareholders one new common share in each of the two new companies for every EnCana share they own. As well, investors will not have to pay capital-gains taxes until they sell their new shares....

AT&T INC. $27 (New York symbol T; Income Portfolio, Utilities sector; Shares outstanding: 5.9 billion; Market cap: $159.3 billion; Price-to-sales ratio: 1.3; WSSF Rating: Average) sells traditional telephone services to 45.7 million consumer and business customers in 13 states. Its wireless division has 81.6 million customers nationwide. Since 2007, AT&T has been the exclusive U.S. carrier of the hugely popular Apple iPhone. The company attracted a record 3.2 million new iPhone users in the three months ended September 30, 2009. About 40% of these customers were new to AT&T. Despite these new clients, AT&T’s third-quarter revenue fell 1.6%, to $30.9 billion from $31.3 billion a year earlier. Earnings fell 1.2%, to $3.19 billion from $3.23 billion. Earnings per share fell 1.8%, to $0.54 from $0.55, on more shares outstanding....

VERIZON COMMUNICATIONS INC. $32 (New York symbol VZ; Income Portfolio, Utilities sector; Shares outstanding: 2.8 billion; Market cap: $89.6 billion; Price-to-sales ratio: 0.9; WSSF Rating: Average) has 33.4 million phone customers in 28 states. It also has 89 million wireless users. The company is the exclusive carrier of Motorola’s new Droid smartphone, which uses the Android operating system developed by Internet search provider Google. This new phone should help Verizon compete with the iPhone. Meanwhile, Verizon earned $0.60 a share (or a total of $1.7 billion) in the third quarter of 2009. That’s down 9.1% from $0.66 a share (or $1.9 billion) a year earlier. These figures exclude integration and other costs related to Verizon’s January 2009 purchase of rural wireless carrier Alltel Corp. Revenue rose 10.2%, to $27.3 billion from $24.8 billion, mainly because of Alltel....

Tax-loss selling (or tax-loss harvesting) is a strategy for lowering your Canadian capital gains tax that involves selling a security at a loss in order to offset your capital gains. You can then deduct these losses against your taxable capital gains in the current tax year. For example, December 24 is the 2009 deadline for tax-loss selling on the Toronto Stock Exchange. If you sell at a loss on or before that date, you could deduct your loss against your 2009 capital gains. However, you can also carry your loss back for the three previous years (2008, 2007 and 2006), or carry it forward indefinitely to offset past or future capital gains. ...

There are many ways to calculate the performance of a stock market newsletter. Some provide far more favourable figures than others. That’s why, in our newsletters, we simply provide the return since our first recommendation, and leave more detailed calculations to independent sources, particularly The Hulbert Financial Digest. (We recently posted returns that were far higher than an index of all publicly traded U.S. stocks — see below for further details.) ...

When investing in the stock market, most investors place “market orders” or “limit orders.” With a limit order, you specify the highest price you are willing to pay to buy. The main risk here is that you won’t get a fill for your order if there is no stock available at or below your price. This introduces a filtering mechanism that can cost you money, especially if you set your limit below the current market price. If you set a price limit, some of your orders will go unfilled, since no stock is available at the price you want to pay....

Iraq’s instability has weighed heavily on its oil exports. That’s caused many oil companies, including some Canadian oil stocks, to hold off on investing in the country. However, the situation has presented some real bargains for foreign firms willing to take larger interests in Iraq. For example, China’s Sinopec recently paid $8 billion U.S. for Addax Petroleum, which was developing the huge Taq Taq oil field in Iraq’s northern Kurdistan region. (See below for an update on a Canadian oil stock with a new presence in Kurdistan. We’ve updated our view on this company in the latest Stock Pickers Digest.)...

The U.S. dollar is down 22% against the Canadian dollar so far this year. Many investors fear it will keep falling. If you knew the U.S. dollar would keep falling, the best strategy would be to sell all of your U.S. stocks and buy them back when the dollar stabilizes. However, you don’t know where the U.S./Canada exchange rate is going next — you never do. ...

When you join my Inner Circle service, you get to ask me your own personal investment questions, plus you get to see what other Inner Circle members have asked, along with our answers. So you can see how the service works, and get a sense of how it might help your portfolio, I’d like to share a member question about the liquidity of more aggressive stock market picks. I hope you enjoy and profit from it. Q: Would you comment on the liquidity of stocks? I fear that if I bought a stock, especially a speculative one, and wanted to sell I wouldn’t be able to. Does the average volume of a stock have any bearing on the stock’s quality, or the ease of being able to sell that stock? I guess what I am asking is if there are any ways to determine the liquidity of a stock. A: Many speculative stocks, including some of our stock market picks in Stock Pickers Digest, our newsletter focusing on more aggressive investments, are inactive or “thin” traders. They trade perhaps a few thousand shares daily, compared to tens, if not hundreds of thousands for, say, a Canadian bank....

Last week, Barrick Gold (symbol ABX on Toronto) said that its research shows that global gold production has been falling by roughly one million ounces a year since 2000. Barrick is the world’s largest gold-mining company. Moreover, the company says that poorer-quality ore has driven down total global mine supply by roughly 10%. In Canada, the U.S, and Australia, for example, average grades of mined ore have fallen to nearly three grams per tonne. That’s down from roughly 12 grams per tonne in 1950. What’s more, Barrick says that South Africa’s gold output has fallen by about 50% from its peak in 1970. ...

Recently, President Barack Obama visited a Florida solar-power plant operated by FPL Group (symbol FPL on New York), one of the green stocks we cover in our Wall Street Stock Forecaster newsletter. The president was there to announce a $200 million U.S. grant to FPL that will help with the green stock’s installation of “smart meters.” Customers can use these meters to cut their power use and save on their electricity bills. The grant is part of the government’s continuing investment in strengthening and upgrading the country’s power grid. FPL is in a good position to scoop up even more green-power subsidies over the next few years. See below for more on this company’s leading-edge operations....

The term “buying on margin” means that you’re borrowing money from your broker to buy securities. The main cost involved with this stock market trading strategy is interest on the money you borrow. Plus, when you sell a security that you’ve bought on margin, you must first pay back the loan from your broker. If you could buy on margin when the market hits bottom, stay margined as the market rises, and sell out at the peak, you could very quickly build a large fortune. But of course, no one has the sense of superhuman timing necessary to consistently succeed in that.

...

Technology stocks have always been a more speculative segment of the stock market. But you can turn the odds in your favour by investing in those that have hidden assets, or assets that other investors overlook. Hidden assets are items that don’t show up on a company’s balance sheet, but can offer dramatic rewards for investors who are able to spot them. ...