The Head Of The World's Biggest Hedge Fund Sees "Economic Collapse" Due To Money Printing By Early 2013

As part of its most recent issue the New Yorker has released a must read interview with Ray Dalio - head of the world's biggest hedge fund, Bridgewater. Dalio's fund, which according to some may now be as large as $80 billion, continues to outperform even in this problematic environment, indicating that unlike various other managers who shall remain nameless, and whose wealth is built up almost exclusively on one trade (and that belonging to someone else in the first place), Dalio, despite rumors that he is preparing to leave his current position and is actively seeking a replacement, is still keenly able to adapt to changing macro conditions. Which is why his warning about future rounds of QE, which he sees as a certainty, should be heeded. Especially since it conforms 100% with the warnings of Zero Hedge - Dalio believes that future inevitable money printing will "lead to a collapse in currencies and bond markets." Dalio is even kind enough to give a time frame. "I think late 2012 or early 2013 is going to be another very difficult period." He is, to say the least, quite diplomatic.

From the full interview:

Dalio believes that some heavily indebted countries, including the United States, will eventually opt for printing money as a way to deal with their debts, which will lead to a collapse in their currency and in their bond markets. “There hasn’t been a case in history where they haven’t eventually printed money and devalued their currency,” he said. Other developed countries, particularly those tied to the euro and thus to the European Central Bank, don’t have the option of printing money and are destined to undergo “classic depressions,” Dalio said. The recent deal to avoid an immediate debt default by Greece didn’t alter his pessimistic view. “People concentrate on the particular thing of the moment, and they forget the larger underlying forces,” he said. “That’s what got us into the debt crisis. It’s just today, today.”

Dalio’s assessment sounded alarmingly plausible. But when one plays the global financial markets a thorough economic analysis is only the first stage of the game. At least as important is getting the timing right. I asked Dalio when all this would start to come together. “I think late 2012 or early 2013 is going to be another very difficult period,” he said.

Translation: enjoy your -0.002% Bills and paying uncle Sam to hold your money while you can.

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The Dollar, Gold and SP500 Trend Analysis

The dollar is and has been in a strong down trend for many years and I feel as though it’s getting close to another major land slide. It could take place any time in the next month or so according to my weekly chart analysis.

The general rule is if the dollar falls in value then we tend to see both stocks and commodities rise. The inverse relationship at times can be tick for tick meaning if the dollar ticks down one increment then we see the broad market or specific commodities move in the opposite direction at the same time.

Since 2009 the relationship between the dollar and investments has been so close that if you were to just focus on what the dollar was doing then you could almost trade equities and commodities without reading their charts. The dollar index chart is one of those trading tools everyone should be analyzing. At $80 a month for getting the dollar index data feed it’s not a cheap trading tool…

Dollar Index 4 Hour Candle Stick Chart:
This chart clearly shows this month’s price action for the dollar which is pointing to lower prices if things play out according to the charts. This short term chart shows that in the next day or so we should see the US dollar start to sell back down.

SP500 Daily Chart (Stock Market):
The SP500 index is a great barometer of what the overall stock market is doing. The chart below shows the 5 and 14 day simple moving averages and their recent crossovers.

Last Friday we had a bearish crossover and if the market does not rally early in the week then I am anticipating further weakness in stocks. While I am still bullish on stocks as of this moment the coming week will quickly tell us what stocks are going to do. If we get a bounce which turns into a strong follow through rally then we should see a sizable rally around the corner and also a falling dollar.

Gold Weekly Chart:
Back in May when gold was hit with strong distribution selling I posted my thoughts on how gold could be forming a 6-12 month topping pattern and how price could get choppy. Well, we are now entering that period which could prove to be interesting…
Keep in mind this is a weekly chart and from the looks of things this top could play out for another 5-6 months from here. Silver is in much of the same predicament but trading way below its May high. I’m thinking more of a double top in silver over the next few months.

