InvestMacro Forex News

The question about which of these two metals to invest in has no simple answer, it is more a question about what kind of investor you are and what you believe in.

If you are a long term investor who is just looking to participate in gold online trading or seeking to preserve value against diminishing currencies, a mix of gold and silver might be something to consider. Gold has, as we know, been a preserver of wealth since before the Roman empire. Lately, however, gold has been under a lot of pressure. It is true that gold preserves value over the really long run, but in the short run it is often used as a tool for traders to bet against something else.

For example, the major bull run in gold price that we saw begin a few years ago, was not due to the fact that gold was all of a sudden seen as a better preserver of wealth than before but rather because of the fear that the FED was creating too many dollars and easy credit. The thought was that these actions would ultimately push up inflation.

So in this sense, the question to ask yourself when you buy gold is not so much if it will preserve its value over time, it will (No matter what happens, your grand-kids will likely be able to obtain as much merchandise with the same amount of gold in 100 years from now). The more pressing issue when buying gold is what you think of the world economy and whether central banks around the world will be printing more money than they should. If so, is it time to buy gold?

The reason we have seen gold drop in price during 2013 is not because gold all of a sudden gold became less a vehicle of preserving value but rather because investors started to believe that inflation would not tick up. It is important to understand that gold preserves value from the point that it is bought just like any other investment instrument. For example, an ounce of gold passed 2000 USD roughly a year ago not because gold was a better preserver of value but rather because of many factors at play in the global economy. If you bought at that point, the idea that the economy was going down the drain and likely to see more central bank money printing needs to come true in order to justify that price. This means that you cannot just buy gold at any price and expect the value to always increase, there is always the matter of timing involved just as the old saying goes, “buy low and sell high”.

Silver Trading

Silver investing and trading is a different kind of trade all together. Silver, like gold, has historically been quite good at preserving value. It has not had the slow and stable growth that gold has had, apart from the volatile journey gold has been on the last couple of years (it was over two decades ago that we saw the same kind of volatile movement in the gold market). On the other hand, silver has a tendency to swing more – making it a perfect metal to trade on a short term basis.

The reason that silver swings more than gold is actually a combination of a few things. First of all, the global market in silver is much smaller – making it more vulnerable to people trying to manipulate its price  – and throughout history there has been a lot of cases of silver price manipulation exposed. There is also almost no interest from central banks around the world to make the silver price stable, since most of their holdings have historically been in gold. More recently, since the mid 1970’s, central banks have been more likely to be buying foreign bonds and other securities to back their currencies with.

The second and last reason is macro economical, a lot of the silver that is mined is not mainly used for storage of value but rather a big chunk of it goes straight into production. Silver is used in everything from watches to computers and toasters. It is true that this goes for gold as well but since the silver market is smaller, the affect on the silver price is more substantial than the same affect on the gold market.

So what is best for the next coming years? Well there is no reason to think that we are going to have a major crash in equity’s again anytime soon. That should put a cap on how high gold can rise in the near-term. Although looking out into the future, if the global economy starts to get overheated and we start to get some serious inflation again, that would be an environment likely to favor gold prices rising again, since currencies will lose value against gold.

When it comes to silver, some of the market is definitely used to preserve value, just as the same thinking is applied to gold. The fact is that silver is also used heavily in production as well and if the global economy really takes off, we could start seeing silver prices rise without that being a signal of inflation or a new collapse in equity.

So to summarize, gold has historically been a more defensive investment play against central bank interventions and as an alternative store of value especially during inflationary economic periods. Silver, on the other hand, can be seen as a more balanced investment. It can be used as a possible store of value as well as an in-demand commodity for use in manufacturing production when we have an economy on the rise.

People have a great desire to make a good fortune on any investment they undertake. Some do not have the knowledge on where to make investments. A new technique of investment has cropped up. It is basically investing in stock and forex markets. Binary options trading is the new method that is hitting headlines globally.

Binary option simply means investing in the stock and forex markets on the basis of positive predictability. An investor hopes that transactions will yield returns. There are numerous reasons as to why it is becoming popular and the most preferred .It is a method that is very simple to execute. It does not involve bureaucratic procedures that an ordinary investor may not easily comprehend. All that they are required to do is go the stock market and state how much of their capital they are willing to invest. After this they take a back seat and only anticipate that there will be favorable yields. Binary Options are booming, everybody knows this.  Most Binary Options brokers already have some kind of affiliate programs to maximize their results.

