Friday, September 23, 2011

6 Big-Name Blue Chips Rated ‘Strong Buy’: AAPL, CVX, CL, IBM, MCD, PM

Unemployment is high, investors are jittery over Greek debt fears and market volatility seems to be the norm. Where can you turn, then, for stock picks? To big-name blue chips, that’s where.

I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. And this week, I’m tracking seven big large-cap stocks that are standing tall amid the turmoil.

Here they are, in alphabetical order. Each one of these stocks gets a “A” grade according to my research, meaning it is a strong buy:

Apple (NASDAQ:AAPL) is a worldwide technology mogul with products ranging from personal computers to networking solutions. Apple has had a strong 2011, gaining nearly 28% and currently is at a 52-week high.

Chevron (NYSE:CVX) provides support to its subsidiaries in the following fields: petroleum operations, chemicals operations, mining operations, power generation and energy services. While many stocks on the NYSE have underperformed in 2011, Chevron stock is up 8% year to date.

Colgate-Palmolive (NYSE:CL) is a staple of consumer products, selling its oral, personal, home care and pet nutrition products in over 200 countries. A nice year-to-date return of 16% has helped keep Colgate stock holders happy all year.

IBM (NYSE:IBM) is an international IT company made famous by its line of personal computers and various IT services. A year-to-date gain of 18% shows IBM stock has a lot to offer.

McDonald’s (NYSE:MCD) is a pioneer of the fast-food industry, operating restaurants in 100 countries. Furthermore, burgers seem recession-proof as MCD stock has soared 20% since the start of 2011.

Philip Morris International (NYSE:PM) is involved with the manufacture and sale of cigarettes and other tobacco products in over 180 countries across the globe. Year to date, PM stock is up 16%, compared to a loss of nearly 2% for the Dow Jones.

Jim Rogers: The Next Global Recession Will Be Worse Than 2008

September 21, 2011: Legendary global investor Jim Rogers tells Reuters Insider the global economy is on the verge of another recession and this one will be even more painful than the last.

Brien Lundin: Long-Term Resource Investing Tips

The Gold Report: Brien, cited the escalating European and U.S. debt crises as triggers for the August 22 spike in gold prices, when it briefly eclipsed the $1,900/ounce (oz.) mark. Since then, the French bank Société Générale has been downgraded and austerity measures are forcing the Greek economy further into recession. Despite these significant catalysts, the gold price remains range-bound between $1,750 and $1,850/oz. Why isn't gold reacting?

Brien Lundin: If the European debt crisis and the S&P downgrade of U.S. sovereign debt had happened separately, say a couple of months apart, I think gold would have risen just as far, but the rise wouldn't have been as steep and the market wouldn't have overheated. But they happened to occur right on top of each other, so the market got ahead of itself and went nearly parabolic. Speculators who were merely trend-following traders came into gold, but the end of the rally sent them all packing at once. That dealt a sharp psychological and emotional blow to the market that we are still recovering from. Since then, we have seen a lot of very fluid, hot money coming in and out of the market.

More recent news from Europe hasn't had quite the same effect. We have seen some itchier trigger fingers, people playing the news of the day and getting right back out. We have also seen physical gold buyers from Asia come in on the price dips.

The result has been rallies tempered on the upside by the speculators abandoning trades more quickly. We have also seen drops tempered by bargain-hunting, physical gold buyers coming in on the downside. In short, gold is in a consolidation phase, awaiting the next trend, which I think will continue to be headed upward.

TGR: You mentioned Asian physical buying. Recent rumors suggested China could be buying Italian debt to help Italy out of its problems. Is that bolstering the euro and keeping investors out of gold?

BL: I think that China helping out Italy hurts the gold price in an indirect way. It's a sign of China knowing which side its bread is buttered on and knowing that it needs a stable Europe to support its economy.

We saw that need for stability when the European Central Bank and other central banks announced a coordinated U.S. dollar liquidity program and Germany and France said that Greece would definitely stay in the euro. All of this is part and parcel of trying to calm the markets down in the interim and to show that the gold price is essentially capped or that the rise is being dampened by official intervention.

TGR: Are you implying that the euro is doomed? (more)

Depressed As A Nation? 80 Percent Of Americans Believe That We Are In A Recession Right Now

According to a brand new Gallup poll, 80 percent of Americans believe that we are in a recession right now. Of course the government insists that the recession ended quite some time ago, but apparently the message is not sinking in. Not only that, most Americans also do not believe that things are going to get better any time soon. According to the Gallup poll, 61 percent of Americans believe that the economy will be the same as it is right now or will be even worse one year from now. Two years ago, only 35 percent of Americans felt that way. Talk about pessimism! So are we depressed as a nation? Have too many people been reading the Economic Collapse Blog? How do we account for such strange numbers?