Weekend Trend Trading Conclusion:
In short, I am bearish on the dollar for a week or so which should help boost stocks and commodities. After that we could see all investments make some big trend changes if buyers don’t step up to the plate to buy. If we any major headline news about the sky is falling then it could trigger a sharp correction. Unfortunately, at this time head line news is running wild spooking investors from buying much of anything other than gold. Any resolution to foreign economic issues will put pressure on both gold and silver and likely help boost stocks.

The past month I have been very cautious because the market is wound up and ready to explode in either direction. During times like this I prefer to stay mostly in cash until I get low risk setups and a clear trend.

9 Great Investment Ideas for a Crazy Market: AAPL, CAT, DD, FDX, GDX, GOOG

Market bulls and bears are at a standoff as the global economic recovery struggles — but not all stocks are in danger of slipping.

Major U.S. stock indexes inched higher as optimism that companies will report higher second-quarter profits outweighed fears that job growth is crashing.

Breadth has been the hallmark of the recent advance, but last Friday was a terrible day — losers outpaced gainers by a four to one margin. Stocks drifted in a range so narrow at midweek that if you turned it sideways, you couldn’t see it.

The bears had a chance to knock sentiment down once Moody’s credit-rating service kicked Portugal’s sovereign debt down under the counter, below the sink and into the basement, and a fairly nasty report on the U.S. service economy followed.

But bulls found a way to pump a few more molecules of helium into their uptrend, and the major indexes ended in the green.

And now we have a standoff, the bulls and bears looking at each other over the barricades with a gleam in their eyes — each knowing without a doubt that they are about to take down the other.

I would love to be optimistic, but the data that I see suggests the world has entered into a cyclical industrial slowdown that has crippled business confidence and job growth. So even if second-quarter earnings are good, outlooks will likely be poor. And ultimately, that means stock prices will peak.

As for the situation in Europe, industrial growth is also probably peaking, so the next quarter-point interest-rate hike by the European Central Bank will likely be the last for a while. Capital Economics analysts expected German industrial production data to show a decline of 0.6% in the latest reporting period, sinking to the lowest level in nine months.

The European Community index of industrial sentiment, the IFO manufacturing index, and the region’s manufacturing PMI survey have also all fallen recently. Some recovery, huh?

So what worked best in the market when it was rising? Whatever was messed up the most in the prior month. Real estate. Tech. The junky Chinese IPOs. Energy. The worst shall be first.

But that’s not all. If that’s what it was all about, we could easily get smug about the rebound and expect it to be very short-lived.

The fact is though, that a lot of very good stocks have been finding favor as well. Like electronic-medical-records standout Cerner (NASDAQ:CERN).

And Caterpillar (NYSE:CAT), FedEx (NYSE:FDX), DuPont (NYSE:DD), Apple (NASDAQ:AAPL) and dare I say it, Google (NASDAQ:GOOG).

And select exchange traded funds beat the market like a steel drum, led by iShares S&P MidCap 400 Growth (NYSE:IJK) and iShares Dow Jones US Health Care (NYSE:IHF). These are your leaders.

And let’s not forget to go for the gold.

Gold futures have been shooting higher over the past week, in contravention of the usual seasonal pattern in which they normally move higher at the end of the summer. Part of the reason may be the downgrade of Portugal combined with turmoil in the Italian and Spanish stock markets, the widening of the spreads on Italian and Spanish credit and rumors of a coming downgrade of Irish debt.

A lot of people seem to think that the next round of downgrades and piling-on will wait until the Europeans complete their August vacations, but I really doubt they will wait.

Right now, gold is within an inch of its all-time high–yet shares of gold miners are down, as benchmarked by the Market Vectors Gold Miners (NYSE:GDX), which is still 15% off from its high.

We made very good money in the gold miners last year in the late summer, and I have been planning to wait again. There is no rule that says the miners’ stocks have to follow the metal, and in fact many large South African miners are being hit by a wave of selling due to rumors of a potential nationalization.

