Up to 50% of Americans are making this retirement mistake

More than half of people under 50 did not make retirement contributions last year, according to a recent report. There's only one excuse for not contributing -- and most people can't use it.

By Joshua Brown, contributor

FORTUNE -- Very little in life is truly free. Free information (think seminars, webinars) requires your time, free "gifts" require you to be obliged to the giver. Because this is the case, when something truly free comes along, you take it.

There's a highly disturbing survey out from T. Rowe Price that looks into the investing habits of Generations X and Y circa now. It seems many Americans who still have decades of work ahead of them have decided that lowering their taxable income is not cool anymore and investing for the future is lame.

Too bad, because they're obviously committing one of the cardinal sins of business: Saying no to the freebies. You'd think this would be obvious, and yet according to T. Rowe's data, only 45% of people between 21 and 34 (Gen Y) and people between 35 and 50 (Gen X) will be making IRA contributions for fiscal 2011. That means a whopping percentage - more than half - will simply do nothing. This is down considerably from 2010, when 71% of those surveyed made contributions to their retirement plans.

This is unacceptable. When I speak with young investors (which many of my readers are), the first thing I tell them to do is contribute the maximum to their 401(k)s or 403(b)s - this before anything else. And if they are not at an employer with a plan, then establishing and contributing to an IRA is the next best option. What they do with the investing of that money is their choice but by not losing it to taxes, they're ahead of the game. (more)

My Favorite Long-Term Bet on Oil

No one knows where oil is going to be 18 months from now. But that doesn't stop people from guessing...

According to the U.S. Department of Energy, crude prices will average over $100 a barrel for the next two years. Research firms Merrill Lynch and Goldman Sachs see crude prices pushing through the $120 mark by 2013.

I take forecasts in this industry with a grain of salt. After all, Goldman called for $200 oil prices in 2008. After touching $150, prices collapsed below $50 a barrel about six months later.

Even without knowing exactly where oil will trade over the next few years, the long term looks good for one "picks and shovels" energy stock...

Transocean (RIG) is the largest offshore driller in the world. Two years ago, one of its deepwater rigs caught fire in the Gulf of Mexico. This caused one of the largest offshore oil spills in history.

After the disaster, the U.S. government imposed an offshore drilling ban for six months. There were reports speculating that the spill could cost Transocean tens of billions of dollars in regulatory and clean-up charges. Shares [2] collapsed from $90 to under $45 in 2010. They recovered rapidly, but lost all their gains and more in 2011.

Today, shares are beginning to gain momentum. As you can see from the chart, the stock is trading over $50.

I don't think you missed the boat on this one. In fact, I believe Transocean could test the $90 level again within 12-18 months.

You see, Transocean makes money by charging customers like ExxonMobil and Chevron to use its ships. The rate is calculated on a daily basis. The industry term is "dayrates."

Right now, dayrates are soaring. For example, Saudi Aramco – one of the largest oil companies in the world – signed a two-year contract with Transocean to use one of its deepwater drilling rigs. The contract is for two years at a rate of $650,000 per day.

To put this rate in perspective, it's near the record amount Transocean was charging for its deepwater rigs in 2008. Back then, the stock traded over $150 a share.

Transocean also contracted two of its older rigs at exceptionally high dayrates in the past few weeks.

At an energy conference on Monday, Transocean said higher dayrates will continue. Demand for deepwater drilling in West Africa, Asia, India, and Australia is surging. These underwater areas are largely untapped. With oil prices high, costs are more than covered.

Growth is not the only reason I like the stock. Shares are trading at just 11 times earnings [3]. It's the uncertainty. The full damage assessments regarding the oil spill from two years ago are still ongoing. But the fears are overblown.

A recent ruling suggested Transocean will not be held liable for pollution damages for oil originating underwater. Damages are now expected to be under $2 billion. That's one-fifth the estimates that came out right after the incident occurred.

Transocean has plenty of cash on its balance sheet [4] to cover these costs. Also, the company suspended its dividend [5], which will provide more cash to help pay potential damages. Once the litigation concludes, Transocean will likely begin paying a dividend again.

I wouldn't wait long to buy Transocean. Sure, the stock has had a nice run off its lows. But shares are trading almost $100 cheaper than the last time dayrates were this high.

Even if oil defies predictions and prices push lower, I don't see international demand for deepwater drilling slowing any time soon.

