Eneryg Stocks To Invest In 2013, Best Energy Stocks For 2013: December 2014

Wednesday, December 31, 2014

Italy: When Hope Is a Strategy

I came back from Italy this week, and one of my guilty pleasures was being able to sit down and watch the last three episodes, including the season finale, of Game of Thrones. For those readers who are not enthralled with the fantasy epic from HBO or have not read the first five books (will he ever finish?), author George R.R. Martin has written one of the most complex fantasy series ever, about a world where everyone is occupied with who will sit on the Iron Throne.

It is a land of numerous countries and cultures, where the average person might just enjoy a little peace and quiet but where their leaders are seemingly always ready to go at one another, dragging their armies behind them, whether at the hint of an insult or the prospect of the ultimate prize. The series is utterly unpredictable, as Martin seems to routinely to kill off both protagonist and antagonist alike with unexpected finality. You have to be careful not to become too involved with any of the characters, as fate (i.e., the author) can pluck them from the scene all too quickly. Plot twists abound in every chapter, and seemingly minor characters can become major players as time unfolds.

In other words it's a place not unlike Europe.

After spending a few days in Rome trying to deepen my understanding of the situation in Italy – which of late has seemed as convoluted as the plot from Game of Thrones, mercifully minus the swordplay but with about the same level of spectacle (who could come up with this cast of characters?), I think I have perceived what might become a significant plot twist in the offing.

So let's look this week at what I uncovered in Italy, which rather surprised me, and think through some of the implications that the new developments suggest for the ultimate outcome of the euro project.

(I want to acknowledge up front the significant help of Christian Menegatti and Brunello Rosa of Roubini Global Economics in setting up key meetings with politicians, bureaucrats, and the Italian central bank. I am also grateful for the candid conversations we had after the meetings, as we tried to work through what we had heard. While this letter will not present a consensus view of our meetings and conversations, I did learn a great deal more than if I had simply gone on my own. Thanks, guys. (They of course are not responsible for any mistakes or inaccurate predictions herein. I can make enough of those on my own.)

Game of Thrones, European-Style

What surprised me about Italy was the emergence of something that felt like speranza, which I am told is the Italian word for hope. On my previous visits to Italy over the years, I have seen frustration, anger, and resignation – generally, there was a feeling that there was very little anyone could do to really change things. Even though the names and personalities and even governments changed, there was an underlying assumption behind every conversation that simply said, "This is the Italian way," especially when it came to doing business. Government was slow and inept and bureaucratic; it took years or decades to get anything through the courts; and that's just the way it was. Italians have displayed a marvelous aptitude for getting things done in spite of government, not because of it.

Italy, and especially the north of Italy, is a manufacturing powerhouse; and while it's not the export behemoth that Germany is, the Italians do quite well, thank you very much. It is a testimony to their entrepreneurial skills and design talent that they have done as much as they have, given the ineptitude of their government. That might seem a little harsh, but I think you could find more than a few Italians who would agree.

But something different seems to be happening now. In the last European elections, a clear winner was an upstart politician in Italy. The EU Observer explains what happened:

In June 2013, Matteo Renzi was still pretending that his greatest ambition was to serve a second mandate as mayor of Florence, a mid-sized town of less than 400,000.

A year on, he is rubbing shoulders with the likes of Barack Obama at G7 summits, and is emerging as the biggest counterweight to German Chancellor Angela Merkel on the EU political landscape.

A historic win in last month's European Parliament elections, where his Democratic Party (PD) took 40.8 percent of votes – the best-ever result for the Italian left, and the highest score ever recorded by a single party since the Christian Democrats in 1958 – has given him a strong hand to challenge Berlin-backed austerity policies, as Italy takes on the EU's six-month presidency on 1 July.

"He has meticulously planned his rise to the top for the past 10 years. Not many people, be it in politics, journalism or business, have the same tenacity, drive and determination that he has displayed," says David Allegranti, a political reporter from Florence who has written two books on Renzi. In February, the 39-year-old became Italy's youngest-ever prime minister.

Renzi is photogenic and charismatic, but most of the commentary I read prior to going to Italy three weeks ago seemed to dismiss him as just another one in the series of soon-to-be-sacked Italian prime ministers, there having been four in as many years. Given the current volatility of Italian politics, it seemed just a matter of (not very much) time before Renzi's government would fall. The only question was what might emerge next from the sausage grinder of Italian politics.