Gold shares are certainly inexpensive now, and could become even cheaper in the next few weeks. Seasonally they usually start moving up in August, but two years ago they began to rise in July, and last year it was mid-July.

A new all-time high in the yellow metal may mean it’s time to buy some GDX, even if the calendar says it’s still a little early.

Americans to Work 10 Years Longer to Pay Debt: Advisor

A former advisor to the Bush administration has told CNBC every American will have to work 10 years longer than they thought to pay off the US debt mountain.

AP

“Will the US go into technical default? This is quite possible,” Philippa Malmgren, a former economic advisor to George W Bush and the president and founder of Principalis Asset Management told CNBC on Thursday.

While this is a serious problem in Malmgren’s view, she said the solution is easy enough.

“Yes it is a serious problem but the US can easily fix it by having everybody work 10 years longer which they'll do anyway,” she said.

Any recovery of the US economy will be based primarily on manufacturing, agriculture and innovation in Malmgren’s view but the banks need to watch out if they continue to refuse to lend to American businesses and consumers.

“I think lending in the US is a great business with great returns. If big banks cannot and will not lend then are there smaller local banks who will Hoover up the best loans,” she said.

With tensions high over the debt crisis in Europe, Malmgren said she expects several rounds of haircuts on bonds that will ultimately see a number of euro zone countries devalue.

“We could have a Northern Rock given the denial of overnight funding to many banks. Central banks will provide the liquidity for that but the bigger issue is how to get Greece and others to grow again. That requires devaluation,” she said.

Monday July 18, 2011 USDA Crop Progress report recap

The weekly crop progress report came out with little surprises, but corn is going to need more rain in the next week. The details are as follows:

Corn

The USDA NASS reported that as of July 17, 2011 the corn crop is 35% silking compared to 14% last week, 62% last year and 47% 5-year average. The condition of the corn crop is 66% good to excellent, this compares to 69% last week and 72% last year.

The Corn crop conditions were down 3% in the good to excellent category. The overall condition of the crop is still good but the current weather forecast of hot and dry conditions suggest that conditions could fall further next week. Also, with the corn crop 35% silking we are getting into the most weather sensitive growth phase and many areas need to see some rain in the next week otherwise yields could be effected.

See Corn Daily chart:

Wheat

The USDA NASS reported that as of July 17, 2011 the spring wheat crop is 60% headed compared to 27% last week, 84% last year, and 88% 5-year average. The condition of the spring wheat crop is 73% good to excellent, this compares to 73% last week and 82% last year.

Winter wheat is 68% harvested compared to 63% last week, 70% last year and 72% 5-year average.

See Wheat Daily chart:

Soybeans

The USDA NASS reported that as of July 17, 2011 the soybean crop is 40% blooming compared to 21% last week, 58% last year and 52% 5-year average. The condition of the soybean crop is 64% good to excellent, this compares to 66% last week and 67% last year.

The Soybean crop conditions were down 2% in the good to excellent category. The overall condition of the crop is still good but silghtly behind.

See Soybean Daily chart:

So, we do need some good rain very soon for corn and again durrind pod set in soybeans, but if we get it we will have a nice crop. The problem is that current weather forecasts keep us hot and dry for some time. This could mean that grains have some upside potential in the near term. However, if and when we get the rain that is needed, grains will likely put highs in the market for some time.

This means that speculators should be looking for opportunities to sell corn and producers need to look to lock up some prices while we have corn in the seven dollar range. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Still Patiently Waiting For Good Entries

Two weeks ago the market looked like it would provide excellent entries soon. The last few days simply don’t look good. Something doesn’t feel right. When I say ’something doesn’t feel right’ it usually means the following:

• Too much selling pressure.
• XLF – The bank ETF is looking worse by the day.
• Thin leadership.
• The market, as in S&P 500, is still in a trading range as opposed to being in a strong unidirectional trend.