In most cases when people are taking risks to invest, they hardly know how much loss they can suffer. They only hope that losses may not be catastrophic such that there is loss of investor capital. Often they peg their aspirations on high profits. But advantages of binary option override that of any known investment. This is because the probable loss that can be suffered at any time of transacting business is known and cannot go beyond that given limit. As a result it has prompted majority of people to channel huge amounts of funds towards this venture.

Nothing makes a lot of sense to an investor than reduced operational costs. When costs are reduced people are certain to make returns on their investment. This unique characteristic is only applicable in binary option trading. This is because; despite the presence of middlemen who undertake the transaction on behalf of investors, no amounts of service fee are advanced to them. Therefore, investors walk away with all the profits accruing to them.

It is very satisfying and encouraging when the investment does not take long periods before generating profits. This means more funds will be ploughed back into the business and enhance its growth. With binary options trading, returns are realized immediately before the close of business. This means that a person can go investing a given amount of capital and even predict an accurate amount of profits realizable. It indeed provides an avenue for rapid economic growth. Since immediate profits can be invested in other sectors that drive the economy.

Universally, there is hardly any known type of investment that comes with a warranty. Most businesses will continue trading into the oblivion regardless of whether profits are realized or not. But with binary options trading, the end of business transaction is well known. Due to this fact potential investors will be able to plan their investment plans and avert unpleasant results. In addition to this feature, it can easily be transacted through the internet with ease. This means that investors do not have to be physically present at the bourse.

History shows that the U.S. should pay attention to economies in Europe

By Elliott Wave International

The economy has been sluggish for five years. There’s no shortage of chatter about “why,” yet few observers mention deflation.

One exception is a hedge fund manager who spoke up at the recent Milken Institute Global Conference.

The presentation by Dan Arbess, a partner at Perella Weinberg and chief investment officer at PWP Xerion Funds, was startling because of how deeply it broke from the standard narrative.

We’ve been wrong to assume that the economic crisis is over, Arbess said. … The threat of deflation is once again rearing its head.

“The persistent risk in our economy is deflation not inflation,” Arbess said.

CNBC, May 2

Deflation appears to be more than a threat. Consider what’s already happening in the U.S. and in Europe.

Industrial production declined in April by the most in eight months, indicating American manufacturers will provide little support for an economy beset by weaker global markets and federal budget cuts.

Bloomberg, May 15

Europe is slipping further into recession.

The euro zone economy shrank more than expected in the first three months of 2013 … as France returned to recession for the first time since 2009 and Germany barely edged forward.

It marked the longest recession for the euro countries since the currency was introduced in 1999.

New York Times, May 15

Here’s a relevant fact: The Great Depression of 1929-1932 started in Europe before coming to America.

The economic wave may be much bigger this time.

Robert Prechter made this observation:

Total credit will contract, so bank deposits will contract, so the supply of money will contract, all with the same degree of leverage with which they were initially expanded.

Conquer the Crash, second edition, p. 111

EWI published this chart in March 2012.

The enormous credit expansion that started in the early 1980s is due to be leveled.

You can prosper during the next economic contraction. Many people did just that during the Great Depression. Robert Prechter’s New York Times bestseller, Conquer the Crash, can teach you what you need to know to protect your portfolio during these high-risk financial times.

For a limited time, you can get part of Conquer the Crash for free. See below for more details.

8 Chapters of Conquer the Crash — FREE This free, 42-page report can help you prepare for your financial future. You’ll get valuable lessons on what to do with your pension plan, what to do if you run a business, how to handle calling in loans and paying off debt and so much more.   Get Your FREE 8-Lesson “Conquer the Crash Collection” Now >>

What is Forex Scalping?

Scalping in forex trading may be defined as the process where forex traders open a trading position for a short time period. This period usually lasts a few seconds and may not exceed a minute. Traders who employ this trading strategy are commonly referred to as scalpers. Such traders often prefer this trading strategy as it minimizes their trading risk. The scalpers argue that subjecting their trading positions to longer time frames exposes them to the risk of making losses as the market may decide to go against their trade. When they scalp, they have the opportunity to close their trades before this happens. However, this type of trading also carries substantive risk as they often have to use high leverage, which is the only way they can make reasonable profits.

Scalping in Forex trading may eventually lead to better profits than conventional trading methods as the scalpers are able to compile their small profits into a large final tally over a shorter time period. The scalping process may either be conducted manually or through the use of automated software. The manual way involves the traders searching for viable signals, analyzing them and making conclusive decisions on what currency pair to buy or sell. The automated way involves the trader adjusting some technical settings on the automated software so that it may look for relevant signals and interpret them accurately.

