Investing in Platinum?!

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Indian investors always had a fascination towards precious metals and stones owing to their hedging ability against the rising inflation and economic uncertainties. While investing in gold and silver has been going on, another investment avenue that is blooming since past few years is the 'noble metal' or platinum. Although platinum has a very short financial trading history associated with it compared to other precious metals, it is slowly becoming one of the favorite investment platform for Indian investors as well. Investing in platinum not only helps in diversifying investment portfolio, but also in providing a smart long term investment strategy.

Platinum is available in the physical form as collectable coins while financial options are available globally including active trade in the National Spot exchange in India.

Platinum Vs Gold: 
Less than a decade ago platinum prices were exponentially high and were nearly 150% the price of gold. With an extended bull run in gold coupled with increasing global recession in platinum manufacturing countries as well as industrial sectors, platinum prices have come down to nearly the same level as gold.  As of first week of November, platinum was trading at Rs. 3,256 per gram compared to Rs. 3,134 per gram for gold. According to industry experts as well as financial analysts, platinum is expected to rally around these levels for the next few months till economic recovery is back on track. The existing low prices of platinum however offer great investment opportunities to the smart investor to jump on the investment bandwagon.

Platinum Vs Diamonds:
Platinum and diamonds have always been on the radar of the rich and famous. With Gold prices reaching astronomical highs, more and more Indian investors are now looking at diamonds and platinum as an equally lucrative investment opportunity. Diamonds are available in physical form and not every investor is aware of the cut and clarity in the absence of hallmarked diamonds which are few and far in between. Platinum on the other hand has no such problems and can be traded on NSEL in electronic form while physical delivery is controlled by Platinum guild India.

Investment Opportunities in Platinum: 
With the rising popularity and the bright future of platinum as an investment vehicle, the National Spot Exchange (NSEL) e-Platinum launched e-platinum trading platform under its e-Series products in April 2012.

E-Platinum:
The e-platinum platform has been slowly gaining popularity amongst the investors. It opens up opportunity for the investors to buy units of Platinum electronically in the multiples of 1 gram with the option to sell, retain or take physical delivery through the platform.  Just like e-gold and e-silver, e-platinum also allows investors to avail physical delivery of Platinum in various denominations usually in granules form imported from London platinum and palladium market (LPPM) approved suppliers. As of now physical delivery of platinum is limited to Delhi, Mumbai, Jaipur and Hyderabad but more cities are being added periodically by NSEL.

Bars and Coins:
For those who want to store the metal in its physical form, Platinum bars, coins and bullions are available across various centers including nationalized and private banks as well as authorized dealers. Physical delivery of platinum is available in various weights including 1 gram to 100 grams with a purity of 99.95%. Since physical buying of platinum is still in its nascent stage in India, individuals must check with their vendors for authenticity certificates and buyback deductions.

Platinum Futures Contract:
Platinum can also be invested in the Futures market as Multi Commodity Exchange (MCX) allows buying facilities for Platinum Futures Contract (1 gram). Since futures market is highly volatile and has inherent risks attached, such investment avenues are only recommended for the advanced traders and investors.

Future Outlook for Platinum:
Even though platinum prices may appear bearish for now, the price of platinum is expected to rise in the near future as platinum jewelry markets get more evolved. In fact The Mineral Exploration and Development Report in its 12th Five Year Plan Period has projected that platinum demand in India will reach 80 tons by the year 2017. Also with the increase on strength of the automobile industry globally, platinum may well retain its high financial strength and offer a perfect investment tool for the serious investors.

Analysts and financial experts may have a different outlook on the short term prospects of platinum but most agree that with the low costs of the metal, this is a perfect time to invest in e-Platinum in demat form which emulates the price of physical platinum in the precious metal market.

 

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Hasbro Buys Stake in Backflip Studios - Analyst Blog

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Toy maker Hasbro Inc. (HAS) is signing back-to-back deals with several mobile gaming companies in order to cater to the increasing demand for digital toys. Recently, Hasbro acquired a 70% stake in Boulder, Colo.-based Backflip Studios for $112 million in an all-cash deal. Hasbro anticipates the transaction to be neutral to slightly accretive to its 2013 financial results.

