Where Are the Bargains in This Market? MCD, CAG, PG

The market continues to forge higher, and the Dow finally made a decisive close over the psychologically important 12,000 mark this week. The mini-panic Friday, which was caused by the unrest in Egypt and elsewhere in the Middle East, seems to be a distant memory. But is that all we’re going to see of a “correction”?

It’s possible, but it’s hard to believe that a seven-month, 27% run in the S&P 500 would give back less than 2%, and then only for a single day!

More likely, the market will follow an erratic, see-saw pattern over the next few weeks, lunging higher for a day or two at a time, then quickly selling off. I still think the hedgers among us will get a decent chance to make some money playing the short side. My preferred hedging vehicle is the ProShares UltraShort QQQ Fund (NYSE: QID), below $10.45 with a stop 10% below your entry point.

Is anything worth buying at these rarified levels? Obviously, you’ve got to be extra careful. Ben Bernanke’s ZIRP (zero interest-rate policy) has distorted — that is, inflated — the prices of hundreds of stocks, making it hard to find true bargain stocks.

However, a few blue chips continue to offer good potential for double-digit returns over the next 12 months. I would single out McDonald’s (NYSE: MCD) at $77 or less, ConAgra (NYSE: CAG) at $23 or less, and Procter & Gamble (NYSE: PG) at $63 or less. Buy them in that order.
A Cheap Emerging Market

Overseas, India stands out as one of the world’s best values. The Bombay market has dropped 14% since Nov. 5. During the same period, the S&P gained nearly 7%. Of course, India has its share of economic problems. Inflation is flaring up, food prices in particular, forcing the central bank to raise interest rates six times in 2010 and again last week.

At only 13 times trailing earnings, though, the Indian market now sells at a significant discount to our own — and I don’t have to tell you which country is likely to grow faster over the next five, 10, 20 years. In my judgment, this is a rare opportunity to build a stake in India on the cheap. Buy the PowerShares India Portfolio (NYSE: PIN) at $24.50 or less.

McAlvany Weekly Commentary

The Next Decade: An Interview with George Friedman

A look at This Weeks Show: - Does America have the will to be an Empire?
- Tactical traps vs. long term strategic thinking
- The balance of power in Europe, the Middle East, & Asia

About the Guest: George Friedman, Ph.D., is an internationally recognized expert in security and intelligence issues relating to national security, information warfare and computer security. He is founder, chairman and Chief Intelligence Officer of STRATFOR, (Strategic Forecasting Inc.) a private intelligence company that provides customized intelligence services for its clients. Click Here

Order the Next Decade Today: Click Here

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Kiplinger's Personal Finance - March 2011

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Chart of the Day: GDP & Debt

Faber: Global Inflation Far Higher Than Official Data Read more: Faber: Global Inflation Far Higher Than Official Data

The latest official inflation data show that consumer prices rose 1.5 percent in the U.S. last year, while they increased 2.4 percent in the euro zone for the year ended in January. Marc Faber, publisher of the Gloom, Boom and Doom report, says don’t believe those numbers.

Inflation totals 5 percent to 8 percent in the United States and slightly lower in Europe, he tells CNBC.

“I guarantee you … the annual (U.S.) cost of living increases are more than 5 percent, and the Bureau of Labor Statistics (which computes the consumer price index) is lying,” Faber says.

“Inflation is much higher than what they publish. I would imagine for most households it’s between 5 and 8 percent in the United States, and in Western European countries maybe a little bit lower — 4 or 5 percent.”

Inflation isn’t just a problem in the developed world, Faber explains. High food prices will cause political turmoil in Pakistan just like they have in Egypt, he says.

“You may not have the problem in Saudi Arabia and the Emirates, because there the governments can heavily subsidize food. But I’m particularly worried that what has happened in Egypt will happen in Pakistan.”

Not everyone is concerned about U.S. inflation. "Although growth appears to be picking up, there is still very little reason to be concerned about rising prices," Jim Baird, an economist at Plante Moran Financial Advisors, tells The Associated Press.

6 Penny Stocks to Buy for the Biotech Boom These stocks offer low price but not extraordinary risk

There is a boom in biotech stock picks right now, thanks to innovative technologies and cutting edge treatments that allow small companies to tap into big revenue with just a single pill and FDA approval. Biotech stocks can bleed money for a short period of time, but with just one successful trial these unprofitable penny stocks can see soaring share price and buyout offers from big pharma.

And most importantly, deliver big gains to stock owners.

Of course, there is big risk in biotech investing too. If a company doesn’t have a proven track record or good management and research staff, a penny stock in this sector can collapse and leave you with nothing.

That’s why I apply some high standards to cheap biotech stocks — they must be listed on a major exchange like the NASDAQ, NYSE or AMEX, they must have a proven track record of earnings or sales success, and they have to have quantitative buying pressure backing them up.

Here are six such biotech stocks that make the grade, and could be breakout buys for investors:

Rexahn Pharmaceuticals (RNN)

Clinical stage pharmaceutical company Rexahn Pharmaceuticals (AMEX: RNN) is developing and seeking to deliver cures for cancer and disorders of the central nervous system. Over the past 12 months, this penny stock has soared an impressive +123%, compared to a gain of +18% for the Dow Jones in the same time frame. The stock has shown growth potential as of late too, and is up +32% over the past three months. (more)

Sugar Jumps to 30-Year High on Australia, India Supply Concerns

Sugar futures surged to a 30-year high on mounting concern that global supplies will trail demand following crop damage in Australia and India, two of the world’s leading producers.

Cyclone Yasi, which pounded the coast of Australia’s Queensland state, may cause the sugar industry losses starting at A$500 million ($504 million), a growers group said. Output from India may be less than predicted after heavy rains, a producer organization said. Prices have more than doubled since the end of June.

“The cyclone is the story,” said Jason Cole, a broker at Starsupply Renewables SA in Geneva. An extended rally will depend on the severity of the damage, he said.

Raw sugar for March delivery climbed 1.35 cents, or 4 percent, to settle at 35.31 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 36.08 cents, the highest for a most-active contract since November 1980. (more)