Given today’s plunge, coupled with the warmer weather forecast and start of the shoulder season of weaker demand, MoneyShow's Jim Jubak is rebuying shares of the second-largest natural gas producer in the US with an initial target price of $19.
Back on February 3, I sold Chesapeake Energy (CHK)—my favorite stock for playing volatility in the price of natural gas—out of my Jubak’s Picks Portfolio.
The rally that had taken the share price from the December low of
$16.71 to $21.01 was a bounce, I said, rather than the beginning of a
sustained recovery. (See my post on the sell here.)
The stock closed even lower than that December level today, March 9,
at $14.24. That’s near a new 52-week low for the shares and is closing
in on the five-year low at $13.59.
I think it’s time to rebuy—maybe for another trade after a bounce,
maybe for a more sustained recovery—we’ll see. Tomorrow, I’ll re-add
these shares to my Jubak’s Picks portfolio. (more)
It’s pretty easy to understand the appeal of indexing, particularly after a year like 2014. Less than one out of five active mutual fund managers
beat their respective benchmark last year. And those few that did beat
their benchmarks did so by a pitiful margin of just 1.8% on average.
Even
worse, many fund managers are really just closet indexers. There is too
much career risk in going against the grain, so most large fund
managers tend to buy the same stocks and sink or swim together. So … why
pay steep fees to active managers for underperform when you can buy an
index mutual fund or ETF with expense ratios of 0.1% or even lower in
some cases? (more)
Best Buy Co., Inc. operates as a multi-national, multi-channel
retailer of technology products in the United States, Canada, China, and
Mexico. Its stores offer consumer electronics consisting primarily of
television and home theaters; digital cameras and camcorders; DVD and
Blu-ray players; portable electronics, such as MP3 devices, headphones
and speakers, car stereo, navigation and satellite radio; and all
related accessories. The company’s stores also provide computing and
mobile phone products, including notebook and desktop computers, tablets
and e-readers, mobile phones and related subscription service
commissions, and related accessories; entertainment products, such as
video gaming hardware and software, DVDs, Blu-rays, CDs, digital
downloads, and computer software; and appliances, including large and
small appliances, and kitchen and bath fixtures, including faucets,
sinks, toilets, and bathtubs.
Take a look at the 1-year chart of Best Buy (NYSE: BBY) below with added notations:
BBY had been on a steady trend higher from its April low up until its
$40, December high. After that, the stock has hit that same $40 (green)
mark a couple more times only to end up eventually pulling back down.
If BBY can finally break through that $40 resistance the stock should be
headed higher. A close above that resistance would also constitute a
new 52-week high.
The Tale of the Tape: BBY has a 52-week resistance
at $40. The possible long position on the stock would be on a breakout
above that level with a stop placed under it.
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Renowned precious metals analyst David Morgan is out with a new book called “The Silver Manifesto.” In a chapter called “The Debt Bomb,”
Morgan lays out the biggest problem and the biggest reason to own
precious metals. Morgan contends, “Basically, the United States have
exported our inflation to every other country. So, for them to stay
competitive, they are required to weaken their own currencies for what
is called competitive advantage. It simply means if they don’t print . .
. their currencies would become too strong, and they would not be able
to export. In order to keep trade flowing, these other countries are
basically required to do what the U.S. government does, and that is
export a great quantity of un-backed paper promises that are impossible
to pay back. That’s the crux of “The Debt Bomb.” It’s going to explode. .
. . The basic premises are: You default on the debt . . . or you keep
kicking the can down the road, and you continue to debase the currency,
which is what governments have always done when it’s a non-backed
currency. If you look at the value of the Federal Reserve from 1913 to
now, in a little over a hundred years, the Federal Reserve itself will
admit that 100 cents is now worth about 4 cents. So, you have lost 96%
of the value of the U.S. dollar. . . . That has been a failure, a
tremendous failure. That is a collapse in slow motion. Now, what we are
really arguing about is what’s going to happen to the last 4 cents of
the U.S. dollar. . . . It looks to me that at some point, a tipping
point, that you will get an acceleration . . . and things will change
dramatically.”
On the Greek debt crisis, will it be forced to default? Morgan says,
“Yes, and the problem is everyone in power is acting like a bunch of
kids. No one wants to be an adult and state the problem clearly. This
new regime in Greece actually has. They are the only truth tellers at
the political level that actually said we are bankrupt.”
On the price of silver, Morgan says, “What is $16 silver compared to
$5 silver over a decade ago, and basically they are the same price.
Isn’t that amazing, this inflation that nobody talks about. It you take
the $5 silver price back in 2003, and you use the true money supply of
fiat currency today, hey guess what, it is pretty close to $16. So, in a
nut shell, because you are buying the same silver for basically the
same amount over a decade ago, it’s really on sale. It is really a
bargain.”
When might the economy and the “debt bomb” explode? Morgan predicts
this fall. Why? Morgan says, “Momentum is one indicator and the money
supply. Also, when I made my forecast, there is a big seasonality, and
part of it is strict analytical detail and part of it is being in this
market for 40 years. I got a pretty good idea of what is going on out
there and the feedback I get. . . . I’m in Europe, I’m in Asia, I’m in
South America, I’m in Mexico, I’m in Canada; and so, I get a global
feel, if you will, for what people are really thinking and really
dealing with. It’s like a barometer reading, and I feel there are more
and more tensions all the time and less and less solutions. It’s a
fundamental take on how fed up people are on a global basis. Based on
that, it seems to me as I said in the January issue of the
Morgan Report, September is going to be the point where people have had
it.”
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In a shocking interview with PBS, billionaire mutual fund icon Jack
Bogle, revealed that Wall Street is unapologetically stealing from
millions of hard-working Americans. Bogle showed how “70% of your market
returns” go straight to the pockets of Wall Street, and only 30%
actually goes to you, the investor.
And Bogle should know.
Bogle, who founded the Vanguard Group in 1974, has had a decades-long
insider’s view of the entirely corrupt fee structure on Wall Street. (more)