Founded in 2009, Backflip Studios develops some of the most sought-after mobile games including DragonVale, NinJump, Paper Toss, Ragdoll Blaster, Army of Darkness Defense and OutWorded. Backflip Studios, one of the most profitable and fast growing game studios, boasts more than 300 million downloads of its popular games. Following the acquisition, Backflip will carry on with the development of its own IP and create mobile versions of some of Hasbro's popular brands.

The Backflip takeover is in line with Hasbro's policy of venturing into different games and gaming formats. Hasbro has been working hard to shift its focus from traditional board games/toys to digital solutions to cope with recent trends. Actually, toy manufacturers have been negatively impacted by age "compression" as children are growing up faster with an exposure to alternative modes of entertainment including video games, MP3 players, tablets, smartphones and other electronic devices.

Earlier this month, Hasbro extended its deal with Electronic Arts Inc. (EA) to develop mobile compatible versions of some of Hasbro's popular games like Monopoly, Scrabble, Game of Life, Battleship, Boggle, Clue, Risk and Yahtzee.

Hasbro has been highly active in signing gaming deals. Some of Hasbro's recent associations include partnerships with Callaway Digital Arts; PopCap Games, which is an operating unit of Electronic Arts and The Tetris Company, which is one of the world's most successful video game d! evelopment companies. Apart from these, in 2012, Hasbro launched a new line of gaming products in the U.S., U.K., Australia and Canada in collaboration with the world's largest social game developer – Zynga Inc. (ZNGA).

Hasbro currently carries a Zacks Rank #3 (Hold). One toy company that is currently performing well is Jakks Pacific Inc. (JAKK) carrying a Zacks Rank #2 (Buy).

Chipotle, Starbucks Gain as William Blair Dubs Them Favorites

William Blair’s Sharon Zackfia, Tania Anderson, and Matthew Curtis use the end of earnings season to take a look at restaurant stocks and fret about recent weakness in sales. They write:

Bloomberg News

With most second-quarter results already reported, aggregate same-store sales trends across the industry accelerated to a 1.5% to 2.0% clip from a weather-affected 0.5% average gain in the first quarter, although two-year comp trends slowed modestly on a sequential basis. Perhaps most concerning was the broader restaurant sales slowdown that occurred in June and seems to have continued into July.

They do, however, note that restaurant stocks should get a boost from lowest expenses. Zackfia and team explain:

On the cost front, restaurant industry wage inflation remains quite manageable at the slowest rate of wage inflation since 2005. Food costs also remain favorable with inflation in the low-single-digit range, while lower-year-over year grain futures are suggestive of continued low commodity inflation into 2014 (particularly given the recent pullback in corn futures, which are now nearly 30% lower versus mid-July).

Their favorites: Chipotle Mexican Grill (CMG) and Starbucks (SBUX). They explain why:

For Starbucks, we anticipate continued potential for earnings upside on remarkably healthy and consistent same-store sales trends (which we believe have continued into the September quarter), with its June quarter comp of 9% leading the entire restaurant industry, despite more than 19,000 global locations. For Chipotle, we remain heartened by strong midsingle-digit same-store traffic gains, with a likely price increase in the first half of 2014 poised to provide upward momentum to estimates, particularly as Chipotle has already absorbed significant commodity inflation that has increased its cost of sales to 33%-plus.

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Starbucks has gained 1.3%, while Chipotle has risen 1%. Dunkin Brands (DNKN), which was also mentioned positively for its strong same-store sales, has advanced 0.9%.