Scalping with Charts & Binary Options

Scalping in forex trading requires the extensive use of forex charts, as this is one sure way of assessing market trends. While scalping may seem to be an attractive trading strategy, it is worth noting that extensive experience with such a strategy is the only way a trader may be able to profit from their trades. It is also important to note that the entire trading position may be wiped out within seconds due to the high leverage involved.

Binary trading is one of the latest tools being used by Forex traders. Forex binary options forecast how certain currencies will perform on the market in a certain period, giving you a chance to plan your trade. The purpose of scalping using binary options is that you can easily select Forex pairs that will bring you maximum profit at a very low risk. You can sample trade binary options with 24option, which offers you several binary option platforms to trade on and tutorials on how to effectively use them.

Purpose of Scalping

Scalping is becoming popular in Forex trading and The purpose of scalping is to earn profit within the shortest time. A scalping transaction lasts for only a few seconds and if it goes beyond a minute it is no longer considered as scalping but normal trading. The short trading period ensures no transaction is left open, therefore minimizing risks incurred in long trading processes.

There are usually small differences between the buying and selling price, the trader capitalizes on this difference so as to maximize profit. There is no limit to the number of scalping transactions you can carry out in a day. Currency is normally liquid and there is no paperwork involved. The process can either be manual or automated. However most Forex traders are opting for automated systems because it is easier to generate and interpret charts and read trade signals.

You can as well scalp through a broker by maximizing on the difference between the bidding price and the ask price. Always ensure that you choose the right Forex pair as the number one purpose of scalping is to ensure you gain from every transaction you make.

By www.CentralBankNews.info
    The global consequences of the U.S. Federal Reserve’s planned wind up of quantitative easing again dominated monetary policy this week, from testimony in Washington D.C. to talks in Moscow by the G20 finance leaders, as the only two central banks to meet maintained their policy rates.
    The decisions by the Bank of Canada (BOC) and the South African Reserve Bank (SARB) were largely expected so markets’ interest was mainly focused on any changes to the banks’ outlook, especially by the BOC’s new governor, Stephen Poloz.
    But any hopes of fireworks from Poloz were dashed, confirming expectations that he would bring continuity and a steady hand to the BOC. Though the wording of the bank’s forward guidance was tweaked, the message was the same: At some point rates will go up as the economy normalizes. The economic forecast was also updated and largely in line with expectations.
    Three of the five new governors that have taken office this year among the world’s major central banks have made substantial policy changes at their first opportunity.
     Haruhiko Kuroda at the Bank of Japan (BOJ) launched the new phase of monetary easing, Mark Carney at the Bank of England (BOE) took the first step toward using forward guidance while Agus Martowardojo at Bank Indonesia (BI) raised rates for the first time since February 2011 in a pre-emptive to reduce inflation expectations and stabilize the rupiah currency.
    Changes by the other two new governors of major central banks – Elvira Nabiullina of the Bank of Russia and Poloz at BOC – have so far been more subtle
    Worldwide, 12 banks have changed governors so far this year, including the Bank of Israel (BOI) whose designated head, former Governor Jacob Frenkel, is having to testify over what he describes as an “unfortunate misunderstanding” that appears to involve a bottle of perfume or cologne at a duty free shop in Hong Kong airport in 2006.
    In addition to Japan, Canada, the U.K., Russia, Indonesia and Israel, the central banks of Venezuela, Slovenia, Rwanda, Ukraine, El Salvador and the Democratic Republic of Congo have new governors or presidents this year.
    (Click here for a list of all central bank governors)

