Momentum stocks can be a canary in the market’s coal mine.

If you were paying attention to the big momentum plays this quarter, you could have pinpointed when the market was ready to turn lower.

Now, with short-term losses mounting, you might have the chance to spot the first buying opportunity by monitoring these very same stocks. When the momentum names begin to catch a bid, we could see the beginnings of an oversold bounce that would send stocks higher in the short-term…

During the first half of 2012, investors fully dedicated their efforts to Wall Street’s momentum darlings. These are the “hot stocks” in the midst of multimonth bull runs. Expectations run high with these momentum names. Valuations run even higher.

It is a ridiculous notion to wait for a correction (or even a pullback) before buying these red-hot stocks. After all, the share price will never fade. Or so the frenzied logic goes…

It’s probably no surprise to you that Apple was the de facto drum major of the momentum marching band. Apple shares shot up more than $230 between Jan. 1 and mid-April — when the furious momentum rally finally topped out.

Apple’s pullback — and the eventual pullbacks in several other overhyped stocks — was inevitable. Apple was displaying all of the classic signs of a blowoff top. The investing public was convinced shares could go nowhere but up. Analysts and the financial media joined the party with their own irrational expectations, including $1,000-plus price projections and declarations that any fund manager who didn’t own Apple should be immediately fired…

But just when the stock appeared to be completely unstoppable, shares abruptly reversed.

The selling wasn’t outright panic. As of this writing, it remains orderly. The market didn’t take an ax to the Apple tree. It only shook it a bit.

It’s how turning points are born. Shorts shake the branches to see if any weak hands fall from the tree. They’re after the low-hanging fruit. These are the folks who bought shares near the height of the rally. Their conviction is far weaker than that of the long-term investors sitting on substantial gains. So they sell. The selling puts enough downward pressure on the price to convince other longs to part with their shares.

Of course, disbelief prompts many buy-and-hold investors to hold shares of a falling stock much longer than they probably should. There are (and will continue to be) many investors who will stand by Apple — even if its decline accelerates. After all, Apple is a great company that makes interesting, in-demand products. But even if expectations from Apple faithful remain high, we doubt the stocks’ incredible performance during the first half of 2012 will be matched anytime soon…

It wasn’t just technology or high-priced stocks that caught the attention of momentum investors.

Smith & Wesson Holding Corp. (NASDAQ:SWHC) — which I recommended to my premium readers in December 2011 — was swept up in the rally that began on Jan. 3.

I didn’t somehow predict the buying frenzy would begin as soon as we recommended the stock. We knew Smith & Wesson shares had held up well during the height of the European crisis last fall. And we had multiple fundamental reasons for picking up shares when we did.

From a fundamental perspective, Smith & Wesson was improving its operations. Management had already started the process of unloading the company’s underperforming security division. Revenue and guidance strengthened as management concentrated on building the company’s core gun manufacturing business.

Gun sales were growing across the board. In fact, gun sales actually booked a one-day record the day after Thanksgiving 2011. The FBI reported a record number of background checks, adding up to nearly 130,000 gun buyers on the day. The old record was set in 2008 — at only about 98,000.

Stories highlighting record-breaking sales throughout the gun industry began to gain traction in the media shortly after our initial recommendation. Attitudes regarding firearms ownership were improving. More and more women were taking to gun ranges across the country. These tangible stories took hold with investors — and the trend that initially pushed shares of Smith & Wesson above $4 in December began to accelerate. A momentum play was born.

By early April, Smith & Wesson shares more than doubled, to $8. With the successes of high-priced momentum plays fresh in their minds, traders and investors jumped at the opportunity to own shares of this fast-moving stock.

But Smith & Wesson was not immune to the momentum sell-off. Shares gave back more than $1 in a matter of hours in early May as new concerns over the economy and eurozone surfaced. Shares have recovered somewhat. And we’re still hanging onto open gains of approximately 95%. But the warning bell has sounded. It’s time to be extra vigilant as skittish investors rush to raise cash during uncertain market conditions.