Oppenheimer, meanwhile, highlights Darden Restaruants’ (DRI) tough summer. Brian Bittner and Michael Tamas write:

We reduce 1Q14E EPS (Jun-Aug) to $0.63 vs. Street’s $0.75. Consensus likely to come down to $0.70 range after several outliers in $0.80+ range adjust. We model -3.4% comps for the Big 3 in 1Q14E, vs. sell-side’s current -0.6%…

High shrimp costs add pressure to 1H14 margins before expected relief in 2H. At 10% of COGS, shrimp is largest food cost and is up 40% YoY as bacterial infection has killed shrimp and constrained supplies from Asian shrimp farms. Management believes this specific issue is fixable relatively quickly and price relief could follow.

The analysts also reduced their price target to $54 from $58. Darden’s shares are virtually unchanged.

At the Close: Dow Falls as Bullard Speaks, JC Penney Jumps on Reporter’s Tweet

The Bullard did it.

Bloomberg News

Stocks dropped today after St. Louis Fed chief James Bullard spoke, offering up an outlook that suggested that the U.S. economy might not be strong enough for tapering to begin.

The Dow Jones Industrial Average (DJIA) fell 0.7% to 15,337, its largest drop since June, while the Standard & Poor's 500 (SPX) dropped 0.5% to 1,685.39% and the Nasdaq Composite (COMP) closed down 0.4%b at 3,669.27.

Jefferies’ Thomas Simons explains what Bullard said:

Bullard is subtly talking down the probability of a September tapering with his comments in this speech.  His references to the utility of a press conference following each meeting and to the fact that the FOMC “still needs more data” suggests that October is a more practical time horizon for the first taper.  The Fed will have virtually no solid information on Q3 data by the September meeting so they would be facing a decision to taper at a time when YTD GDP would be averaging just 1.5%.

Bullard’s comments, like Lockhart’s earlier this week, suggest that the Fed is going to stick with the data-dependence of their policy decisions and will probably push off the decisions to taper to October at the earliest.

Now, I thought that no tapering was supposed to be good for the market, you know, the so-called Goldilocks scenario and all. Perhaps it’s simply the fact that investors were assuming that the U.S. economy was out of the woods–and then here comes Bullard arguing that it might not be strong enough to end these extraordinary measures.

One group of stocks certainly benefited from Bullard’s comments: Mining stocks. Of the 11 mining companies in the S&P 1500 index, all but two finished higher on the day. Newmont Mining (NEM) gained 6.2% to $31.94–and just broke its 50-day moving average–while coal miner Alpha Natural Resources (ANR) gained 5.5% to $6.13. JC Penney (JCP), meanwhile, gained 3.4% today after a New York Post reporter tweeted that the department store’s sales have picked up recently.

Macy’s (M) wasn’t so lucky. It reported earnings and revenues that came in below forecasts and its guidance disappointed as well. (Read Barron’s Take here.) Its shares dropped 4.5% to $46.33. Moody’s (MCO), meanwhile, plunged 5.1% to $65.50.

SEC Nominees Support Changing ‘Neither Admit Nor Deny’ Policy

President Obama’s picks to be the two new Commissioners at the Securities and Exchange Commission voiced their support during their confirmation hearing Thursday for SEC Chairwoman Mary Jo White’s recent announcement that she’d be changing the agency’s “neither admit nor deny” settlement policy by seeking admissions of guilt in some of the more egregious cases.

Sen. Elizabeth Warren, D-Mass., said at the Senate Banking Committee hearing—which also considered the nomination of Rep. Mel Watt, D-N.C., to be the director of the Federal Housing Finance Agency and two other nominees—that requiring admission of guilt in some cases “is an important step” for the agency and “shows that SEC will show some backbone in certain cases.”

Warren then asked Kara Stein, an aide to Sen. Jack Reed, D-R.I., who was nominated to replace SEC Commissioner Elisse Walter, and Michael Piwowar, an economist on the Senate Banking Committee’s staff who was nominated to replace Troy Paredes, whether they supported White’s decision.

Piwowar replied that he agreed, as the SEC’s policy has been on “autopilot” for too long. “Enforcement should be on a case-by-case basis,” he said. Stein said she also agreed, echoing Piwowar’s sentiment that “nothing should be on autopilot.”