In a little bit we're going to cover in detail some of the rather serious economic realities that face any Italian government. The challenges are daunting, and heretofore the system seemingly just hasn't been properly designed to deal with them. With a debt-to-GDP ratio of over 135%, simple interest costs of 5% of GDP, ultra-low inflation, high unemployment, low to no growth, and rising debt, Italy's economic problems are all too real.

So where is the hope coming from? Renzi is not just going after the economic troubles. He seems to be attacking the very deep structural issues in a novel way. He is seeking serious constitutional reform in a country that has seen no constitutional changes for 30 years. Changing the constitution is difficult and requires a super-majority, which Renzi does not have. But when you meet with Parliament members and ministers from Renzi's party, there is an optimism that is almost catching. Somehow or another Renzi has convinced a lot of people in the Italian political system that reform is possible. In particular, he wants to do away with the upper house (their senate) and streamline the decision-making process in the remaining house of Parliament, with different rules for creating majorities.

Further, he is looking to reform the judicial process in a way that will allow court cases to actually be resolved in a realistic timeframe, removing the "justice delayed is justice denied" issue. Of course, labor reforms are also on the docket.

Meeting with ministers and government leaders who are involved in developing the budget, I found acknowledgment that the only way they can get out of their current situation is to grow their economy. They admitted they needed 2% real GDP growth, 2% inflation, and a 4% "primary surplus" (more on that later). They candidly acknowledged that this outcome is possible is only with significant outside foreign direct investment, substantial growth in exports, and a drop in the unemployment rate. "We have to unleash Italian industry and business."

The current system discourages foreign direct investment and is actually chasing Italian businesses from Italy. The recognition that things need to change if there's going to be any progress in the economy is widespread across the spectrum of political views.

Tuesday, December 30, 2014

The only funds you need in your portfolio now

The retirement checklist NEW YORK (CNNMoney) How many mutual funds do I need to have a diversified retirement portfolio? And what funds should they be? -- E.F.

A lot of people have the mistaken impression that to successfully invest for retirement you've got to assemble a portfolio of at least a half dozen or more mutual funds or ETFs.

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That's nonsense.

The number of funds you own isn't nearly as important as the types of securities your funds own. And if you choose funds that hold a broad range of stocks and bonds and work in synch with each other, you can put together a well-diversified portfolio with two or three funds, or in some cases, just one.

Of course, some advisers will suggest that you're missing out unless you spread your money among all manner of exotic investments (which they're more than happy to sell you). But the more complicated your portfolio is, the more expensive and more prone to blow-ups it's likely to be -- which also increases the odds that it will generate subpar returns.

Which is why I suggest that as you review your investment strategy for the New Year and beyond, you consider a streamlined approach that allows you to get by with lower fees and fewer funds.

How few? Below you'll find my recommendations for three simple but effective diversified retirement portfolios consisting of three funds or less.

THE THREE-FUND DIVERSIFIED PORTFOLIO

To create this portfolio, simply invest in the following three funds (or their ETF equivalents): a total U.S. stock market fund, a total international stock market fund and a total U.S bond market fund.

Do that, and you'll gain exposure to virtually every type of publicly traded stock in the world (large and small, growth and value, domestic and foreign, all industries and sectors), as well as the entire U.S. investment-grade taxable bond market (short- to long-term maturities, corporates, Treasuries and mortgage-backed issues).

You can buy such funds and ETFs directly from any number of investment firms, including biggies like Fidelity, Schwab and Vanguard, all of which sell their own funds and ETFs or those of other firms, such as iShares, or both. If you're working with an adviser, he or she can buy these funds on your behalf.

The annual fee you'll pay will vary depend! ing on which firm's funds or ETFs you choose. (If you go with ETFs, you may also incur a brokerage charge, although several firms are currently waiving commissions and transaction fees on at least some ETFs.)

But you should easily be able to assemble a portfolio for an annual fee of 0.20%, or $20 per $10,000 invested, if not less. If you invest through an adviser, he or she will charge a separate fee.

THE TWO-FUND DIVERSIFIED PORTFOLIO

This portfolio is identical to the one above, except for one difference: it skips the total international stock fund.

Some pros may argue that jettisoning foreign stocks makes no sense, especially since we live in such a global world. But others, including Vanguard founder and low-fee zealot Jack Bogle, argue that you can get along fine without international shares.