    In South Africa, Gill Marcus, the first female governor of SARB, found herself in the uncomfortable position of having to keep interest rates steady despite weakening economic growth, due to inflationary pressures from a decline in the rand currency.
    The rand has been caught up in the general downdraft from the expected withdrawal of asset purchases by the U.S. Federal Reserve later this year, down 14 percent against the U.S. dollar this year.
    But this pressure comes on top of a general depreciation of the rand since March last year as labour unrest in the country’s critical mining industry has undermined investors’ confidence. Since early March last year, the rand has lost almost one-quarter of its value against the U.S. dollar.
    So far, the impact on South Africa’s inflation rate from the rand’s drop and higher import prices has been contained by weak pricing power amid a sluggish economy. But Marcus is worried that any further drop in the rand would quickly fuel inflation.
    Just as finance ministers and central bank governors started arriving for their Group of 20 meeting in Moscow, the People’s Bank of China took another step toward freeing up its state-controlled financial system and moving toward a market-based system.
   The move, which was widely flagged, was described by the PBOC as aimed at “further promoting market oriented interest-rate reform” by “full liberalization of financial institutions lending control.”
    Like most central banks, China’s central banks targets interest rates to control inflation and since July 2012 the benchmark one-year lending rate has been 6.0 percent and the one-year deposit rate 3.0 percent.
    The PBOC also sets a maximum limit on the interest rates that banks can pay depositors and a minimum rate on banks’ loans, ensuring the banks are profitable so they can finance the planned investments in China’s economy.
    The minimum lending rate had been 70 percent of the 6.0 percent benchmark rate, i.e. 4.2 percent while the maximum deposit rate was 110 percent of the 3.0 percent deposit rate, i.e. 3.3 percent, giving banks a guaranteed margin of minimum 90 basis points.
    The central bank has now scrapped the minimum rate that banks can charge for loans, a move that should cut the cost to companies and allow the banks to compete with the shadow banking sector.
    For now, the PBOC retained the ceiling on what banks can pay depositors, but it is only a question of time before that restriction is lifted.

    Through the first 29 weeks of this year, central bank policy rates have been cut 68 times, or 24.6 percent of the 276 policy decisions taken by the 90 central banks followed by Central Bank News, marginally down from 24.8 percent last week and down from 25.4 percent the previous week.
    While the global trend towards lower policy rates paused this week, the number of rate rises has slowly rising. Policy rates have been raised 14 times this year, accounting for 5.1 percent of all decisions, steady from last week.

    LAST WEEK’S (WEEK 29) MONETARY POLICY DECISIONS:

   
    NEXT WEEK (week 30) eight central banks are scheduled to hold policy meetings, including Turkey, Nigeria, Hungary, Sri Lanka, the Philippines, New Zealand, Fiji and Trinidad & Tobago.

 
  www.CentralBankNews.info

By MoneyMorning.com.au

TECHNOLOGY: Hey Mr. Ford…This is How You Make A Car

The auto industry in Australia is dead. In fact, globally there are a number of car makers that are struggling to adjust their business to the changing needs of society.

It’s for this reason companies like Ford and General Motors have put their hand out for help. And government has been willing to keep them alive.

With technology today, there’s no need for big, thumping cars with gas guzzling engines. Advances in green technology mean the days of the combustion engine are numbered.

‘Yeah, yeah, we’ve been here before Sam. Electric cars will save the world, blah, blah, blah.’

Our guess is that thought may have run through your head at some stage, and that’s fair. There’s been big promises by electric car makers before, and they haven’t delivered.

But what held back the makers of electric cars was the lack of infrastructure and technology to do so. ‘Traditional’ car makers have been making cars based on an age of industrial revolution.

That is, getting people to operate machinery to build cars. It worked so well for so many years and created companies worth hundreds of billions of dollars.

But yesterday we saw a video of a car maker that operates in the world we live in today. This company embraces technology and realises efficiency is best achieved by computer programs and robots. That’s not to say their process doesn’t need people at all. It just means robots make their cars better than people do, so they use them more.

This link will take you to a video. This video will show you how Tesla Motors [NASDAQ: TSLA] make cars.

If you were unaware, Tesla is the electric car maker founded and run by serial entrepreneur Elon Musk. Watch it. You will be amazed, because you’re looking at a company that’s looked into the future of their industry and created a vision. They’ve then built their company around this vision and put it into practice.

If you are at all wondering why Ford and Holden aren’t competitive in Australia, and why the traditional car makers are struggling against upstarts like Tesla, the video should help clear that up.

It’s not the immediate end of big companies like Toyota, GM and Ford, but it’s certainly a sign that if they don’t change, it could be lights out before they know it.

HEALTH: How the Flick of a Switch Could Change Lives

If you’re having a baby you don’t get to choose its gender…usually. What we mean by that is you may or may not know, but in some countries you can choose the gender of your unborn child.

In countries like Thailand and Malaysia you go to the right kind of doctor and say, ‘I want a boy,’ or ‘I want a girl.’ Using modern medical technology the doctor goes through the process of getting the right sperm and egg to get the right gender. What seems like a crazy concept is a relatively simple procedure.

