Saturday, April 18, 2015

Buy vs. Rent: If You’re Thinking About Buying a House, You Need to Read This

Millions of Millennials are eager to buy their first house, but one financial expert is urging new home buyers to slow down.

Garth Turner is a best-selling author and financial speaker. From his popular blog, Garth warns that soaring debt levels have created an epic housing bubble, especially in cities like Toronto and Vancouver.

Renting, he argues, could be a smarter move in some cases. Disciplined renters who plough their savings into a balanced portfolio—made up of say, the iShares S&P/TSX 60 Index Fund (TSX:XIU), the iShares S&P/TSX Capped REIT Index Fund (TSX:XRE), and the iShares DEX Short Term Bond Index Fund (TSX:XSB)—could actually come out ahead of homeowners with less risk. (more)

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Texas Pacific Land Trust (TPL): This Oil Stock Doubled... Even in a Bear Market

Instead of mining metals or producing oil or natural gas, royalty companies generate cash by earning revenue streams on the production of natural resources.
This business model means royalty companies don't have the same risks and expenses producers have. Because they don't spend money to explore or produce, royalty companies are also shielded from swings in the prices of commodities... and they generate massive profit margins.
In short, royalty companies allow investors to participate in the natural resource sector with far less risk than buying producers and they have big upside potential. (more)

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Corn Futures Testing Support

Both old crop and new crop corn futures are currently testing support levels defined by the January and March lows. Prices are hovering about 30 cents above the fall lows, or the lows established on October 1st. Depending on who you talk to and the basis at various points in the Midwest, corn prices are approaching cost of production for many producers. A benchmark cost of production is perhaps $4.00? December futures are trading near $4.00 and with a 30 under basis for new crop corn you're talking current prices well below cost of production. Keep in mind that prices don't have to stop going down because they're below the cost of production. That's not my point. My point is that decisions can and will still be made in regards to acreage devoted to corn production in the U.S. this year. (more)

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PowerShares DB U.S. Dollar Bullish ETF (NYSE: UUP): This Could be the Contrarian Play of the Year

Two of the most important lessons I’ve learned in more than 20 years of professional analysis and trading are:
1. The market nearly always overreacts, and
2. Investors are blind to the writing on the wall when fundamentals turn.
And I’m glad this is the case, because betting against market overreactions is one of the best ways to make money in the market. It’s how I plan to make 67% with this week’s trade and how we recently closed a 69% winner in Trade of the Week. (more)

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Alibaba Group Holding Ltd. (NYSE: BABA): This “Piggybank Investment” Will Make You a Millionaire

Many investors are looking at the steep skid Alibaba Group Holding Ltd. (NYSE: BABA) has taken since its IPO as a major cause for concern.
But for us, this is only an opportunity.
In fact, this sell-off plays right into what I told you when I put Alibaba in “The Million Dollar Tech Portfolio.” Here’s what I said at the time:Keep buying bits and pieces regularly – whatever you can afford at the time – whenever it sells off.”  (more)

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Bank of Canada Warns of Real Estate Price Drop in Canada

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Oasis Petroleum (NYSE: OAS)

For traders with a bit more nerve and a feisty contrarian spirit, shale oil exploration and production stock Oasis Petroleum (NYSE: OAS) offers a different set of virtues.

The first is the very bearish sentiment surrounding shale oil stocks. If prevailing wisdom was negative on more traditional energy stocks, it was downright hateful for this subgroup. When the bottom fell out of oil prices last year some shale stocks tumbled more than 80%. OAS was one of them.

As loved as shale stocks were when oil prices were rising, they were completely forsaken by the end of 2014. Nobody wanted to touch them, and headlines from drilling operator employment to real estate demand in states hosting this industry kept fear levels high. That is a recipe for a stock that could have big potential gains once it starts to move higher -- and OAS has started to move higher.

Many shale stocks actually stopped falling in December and have been trading in healing sideways patterns since then. This allows bulls and bears to rethink their strategies.

It may not seem this way since OAS remains in a trading range, but something important has changed for the better. Volume is soaring and most of it is changing hands as prices moved higher, not lower. This pushed the cumulative volume study to levels not seen since July -- before crude oil prices broke down.

That tells us that demand is strong here and suggests the trading range is close to an upside breakout. Indeed, Oasis has spent the past week trading above its key 50-day average, something it has not been able to sustain since the middle of last year -- again, before oil prices sank.

Based on the size of the trading range, the upside objective could be as high as $27.50, which is where the falling 200-day average will be in just a few weeks. And that would still only be a 38.2% retracement of the entire bear market trend from last year. Parameters for this trade reflect greater volatility and the very wide stop provides greater risk in the hope of capturing a very big reward.

Recommended Trade Setup:

-- Buy OAS at the market price
-- Set stop-loss at $16.25
-- Set initial price target at $27.50 for a potential 47% gain in eight weeks Please share this article