I'm agnostic on this issue. Diversifying internationally should typically make your portfolio a bit less volatile since foreign markets don't always move in synch with U.S. stocks. But holding foreign shares isn't likely to offer shelter during major meltdowns, as virtually all markets move together in times of extreme duress.

If for whatever reason you're antsy about owning foreign shares or you just like to keep it simple by sticking to domestic equities, I don't think going with a USA-all-the-way portfolio is going to interfere with you achieving your goals.

THE ONE-FUND DIVERSIFIED PORTFOLIO

If you really don't want to be bothered putting together a portfolio, then a target-date retirement fund may be the solution. You choose a fund with a target year that roughly corresponds to the year you plan to retire (2015, 2020, 2025, whatever) and you get a ready-made mix of domestic and foreign stock and bond funds suitable for someone your age.

What's more, the fund automatically follows a "glide path," shifting into bonds each year and becoming more conservative as you approach and enter retirement.

You may end up paying a ! slightly ! higher annual fee for this portfolio-in-a-fund than you would by putting together the two- or three-fund portfolio option above. But you should easily be able to keep your annual expenses below 1% a year. And if you go for an all-index-fund target fund like Vanguard's, you'll pay less than 0.20% annually.

If you go with the two- or three-fund portfolio, you'll also have to decide how to divvy up your money between stocks and bonds. That's largely a matter of balancing your appetite for risk (which you can determine by completing a risk tolerance questionnaire) against the size returns you'll need to build an adequate nest egg or, if you're already retired, assure that your savings will sustain you throughout retirement. By plugging different blends of stocks and bonds (as well as different spending rates) into this retirement income calculator, you can get a good sense of which mix is right for you.

Since stocks and bonds typically don't deliver identical returns from year to year, you may have to rebalance your two- or three-fund portfolio to restore it to the right mix. Every few years or so, you may also want to reassess your risk tolerance and goals, just to make sure you're still okay with whatever stocks-bonds mix you originally set.

But aside from this sort of routine maintenance, you really don't need to do much with any of these portfolios. Just sit back and reap the benefits of the broad diversification each has to offer.

Walter Updegrave is the editor of RealDealRetirement.com. If you have a question on retirement or investing that you would like Walter to answer online, send it to him at walter@realdealretirement.com.