Certainly there are some areas of the country that are still doing quite well. If you live in an area that is closely tied to the federal government (Washington D.C.), the big Wall Street banks (New York) or corporate America (Silicon Valley, etc.), then you can go out on the weekends and find packed restaurants and mall parking lots that are overflowing.

But most of the rest of the country is really hurting.

Tonight, there are millions upon millions of Americans that won't sleep well at all because they are trying to figure out how to get back on their feet. It can be really tough to keep going when you have been searching for work for years and still nobody will hire you. If you have a family, it is easy to feel like a failure when you have to look your spouse and your children in the eyes day after day knowing that they are depending on you.

If you have never been through it, then you should not mock those that are depressed because they cannot find work. Losing a good job and not being able to find another one can be an absolutely soul-crushing experience.

So why do 80 percent of Americans believe that we are in a recession right now?

Well, it is because that is what it feels like for most people.

For example, a reader identified as Carol recently shared the following with us....

My unemployment ends the end of December, yes, I will be one of the 99′ers, one that did not sit at home and eat potato chips, drink soda and watch TV. I have no health insurance, I support myself and cannot afford it. I was diagnosed with rheumatoid arthritis last fall. Not to mention, degenerative disc disease, and osteoporosis. But I have continued to pursue work and regain employment, despite my health. I have no other choice but to fight and PRAY!

It amazes me at the stupidity of the general population, who still have their heads in the sand. The majority have no idea what is actually going on in our country on the political or economic side.

What would you do if you found out you were sick, you had no job, no health insurance and you were rapidly running out of money?

Please pray for those that are out of work. You never know when it will be you that needs some assistance.

For those that still believe that the economy is doing "great", let's review some of the cold, hard facts....

*46.2 million Americans were living in poverty in 2010.

*The number of Americans living in poverty increased by 2.6 million last year. That was the largest increase since the U.S. government began keeping statistics on this back in 1959.

*14 million Americans are officially unemployed.

*6 million Americans have been unemployed for at least half a year.

*8.8 million Americans are working part-time because they cannot find full-time jobs.

*Only 63.5 percent of all men in the United States had a job during the month of July.

*Zero jobs were created in the United States during the month of August.

*Median household income has fallen for three years in a row.

*49.9 million Americans do not have any health insurance at all.

*The percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.

*More than 45 million Americans (a new all-time record) are on food stamps.

If you are still doing really well, be thankful for that. Don't use the fact that you are on top of the hill as an opportunity to look down on others.

Unfortunately, as I talked about in a recent article, the U.S. economy continues to get even worse.

It certainly does not help that we continue to see millions of jobs shipped overseas. Neither the Democrats nor the Republicans are proposing anything that will stop the bleeding.

A lot of very skilled Americans are being put out of work by all of this offshoring. For example, a reader identified as GlennA recently shared the following with us....

Yes, lurking in the shadows, that’s been me. A professional man with a master’s degree in a technical who has not worked at a full-time job with benefits since mid 2009. Spent my last 2 years with the company offshoring to India all my team’s work. I hear through the grapevine that quality there has gone completely off a cliff, but profits are OK.

Have had only sporadic benefitless contract work ever since, and am now down to my last few bucks.

All of the horrible natural disasters that we have experienced this year are not helping things either. As I have written about previously, in many ways this has been the worst year for natural disasters in modern U.S. history.

In a recent article for Newsday, Jennifer Wheary described the impact these horrible natural disasters have had on many areas of the country that were already facing tough economic times....

But after decades of disappearing jobs, declining wages and increasing expenses, this is no longer the case. As a result, people across New York, New Jersey, Pennsylvania, Massachusetts, Vermont, Maryland, the Carolinas, Texas and elsewhere lack the savings needed to weather these unexpected economic shocks. Well before the spate of recent bad weather, or the recent recession, millions of middle- and working-class families were already under water.

Right now, even the vast majority of American families that still do have jobs are barely scraping by. At this point, "financial security" is just a far off dream for most Americans.

So what are our leaders doing about this?

Well, as I have written about previously, the Obama jobs plan is a complete joke. It is really quite sad if that was his best shot. His plan would spend a lot of money, but just like the last "stimulus plan", it would not create many jobs at all.