This is all achievable because of our understanding of DNA and the human genome. Over the last 10 years our knowledge of the structure of humans has moved forward at a rapid rate. This is thanks to the research that had come about because of the Human Genome Project.

And a new breakthrough means genetic manipulation may just become a normal part of having a baby. Gender selection will be common place and the traits of your future child will be customisable.

Scientists at the University of Massachusetts have been able to ‘silence’ the extra chromosome that exists in Down syndrome patients. This breakthrough means the syndrome can be ‘switched off’.

This is a proof of concept discovery. It wasn’t trialled on people. The belief is it won’t necessarily reverse Down syndrome, but it will potentially eliminate certain symptoms of the disorder.

The bigger picture from this breakthrough is the impact genetic manipulation might have on the world. We could see a huge improvement in the health and wellbeing of generations to come. All thanks to being able to turn on and off particular genes. It’s another example of genetic science advancing at great speed.

With the ability to manipulate genes to ‘switch off’ down syndrome, you wonder where this science will lead to next.

Already there’s a listed company working in the field of genetic science that we think has the ability to end disease and illness with the ‘Flick of a Switch’. 

Fear mongers have it that these ‘crazy scientists’ are playing ‘God’ and just want to create ‘designer babies’. But perhaps the flip side is a future generation that doesn’t suffer from some of the ailments and illnesses that impact people’s lives today.

From our perspective we see genetic manipulation become more prevalent and relevant, and being used for the greater good, not to create designer babies.

ENERGY: Hypersonic Is Now a Little Step Closer

Back in late March we wrote about Reaction Engines. Reaction are a UK based company working away at a world first Hypersonic engine system. The name of the project is SABRE, which stands for Synergetic Air-Breathing Rocket Engine.

The point of this project is to work with the European Space Agency (ESA) to build the world’s first hypersonic plane. In effect that means you’d be able to travel from Sydney to London in under four hours.

And there’s been an update to the work that Reaction is doing with the ESA just in the last week. The press release from the ESA reads,

‘The UK government has announced plans to invest in the development of an air-breathing rocket engine – intended for a single-stage-to-orbit spaceplane – following the ESA-managed feasibility testing of essential technology.

‘The £60 million investment, provided through the UK Space Agency, will back technical improvements leading to construction of a prototype Synergistic Air-Breathing Rocket Engine, or SABRE.

‘Designed by UK company Reaction Engines Ltd, this unique engine will use atmospheric air in the early part of the flight before switching to rocket mode for the final ascent to orbit. The concept paves the way for true spaceplanes – lighter, reusable and able to fly from conventional runways.’

This is a big deal for Reaction. Like any tech company, there’s always a need for ongoing funding. To get assurance from the UK government that the funding is there is reassuring for the company.

We have no doubt that Reaction is on track to get a fully working engine on a plane soon. With the ESA helping and the UK funding it should happen a lot faster than previously thought.

When a test flight actually happens it will reshape the entire concept of intercontinental travel.

The whole aerospace industry will change for the better. And that’s the whole point of revolutionary technology, to change the world for the greater good.

Sam Volkering+
Technology Analyst, Revolutionary Tech Investor

Join Money Morning on Google+

From the Archives…

Quantam Computers – Why It’s Time to Believe the Unbelievable
12-07-2013 – Sam Volkering

Red Alert: Why This Stock Market Rally is a Trap
11-07-2013 – Murray Dawes

Why Oil Could be the One Commodity to Defy the Doom…
10-07-2013 – Dr Alex Cowie

Gold Breaks A Record
9-07-2013 – Dr Alex Cowie

Time to Plan for the Year-End Stock Rally?
8-07-2013 – Kris Sayce

By MoneyMorning.com.au

Rogue economist Phil Anderson has gone on the record to say America’s heading into a property boom and might take Australia with it. Phil’s theory is based around an 18 year real estate cycle and the key variable of land values. He says it can lead you to much better investment decisions. That’s worth a look in anyone’s book.

Phil says the signal that confirms we’re into a new beginning of the cycle is US stocks hitting a record high. That’s what he predicted would occur.

Both the Dow Jones and S&P500 indexes hit record highs this week. Will Phil’s other predictions also be right? 

The Importance of ‘Higher Bottoms’

We don’t know. What IS intriguing is Phil wrote an article in 2008 with this headline: ‘Property Will Fall Until at Least 2011, Then US Stocks Will Lead the Way’. So far that forecast is on track.

That’s more than you can say for the Chairman of the US Fed, Ben Bernanke. He spoke this week, with moves in the market mostly attributed to him. The hapless Bearded One has consistently overestimated the growth of the US economy, despite having an army of economists behind him.