AMGN has been consolidating with support around its 50-day moving average

Amgen (NASDAQ:AMGN) — This independent biotech company has been a leader in the development of genetically based research and treatment for cancer, anemia, rheumatoid arthritis, and a host of other major illnesses. It markets five of the world’s best-selling biotech drugs.

The Trade of the Day first recommended AMGN on Dec.19, at $60.25, when it broke from a huge cup-and-handle formation. After topping at close to $70, the stock has been consolidating with support around its 50-day moving average at $68. Note the recent buy signal from the stochastic. The trading target for AMGN is $75.

Earnings for 2012 are estimated at $5.97 and $6.60 for 2013. AMGN has a dividend yield of 2.12%.

Jay Taylor: Turning Hard Times Into Good Times

4/3/2012: Can China Save the Western Economies?

Is Natural Gas About to Bottom?

This morning I came across an interesting slide from Ultra Petroleum’s ($UPL) latest investor presentation at the Howard Weil Energy Conference:

F&D cost stands for “finding and development cost” which means that UPL’s average cost to find and develop its natural gas resources stands at roughly $1.60/Mcfe of gas. Moreover, UPL is one of the lowest cost operators in the natural gas E&P industry, however, its all-in cost ($2.88/Mcfe) is still above the current front month $NG_F futures price:

These slides help to reinforce the potential for a deceleration in the growth of supply over the coming years due to the current depressed gas prices. If companies such as UPL can barely produce acceptable levels of ROE at current prices then you can be sure that less economic producers will be scaling back on new projects and production. If one combines a moderation of the growth of supply with the tremendous potential for increased demand over the coming years due to the huge BTU cost advantage relative to other energy sources, it is possible to see some light at the end of today’s dark tunnel.

One of my latest and favorite follows Andrew Nyquist has highlighted a DeMark buy setup which indicates a potential bounce for natural gas ($NG_F $UNG) sometime between April and July. To top it all off I have noticed many pundits proclaim that they “have no doubt” that natural gas will have a “1 handle” very soon. This could make for a perfect storm that finally culminates in a bottom to the nearly four year downtrend in natural gas prices.

LUMBER PRICES SAY THIS IS A TOP FOR HOUSING STOCKS

Here is an update to an article I posted in September 2011, describing the leading indication that lumber prices give for the shares of housing related stocks. Back then, it was saying that a rally was ahead for homebuilders, building materials providers, and others involved in the housing industry. And that opinion ran contrary to what was being voiced back then by a lot of other analysts.

Now the commentary I hear on the business TV channels seems largely bullish toward housing stocks. They cite the growing economy, falling unemployment, rising rental prices, and other factors that should benefit the housing sector.

In response, I just cite the message from lumber prices, which peaked a year ago and fell throughout the rest of 2011. Because lumber’s price movements tend to get echoed a year later in the HGX Index and other housing related sector indices, the implication is that we are at a top for housing stocks. Perhaps lumber knows something that the economists don’t.

This relationship does not always work perfectly, and that fact should be understood by anyone contemplating listening to it. A notable difference in behavior was the refusal of the HGX in early 2011 to follow the path of lumber prices up to a giant spike top. But it should be understood that this spike in lumber prices back in April 2010 was due to the earthquake in Chile, which disrupted production of lumber in that country and sent lumber buyers scrambling to lock in supplies.

The reason why this relationship seems to work is that market forces that are going to affect the prices of housing related stocks tend to show up a year earlier as market forces affecting lumber prices. Because the Chile earthquake was an anomalous event, and not a reflection of the interplay of supply and demand forces in a liquid market, that effect did not flow through to housing stocks a year later.

We have not seen a similar anomalous event in the past year that would explain the decline in lumber prices. So it seems reasonable to expect that the market forces which helped push lumber down a year ago should be echoed in 2012 in the share prices of housing related stocks.

How To Save Your First $100,000

Perhaps these past few years would be the ones that highlighted uncertainty. Everything that we thought would be rock solid had come crashing down. Financial institutions, companies and countries have all stumbled and are struggling to stand back up. Even the weather was highly erratic. It's not at all unusual to worry and wonder how you will weather the storms that enter your life from time to time. Financial stability, apart from being able to pay unexpected bills, funding your child's education or your own retirement, gives the confidence and strength to go through everyday life. By saving money and increasing your income you too can move towards earning your first $100,000. And once you do that, the way to the next $100,000 becomes easier.