The Federal Reserve has decided that it better jump into action again. The Federal Reserve has just announced that it is going to sell $400 billion of its short-term U.S. Treasuries and will use that money to buy $400 billion of long-term U.S. Treasuries. The Fed is hoping that this will lower interest rates on mortgages and home loans and will help to spur the economy.

So will this fix our economic problems? No, it will have even less of an impact than QE2 did. But the Fed wants to at least appear as if it is trying to do something.

The Federal Reserve has also pledged an "unlimited" amount of dollars to help bail out big European banks in October, November and December.

It is quite frustrating that virtually nobody in the mainstream media seems upset that the Federal Reserve is going to be showering European banks with cheap loans. Apparently they must all think that this is a wonderful idea, or perhaps they are just too preoccupied with talking about "The X Factor".

In any event, it does look like the global financial system may need some propping up very soon. Yesterday, I shared 21 signs that the financial world is on the verge of a nervous breakdown.

Well, here are a couple more....

Right now, corporate insiders are selling 7 dollars of stock for every 1 dollar of stock that they are buying.

That is a very troubling sign.

Another troubling sign is that Moody's has just downgraded the credit ratings of Citigroup, Wells Fargo, and Bank of America.

The last time we saw so much financial chaos was back in 2008.

We all remember what happened back then.

At this point, things are still so bad that 80 percent of Americans believe that we are still in a recession.

So what are things going to look like if there is another major financial crash in the coming months?

Will we soon see millions more Americans going dumpster diving as they hunt for something to eat?

Will we see even more tent cities start popping up all over the nation?

Will we see even more elderly people freeze in their own homes because they can't afford to heat them?

Already, more than one out of every five children in the United States is living in poverty.

How much worse can things get?

Unfortunately, they can get a lot worse.

If you think that Americans are depressed now, just wait and see what happens after the next financial crisis.

This country is going to become unglued in a major way.

Buckle up and hold on tight because it is going to be a bumpy ride.

What It Takes to Become a Millionaire

The idea of becoming a millionaire may seem like a pipe dream.

When it comes to retirement, most Americans doubt they've saved or invested enough to retire comfortably, let alone reach that million-dollar milestone. A new AP-CNBC poll finds nearly one-third (31 percent) of U.S. residents believe they would need a minimum savings of $100,000 to $500,000 if retiring this year in order to be confident of living comfortably in retirement, and 22 percent believe the minimum is $1 million or more to retire comfortably.

Only one-fifth of U.S. respondents think it's likely that their net worth will total at least one million dollars in the next 10 years, while 62 percent said that is "very unlikely." The consensus from the majority of respondents (61 percent): It is "extremely" or "very difficult" to become a millionaire in the United States today.

But many are still trying to hit that million-dollar mark — and millions of Americans have already attained that goal.

The number of millionaires in the country is growing. The U.S. has more than 10 million. Despite the European debt crisis and worries about the U.S. economy, a May 2011 report from the Deloitte Center for Financial Services projects that the number of millionaire households in the U.S. will more than double to 20.5 million in 2020, with combined wealth of $87 trillion, up from $39 trillion in 2011.

Money makes money, but it can be tough to make that money grow in these rocky financial markets. The AP-CNBC poll found six in 10 U.S. residents (62 percent) say their confidence in investing has been shaken by recent volatility in the stock market. That sentiment has increased over the past 12 months. Today, 65 percent of those who own stocks, bonds and mutual funds are less confident about investing, compared with 61 percent last year.

Respondents in the AP-CNBC poll say they're making saving and investing a top priority. The survey asked people what they would do with a million dollars and found, on average, that Americans would spend 31 percent on saving or investing; 17 percent on giving to family; 14 percent on spending; 13 percent on paying down debt; 12 percent on buying real estate and 11 percent on charitable donations. Unfortunately, the reality is that mounting expenses, lower wages and job losses require many Americans to dip into those savings to pay for household bills or pay down debt.

[Click here to check savings products and rates in your area.]

The reality is that investors who stayed the course and did not pull their money out of the market in the last few months may actually have fared pretty well. Despite an almost 8 percent decline since mid-July, the broader stock market, represented by the S&P 500 Index, is up nearly 8 percent over the past 12 months. Certainly it's been a rough few years with the S&P 500, down 8 percent in five years. But over the past decade, the broader stock market is up by more than 10 percent.