What can I say. A very important rule is to accept the hand you are dealt. Trading one’s opinion and‘trading against the charts’ is not going to yield positive results. So the ‘waiting game goes on‘ as I once posted.

The most worrisome aspect in my opinion is the weak banking sector. Some traders don’t view this as being such an important factor. Their reasoning goes somewhat like this: “The market so far was able to move up nonetheless. ‘Bad news’ is a non-issue.” True, but I somehow disagree. One of the market truisms I learned years ago and that is now deeply engrained is the following: Big players and value investors wait for revolutions to hit developing countries. They literally wait for dictators to get removed, the parliament to go up in flames and for the famous ‘blood in the streets’. What most people have heard about in this context is ‘buy when there’s blood in the streets‘. As a matter of fact in these situations the big buyers typically buy the stocks of the three biggest banks of the country. The reasoning is simple. If the economy is going to do well, banks will profit.

• Financials – Sector Overview Chart

Conclusion: To make a long story short, when banks are in trouble it is not the time to play offense. Technically speaking we could still move higher though as lots of today’s candles look like reversal candles. Still, I see lots of indecision when it comes to the market’s message. We will most likely get lots of clues as what to expect next before the week is over.

Gold is acting very well, the miners are starting to outperform the metal. Something we haven’t witnessed in quite a while. Got to keep an eye on this new development. I will write more about this topic soon.

Marc Faber Advises Buying Gold Now

Dr. Marc Faber of the Gloom, Boom & Doom Report joins Jim Puplava of the Financial sense News hour in a wide-ranging interview to discuss Ben Bernanke, QE3, inflation, gold and much more. Marc Faber says QE3, More Inflation Coming and Advises Buying Gold Now

Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

4 Reasons Not To Refinance Your Home

Interest rates are still extremely low, but they aren't expected to stay there for long. Should you refinance before it's too late? Not necessarily. Here are four reasons why refinancing might be a bad idea.

1. The break-even period is too long.
The break-even period is the number of months it will take you to recoup the costs of closing a new loan. To calculate your breakeven period, you'll need to know how much the closing costs will be on your new loan and what your new interest rate will be. You should be able to get an estimate of these figures from a lender.

There is no magic number that represents an acceptable break-even period - it depends on how long you plan to stay in the house and how certain you are about that prediction.

2. The long-term costs are too high.
Refinancing to lower your monthly payment is great - unless it hurts you significantly in the long run. If you're several years into a 30-year mortgage, you've paid a lot of interest but not much principal. Refinancing into a 15-year mortgage will probably increase your monthly payment, possibly to a level that you can't afford. If you start over again with a new 30-year mortgage, you're starting with almost as much principal as you had at the beginning of your current mortgage. While your new interest rate will be lower, you'll be paying it for 30 years. So your long-term savings might be insignificant or the loan might even cost you more in the long run.

If lowering your monthly payment means the difference between staying current on a new, lower payment and defaulting on a current, higher payment, you might find this long-term reality acceptable. But if you can afford your current mortgage payment, you might now.

3. You'd have to move into an ARM to meaningfully lower your rate.
Let's say you already have a low interest rate: 5% on a 30-year fixed-rate mortgage. If you refinanced into another 30-year fixed at 4.5%, the monthly savings would not be substantial unless you have a mortgage several times larger than the national average.

Getting an adjustable-rate mortgage (ARM) might look like a great idea. ARMs have the lowest interest rates available: Quicken Loans advertises rates as low as 2.75%, for example. Advertised rates are so low that it might seem crazy not to take advantage of them, especially if you're planning to move by the time the ARM resets. Surely the housing market will have recovered in five or seven years and you'll be able to sell, right?

The thing is, rates are so low right now (around 4.5% for a 30-year, fixed-rate mortgage) by both historical and absolute standards that they aren't likely to be significantly lower in the future. So you'll probably either face significantly higher interest payments when the ARM resets, if you are able to refinance your way out of an ARM, or if interest payments if you manage to sell and buy a different home.