The Right Mindset
Saving your first $100,000 is a goal that is neither short nor easy. To get there you need to start training your mind. You need to understand how to achieve this goal and plan accordingly. If you are the kind of person who rarely notes your expenses or budgets, now would be the time to start. All actions need to be oriented towards achieving this goal. Saving could start from reducing that daily Starbucks habit or taking a bus to work. If you understand that these are minor sacrifices for a little less financial uncertainty, the going will be smoother.

Create Short-Term Saving Goals
It's all very well to imagine yourself in a country home post-retirement, but that may not get you going for now. Break your saving goals into further short-term goals. They could be even be weekly goals. For example, a man who ran a dry-cleaning service decided he would take some small change everyday and put it in his daughter's college fund, starting from when she was five. This did not hinder his business or his day-to-day life, and he had a tidy sum by the time his daughter was ready to go to college. The earlier you start and the smaller the amounts are when you first start, then you'll know you have started covering the distance of a long journey. You could have daily saving goals too. This will help keep you fired up for the longer goals. Savings accounts, certificates of deposits, money market deposit accounts and government bonds are good short-term money saving instruments. A savings account is particularly useful as an emergency fund keeper. These instruments also earn you an interest on your savings.

Save on Taxes
If you are employed and your employer is enlisted, go for a 401(k) tax deferred saving plan. The amount you contribute to the plan and the earnings on it are tax-free, until you pull it out for retirement. The percentage you contribute also reduces your taxable income by the same percentage. Early on in your career, you can invest in stocks more aggressively. If your employer is not enlisted with a 401(k) plan, then you could go for an individual retirement account (IRA). Earnings in an IRA account are also tax deferred. To enroll in either, all you have to do is fill out a simple form and contribute. This is a structured way to save, where the interest is compounded, with tax savings to boot.

Reduce Your Interest Burden
We want it all. We want the home, car, home theater system or the double door fridge. With a few easy key stokes online and we can have it. It turns out that instant gratification has a hefty price that could take years to repay and even years off your life. Prioritizing debt and reducing it is the first critical step to saving. Take a look at all of your loans and see how long it will take you to whittle them down. If you do have savings or fixed deposits, you can liquidate some to reduce your debt burden. If you get a bonus or a dividend, think of prepaying a part of your mortgage to reduce your interest burden. In the case of credit card debt, talk to your credit card company and negotiate for a lower rate if possible. Companies are sometimes offering to take on other credit card company loans at a lower interest in their pursuit of new customers. If you need to take out a loan, make sure you look around carefully and take money with the least interest. You will be surprised how many people don't. Do ask friends and family who might be willing to extend interest free loans for shorter periods.

Take Advantage of Employee Benefits
Look at how your employer can be your partner in your savings goal. Many employers contribute an equal amount to 401(k) plans. Contribute aggressively. Avail any other benefits your employer may provide like special discounts at stores, coupons or health plans. If your employer provides assistance for skill upgradation or 'back to school' programs, use them.

Generating Additional Income
Generating revenue is the other oar that will help you reach the $100,000 goal faster. Do you sew, do some other craft or teach? These are some hobbies that can help rake in some extra money. You could tutor children for a few hours or sell your crafts at the weekend market. You could spend some time investing in stocks or do some freelance projects. Don't let any of your skills or talents go to waste. They will help you earn some more money and keep you more fulfilled.

Keep Costs Low
There are always things you can do to keep your costs down like make more home dinners, walk short distances rather than take the car, read online rather than taking magazine subscriptions, take your kids to the park or zoo rather than the local mall, buy your groceries in bulk for the month and you will save more, stop smoking, take lunch to work, use your car until it can't be used anymore, buy a house within your means, if not rent, if you are not using that gym membership then don't renew it, recycle and reuse, use alternative energy to light and heat your home and you can sell what you don't use. The list is endless. There are many possibilities of saving in our everyday life. The dollars and cents will all add up to your $100,000 goal. Your quality of life will improve and not suffer.

The Bottom Line
Getting to your first $100,000 can be fulfilling, with many financial and non-financial insights along the way. It could mean redefining the way you live now, or strengthening it. Be it emergencies, or greater financial maneuverability and therefore opportunities, getting to that first $100,000 is a good habit to learn and keep.