While the secret of Smith & Wesson’s potential is now more widely known, the stock has a much better chance at weathering the momentum sell-off than some of the more closely followed names on the market. Traders shook Smith & Wesson’s tree. But investors have stepped back up to the plate and bought back shares.

Only time will tell if the stock will consolidate and move higher from here. If Smith & Wesson and other momentum names catch a bid, we could get our first signal of a move higher.

Sincerely,

Greg Guenthner
for The Penny Sleuth

How to Time the Market with Momentum was originally featured in the Penny Sleuth.

Sometime in the next few weeks we’re going to find out if Greece can afford to stay in the euro. We’re also going to find out if Spain and Italy can afford to leave the euro. Access to credit markets is the key issue. The stigma of default will lock a country out of capital markets. If you don’t have a plan to replace your currency and then devalue it, you’re doomed.

But first, the crisis in Greece didn’t come to a head over night but it can’t be far away. Rival political parties have been unable to form a government. New elections are scheduled for the second week in June. The financial has definitely become political. The people have run out of patience with unsound money and the world built on it.

All that said, the Greeks managed to make a €430 million payment to hold-out creditors last night. Nearly 97% of Greek creditors agreed to the restructuring of the country’s debt in March. That wiped off over €100 billion in Greek debt and resulted in 70% losses for some of the bondholders who accepted the deal. Not all of them did.

Yesterday, the bondholders who didn’t accept the deal got paid in full. There is still about €6 billion worth of debt owed to creditors who refused to participate in the restructuring. You can imagine that the Greek decision to pay the holdouts would anger the creditors who agreed to the deal. They look like schmucks now. Schmucks.

But in the current scheme of things, €430 million is chump change. The real issue is whether the Greeks are going to default on €150 billion worth of government debt. If those bonds are owned by foreign creditors – let’s call them other European banks – then the Greek crisis becomes a European crisis. We’ll come back to this issue of “containment” shortly.

For the Greek people, the most alarming aspect of what’s going on is that their life savings are at serious risk of a massive, overnight, non-voluntary devaluation. There are a lot of words for the magical process of turning one thing into something else: alchemy, transmutation, and transubstantiation come to mind. But to the Greeks it’s going to look a lot like highway robbery.

You’ll go to bed one night with your life savings denominated in euros. You’ll wake up the next day with them denominated in drachma. And your euro savings will be automatically converted to drachma at an exchange rate not of your choosing. For example, your 1,000 euros will become 100 drachma…or even 10,000 drachma. The nominal amount won’t matter. What matters is that the devaluation strips you of 70% or 80% of your purchasing power.

Most people would avoid that kind of value destruction if they could. Maybe that explains why €700 million was withdrawn from Greek banks on Monday, according to remarks made by Greek President Karolos Papoulias and reported in the Wall Street Journal. The Journal reports that between €2 and €3 billion in deposits have been withdrawn from the Greek banking system each month for the past two years. January was a high point, with €5 billion.

A bank run by any other name would look as desperate. And who wouldn’t be desperate now?

Leaving the euro, devaluing the drachma, and defaulting on debt owed to foreign creditors are Greece’s best long-term economic survival strategy. But the unavoidable side-effect is to destroy the savings of the people, not to mention usher in a period of lower standards of living.

That won’t win you many votes. It may start a revolution.

And how do you prevent the Greek precedent from being imitated by the Spanish and the Italians? To be candid, we don’t think it matters much now. Greece can’t afford to stay in the euro. The Spanish and the Italians can’t afford to leave it.

The economies and banking systems of Spain and Italy are indispensable to Europe. If they leave the euro, there is no euro. The Greeks can leave, devalue, default and use a weaker currency to claw their way back to economic competitiveness. If the Spanish and Italians leave, they lose access to private capital, they lose access to the ECB and they take down Europe’s banking system. They can’t leave. More importantly, they can’t be allowed to leave.

This makes the task of the European Central Bank (ECB) much easier. It simply has to guarantee Greek debt owed to all non-Greek creditors. Or, it could simply buy that debt. This would solve the problem of anyone outside Greece taking losses on Greek debt.