If you already have a low fixed interest rate and you're managing your payments, you might want to stick with the sure thing. An adjustable-rate mortgage is usually much riskier than a fixed-rate mortgage. It might pay off and save you thousands of dollars - or it might end up costing you thousands of dollars or even force you out of your home.

4. You can't afford the closing costs.
There isn't really any such thing as a no-cost refinance. You either pay the closing costs out of pocket or you pay a higher interest rate. In some cases, you're allowed to roll the closing costs into your loan, but then you're paying interest on them for as long as you have that loan.

Can you afford to spend several thousand dollars right now on closing costs, or do you need that money for something else? If you're looking at a no-cost refinance, is the refinance still worthwhile at the higher interest rate? If you're looking at rolling the closing costs into your loan, consider that $6,000 at 4.5% interest for 30 years will cost you approximately $5,000 extra in the long run compared to just paying the money out-of-pocket now.

The Bottom Line
The only person who can decide whether it's a good time to refinance is you - and if you want a professional opinion, you'll be more likely to get an unbiased answer from a fee-based financial advisor than from someone who wants to sell you a mortgage. The details of your individual situation, not the market, should be the biggest determining factor in whether you choose to refinance.

JPM TBT Poised for Upside Reversal

If the directional overlay of the big money center banks -- i.e., JP Morgan (JPM) -- on the ProShares UltraShort 20+ Year Treasury (TBT) is any gauge, then the mature downtrend in both JPM and the TBT is poised for a powerful upside reversal.

The TBT hit its low on July 12 at 31.87 and has climbed to 33.25, while JPM hit a new multi-month low today at 38.93, but has recovered to 39.50 so far.

This chart is "warning" us that higher rates matter to a major lender like JPM, especially in a likely new regulatory environment that seeks to redefine banks in a more traditional business role (not as speculative hedge funds). The key to such a successful transition for a JPM, for instance, is an ability to make money by borrowing near term, and lending longer term. Higher longer term rates will accomplish that, which just might be what this comparison chart is telling us.

Of course, it also could be telling us that no matter what Congress and the President decide to do about the debt ceiling and the deficit, credibility and trust in the efficacy of the U.S. Government has taken a serious hit in confidence, which is why longer term rates (and the TBT's) are headed higher.

Nonetheless, regardless of the reason for higher longer-term rates, JPM should benefit.

News Corp. at 50% Discount Shows Diminishing Murdoch: Real M&A: NWS

What’s News Corp. (NWS) really worth? At least 50 percent more without Rupert Murdoch.

The company, which owns the Fox TV networks and the Wall Street Journal, fell 13 percent through last week after allegations surfaced that one of Murdoch’s tabloid newspapers hacked into the voicemail of a murdered schoolgirl, wiping out $6 billion from News Corp.’s market capitalization in less than two weeks. The $41 billion company now sells for less versus earnings than any of its closest rivals, according to data compiled by Bloomberg.

By valuing each of News Corp.’s businesses separately, the New York-based media conglomerate would be worth $62 billion to $79 billion, estimates from Barclays Plc and Gabelli & Co. show, indicating News Corp. trades at an almost 50 percent discount to its units. Murdoch, 80, is facing increasing scrutiny over his management of News Corp. after the phone-hacking revelations forced him to abandon a takeover ofBritish Sky Broadcasting Group Plc (BSY) and deepened a slump that’s left shareholders with a 16 percent loss in the past five years even as rivals gained.

“There’s just sort of this generic Murdoch discount, which encompasses the concern that he will make decisions that are not consistent with other shareholder interests,” said Michael Morris, an analyst at Davenport & Co. in Richmond, Virginia. “The sum of the parts on News Corp. is huge compared with where the stock trades.”