Perhaps it’s inevitable for an organisation drenched in conventional thinking. That’s not something you could ever accuse Phil Anderson of. You could argue a part of Phil’s previous forecasting success — being all in cash in 2007–8 springs to mind — is due to the fact that he did not train as an economist in university.

We were curious enough to go back and check out again what he told Dan Denning in a Port Phillip Publishing Strategy Session back in March. If you need a refresher, he was speaking at time when the Dow Jones had closed higher for nine days in a row, the longest winning streak for the Dow since 1996. The DJI was 14,455 at the time.

This is how Phil explained the behaviour of US stocks:  

‘The stock market starts making higher bottoms, which we got right through 2010 and 2011, but those higher bottoms happen on actually worse economic news. And that’s what fools everybody…the higher bottoms, even though they’re on worse economic news, are actually telling you that the market thinks things are improving. I’ve noticed over the years, except at the extreme highs, the stock market never gets that wrong.

‘So once those higher bottoms were occurring it was fairly clear to me that despite the economic news getting worse, and despite in the US property news getting a little bit worse, company earnings were improving, and therefore when company earnings improve the prices of stocks simply have to go up. And that’s what’s been happening over the last couple of years. That process has happened every single time, in exactly the same way, since 1800 in the US.’

The Dow Jones is now over 15,500. Hmm. The question, of course, is this: is the recovery in America thanks to Ben Bernanke’s trillion dollar money printing, or a genuine rebirth as Phil claims?

Well, that depends on how you see the commodity markets.

Panic or Boom?

The second major pillar of Phil’s argument is for the worldwide commodity boom since 2000 to not only continue, but to go even higher. Compared to the mainstream view right now, he looks even more crazy. Infamous US short seller Jim Chanos would certainly say so. 

He spoke this week at the CNBC/Institutional Investor Delivering Alpha conference on Wednesday to say he was shorting (betting the price will go down) US blue chip stock Caterpillar.

Caterpillar is a world leader when it comes to construction and mining equipment. You can view it as a kind of proxy for those industries. But Chanos views it as a proxy for the end of the so-called commodity ‘super cycle’ and the end of the road for China’s credit-led infrastructure boom.

This brings us to the familiar spectre of China’s ghost cities and alleged mountain of what Austrian economists call ‘malinvestment’. That is to say, government boondoggles that have no business being where they are or doing what that do because they don’t make any economic sense.

The world has spent a long time waiting to see something crack in China. Will 2013 be the year? We don’t know. We do know our colleague Greg Canavan says yes. He’s expecting a panic. 

It seems like for Australia it always comes back to China. Phil Anderson says the Middle Kingdom is the one variable he can’t quantify into his (admittedly unscientific) model. He still remains bullish on Aussie real estate because, he says, land values will capture the wealth from strong commodity prices. That’s the link between his two forecasts.
 
But that leaves us with Greg and Phil completely at odds with each other. The bull and the bear. How will it play out? Who will be right? Stay tuned. 

Callum Newman+
Editor, Money Weekend

From the Port Phillip Publishing Library

Special Report: The Sixth Revolution

Daily Reckoning: The End of The Economy Deformed by Easy Money

Money Morning: Why Invest ‘Hard’ When You Can Invest ‘Easy’?

Pursuit of Happiness: Getting Serious About Freedom at FreedomFest

By WallStreetDaily.com

There are trends and mega trends… And now ­– thanks to the American Medical Association (AMA) – we’re on the verge of a super-sized trend.

The AMA recently changed obesity from a condition to a disease – just like cancer, AIDS, MS, hepatitis and so many others. That may not seem like a big deal, but it is.

You see, as a disease, the treatment of obesity must be covered by insurance companies under the Affordable Care Act.

It doesn’t matter how you gained the extra pounds: poor eating habits, sedentary lifestyle, or your mother’s genes. You’ll now be able to see a doctor and be treated for obesity and any ailments caused by it. And insurance companies must help foot the bill.

This may have the anthems of the world feeling a bit queasy, but weight management-related companies are licking their collective chops.

More than one-third of adults in the United States are considered obese, according to the Centers for Disease Control and Prevention. A report by the American Journal of Preventive Medicine says that by 2030, that figure could grow to 42%. Add another 18% of children ages six to 19 who are considered obese, and we’re talking about an epidemic.