This is what corporatism looks like, when the Big State and Big Finance become the Big Power in the economy. Losses cannot be tolerated. Any loss results in lower equity capital at a financial firm would require selling assets. Since everyone owns a piece of everyone else, and owes to everyone else, any major loss in one place results in losses everywhere.

Of course it’s absurd that Europe is moving toward this kind of “extreme socialism”. The people most responsible for the crisis are not accountable and the people who have saved get punished. The elite are enriched and everyone else is enslaved.

This is why the financial crisis could so quickly become a political and social crisis. When people don’t think they can get justice from the courts or the cops, and when they think that cheating is the only way to get ahead in a system, the political and financial order is on borrowed time. The clock is ticking.

Regards,

Dan Denning

The Daily Reckoning Australia

Why Greece Can’t Afford to Stay in the Euro was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Source

As the Stock Market has trotted down over the last ten trading days, it is now sitting essentially at Custer’s Last Stand?”  We see Lower Highs and Lower Lows which suggest more on the downside and although we are not completely oversold, the market is weighed down by the Major Problems in Europe and a Poor Jobs Report:

The two critical items the US market is focused on are the shennagins in Europe and the Facebook IPO to come:

The chart of the Market Indexes shows that all key Lines in the Sand are broken today and we are now at Custer’s Last Stand:

The critical 2900 on the Nasdaq has been broken and for sure we are on the Low Road Scenario at this time:

The Latest Breaking News is that we had a Bingo Signal today on the Nasdaq and that means we are either close to a bottom with an oversold signal or it is the start of heading down a lot further…just look at the previous grey bars:

Two of the Canaries are gasping for Oxygen and they are AAPL and PCLN!

It is not surprising with all the uncertainty in Europe and the rotten Jobs Report that the VIX is stirring:

Net-net, it is no news to you that the S&P 1500 is now oversold with ~52% in the Bottom Three Buckets:

Likewise with regard to Accumulation and Distribution, Laggards are leading the Leaders by approx. 2:1.

The Bottom Line is that we are close to the Floodgates being opened and the only hope to turn this market around is to see a strong BOUNCE Rally with the Facebook IPO on Friday.  If the reception turns out to be anemic then we wait to see where the Market Indexes find support and hope that it is no worse than a 10% Correction.

Best Regards,

Ian

Source

By Karen Starich

I wrote to my subscribers beginning on April 8, 2012 to be very mindful of three very critical dates: 4/19, 5/3, and 5/18, and to watch for a setback in the financials.  I also warned that there could be default worries regarding California that would most likely hit the news in May and potentially unravel further in August.  So far these dates have proved to be significant as we have watched the markets fall from their April highs with the financial sector leading the way.

Tomorrow is the final critical date, and I find it ‘maybe’ not so coincidental that Facebook is launching it’s IPO on May 18th.  Is Facebook about to bail out California?  This is perhaps not such a wild idea, and could be the reason the IPO date was moved up from June, as news reports suggested earlier in the year.  California is cash strapped at the moment, to the tune of $16 billion.  Perhaps California needs an injection ASAP before the dreaded earthquake (that would be ‘financial earthquake’) hits the beaches of sunny CA.

The markets could be up tomorrow along with the surf in California, but the sunny days may not last too long.  There could be another very harsh setback just around the corner, so be very careful!

The following is by Karen Starich, who uses astrology to forecast events in the financial markets. Astrology Traders provides specific dates and in-depth analysis of future events for the financial markets through weekly updates, trade alerts, and educational webinars. Next webinar this Sunday!

Related Astrology Posts:

Market Astrology: The Facebook IPO Risk Trade

Market Astrology: Solar Eclipse

Market Astrology – Strategy Going Forward

Go to Source

“Liquidity is like crack: The more you rely on it, the greater is the craving.”
— Louis Lowenstein, Sense & Nonsense in Corporate Finance

Liquidity is one of the most overhyped of modern financial ideas. In the context of the stock market, all liquidity means is that you can buy and sell easily. Lots of liquidity means lots of trading volume. It means the bid-ask spread is narrower in a liquid stock than it is in one that is illiquid.

As it turns out, the best opportunities are often the most illiquid. In what follows, we’ll take a look at illiquidity as an investment strategy.