Based on Morris’s own sum-of-the-parts analysis, News Corp. is worth about $25 a share, 60 percent higher than the company’s closing price of $15.64 last week.

Today’s Trading

News Corp.’s spokeswoman Julie Henderson in Los Angeles declined to comment. Alice Macandrew, a spokeswoman for News Corp. (NWSA) in London, also declined to comment.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

Shares of News Corp. slid 4.3 percent to $14.97 today in New York. Shortly before the close of trading, Standard & Poor’s put the company’s BBB+ corporate debt rating on CreditWatch with negative implications, citing the potential damage to News Corp.’s business and reputation from probes into phone hacking.

Murdoch and his son James were summoned last week to appear before U.K. lawmakers to answer questions about employees paying police for stories and the FBI began examining whether News Corp. employees tried to hack into phones of Sept. 11 victims.

Resignations, Arrests

Les Hinton, chairman of News International, the U.K. publishing unit that included News of the World when the alleged hacking occurred, stepped down as head of the Dow Jones division on July 15. That came hours after the exit of News International Chief Executive Officer Rebekah Brooks, who was then arrested by U.K. police yesterday.

Brooks was editor of News of the World, which closed this month as a result of the scandal, from 2000 to 2003.

The spotlight will shift back to Murdoch and his son James tomorrow as they testify before the U.K. Parliament.

Ed Miliband, leader of the U.K.’s opposition Labour Party, called yesterday for Murdoch’s media company to be broken up. Miliband told the Observer newspaper that the breadth of Murdoch’s ownership is “unhealthy because that amount of power in one person’s hands has clearly led to abuses of power within his organization.”

Independent directors of News Corp. have begun questioning the company’s response to the crisis and whether a leadership change is needed, said two people with direct knowledge of the situation who wouldn’t speak publicly.

‘Best Interest’

Some people close to the Murdoch family and News Corp.’s directors said last week they thought it would make sense for Murdoch to relinquish his job as chief executive officer and stay on as chairman.

“Rupert should go because it’s in the best interest of everybody,” said Terry Smith, chief executive officer of London-based inter-dealer broker Tullett Prebon Plc. (TLPR) “The phone-hacking scandal is symptomatic of his business judgment.”

“When a large number of your staff have been involved in criminal activities, normal CEOs of public companies who have to answer to outside shareholders and capital providers are less inclined to sweep it under the carpet,” he said.

If the position of the Murdoch family weakens further, Chief Operating Officer Chase Carey may be named as interim CEO, one person close to the family and board of directors said last week. In a statement last week announcing Hinton’s departure, Murdoch downplayed his own importance to the company he built from two inherited Australian newspapers.

‘Collective Creativity’

“News Corp. is not Rupert Murdoch,” he said. “It is the collective creativity and effort of many thousands of people around the world.”

Yacktman Asset Management Co.’s Don Yacktman, whose biggest holding is News Corp., said that while Murdoch is in charge the company may remain undervalued versus its rivals.

“Mr. Murdoch is going to do what Mr. Murdoch chooses to do, unless he is forced to do something else,” said Yacktman, whose $5.4 billion Yacktman Fund (YACKX) has beaten 99 percent of like funds in the past five years. “If he stepped down, yeah, probably the stock price would go up, because there’s a Murdoch discount.”

“There are other people on the management team than Murdoch,” Yacktman said, citing Chase Carey. Still, “You have to have some admiration for Murdoch, even those who despise him, for his financial acumen because he’s been successful. Murdoch has shown kingdom building skills.”

BSkyB

The crisis at News of the World has for now thwarted News Corp.’s strategy to leverage pay-television provider BSkyB into new digital businesses.

Full ownership of Isleworth, England-based BSkyB, which has 10 million subscribers, would have facilitated the bundling of print and pay-TV subscriptions by spreading content over different media platforms, making News Corp. less susceptible to advertising sales at its newspapers.