In most cases, the road to financial security in retirement comes with steady savings, strategic investing, and probably a later retirement date than you may have envisioned at the start of your career. Keep these three rules in mind: First, you need to live within your means. Next, you have to commit to saving a certain amount every month and stick to that goal. Then, you have to make sure your investments are in a diversified portfolio — a mix of stocks, bonds, and alternative investments (commodities and real estate) and rebalance that mix to attain your goals for growth.

So how long will it take until you're a millionaire?

If you start with an initial $10,000 investment and your portfolio grows by 5 percent every year, here's how much you need to save each month to reach your $1 million goal by age 70, according to's calculator.

• 25-year-olds have to save $450 a month. That's just $15 a day for the rest of your working years.

• 35-year-olds have to save $850 a month.

• 45-year-olds have to save $1,700 a month.

• 55-year-olds have to save $4,000 a month. (Of course, with an average inflation rate of 3 percent, that $1,000,000 nest egg will only be worth $642,000 in today's dollars. So that means you'll likely wind up having to save even more.)

Still, for those who start early and save often, becoming a millionaire doesn't have to be a pipe dream.

Potash stocks are now in buying range (POT, IPI, MOS)

Potash stocks had a list of sell orders longer than Suge Knight's rap sheet today, but stocks like Mosaic (MOS), Intrepid Potash (IPI), and Potash Corp of Saskatchewan (POT) are now in Mastery buying range.

As noted in our article from earlier this week, "Why Potash Stocks are getting hammered (POT, IPI, MOS)" , Mosaic is about to release earnings next Wednesday, 09/28/11. We expect them to be nothing short of stellar, and hopefully we'll get a relief rally in the market to boot.

Here are the buying ranges we recommend - all 3 of these stocks are trading below our 'Range to Buy' at this point, except Mosaic which is very close.

Ticker Current Price Range to buy Target Price
POT $46.90 $50 - $52 $58
MOS $60.11 $60 - $62 $72
IPI $28.36 $28-$30 $34.25

Mastery Bottom Line:

The bulls defended the psychological level of 1120 today, which is a step in the right direction. However, if the S&P closes below 1100 you're going to need to bail on this Potash play, because it's crash time. Good luck.

Aden Sisters: Buy Gold NOW as it Corrects on its Way to $2,000

When you just consider the downgrade of U.S. debt, the jobs problem, the housing situation, the European bank concerns and their debt crisis, the negative outlook for the global economy, not to mention that the Fed will likely seek new measures to help the economy, we just don’t see gold coming down any time soon, other than having a normal downward correction [as currently is the case. Let us show you why.] Words: 1102

So say Mary Anne & Pamela Aden ( in an article* which Lorimer Wilson, editor of (Your Key to Making Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

The Adens go on to say:

$2000 or Bust

Gold moved into a stronger phase of the bull market in September 2009 and it hasn’t looked back since then. It broke clearly above $1000, and here we are approaching $2000, which [will be] another doubling of the price in two years [even though we are currently in a downward correction]. The volatility we’ve seen this month, with almost $200 fluctuations, is probably a sign of an intermediate top and now with the dollar starting to rise, while the other currencies decline… [the current correction in gold is to be expected]. Its leading indicators on Charts 1B and C are near overbought, which also reinforces this.

When to Buy; How to Buy

We receive letters asking if it’s too late to buy gold. We’ve taken the stance of buying gradually over the months to average in at a fair price…[but with the current] correction, don’t think much about it and buy with both hands. Keep in mind, gold will remain strong even if it falls to the $1650 level. If it closes below this level, [however.] a steeper decline could take it to $1420, its major support. Currently, volatility reigns and overshoots could also easily happen.

Silver and Gold Shares

Since silver and gold shares have not been on a tear like gold has, they’re not overbought. They were also pressured by the falling stock market and concerns of the slowing global economy but, as Charts 2 and 3 [below] show, they have room to rise further.

First, note that silver is holding firmly near the higher side while its intermediate leading indicator bounces up from the lows. This means that silver has room to rise further. It’s strong above $38.50 and the major trend is up above $30.50.

As for gold shares, the XAU index is near the highs as it follows the gold price. Gold shares also have room to rise further since the leading indicator is still coming up from a low area. As for silver shares, they’re not bouncing up as much as gold shares, but we think it’s just a matter of time until they follow.

Euro Crisis “More Dangerous” Than Lehman, Says Soros

The euro zone sovereign debt crisis is “more dangerous” than the bankruptcy of Lehman Brothers in 2008, according to George Soros.