Monday, December 29, 2014

GM Canceled Ignition-Switch Fix in 2005 Due to Costs

General Motors Co. To Recall 1.3 Million Vehicles to Repair Steering David McNew/Getty Images General Motors (GM), after months of studying ignition-switch failures in the Chevrolet Cobalt, canceled a proposed fix in 2005, when a project engineering manager cited high tooling costs and piece prices, according to documents obtained by U.S. congressional investigators. A separate opportunity to address the defect was passed over by the National Highway Traffic Safety Administration in 2007, when it opted not to open a formal defect investigation even after an agency official had said a probe was justified, according to an interview between current NHTSA officials and staff members of the House Energy and Commerce Committee. Those decisions and this year's recall of 2.6 million small cars for faulty ignition switches are set to be the main focus of congressional hearings Tuesday and Wednesday. GM Chief Executive Officer Mary Barra and acting NHTSA Administrator David Friedman are being asked to explain the handling of years of complaints about stalling cars and disabled air bags that have now been linked to the switches and tied to 13 deaths. "Lives are at stake, and we will follow the facts where they take us as we work to pinpoint where the system failed," Representative Fred Upton, the chairman of the House Energy and Commerce Committee, said in a statement Sunday. GM opened an engineering inquiry about the Cobalt ignition switch in November 2004, after customers complained the engine "can be keyed off with knee while driving," according to a problem-tracking system document obtained by House investigators. Four months later, the Cobalt project engineering manager rejected a key slot change, citing cost and long lead times. "None of the solutions presents an acceptable business case," according to a GM memo cited by the House committee. 'Early Warning' The chief of NHTSA's Defects Assessment Division emailed other officials in the Office of Defects Investigation in September 2007, saying owner complaints from 2005 and "early warning" data about warranty repairs and injuries justified a probe, according to the memo from the committee. "Notwithstanding GM's indications that they see no specific problem pattern, DAD perceives a pattern of non-deployments in these vehicles that does not exist in their peers," the official said, according the memo issued before a committee hearing on vehicle defects. NHTSA chose not to open a formal defect investigation in 2007 after reviewing the air-bag data. In 2010, after a special crash investigation report was filed with NHTSA about a May 2009 Cobalt crash, the agency again considered a defect probe focused on the car's air bags. For a second time, the agency backed off after further reviewing data, according to the memo. 'At Stake' Barra and Friedman are scheduled to appear before Upton's committee Tuesday, and a Senate committee Wednesday. "As we have stated previously, the agency reviewed data from a number of sources in 2007, but the data we had available at the time did not warrant a formal investigation," a NHTSA spokesman, Nathan Naylor, said. "Recent data presented by GM provides new information and evidence directly linking the ignition switch to the air-bag non-deployment. That's why we are aggressively investigating the timing of GM's recall." The ignition-switch defect in six GM models including the Cobalt and Saturn Ion has been linked to the deaths in at least 31 crashes. GM recalled about 1.6 million cars worldwide in February, and an additional 971,000 last week. "We deeply regret the events that led to the recall," a GM spokesman, Greg Martin, said in an emailed statement. "We are fully cooperating with NHTSA and the Congress, and we welcome the opportunity to help both have a full understanding of the facts." Barra's Leadership GM approved production of the ignition switch in 2002 even though testing showed torque in the part fell short of the company's original specifications, the part's supplier, Delphi Automotive Plc, told House investigators. The congressional hearings present a test of leadership for Barra, who took over as GM's first female CEO on Jan. 15 and said she first learned the details of the recall two weeks later. Barra and other top executives are trying to remake the image of the Detroit-based automaker after last year shedding the final vestiges of U.S. government ownership linked to its 2009 bankruptcy. Barra has apologized for the slow response that resulted in deaths. GM has also hired an outside investigator to probe the delay and has created a vice president position in charge of global vehicle safety, as Barra has sought to shore up GM's image and reinforce the automaker's message that it's recreating itself after its $50 billion taxpayer-funded bailout. Firestone, Ford Upton has said he wants to know why regulations already in place didn't catch the GM problems sooner. Upton led the probe in 2000 over highway deaths linked to Firestone tires on Ford Motor's (F) Explorer sport-utility vehicles. Upton, 60, was the lead House author of the Transportation Recall Enhancement, Accountability and Documentation Act, or Tread Act. The 2000 law boosted communication between carmakers and the government and increased NHTSA's ability to collect data, with automakers required to report more potential threats such as defect claims or lawsuits, and recalls in other nations.

Sunday, December 28, 2014

Most Generous 401(k) Plans in America

By Hal M. Bundrick

NEW YORK (MainStreet) Thank your employer for offering a 401(k) retirement plan. It's a big deal. And if you work for one of the companies listed below, you're receiving the most generous benefits available in the U.S. BrightScope, the financial benefits research firm, says these companies "value setting their employees up for a strong financial future."

The research firm examined plan vesting schedules, eligibility periods and all contributions to the plan made by the company for the sole benefit of the plan's participants. Companies in professional services, science and technical fields dominated, representing half of all the plans listed.