Murdoch’s attachment to newspapers, which has contributed to a 28 percent decline in operating income at News Corp.’s newspapers and information services unit in the past five years, has cost News Corp.’s shareholders billions of dollars.

The company’s market value has shrunk by $31 billion since it offered to pay a 70 percent premium for New York-based Dow Jones & Co., publisher of the Wall Street Journal, in May 2007.

News Corp. wrote down the value of the $5.1 billion deal by $2.8 billion in the second quarter of fiscal 2009, according to a filing with the Securities and Exchange Commission.

Relative Value

Since completing the deal in December 2007, News Corp. has lost 21 percent, including dividends, while media companies in the Standard & Poor’s 500 Index gained 20 percent. New York- based Time Warner Inc. (TWX), owner of HBO and TNT, returned 12 percent in that span, and Walt Disney Co. (DIS), the Burbank, California-based owner of the ABC network, rose 24 percent.

News Corp. also exited its 41 percent stake in Gemstar-TV Guide International Inc. in December 2007 after $6 billion in writedowns, and agreed last month to unload MySpace for $35 million, a fraction of the $580 million it spent six years ago.

Murdoch’s purchase of his daughter’s TV production company, Shine Group Ltd., caused shareholder Amalgamated Bank of New York to sue News Corp.’s directors in March and accuse Murdoch of nepotism.

News Corp. now trades at 12.7 times its reported profit, versus an average of 16.5 times for media companies in the S&P 500. Time Warner has a multiple of 14.7, while Disney trades at 17.1 times profit, data compiled by Bloomberg show.

‘Just Don’t See’

“You’ve got a lot of headlines about News Corp. that you just don’t see about other media companies,” said Barton Crockett, a analyst at Lazard Capital Markets in New York. “You’ve got phone hacks, purchases of companies run by relatives and big acquisitions of newspaper companies. Investors don’t necessarily like Murdoch spending on these things.”

The missteps have left News Corp. trading at a discount to the value of its parts, even without its newspaper business.

By applying market multiples to each of News Corp.’s units, Brett Harriss, analyst at Gabelli in Rye, New York, says the company may be worth a total of $79 billion.

News Corp.’s cable business, which Harriss estimates commands a valuation of 9 times its estimated earnings of $3.93 billion before interest, taxes, depreciation and amortization next fiscal year, would be worth $35 billion including net debt.

The company’s film, TV and satellite units together would sell for almost $20 billion, and News Corp. also has about $13 billion in investments, based on his projections.

Adjusting for News Corp.’s estimated net cash next fiscal year, the company’s equity value without the newspaper unit would still exceed $70 billion, the data show.

Share Buyback

On a per-share basis, Harriss estimates that all the media conglomerate’s pieces would add up to almost $29.87, an increase of more than 90 percent from its current share price.

Barclays projects that the value of News Corp.’s businesses may equal about $25.77, excluding its so-called conglomerate discount and after accounting for share buybacks. Last week, the company almost tripled its repurchase program to $5 billion.

While News Corp. languishes at a discount to the sum of its parts, Stewart Capital’s Malcolm Polley says Murdoch is unlikely to consider a sale or break up after spending decades to build up his global media empire.

Even if Murdoch were to step down as CEO, he and his family would still control management decisions at News Corp. through its 38 percent stake in the Class B voting shares, Polley said.

‘Might Make Sense’

“You’ve got a company where a very large shareholder controls what’s going on,” said Polley, who oversees $1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. “There are things that might make sense to do that in a normal situation shareholders might agitate to get done, such as having him step down or selling off businesses, but you really can’t here.”

Still, Tullett Prebon’s Smith says the phone-hacking allegations and the resignations of two of the company’s senior executives will embolden more shareholders to question Murdoch and his role at News Corp.

“We’ll see more pressure on Murdoch now,” Smith said. “One of the things that’s kept people away is that he has a powerful media presence, and people are fearful of crossing swords with him. Much of that fear is gone now.”