Markets are more liquid than ever these days, but that is not all a good thing…

Back in 1960, investors held their stocks for an average of seven years. No one complained about a lack of liquidity. Today, people hold stocks for on average for four-eight months.

The ability to get in and out of a stock quickly means you have lots of sloppy owners. As Lowenstein points out: “Those who expect to sell out quickly and cheaply are more likely to buy for speculative or foolish reasons and to act as uninformed owners in between times.”

An illiquid stock is, by its nature, more likely to attract a smarter shareholder base. This is simply because the people going in know they can’t get out of it as easily, so they are more careful about how and why they get in.

This may have something to do with the outperformance of illiquid shares.

Roger G. Ibbotson and Wendy Hu of Zebra Capital Management studied the performance of liquid stocks against illiquid ones. They found that illiquid stocks tended to trade at a discount to more-liquid stocks. “Investing in less-liquid stocks thus pays,” they write.

Moreover, they found that less-liquid assets tend to become more liquid over time, thus helping to erase that gap.

Ibbotson and Hu also note that investing in less-liquid securities as a strategy has an advantage in that it “avoids, or invests less in, popular, heavily traded glamour stocks and favors out-of-favor stocks, both of which tend to revert to more-normal trading volume over time.”

That’s all fine and makes sense. But you can really see it in practice by looking at portfolios investors construct.

Nick Padgett and Stephen Mack are the managing directors of Frontaura Capital. The fund invests in frontier markets such as Cambodia or Mongolia. I’ve never met them personally, but hope to someday. I was introduced via email by my friend Doug Clayton at Leopard Capital. They share their shareholder letters with me, and the latest one had an interesting observation on this liquidity idea.

Frontier markets can be very illiquid. It can take weeks, maybe months, to buy even small positions in Mongolian stocks on the Mongolian exchange, for example. This means frontier markets are cheaper, but not always. Frontier markets have some liquid stocks. And the valuation disparity between the liquid and illiquid is great. The most-liquid stocks can trade at the same price-earnings multiples as S&P 500 stocks like Wal-Mart or Intel.

“Thus,” Padgett and Mack write, “those willing to invest beyond the most-liquid frontier stocks could have a performance advantage, provided they remain patient and committed during difficult market periods, when less-liquid stocks may perform worse.”

As evidence of the disparity, consider the MSCI Frontier Markets Index. It is made up of the largest and most-liquid frontier companies. Padgett and Mack don’t own a single stock in this index. “Many of these stocks are good companies,” they write, “but they do not trade at the most-attractive valuations.”

At the time of their letter, Frontaura’s portfolio had an average price-earnings ratio of 6 with a price-to-book ratio of 1 and a yield of 5%. By contrast, the MSCI Frontiers Markets Index had a PE of nearly 11, a price/book of 1.5 and a yield of 4%. Frontaura’s valuations are cheaper in the less-liquid names.

I offer another exhibit of an absurdly cheap illiquid stock: Siem Industries.

This trades on the Pink Sheets under the ticker SEMUF. Siem is a holding company in the oil and gas, marine transportation and shipping industries. Siem owns pieces of Subsea 7 S.A., Siem Offshore and Star Reefers. Siem Industries is another stub play, as these three companies are all publicly traded.

The stake in these three companies is more than double the market cap of Siem Industries.

Siem Industries owns other stuff, too. It owns 100% of Siem Car Carriers, which owns ships that carry cars. It has a stake in a private equity fund that owns a variety of Scandinavian companies. It has stakes in a potash mine and an insurance affiliate. None of this is counted above.

The catch?

The shares don’t trade much. Over the last three months, the average trading volume was 945 shares. That’s a daily volume of about $60,000. And that overstates it. I checked over the last 16 trading days and found that on 11 of those days, no shares traded at all. Not a single share. On many days, you’ll see 200, 400 or 600 shares trade. As I write, the bid-ask spread is enormous. You pay $74 per share to buy and get $63 to sell.

That, I think, is the big reason for the discount. But this is not a situation that will persist forever. In the meantime, there is a whopping discount to the patient shareholder, and probably a rewarding ending.