Six of the top 10 plans allow immediate vesting: workers are fully vested from the first day of employment. The average account balance for plans on the "most generous companies" list is $470,014 much higher than the average balance of all plans within the BrightScope system ($99,061). The average amount a company contributes to each plan on the list is $31,181, compared to the plan average of $4,184. And the average participation rate is 96.49% -- compared to an average of 85.03%. "Generosity is an important means for companies to recruit and retain top employees," says Brooks Herman, head of data and research at BrightScope. "Its importance is exemplified by the fact that half of the companies on this list have been on one or more other BrightScope rankings this year, and several more have been featured in years past." The 30 Most Generous Companies are: 1. Sullivan & Cromwell LLP - Retirement Plan of Sullivan & Cromwell LLP 2. North American Partners in Anesthesia, LLP - North American Partners in Anesthesia, LLP Profit Sharing Plan 3. Oregon Anesthesiology Group, P.C. - Oregon Anesthesiology Group, P.C. 401(k) Profit Sharing Plan 4. Frontier Refining & Marketing Inc. - Frontier Retirement Savings Plan 5. O'Melveny & Myers LLP - O'Melveny & Myers LLP Keogh Plan 6. Zeta Associates - Zeta Associates Incorporated Savings Plan 7. Shearman & Sterling LLP - Shearman & Sterling LLP Partners Retirement Plan 8. Anesthesia Service Medical Group, Inc. - Anesthesia Service Medical Group, Inc. 401(k) Profit Sharing Plan Trust 9. Cravath, Swaine & Moore LLP - Retirement Plan of Cravath, Swaine & Moore LLP 10. Bryan Cave LLP - Bryan Cave LLP Retirement Plan for Partners 11. Debevoise & Plimpton LLP- Retirement Plan for Lawyers of Debevoise & Plimpton LLP 12. Kay Scholer LLP - Kaye Scholer LLP Retirement Plan 13. Skadden, Arps, Slate, Meagher & Flom, LLP - Skadden, Arps, Slate, Meagher & Flom Retirement Plan 14. Deloitte LLP - Deloitte Profit Sharing Plan 15. United States Member Clubs of the National Hockey League - National Hockey League Pension Plan for Players of United States Member Clubs 16. Ernst & Young U.S. LLP - Ernst & Young Partnership Retirement Plan 17. Weil, Gotshal & Manges, LLP - Weil, Gotshal & Manges Partners' Target Pension Plan 18. Simpson Thacher & Bartlett LLP - Simpson Thacher & Bartlett LLP Supplemental Profit Sharing Plan for Partners 19. Jones Day - Jones Day Retirement Plan 20. Jennison Associates LLC - Jennison Associates Savings Plan 21. Duane Morris LLP - Duane Morris Retirement Plan 22. Dodge & Cox - Dodge & Cox Profit Sharing Plan & Trust 23. Sutter Medical Group, Inc. - Sutter Medical Group 401(k) Profit Sharing Plan 24. United Parcel Service Company - UPS/IPA Defined Contribution Money Purchase Pension Plan 25. Gould Medical Group, Inc. - Gould Medical Group, Inc. 401(k) Profit Sharing Plan and Trust 26. Garland Industries, Inc. - The Garland Industries, Inc. Employee Stock Ownership Plan & Trust 27. Tufts Medical Center Physicians Organization, Inc. - Tufts Medical Center Physicians Organization, Inc. 401(a) Retirement Plan 28. McMaster-Carr Supply Company - McMaster-Carr Supply Company Profit Sharing Trust 29. National Basketball Association - NBA-NBPA 401K Savings Plan 30. Northwest Permanente, P.C. - Northwest Permanente, P.C. Retirement Plan Money Purchase Pension Aspect --Written by Hal M. Bundrick for MainStreet

Dear Apple, Don't Go to China!

All the hype regarding Apple Inc.’s (AAPL) deal with China Mobile seems to have vanished now. The company had earlier announced that it had an upcoming deal with China Mobile where China’s largest carrier would sell subsidized iPhones. However, the company recently said that it was still in talks with company which has given rise to the feeling among the people that the deal is uncertain. The market hasn’t reacted positively to this news. The common feeling is that this would affect Apple adversely. However, I think this deal being undone would prove to be blessing in disguise for Apple. Let me cite the reasons for saying so:

Absence of leverage in China:

Apple simply doesn’t have the leverage in China that it has in the US. In spite of the fact that it has a hell of a lot of customers all around the world it would be wrong to say that it same advantage in all the markets that it has in the US. In fact, for that matter, I’d say that Apple would be better off if they don’t go for the deal. The reason is that the Chinese government does not favor those products that are produced outside the nation’s boundaries. Samsung, the South Korean giant, though, has a pretty strong presence in China. This can be owed to the tech giant’s brilliant marketing skills. This apart, even Lenovo and ZTE has a pretty huge market share in China. Xiaomi, widely regarded as the Apple of China has the maximum market share in China. The iPhone bug hasn’t bitten the Chinese yet. This is pretty evident from the fact that the people in China view iPhones as a nice product but not a ‘must have’. So those investors that view Apple from a US-centric perspective are missing the global picture. All in all, it wouldn’t be wrong to say that though Apple has a considerate market share in China it is nowhere close to being a leader there.

Shareholders would bear the brunt:

The China Mobile subsidy deal will eventuall! y happen. This would mean that Apple would have to sacrifice on the profit margins. This is because the company would be bearing the US carrier-like prices with low subsidy. The end result would be that Apple shareholders would be losing. The analysts are saying that a further compression in margin would do the company in.

The road ahead:

The deal with China Mobile isn’t going to help the company at all. The reduction in margins would mean a drop in the shares of the company. The shares are likely to drop after going through a 50 day simple moving average of $528. If the revenues continue to be low for a long time the share prices would hit an all-time low.