Both Piwowar and Stein's nominations are expected to be approved.

As reported by Reuters, White said at the annual CFO Network event hosted in Washington on Tuesday by The Wall Street Journal that the SEC is “going to in certain cases be seeking admissions going forward. I think ... public accountability in particular kinds of cases can be quite important, and if we don't get them, then we litigate them.”

In a June 17 email to the SEC’s enforcement staff, the enforcement division’s co-directors, George Canellos and Andrew Ceresney, said that the agency had begun to review its settlement approach “to ensure we make full and appropriate use of our leverage in the settlement process, including a discussion of the neither admit nor deny approach. While the no admit/deny language is a powerful tool, there may be situations where we determine that a different approach is appropriate.”

From discussions with White and the commissioners, Canellos and Ceresney said that the types of cases where admissions of guilt could be in the public interest include “misconduct that harmed large numbers of investors or placed investors or the market at risk of potentially serious harm; where admissions might safeguard against risks posed by the defendant to the investing public, particularly when the defendant engaged in egregious intentional misconduct; or when the defendant engaged in unlawful obstruction of the commission’s investigative processes.”

In such cases, “should we determine that admissions or other acknowledgement of misconduct are critical, we would require such admissions or acknowledgement, or, if the defendants refuse, litigate the case,” the two enforcement directors said.

Both Canellos and Ceresney said, however, that they “recognize that insisting upon admissions in certain cases could delay the resolution of cases, and that many cases will not fit the criteria for admissions.” For these reasons, they added, “no-admit-no-deny settlements will continue to serve an important role in our mission and most cases will continue to be resolved on that basis. We will also continue to strongly defend our discretion to reach such settlements in response to inquiries from courts.”

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Check out SEC Changes Policy on Admission of Guilt in Fraud Cases on AdvisorOne.

The 10 Most Popular Stocks Owned By Congress

The truth will make you sick. Technically it's public knowledge, but I can tell you -- it's Congress' dirty little secret.

Congress is rich. Unbelievably rich. And until just recently, insider trading laws didn't apply to Congress.

I don't know which is worse: The fact that insider trading was legal for some of our nation's wealthiest politicians... or that Congress refused to do anything about it for decades.

"A few lawmakers proposed a bill that would prevent members and employees of Congress from trading securities based on nonpublic information they obtain. The legislation has languished since 2006," according to The Wall Street Journal.

 

That was, the legislation languished until "60 Minutes" -- one of the most respected investigative journalism programs on television -- dedicated a segment to the issue. Here's a portion of what they had to say...

"In mid-September 2008, with the Dow Jones Industrial Average still above 10,000, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were holding closed-door briefings with congressional leaders and privately warning them that a global financial meltdown could occur within a few days. One of those attending was Alabama Rep. Spencer Bachus, then the ranking Republican member on the House Financial Services Committee and now its chairman.

"While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts."

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And that was just one example. Also dug up by "60 Minutes":

House Minority Leader Nancy Pelosi, D-Calif., and her husband have participated in multiple exclusive IPOs -- including that of Visa (NYSE: V). According to one report, Pelosi purchased 5,000 shares of Visa at the IPO price of $44. Just a couple of days later, when the stock was trading to the investing public, it traded at $64 per share.

House Majority Leader John Boehner, R-Ohio, bought stocks in health care companies days before the so-called public option was pulled from the legislation. The removal of the public option proved to be a boon for private health insurers, making a significant sum for Boehner's investments.

The report from "60 ! Minutes" led to a frenzy. And a few months after the story aired, the STOCK Act, which curbed insider trading by Congress, was signed into law.

But why was it delayed for so long?

Apparently Congress was making too much money off the lax rules to do anything about it.

According to data from the Center for Responsive Politics, 249 of the 535 members of Congress are millionaires. That's 47%. For comparison, about 5% of American households are worth more than $1 million.

So much for representation "by the people." And why on earth would Congress change rules that have obviously helped its members for decades?