Note: Siem Industries is not an official recommendation. I think it’s too illiquid for me to recommend here. Too few would get in on the trade.

In any case, liquidity as an investment strategy is a useful idea, as these examples show.

Sincerely,

Chris Mayer
for The Penny Sleuth

Liquidity, Crack and the Quest for Better Returns was originally featured in the Penny Sleuth.

Libertarianism is, obviously, an idea whose time has come. Or maybe you don’t like that term. There are plenty of others. My preference is old-fashioned. I like the term “liberal” — or maybe “radical liberal” — to distinguish my own intellectual commitments from the generation that naively believed that government could be created and limited by things like constitutions or social contracts.

Whatever you want to call it, the libertarian push is the animating force behind today’s most-exciting business ventures, technological innovations, cultural movements and political trends. Where the so-called left is most successful today, it is due to the urge to end war and protect civil liberties against state encroachment. Where the so-called right is most successful, it is due to the emphasis on keeping what you earn and giving freedom to the entrepreneurial class.

And think about all the exciting technologies that are transforming our lives in the digital age. They are wonderful not because they are giving us greater access to the dubious offerings of the public sector, but precisely the opposite. They are allowing us to re-create civilization itself based on human volition, voluntary association, borderless economic exchange and choice as the driving agent of change.

What if there were a kind of intellectual exposition of the most wonderful ideas in the world of liberty? It turns out that there is one. It is called FreedomFest. This year, it is in Las Vegas, Nev., July 11-14, 2012. This year is particularly exciting because it promises to be the biggest yet and to feature all the key minds that are carving out a future for human liberty, despite the continuing push by leviathan to control our lives.

I time attended two years ago, and the whole experience blew my mind. I might even go further and say that it changed my outlook on life and the prospects for liberty in our time. There was a gigantic diversity of people and institutions represented. There were large sessions attended by everyone and hundreds of breakout sessions you could attend based on your personal interest in some particular cause.

Because the subject of human liberty is as big as life itself, there really are no limits on what is being discussed. The result is somewhere between an intellectual salon and a large-scale commercial bazaar. It is both very serious and very fun. The levity that exists here makes for a great learning environment because the mind stays constantly stimulated.

It makes sense to me that a conference on liberty should be fun, enjoyable, unpredictable. Nothing should come prepackaged. This is something that Mark Skousen intuited when he started this event. Let the socialists be the dreary ones, wallowing in depressing predictions about the plight of the workers and peasants. Let those who love liberty celebrate ideas in an atmosphere of reckless disregard for convention and approved ways of thinking! This is what is encouraged and what you get at FreedomFest.

Laissez Faire Books is not only serving as the official seller at the entire event. We are also holding our own panel. This panel will be competing against other panels, so I wanted to put together something completely different that would attract people and give attendees a new point of view.

The theme concerns new ways to live a happy and free life, and promote the right ideas, in these odd times when the leviathan rules the physical world and liberty is making gigantic advances in the digital world.

Here is what we came up with: “Liberty That Works: New Approaches in New Times.”

We are featuring six presentations.