The company could also announce a bigger buyback and/or a fatter dividend to cushion any blow. However, these would only be short term solutions.

Apple should go for the deal only after analyzing its impact on its financials. That they would go for the deal is quite certain, what’s there to see is the extent to which would the shareholders be penalized. The investors must therefore play their cards carefully.

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Myghitis - 1 day ago

Japan's market share for Apple is 76%.It will be absurd to stay away from China, with over a billion users (750m at china Mobile) at Apple's terms.And furthermore, the uers will demand apple products.Your article does not make any sense.

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Dear Apple, Don't Go to China!

Absence of leverage in China:

Shareholders would bear the brunt:

The road ahead:

The company could also announce a bigger buyback and/or a fatter dividend to cushion any blow. However, these would only be short term solutions.

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Myghitis - 1 day ago

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Saturday, December 27, 2014

Jim Cramer's 'Mad Money' Recap: Major Moves on Lesser News

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

NEW YORK (TheStreet) -- The markets are seeing a lot of major moves on very little news, Jim Cramer said on "Mad Money" Tuesday.

Cramer said there's a revaluation of stocks underway, the likes of which we haven't seen in a very long time. He said that certain old-line names are seeing new life and new highs.

Among the big movers: Best Buy (BBY), Boeing (BA) and Bristol-Myers Squibb (BMY). Cramer said Best Buy's comeback from $26 a share to now $42 has been remarkable while Boeing is up 71% for the year, even in the face of early problems with its Dreamliners. Bristol-Myers has popped from $48 to $53 a share in just a few days. Others on Cramer's list include Chipotle Mexican Grill (CMG), Core Labs (CLB) and FedEx (FDX), along with GameStop (GME) and Kimberly-Clark (KMB). Cramer said Chipotle's momentum has returned, while Core Labs has also sprung back to life, as has FedEx, a big beneficiary of the global economy. Meanwhile, GameStop is benefiting from the next generation of console gaming and Kimberly-Clark is seeing lower input costs. Last on Cramer's list of standouts is Schlumberger (SLB), whose shares are up from $71 to $94 a share, and Whirlpool (WHR), which has seen a move from $112 to $148 even with a slowdown in housing. Cramer said all of these are good companies that have gotten even better in recent months. The market is clearly listening. Back From the Dead What ever happened to Cramer's "F.A.D.S. C.A.N." list of growth stocks from 2010? Cramer said the list -- which included F5 Networks (FFIV), Apple (AAPL), Deckers Outdoor (DECK), Salesforce.com (CRM), along with Chipotle Mexican Grill (CMG), Amazon.com (AMZN) and Netflix (NFLX) -- is back from the dead, just in time for Halloween. Chipotle was an unstoppable momentum name until it faltered during the summer of 2012. Since then the momentum is back and this stock has a lot more runway ahead of it, Cramer said. Apple, a holding in Cramer's charitable portfolio, Action Alerts PLUS, also has been working its way back from when shares fell to below $400. With the company delivering a strong line of updated products, Cramer said it's a steal at 8.5 times earnings.

Netflix is up 225% since Cramer recommended it back in 2010, but not before sinking to $54 a share on a series of bad management mistakes. Since then, the mistakes have been rectified; with a host of new exclusive content, subscriber growth is on a tear.

Then there's Deckers, makers of Uggs footwear. Cramer said after losing the eye of investors for several quarters, Deckers shot the lights out this quarter and is seeing its shares steadily rising.

Cramer saved his commentary on the rest of the F.A.D.S. C.A.N. names for after the break. F.A.D.S. C.A.N., Part 2

Continuing his followup on his F.A.D.S. C.A.N. growth stocks from 2010, Cramer offered up his analysis on F5 Networks, Amazon.com and Salesforce.com. Cramer said Salesforce.com, a stock that's up 155% since 2010, continues to power higher on every pull back. He said the company is stronger than ever with $3 billion in sales. Amazon.com is the only name in the list that's not back from the dead, as this stock never died in the first place. Cramer said Amazon just keeps coming at you like a zombie, crushing competitors while growing its sales and expanding its gross margins in the face of continuing pessimism. Finally, there's F5, the network equipment maker that also keeps making comebacks from anything that's thrown at it. Cramer noted this stock fell from $138 to just $67 a share, but has already crawled back to $84 on the back of a new product cycle. Lightning Round In the Lightning Round, Cramer was bullish on Magnum Hunter Resources (MHR) and Southern Company (SO). Cramer was bearish on Federal-Mogul (FDML), Applied Materials (AMAT) and Cisco Systems (CSCO). Off the Charts In the "Off The Charts" segment, Cramer went head to head with colleague Carolyn Boroden over the direction of the markets. Boroden's most recent analysis suggested that its time to get cautious, as the S&P 500 is approaching two ceilings of resistance where the markets could pause or even reverse course. She identified levels between 1,760 and 1,768 and also between 1,776 and 1781 as the trouble spots to watch for.

