Daily Gains Letter

Sovereign Debt

Bonds that a government issues in a foreign currency are referred to as “sovereign debt.” Sovereign debt does not come with a specific charge on a government’s assets. It is simply a promise to pay. In reality, if a government does not pay its sovereign debt upon maturity, the loss of creditability is the biggest threat to the country—it will have a difficult time issuing sovereign debt again.

Online Retailers Holding Up, but Are They Worth the Investment Risk?

Online Retailers Holding Up, but Are They Worth the Investment Risk?Earnings season is in full swing, and it’s looking like the retail/merchandising sectors are doing relatively well. The data support the case that consumers are spending again; whether this is sustainable or not is another matter, but for the first quarter, it looks like consumers have opened up their wallets. One company that really surprised to the upside was Overstock.com, Inc. (NASDAQ/OSTK). On the stock market, the company’s been in the doldrums for years, but its current numbers certainly show renewed momentum in its o ... Read More

Risk Alert: Business Cycles About to Collide

090413_DL_clark It’s time for all stock market investors to re-evaluate their portfolio risk. If a new bull market happens to develop, it’s easy to jump on the bandwagon. But with so much uncertainty and risk out there—risk that is 100% beyond your control—equity investors need to be safe. There is always room for speculation with play money, but when it comes to money being used to save for retirement or dividend income being used while in retirement, capital preservation is absolutely key. Utility stocks immediately come to mind when I think about capital preservation and the stock market. This is a sector that is often used to generate income for those who are in retirement. Surprisingly, some utility s ... Read More

Global Sovereign Debt Skyrockets, Bubble to Burst

080413_DL_clark “Risk” is a four-letter word. It’s the kind of thing you wish you spent a lot more time thinking about before a shock actually happens. Right now, the Federal Reserve is re-inflating assets while sovereign debt skyrockets. It’s been doing so for a number of years now, and the stock market is moving. Stock market action illustrates that it doesn’t pay to fight the Fed. But one of the biggest trends in the stock market’s performance over the last few years is the strength in blue chips that pay dividends. You don’t need a highflying technology stock in this kind of market. With so much sovereign debt growth and uncertainty that continues unabated, I think all investors need is to take a f ... Read More

Why Farmers Are Key to the Commodity Price Cycle

050413_DL_clark Farmers really are the best customers. Monsanto Company (NYSE/MON) has become more than a 10-bagger since listing on the stock market. Its performance over the last year has been good, and the company just beat the Street with its quarterly earnings results. I suspect that many farmers have a kind of love/hate relationship with Monsanto. The company’s “Roundup Ready” products work, but it’s the way the company has litigated some farmers that has probably turned off a number of customers. The company’s earnings results were good. Revenues in its latest quarter grew 15% to $5.5 billion. Global corn sales were particularly strong. Earnings came in at $1.5 billion, up 22% from comparable earning ... Read More

Avoid the Eurozone Mess: How to Profit Domestically

280313_DL_clarkMost investors will consider utility stocks in saving for retirement, or when looking for regular stock market income while in retirement. This is a group that has a better track record on the stock market than you might think. Old economy stocks can still generate solid investment returns, even if they are well-established utilities. The Dow Jones Utility Average has a good long-term track record of wealth creation, but it has not been without volatility. Clearly this is a group that is less volatile than many other stock market sectors and these stocks experience waves of enthusiasm from institutional investors. Utility stocks are not for everyone. A lot of investors feel that they would be better off in f ... Read More