• Robert Murphy, the economist who dared to eschew academia and set out on his own to become one of the great teachers and researchers of our times. He has a shy temperament, but he overcame it to use digital media to produce some of the greatest economic education tools you can find anywhere. He has written a leading text for high-school students, and he never misses an opportunity to teach, always with brilliance and wit. His topic is alternative educational institutions
• Wendy McElroy is a philosopher, historian and theorist whose work, dating back to the 1970s, seems incredibly prescient in the digital age. So far as anyone can tell, for example, she was the first to consistently apply the idea of liberty to the subject of intellectual property and publicly debate others who were waffling on the issue. She has a fabulous new book coming out from Laissez Faire called The Art of Being Free. It is brilliant, and I can tell you this: There are passages in here that had me nearly crying tears of joy. Her subject is simple, frugal, independent living
• Jacob Huebert is the young attorney who wrote the best primer on the topic of libertarianism. The audio version of his book is being released to members of the Laissez Faire Club. He is particularly enamored with finding practical ways to carve out large-scale zones of liberty in a statist world and has some unique thoughts on strategy as well. Example: He eschews political organizing completely. His topic is private forms of security and dispute management
• Chris Mayer is the author of World Right Side Up, a book that traces emerging markets around the world to show how we are transitioning to a post-American world economy. I’m particularly delighted with his participation because he has a nose for economic trends big and small. His book had my heart racing with excitement about the great trends for liberty in far-flung places. His topic is supporting capital and commerce globally through unconventional investing
• Stefan Molyneux needs no introduction to any liberty-loving student under the age of 30. He might be considered the philosopher king of the digital age. His audience is gigantic and his passion for liberty boundless. Yet he somehow manages to maintain a beautiful, service-oriented humility in the promotion and application of the ideas of the libertarian tradition. What’s particularly impressive to me is he has done this all on his own, without institutional support. His topic is redefining communities of peace and learning
• Finally, I’ll be speaking on the need to defy the plan through your own digital civilization. Yes, I’ll be speaking about the Laissez Faire Club, but also about many other ventures that are charting new paths toward building a global intellectual push for things that are most important in life.

A shocking diversity of people and ideas! This is the way it should be. I’m hoping to see what emerges when all these great minds come together in an atmosphere of freedom and learning. In the right kind of setting, with the right kind of encouragement, everyone can come away from an event like this with new, creative ideas for tackling the challenges ahead of us.

I hope to see you there.

Jeffrey Tucker

FreedomFest was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Source

Source

By Karen Starich

Facebook is set to launch it’s initial public offering on May 18th. The social media giant has an initial target valuation as high as $100 billion. Looking at the astrology for May 18th we can get some clues as to how the stock will do, and the potential risks involved with the trade.

Mark Zuckerberg, co-founder and Chief Executive at Facebook, recently celebrated his 28th birthday making the Sun’s placement in the IPO chart conjoin to his birth Sun. This is a powerful placement for the founder and the company to share in a new creative venture that will carry far into the future.

Looking at the short term trading opportunity for the stock IPO, there are some considerations in the May 18th date that should be taken into account. The strongest aspect for the IPO is a trine with Saturn (steady business model) to Venus in the sign of Gemini (social networking and communications). Venus, however is moving retrograde, and for a corporation’s chart could indicate they may have an initial breakdown that they will have to recover from. The positive trine shows the potential to be practical and overcome a potential setback.

The weakest point in the May 18th chart, and the one that could cause the most immediate difficulty, is a sesqui-square (135 degree angle) between Jupiter (the planet of expansion) and Pluto (the planet of covert agendas). The aspect suggests there could be inconsistent and abrupt changes in business acquisitions that could involve the company in red tape and lead to investor uncertainty. Recently Facebook made two acquisitions, Instagram and Microsoft patents, totally over $1.5 billion. According to some reports the Instagram deal was the sole brainchild of Zuckerberg’s, and the board’s approval was basically “symbolic” after the deal was already done. As of the IPO date the deal with Instagram remains open while the FTC completes a review of the takeover. This could bring some setbacks to the company’s stock the first week of June when there could be negative news regarding the company’s possible over extension and over expansion that could be viewed as a credit risk. Jupiter is also inconjunct Saturn (150 degree angle and shaped like a boomerang) on the 18th, and suggests investors should use very careful deliberation before making any financial move with this IPO.

A good chart to compare is the Linkedin, Inc. (LNKD) IPO, which ironically was on the same date of May 18th last year. The stock soared to $120 and then fell back to $60 within the first month. There could also be turbulence in the general markets at the end of May, similar to last August, so from my view I prefer to let the dust settle on this IPO.

The following is by Karen Starich, who uses astrology to forecast events in the financial markets. Check out Astrology Traders for specific dates and in-depth analysis of future events in the various markets she covers.

Related Astrology Posts:

Super Moon Brings Down The Financial Sector

Market Astrology: Solar Eclipse

Market Astrology: More Netflix Downside

Go to Source

Income investing to many people means picking up a few “go-to” industries. Utilities, energy producers and health care stocks are all obvious plays for anyone looking to lock in larger income. Unfortunately, it just isn’t that easy.

