Friday, August 30, 2013

5 Ways To Protect and Grow Your Retirement: Whether You’re 45 or 75 or Somewhere In Between

from Gold Seek
We just recently Money Weekly‘s first birthday, and this milestone also got me thinking… If I had a magic wand and could instantly pass along a bundle of critical information to my peers, what would that message include? Since I don’t have a magic wand, I had to distill a bit of my practical wisdom down to five points (no easy task).
#1. We Are All Pension Fund Managers Now
These days, unless you are a government employee, there is a 97% chance you will not retire with a pension. Instead, you probably have some sort of IRA or 401(k) and other personal savings that you will need to supplement those measly Social Security checks. We have all been thrust into the job of managing our own personal pension funds, so we might as well embrace the challenge and continue our financial education.
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Southern Copper Corp (NYSE: SCCO)

Southern Copper Corporation engages in mining, exploring, producing, smelting, and refining copper and other minerals in Peru, Mexico, and Chile. It is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce anode copper; and refining of anode copper to produce copper cathodes, as well as refined silver. The company operates the Toquepala and Cuajone mine complexes and the smelting and refining plants, which produce copper with production of by-products of molybdenum, silver, and other material. It also has the La Caridad and Buenavista mine complexes and the smelting and refining plants that produce copper with production of by-products of molybdenum, silver, and other material. In addition, the company operates five underground mines that produce zinc, copper, silver, and gold; a coal mine, which produces coal and coke; and a zinc refinery. It has 80,512 hectares of exploration concessions in Peru; 123,293 hectares of exploration concessions in Mexico; 100,383 hectares of exploration concessions in Argentina; 35,958 hectares exploration concessions in Chile; and 2,544 hectares of exploration concessions in Ecuador.

To review Southern’s stock, please take a look at the 1-year chart of SCCO (Southern Copper Corporation) below with my added notations:


SCCO has been in a persistent downtrend since January of this year. During that time the stock has also formed an important trend line of resistance (red). Always remember, any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. As you can see, SCCO’s trendline was very important. Now that the stock has broken that resistance SCCO should either move higher or begin to form a base.

The Tale of the Tape: SCCO has broken a downtrending resistance. The stock should be bottoming out and eventually moving higher. Now would be a good time to watch the stock to identify a key level of entry, like for example, on a pullback down to $26.
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Sprott Resource Corp. (TSX: SCP) : Has a Misstep by Management Created an Opportunity for Value Investors?

It was only eight months ago when the management of Sprott Resource Corp. (TSX: SCP) announced that it would institute a lucrative dividend.  At the time, current Sprott Resource investors, while maybe a little confused, were for the most part willing accomplices.  After all, the initial rate would give them a handsome yield and pushed the price of the stock up over 10% on the day of the announcement.  The stock continued to soar as income oriented investors piled in, laying there claim to a juicy yield of over 10%. A few weeks after the announcement, the stock was up over 24%.

Fast forward to the present.  The stock price is now down roughly 20% from where it closed the day prior to the dividend announcement and down over 40% from its 2013 peak.  Why the crash?  Management decided to pull the plug on the dividend and in the process, pulled the rug out from under its investors.  Even with the hefty yield, investors that bought after the dividend announcement still find themselves, for lack of a better term, holding the bag.   The only good news…the bag is loaded with potentially valuable assets. (more)

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Trader alert: One of the world's biggest banks could be on the verge of another big decline: JPM

JPMorgan has declined 50% in value – twice, along line (1) – since 1998.

Now this leading financial company is back at this key resistance line again, and has formed a bearish rising wedge. It's now looking like support of the wedge is breaking...

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COTD: Earnings & Profits Per Share Suggest Overvalution

Today’s chart of the day was the result of a question by my friend Richard Rosso who asked if corporate profits were suggesting that the current market environment was becoming overvalued.  The timing of the question was apropos as I was already pondering a statement made by Matthew O’Brien at the Atlantic who stated:
“Just because the price of something is going up doesn’t mean it’s a bubble. Even if it’s going up a lot. And even if it’s something you don’t like. After all, there might be a good reason it’s going up so much. A good reason like … record profits.”
While Matthew was addressing whether, or not, the artificially inflated markets have once again started to reach “bubble” territory, and there are certainly arguments that suggest it well could be, the importance of his argument really focuses around the notion of record profits.
The mistake that is likely being made by many is the assumption that when profits reach a new “record” it is the beginning of a new trend rather than the end of something that begin some time ago.  The issue comes when mainstream analysts begin manipulating data in order to justify current market dynamics.  In this instance in order to justify high market prices one must assume that the current “record” levels of profits will continue forward indefinitely.  The problem with that assumption is that this has never been the case historically and one that will likely not manifest in the future.
The chart below shows several things of importance relating to the current valuation of the financial markets.  The only valid measure of market valuation that is historically consistent is trailing twelve month REPORTED earnings per share.  Using other measures such as operating, or pro-forma, earnings to try and justify current market levels is both inconsistent and inaccurate when performing valuation analysis.  I have also included price to corporate profits (NIPA) per share for a comparative measure.
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Why Oil Could Rise Even Without Syria Tensions

Oil markets got a bit of a shocker Wednesday from a SocGen prediction that Brent could reach $125 a barrel in the coming days in connection with a U.S.-led retaliation against Syria. And if there’s a big regional spillover from this, SocGen says $150 Brent could be not far off.

But the investment bank isn’t the first to the game on a bullish oil call.

Yves Lamoureux, president of Lamoureux & Company, a market advisory firm based on behavioral economics, set a new price target of $140 for WTI crude about two weeks ago. Unlike SocGen, his call has little to do with the Syrian conflict.

Lamoureux backs up his oil call with these three reasons:
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