“It is a more dangerous situation [than Lehman Bros] and I think that the authorities, when push comes to shove, will do whatever it takes to hold the system together, because the alternative is just too terrible to contemplate,” the legendary investor stated in a CNBC interview.

Soros went on to say that “I think that you could have two or three of the small countries default or leave the euro provided it is prepared and done in an orderly way…If it were to happen unprepared it could actually disrupt the global financial system, but that’s why it’s important to allow for it to happen and then those countries have a genuine choice it doesn’t mean they are being pushed out.”

As for the U.S., Soros contended that it has already entered into a new recession.

“We have a slowdown and basically a conflict about whether the rich ought to pay taxes to create jobs or not and there was a deal in the making which would have balanced the budget over the long term, but would have allowed short-term fiscal stimulus, which would have been the right policy,” he added. ”That was rejected, it fell apart… so it will come to the electorate next year to decide what they want.”

Leveraged ETF to Play the Fed Sell-off : SMN

ProShares UltraShort Basic Materials Fund (NYSE:SMN) — This leveraged ETF seeks daily investment results (minus fees and expenses) of twice (200%) the inverse of the Dow Jones U.S. Basic Materials Index.

SMN had a major breakout when stocks plunged yesterday in response to the Fed’s new quantitative easing plan, Operation Twist. If stocks continue to fall and the major indices plunge through support, this inverse fund could rise to new highs. The trading target is $28. Use stop-loss orders to protect against a large loss.

Leveraged ETFs are not for everyone. The buyer should be a seasoned trader with a record of success trading highly leveraged investments

Trade of the Day – ProShares UltraShort Basic Materials (NYSE:SMN)

Trade of the Day Chart Key

Commodities Erase This Year’s Gains

Commodities erased this year’s gains after the U.S. Federal Reserve said that the world’s biggest economy faces “significant downside risks,” boosting speculation raw-material demand will falter.

The 24-member Standard & Poor’s GSCI Index dropped as much as 2.8 percent to 620.58, the lowest level since Aug. 10, and a 1.8 percent decline this year. Copper tumbled into a so-called bear market, while crude oil fell to a four-week low and wheat slipped to a 10-week low.

European stocks tumbled as the Federal Reserve signaled “significant downside risks” to the world’s largest economy and Moody’s Investors Service downgraded three U.S. banks. Fed policy makers said yesterday they will replace much of the short-term debt in their portfolio with longer-term Treasuries in an effort to keep the economy from relapsing into a recession.

“The global growth scenario continues to be clouded, all the commodities were hit,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “There is a lot of bearishness.”

The world economy will expand 4 percent this year and in 2012, the International Monetary Fund said on Sept. 20, cutting forecasts made in June for a 4.3 percent expansion this year and 4.5 percent in 2012.

Manufacturing in China, the world’s largest metals user, may shrink for a third month in September, according to a preliminary index of purchasing managers from HSBC Holdings Plc and Markit Economics released today. The initial reading for this month was 49.4 compared with a final 49.9 for August and 49.3 for July. Figures below 50 signal a contraction.

‘World Slowdown’

“My fears for a world slowdown are playing out,” said David Thurtell, an analyst at Citigroup Inc. in Singapore. “As a barometer of the pace of the world industrial production cycle, the copper price is falling.”

Three-month copper on the London Metal Exchange fell as much as 5.3 percent to $7,860.75 a metric ton, the lowest price since Sept. 28. That’s 23 percent below the record $10,190 set on Feb. 15, more than the 20 percent drop that’s regarded by some investors as signaling a bear market.

Copper may drop to as low as $7,000 as concerns grow about the global economic slowdown, Im Byeong Cheol, an executive at South Korea’s Public Procurement Service, said on Sept. 21. The contract hasn’t traded below $7,000 since July 2010.

Wheat Falls

November-delivery oil fell as much as 3.7 percent to $82.75 per barrel, the lowest level since Aug. 22, on the New York Mercantile Exchange. Brent for November fell as much as 2.6 percent to $107.50 on the ICE Futures Europe Exchange.

Wheat for December delivery fell as much as 2.4 percent to $6.51 a bushel on the Chicago Board of Trade, the lowest price since July 12. December-delivery corn lost as much as 2.6 percent to $6.6825 a bushel, while soybeans for November delivery declined as much as 1.9 percent to $12.96 a bushel, the lowest price since Aug. 11.