Boroden also applies her Fibonacci theory to the timing of the market, looking at the number of days between market moves. Here, her analysis flagged from Oct 28 through Nov 5th as the days when the market is most likely to take its pause.

Boroden and Cramer both agreed that now is an excellent time to take profits, as the market has had a big rally and it's never a mistake to lock in a gain after a big market move. No Huddle Offense

In his "No Huddle Offense" segment, Cramer sounded off on the moronic trading in Apple.

Cramer said the press is always in a race to get the story told, even if they don't yet know what the story is. That's how Apple's stock was able to get hit for $15 a share after the "headlines" reported stalled gross margins. But as soon as investors learned that an accounting change at Apple deferred nearly $1 billion in revenues, the stock immediately took a $21 a share bounce off the bottom. Similar events occurred on another Action Alerts PLUS holding, Eaton (ETN), during its earnings call; investors learned, after the headlines, that orders were on the rise towards the end of the quarter. Cramer said sometimes it makes sense to beat the other guy to the market, but for the most part, jumping in after a company reports, is never a smart move. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here. -- Written by Scott Rutt in Washington, D.C. To email Scott about this article, click here: Scott Rutt Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, CSCO and ETN. Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money." None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser. Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

Alcoa Urges Changes to LME (AA)

Aluminum giant Alcoa (AA) has sent a letter to the London Metal Exchange urging rule changes to appropriately meet the needs of the aluminum market.

The proposed changes are specifically aimed at the availability of aluminum as well as making the entire industry more transparent. Alcoa CEO Klaus Kleinfeld wishes for the LME to improve its reporting system to increase market efficiency and to improve contracts to better allow traders to hedge against price risk.

Alcoa’s letter comes shortly after the company learned it would be removed from the Dow Jones Industrial Average, an index which it had been a member of since 1959.

Alcoa shares were up 13 cents, or 1.59%, at Wednesday’s close. The stock is down more than 5% YTD.

Thursday, December 25, 2014

The War for Online Video Is Heating Up

Amazon (NASDAQ: AMZN ) , Yahoo! (NASDAQ: YHOO ) , AOL (NYSE: AOL ) have made key moves to build a video arsenal-moves that will surely lead to a showdown with everyone, including Netflix (NASDAQ: NFLX ) and Google's (NASDAQ: GOOG ) YouTube.

Will Netflix and YouTube survive this onslaught?

For some time now, Amazon and Yahoo! have partnered with content creators to create a hub of online video. But, in just the past few months, both companies have struck deals to become the exclusive streaming partner for certain TV shows. Now, Amazon is the only one that has access to shows like Downton Abbey and Justified online, meanwhile Yahoo! will soon become the place for Saturday Night Live.

Additionally, each company is creating original shows. Last month, Amazon piloted 15 new pilots, AOL announced it would create a studio to help shoot 15 shows as well, and Yahoo! has been creating its own web series for a while.

So, it looks like Netflix and YouTube have their work cut out for them. Luckily, Netflix and YouTube seem well-positioned to weather any battles for the next couple of years. In the following video, Motley Fool contributor Kevin Chen compares Netflix and YouTube's prospects to their ever-growing competitors. To learn more, click on the video below.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

Kohl's Q1 Net Drops, but Beats EPS Estimates

Kohl's (NYSE: KSS ) results for the company's Q1 have been released. For the quarter, sales totaled just under $4.2 billion, down slightly from the $4.24 billion in the same period the previous year. Net profit also saw a slide, by 4%, to $147 million ($0.66 per diluted share) from Q1 2012's $154 million ($0.63).

On average, analysts had been expecting revenue of $4.27 billion and EPS of $0.57.

In terms of operations, the firm ended Q1 with a total of 1,155 stores spread across 49 states. The former number in the same quarter of 2012 was 1,134.

Kohl's also provided forward earnings guidance. For its current Q2, diluted EPS is expected to come in at $1.00-$1.08. This projection anticipates share repurchases during the quarter, however.