Chart of the Day - Costco Wholesale (COST)

The "Chart of the Day" is Costco Wholesale (COST), which showed up on Monday's Barchart "All Time High" list. Costco on Monday posted a new all-time high of $92.10 and closed up 1.15%. TrendSpotter has been Long since Feb 3 at $85.36. In recent news on the stock, William Blair on March 5 upgraded Costco to Outperform from Market Perform. Costco on Feb 29 reported fiscal Q2 EPS at 90 cents, above the consensus of 87 cents. Costco, with a market cap of $39 billion, operates membership warehouses based on the concept that offering members very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover.

Oil trades sideways as demand fears weigh

Brent crude traded sideways near $125 a barrel on Tuesday as worries about tighter supply due to delays to North Sea crude loadings and an influx of quarterly fund flows battled with negative sentiment stemming from bearish U.S. gasoline demand data.

Brent crude futures were down 8 cents to $125.35 a barrel by 1350 GMT, after settling up $2.55 on Monday at $125.43, then trading down over a dollar early in Tuesday's session.

U.S. crude futures fell 61 cents to $104.62, after rising $2.21 in the previous session.

Both crude contracts were also being pushed around as traders squared off positions ahead of the long Easter bank holiday weekend, but remained stubbornly range-bound.

"Essentially the market is continuing the pattern we saw last month, when it couldn't find a clear direction," said James Zhang, energy analyst at Standard Bank. "Few people are willing to aggressively short this market given the geopolitical risk."

"It's the same pattern we've seen for one and a half months," agreed Filip Petersson, commodity strategist at SEB. "Brent is stuck at between $122-$126 a barrel. We are still waiting for the Iran situation to become a bit clearer."

A combination of delays to North Sea loadings, quarterly fund allocations, ongoing uncertainty over Iran and U.S. manufacturing data helped fuel Monday's rally and is likely to keep prices elevated this week, traders and analysts said.

However, oil futures were put under pressure as the market digested more bearish U.S. oil and gasoline demand data from the Energy Information Administration.

Monday's stronger-than-expected U.S. manufacturing data from the Institute of Supply Management (ISM) and Sunday's Chinese PMI data had raised hopes of a pick up in demand for fuel.

But some scepticism set in following the softer demand data from the EIA. Although January's demand figures were revised slightly higher, they were still down 4.5 percent year on year, and are at the lowest January level since 2001.

"As prices have risen further since then, I don't expect demand to pick up more than the seasonal pattern, if at all," said Carsten Fritsch, an analyst at Commerzbank in Frankfurt. "Talk about demand destruction will continue and cap prices."

Trading is thought likely to stay range-bound ahead of the long Easter bank holiday weekend as the market waits for key jobs data from the United States on Friday.

There are some fears that unless there is a strong positive number in the weekly jobs report, there could be a negative effect on the U.S. growth projections for the second quarter. This is contributing to the bearish sentiment, although traders noted that volumes remained thin.

"The market is taking a breather today, and is likely to be subdued for the rest of the week," said Victor Say, an analyst with Informa Global Markets in Singapore.

"No speculator will want to get caught on the wrong side with a long weekend coming up," agreed Michael Poulsen, an oil analyst at Global Risk Management. "Therefore some 'strange' price movements might occur, as speculators square their books or buy options to protect their current portfolio."

DISRUPTION THREAT

The threat of further supply disruptions in the North Sea is helping to keep a floor under Brent, after British oil major BP (BP.L) said it had shut the Valhall platform in the North Sea last week.

This is creating loading delays for one of the four crude oil streams used for the global Brent price benchmark, traders said.

"Supply outtake in the North Sea has now hit at least 160,000 barrels per day," said Poulsen. He suggested a year-on-year decline of 100,000 barrels per day would be a conservative estimate for 2012.

Traders and analysts also noted that oil futures sometimes benefit from an influx of investor flows at the start of a new quarter as asset allocators rotate into sectors that performed well in the previous quarter.

" The beginning of a new quarter is always a bit tricky - you have more investment money coming in and so the market can be a bit more volatile than normal," said Zhang.

The oil market is awaiting the weekly U.S. inventories figures from the American Petroleum Institute later today. A Reuters poll of analysts has forecast that crude oil stockpiles will rise by 2.1 million barrels.

Traders and investors will also be eyeing the minutes from the U.S Federal Reserve's last policy meeting due today, for any hints of a third round of quantitative easing, which will be supportive for oil prices.