My portfolio has plenty of the first two categories. We have a handful of above-average utilities and energy stocks. But we have only one health care play. If you look at other income-focused portfolios, you’ll find a number of health care real estate trusts and pharmaceutical makers.

Now, we’re not unaware that changing demographics in this country and rapidly growing health care costs have made this a powerful sector. But the numbers are all wrong.

On the real estate side, there are still a number of issues concerning what the property should cost. So smart investors have to remain picky when it comes to hospital and retirement home REITs.

But when it comes to pharmaceuticals, we’re dealing with a whole other set of problems.

We have been covering the ongoing “patent cliff” in name-brand drugs for years now. Some $49 billion in annual pharmaceutical sales are at risk of losing their exclusivity.

And for a drug maker, that’s your most important asset…exclusive rights to make and sell your drugs.

This isn’t some far-off problem. Last year, industry leader Pfizer lost exclusive rights to Lipitor. That drug brings in — or, more accurately, brought in — more than $4.5 billion in annual revenues. That’s a sizable chunk of change.

Others have faced similar challenges. Eli Lilly lost exclusivity to Zyprexa — $1.9 billion in yearly sales. GlaxoSmithKline lost Advair — $4.7 billion in U.S. sales. The list goes on and on. There are also plenty of big drug patent expirations on the horizon. In fact, the majority of these problems are yet to come for most major companies.

Now that we are further along on this patent cliff, other potential plays are popping up. There is one company we recently released to our Lifetime Income Report subscribers…

Up until now, we’ve been a bit cautious to get into it, however. Its long and successful history didn’t give it a pass on this patent cliff problem. It was very much in trouble.

However, through all of this, the company still managed to generate $11.4 billion free cash flow and increase its earnings per share for the 28th year. It has been able to do that in face of some of the stiffest economic environments in history and its expiring patent issues.

And, it has ensured continued growth through their proactive portfolio transformations.

What really strikes us about this company’s approach is how, despite its long legacy, it refuses to be a dinosaur. Its current goal is to realize half of its health care revenue from products developed in the last five years. Considering the backward-looking industry it finds itself in, that’s great foresight…

Sincerely,

Jim Nelson
for The Penny Sleuth

A Crack at One of the Fastest-Growing Sectors in the Market was originally featured in the Penny Sleuth.

We hate being right.

After all, we have been predicting that people in the US and most of the western world will soon find themselves living in a Terminator-esque world where they will be tracked every moment of the day (US Government Builds World’s Biggest Domestic Spy Complex), 1 the US Government can jail indefinitely and even kill its own citizens (NDAA Bill Can Send Americans to Prison Indefinitely Without Trial), that the assets of westerners will be taken and consumed by their vampire overlords (France mulls 100% tax rate), they will be restricted in their ability to travel outside the country (Congress about to pass a bill that restricts travel and revokes passports with no trial) and it will be impossible to get your money outside of the country to protect it from confiscation (capital controls).

On the topic of capital controls we had predicted what is now happening. We’ve been writing about it for some time. The only thing that has surprised us is the speed in which it is all happening. We are rarely shocked but we have been surprised at the speed with which the world’s banks have stopped accepting US citizens as clients.

It was only a few weeks ago that we penned, “International Banking Options for Americans Closing Down Fast” and stated that our sources had notified us of at least one bank (in Latvia) which has stopped accepting US clients because of the rules put in place by the IRS in the Foreign Account Tax Compliance Act.

That was then, this is now. Here is just one man’s recent statement:

“I don’t open U.S. accounts, period,” said Su Shan Tan, head of private banking at Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory attitudes toward U.S. clients as “Draconian.”

The phone has been ringing off the hook at TDV Media and Service’s headquarters. Nearly hourly word has come in of another bank that has stopped accepting US clients. Some have even started closing accounts for US clients… a trend we definitely expect to continue.

Don’t believe us? Check out this article from the San Francisco Chronicle. They only got one thing wrong. The title of the article is “U.S. Millionaires Shunned by Banks as Tax-Evasion Law Looms”. But, it’s not just millionaires. It’s all US citizens with a foreign bank account.