Thankfully, the STOCK Act strengthened financial reporting requirements for members of Congress (along with some of their higher-paid aides). Not only did it eliminate insider trading, but Congress must now disclose their trades within 45 days after they happen.

That means we have an opportunity to see exactly what our "representatives" are buying. And we need to know...

In a study cited by Barron's, members of the House of Representatives beat investors like you and me by 55 basis points a month. That comes out to an extra 6.8% per year. I think Barron's said it best...

"To give an indication of what House members' outperformance is worth, investing at the stock market's long-term total return of 10% would mean $10,000 would grow to $25,937 in 10 years. But with their special investment acumen, their 16.8% annual returns would leave them with $47,253 in 10 years."

With that in mind, I decided to dive in and see just exactly what the most popular investments are with Congress...

The 10 Most Popular Stocks In Congress
I'll be honest -- the most popular stocks held by Congress aren't some super-secret investments. They aren't exclusive investments owned only by those in Congress with some inside knowledge of a future breakthrough.

Instead, they're large multinational corporations that make up the bulk of many average investors' portfolios.

I won't keep you in suspense...

1. General Electric (NYSE: GE) -- 83 members

2. Proctor & Gamble (NYSE: PG) -- 68 members

3. Microsoft (Nasdaq: MSFT) -- 64 members

3. Bank of America (NYSE: BOA) -- 64 members

5. Exxon Mobil (NYSE: XOM) -- 56 members

6. JPMorgan Chase (NYSE: JPM) -- 53 members

7. Cisco Systems (Nasdaq: CSCO) -- 52 members

7. AT&T (NYSE: T) -- 52 members

9. Intel (Nasdaq: INTC) -- 51 members

9. Pfizer (NYSE: PFE) -- 51 members

This data is provided by the Center for Responsive Politics. The most recent year available was 2011, before the STOCK Act passed.

As I said, Barron's cited a study that suggests members of Congress post returns much better than average investors.

If their most popular holdings are similar to what many investors own, how is it that members of Congress can earn such higher returns?

No one can say for sure, but my research is turning up a few clues.

If you check out the 10 most popular stocks owned by members of Congress five years ago, eight of them are on the list today. And the two not on the list are in the top 25 today. So is it that members of Congress are just holding on to stocks longer?

That's what I think, but let me explain why...

In 1940, the average holding period for an investment was seven years, according to William Hutchings of the Financial News. By 2007, that period had shrunk to just five days.

But you don't have to trade every day... or every week... or even every year to beat the market. In fact, your success actually in! creases the fewer trades you make and the longer you hold.

A recent study by mega-investment firm Oppenheimer showed that the S&P 500 index has NEVER suffered a loss in a 20-year period (measured in rolling monthly periods), dating all the way back to 1950.

Of course, we all know you can't say the same for holding stocks for a year or two. When you hold stocks for a short period of time, your odds of losing money are much, much higher.

And you can lose a boatload of money in a hurry...

In fact, in its worst one-year period, the S&P 500 dropped 44.8%. No wonder Warren Buffett has always said his favorite holding period is "forever."

I think these shorter holding periods for average investors are hurting their returns.

So yes, it appears members of Congress are buying many of the same well-known stocks as everyday investors, who are now holding for shorter periods than ever and hurting returns.

It was with this thought in mind a few months ago that prompted me to have StreetAuthority's research team update our report on "Forever Stocks." These stocks are ones you can buy and hold practically "forever" and watch the profits roll in. Since first releasing this report, these 10 stocks have returned on average 40% in just a few short years.

If you're a longtime StreetAuthority reader, you've likely heard us talk about some of these stocks before. In fact, a few of the names (like Cisco and Intel) are widely owned by members of Congress and are featured in the list above.

But what you might be surprised to know is that some of our "Forever Stocks" are ones that few people are aware even exist. If you're interested in finding out more about my list of "Forever Stocks" and how you can spot other stocks that should be added to the list, I invite you to check out this short presentation.

Best Stock Picks 2018

Best Stock Picks 2018