A multi-billion-dollar epidemic…

As the author of Fast Food Nation, Eric Schlosser, states, “The annual healthcare costs in the United States stemming from obesity are approaching $240 billion.” That’s more than 20% of this country’s total medical bill.

If the rate of childhood obesity stays constant, that figure could balloon to $957 billion by 2030.

The term “obese” may conjure up images of reality TV personalities on “Extreme Weight Loss” or Dr. Phil’s latest pet project. But, in truth, it only takes an extra 30 pounds to be classified as obese. It ultimately comes down to having a body mass index (BMI) of 30 or higher. Flab, not muscle, tips the BMI scale.

And this dilemma is far more serious than your spouse asking, “Do I look fat in these jeans?” Obesity contributes to increased rates of more than 30 serious diseases. The most common, type 2 diabetes, affects about 30 million people and is linked to excess fat and a sedentary lifestyle.

Of course, having obesity covered by insurance doesn’t guarantee that people will automatically turn to a doctor – rather than a fast food drive-through. But it’s motivation nonetheless. The sheer number of people who are obese – and the markets that cater to them – represent an opportunity to shape up our health and stock portfolios.

Facing the potential “trimming of fat” from insurance companies, at least three industries stand to benefit from the long-term fight against obesity…

Let’s take a brief look at each, along with specific opportunities for interested investors…

~ Beneficiary #1: Healthcare

The major manufacturers of insulin, the main treatment for diabetes, are Novo Nordisk (NVO), Sanofi-Aventis (SNY) and Eli Lilly (LLY). Global sales are a staggering $15.4 billion annually, increasing 400% since 2000. It’s predicted that by 2050, 20% to 30% of the U.S. population will have diabetes, mostly with obese-driven type 2. United Healthcare estimates that Americans will spend $3.4 trillion over the next 10 years on diabetes-related costs.

~ Beneficiary #2: Weight Management

The weight management industry generates $59 billion in revenue annually in the United States alone. You might say that the potential loss of pounds by customers of Weight Watchers (WTW), NutriSystem (NTRI) and Nestle (NSRGY) – owner of Jenny Craig and Lean Cuisine – could translate into healthy gains for investors.

Personally, I like Weight Watchers for its 50-year focus on group support, sustainable food plans and behavior modification. In 2012, consumers spent $5 billion on Weight Watchers’ branded products and services. As you would expect, an economic slowdown in 2009 saw net revenue fall 8.9%. However, from fiscal 2008 to 2012, revenue compounded at an annual growth rate of 4.4% and shareholder equity rose 30%. With a little help from the healthcare system and smoother economic times, Weight Watchers will remain as much a staple as whole wheat bread.

~ Beneficiary #3: Pharmaceuticals

When it comes to the drug industry, three heavyweights basically corner the market: Roche’s (RHHBY) Xenical, Arena Pharmaceuticals’ (ARNA) Belviq and Vivus’ (VVUS) Qsymia. Not expected to gain FDA approval until 2014 or 2015, Contrave from Orexigen (OREX) may eventually give the others a run for their money – but not in the short term.

We can talk in great detail about how each pill differs, but all that really matters for consumers is how many pounds you can shed in what period of time (with the fewest debilitating side effects, and without contaminating any organs).

Cost is the other obvious factor, and getting insurers to cover the drugs is a key driver of sales…

For instance, Vivus experienced an abandonment rate of 30% when it first launched in September, “likely because of sticker shock from those not covered by insurance.” Belviq, made available in June, isn’t covered by most health plans, which is part of the reason some analysts think it got off to a slow start.

Bottom line: No matter how we choose to prevent and treat obesity, the real battle has just begun. The fact that insurance companies must help fund the fight could prove to be the biggest wildcard behind this super-sized trend.

Ahead of the tape,

Karen Canella

The post Three Ways to Profit From a Super-Sized Trend appeared first on  | Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Three Ways to Profit From a Super-Sized Trend

London Gold Market Report
from Adrian Ash
BullionVault
Friday, 19 July 09:10 EST

GOLD crept higher in quiet summer trade in London on Friday, adding 0.4% for the week as world stock markets also rose but commodity prices fell back.

 Silver held 2.5% below last Friday’s finish in Dollars.

 Government bond prices were unchanged.

 “Gold going down is not necessarily a bad thing,” said US Fed chairman Ben Bernanke to lawmakers in semi-annual testimony on Thursday.

 “It suggests people have somewhat more confidence, and… feel less need for whatever protection gold affords.”