BLOODBATH

It’s a bloodbath. People who make their living off of helping US citizens set-up foreign bank accounts to diversify some of their assets outside of the country are closing shop… all in the last few weeks. They are walking away from their honest, often decades-old business like victims of a bomb blast… in shock.

We feel very bad for them but we knew this was coming and have been hiring people almost daily to help out with the demand. If you are a US citizen and have money in a foreign bank account that you would like to keep there, expect a call any moment. It’ll be the bank and they’ll tell you that you have 72 hours to close your account and to tell them where to send the funds. If you don’t want to send it back to the US where Barack O’Bomber already has grand plans for how to spend it then your options are seriously limited.

But, here’s the good news, there is still options. Here are just a few options that are still on the table:

• There is at least one bank in the Caribbean that is still willing to accept US clients. If you get a call from your bank that you must move funds immediately and do not want to repatriate them then you can open an account with them. We have already identified the bank and have set-up relationships to get your account opened and processed all via the internet within 24-48 hours . Contact info1@tdvoffshore.com for more information
• You may still have a few months before your bank contacts you. In that time, we have found a number of ways to get a second, foreign passport inside of 30-60 days. Once you have a passport other than a US passport you can then convert your foreign bank accounts to your new citizenship and avoid having your accounts closed or reported to the IRS. Contact info1@tdvpassports.com for a consultation on the best solution for you.
• You can also convert a significant portion of your cash into precious metals… which is a very smart move to begin with… you can easily buy and/or transport these assets to a number of international destinations where property rights are respected and the governments are not in massive debt and in need of confiscating your assets. This includes Singapore, Switzerland, Hong Kong, Uruguay and many more. See “Getting Your Gold Out Of Dodge” for specific, detailed actionable info on doing this.

Even if you don’t need any of these types of services at this time, but it is finally dawning on you that the fiscal cliff is approaching very quickly and want to be prepared for what is to come, all of this type of information is the main focus of The Dollar Vigilante newsletter. Subscribers are regularly updated with news, analysis and info for how to survive the coming western financial system collapse.

SELF INTERESTED SCARE MONGERING?

You may be thinking, “this guy just seems to be trying to scare us and promote his own products”. If you’ve followed my writing for any length of time you will know that I’ve been writing about these events for years. And, up until recently we didn’t even offer products. We began writing The Dollar Vigilante two years ago because the writing on the wall had become clear and we wanted to help as many as possible to survive the coming western nation-state and financial system collapse… but we were inundated with emails asking us, “Ok, we agree with your prognosis but what can we do to protect ourselves?”

It was then that we began scouring the world looking for second passport and offshore bank account services and found them lacking. We looked for other information such as is included in Getting Your Gold Out Of Dodge and came up empty. That’s when, as good entrepreneurs and capitalists, we decided to offer the products ourselves. That’s what good capitalism is about… finding ways to help people in need.

The monetary system that the world has lived under for the last 41 years, since the US went off the pseudo-gold standard in 1971, is entering the end game. And we are sorry if we need to be so abrupt in trying to wake you up to it. But, to show you the kind of brainwashing and psychological issues we are regularly up against, here is a conversation we recently had from a woman who had called us to see if she really needed to make her move to protect herself ASAP:

Jane: I just don’t believe it is that urgent. There is nothing on the nightly news about this… and my financial advisor says there are green shoots and we are in recovery.

TDV: What would it take you to realize that it was time to get out of the US?

Jane: I’m not leaving until they shut down the border.

We sat there speechless for about a minute after that one. She has normalcy bias. And, normalcy bias is very dangerous in times like these when everything is about to change.
We suggest you don’t wait until the borders close to get out. And, this is not just a US phenomenon. The entire west will follow in its footsteps… and other nationals as well, such as the Chinese, also should see the need to internationalize themselves (and they do, “China’s Millionaires Looking For Way Out”). There is already a wall around China, don’t wait until there is one around you before you start taking the steps necessary to protect yourself from leviathan.

Regards,

Jeff Berwick

Hear That? It’s The Sound Of The Doors Closing For Americans was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Source