 But “gold investors started to get nervous” in late 2012, says a note from Canada’s TD Securities “about an eventual deceleration in the Fed’s extremely accommodative monetary policy.

 “Positive returns elsewhere [then] prompted investors to get out of gold.”

 Looking ahead, however – and with Bernanke repeating this week that tapering QE is “not a preset course” – “Economic data is unlikely to be stellar,” says the TD note, “and the Fed will remain coy.”

 Touching $1295 per ounce in Asian trade Friday, gold prices for Euro investors were flat from last week.

 The price in Sterling stood 0.5% lower at £846 per ounce for the first weekly drop in three.

“Gold miners across the world are cutting output and costs as gold prices slump,” says the latest Commodities Weekly from French investment bank and bullion dealers Natixis.

 “This is affecting new projects as well as existing mines.”

 After reducing their ‘hedge book’ as a group from nearly 3,000 tonnes to almost zero last decade as gold prices rose five-fold, “Mining companies are [now] queuing up at bullion banks to discuss short-term hedging arrangements,” says one London bank’s trading desk in a note.

 “Some forward sellers already sleeping well at nights…others are rushing to lock-in ‘good’ prices.”

 Gold lenders are currently enjoying the strongest sustained returns in almost a decade according to data from market makers and other bullion banks, with gold lease rates up and swap offer rates negative.

 “Some emerging-market central banks are taking advantage,” adds the London bullion bank’s note, “getting some yield on their gold reserves” by offering metal for loan.

 The Philippinnes, Russia and Turkey between them have accounted for half the total addition to national gold bullion reserves in the last 5 years.

 Now the world’s No.2 consumer, “China is importing large quantities of gold to meet [private] domestic demand,” says Friday’s note from Commerzbank in Germany.

 “China thus remains a crucial support for the gold price.”

 China’s gold demand is “slowing” however, says today’s note from Standard Bank, which points to the Shanghai gold premium falling from $37 per ounce above London’s benchmark two weeks ago to $22 today.

 “Real economic indicators remain uninspiring” for industrial commodities, Standard Bank adds.

 “Freight volumes in China continue to show significant drops…consistent with [weaker] manufacturing data for raw materials, exports orders and to some extent new orders.”

 Chow Tai Fook Jewellery, the world’s biggest jewelry chain, is meantime one of several stores being investigated in China for price collusion, government newspaper the People’s Daily reports.

 Down 25% for 2013 so far, shares in Chow Tai Fook rallied sharply last week after it reported a jump in second-quarter sales.

 “We don’t understand why we got involved in the story,” a spokeswoman told Reuters overnight.

Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By The Sizemore Letter

From Covestor:

Your search for an investment adviser should start with ones who put their money where their mouths are, says Charles Sizemore, portfolio manager on the Covestor platform.

Ask yourself: Why wouldn’t a manager invest in the portfolio they are managing? And if they won’t, why should you?

”You care more about it when you have your own money on the line,” Sizemore says of investment advisers, in our latest online hangout. “It’s just human nature.”

Looking for managers with skin in the game, so to speak, may even have a tie to investment performance. According to Morningstar research, funds run by managers who had invested $1 million or more in the funds they managed outperformed 58% of their peers over the 5-year period ended in July 2009.

The Morningstar report did not attempt to say that levels of manager investment can predict future performance, however.

According to Sizemore, the benefit of having managers invest in their own strategies also applies to financial advisers who run separate accounts for clients. He says it’s a sign of confidence in the manager’s abilities.

“You want to know that your financial adviser or your money manager is aligned with you and that you have the same interests,” he says.

On a related subject, Sizemore says that it’s important to find an adviser that is only paid based on the assets being managed or on the performance of the assets under management, and to avoid ones that are paid based on commission.

“If they are earning their pay based on a commission sale, then they are incentivized to sell what pays the highest commission,” Sizemore says. That’s not to say that all brokers are crooks, but as human beings, we tend to do what we are incentivized to do.”

Rounding out his top traits of financial advisers, he says to look for one with a clear and easy-to-understand investment process.

“Any financial adviser or money manager should be able to explain what they are doing and why… . You need to see thought and a process behind their moves.”

This material represents statements made live on July 17, 2013.  All opinions included in this material are as of July 17, 2013 and are subject to change.  The opinions and views expressed herein are of the portfolio manager and may differ from other managers, or the firm as a whole.  All investments involve risk (the amount of which may vary significantly) and investment recommendations will not always be profitable. Past performance does not guarantee future results.