More Expert Advice from The Motley Fool

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Wednesday, December 24, 2014

Sony Pulls 'The Interview' From Theaters Amid Safety Concerns

Updated from 5:45 p.m. with information about the role of North Korea's government

NEW YORK (TheStreet) -- After threats from a cyber hacking group that prompted top theater chains to cancel showings of "The Interview," Sony (SNE) Pictures called off its planned Dec. 25 release of the film at the center of a extensive hacking of the film studios computer network.

" In light of the decision by the majority of our exhibitors not to show the film 'The Interview,' we have decided not to move forward with the planned December 25 theatrical release," Sony said in a statement sent to reporters. "We respect and understand our partners' decision and, of course, completely share their paramount interest in the safety of employees and theater-goers."

Must Read: Jim Cramer's 8 Best Stock Picks for the Housing Sector

Sony's decision not to move forward with the film comes after five major U.S. theater chains declined to show the "TheInterview," citing concerns about the safety of moviegoers and employees. Carmike Cinemas (CKEC) , Regal Entertainment (RGC) , A MC Entertainment Holdings (AMC) , Cinemark Holdings (CNK) , and Cineplex Entertainment (CGX) all said that they wouldn't show the James Franco and Seth Rogan comedy about a TV crew hired to assassinate current ruler of North Korea Kim Jung Un. U.S. intelligence officials said that the North Korean government was "centrally involved" in the recent cyber attacks on Sony, including the most recent threats, according to the New York Times. It is not known whether the White House will directly address North Korea over these acts. The threats were made by Guardians of Peace, a group of hackers linked to a suspected North Korean group called DarkSeoul. The group released a statement admonishing Sony for the film and threatening physical harm to theatergoers.

"The world will be full of fear. Remember the 11th of September 2001. We recommend you to keep yourself distant from the places at that time. (If your house is nearby, you'd better leave.)," the group said in a statement.

An official from the Department of Homeland Security said that the agency did not have any credible evidence of any threats to theaters in the U.S., according to Variety. The group is also responsible for hacking Sony and releasing everything from embarrassing executive emails, the social security numbers of employees, and not-yet-released films such as "Annie." Many celebrities expressed disappointment with the film's cancelation: "Canceling "The Interview" seems like a pretty horrible precedent to set.," tweeted actor and director Zach Braff. "THE INTERVIEW is now poised to shatter the world record for "spite viewings," comedian Patton Oswalt joked on Twitter. " We stand by our filmmakers and their right to free expression and are extremely disappointed by this outcome," Sony added.

Sony did not say when or how the film would be released. Must Read: Jim Cramer's 4 Best Stock Picks for the Health Care Sector

Tuesday, December 23, 2014

Why Microsoft Just Partnered With One of Its Biggest Competitors in the Cloud

Office 365 and Dropbox will finally play nice together. Source: Microsoft.

CEO Satya Nadella is getting rather aggressive with Microsoft (NASDAQ: MSFT ) Office 365, the online version of Microsoft's productivity suite. Last week, the company announced it would provide unlimited cloud storage to Office 365 subscribers in an effort to court more subscribers, especially businesses with lots of storage needs.

Last week, I noted that consumers likely aren't that interested in unlimited cloud storage. Very few individuals have more than a few gigabytes of data they'd like to backup to the cloud. And when it comes to consumer cloud storage, Dropbox is at the top of the list. Despite the two competing for individuals and businesses for cloud storage services, they've put aside their differences to make Office 365 play nice with Dropbox.

Solving one of the biggest complaints
With this partnership, Microsoft is solving one of the biggest complaints about Office for iPad. Previously, users had to keep documents in Microsoft's OneDrive.

The reason this is a problem is because a lot of consumers have already set up and uploaded all of their documents to Dropbox. Dropbox has grown rapidly during the last couple of years through its clever referral program, which incentivizes users to sign up their friends. Six months ago, Dropbox surpassed 300 million users, and it's likely closer to 400 million users today.

With the introduction of unlimited storage for Office 365 subscribers, Microsoft has much less incentive to onboard users to OneDrive storage. There's no opportunity to upsell them to more storage. Office 365 has become the cloud storage product; if consumers want to use another service, Microsoft should be happy to let them, as long as they subscribe to Office.

Why investors should care
Office is, by far, the biggest revenue generator for Microsoft. With Windows sales decreasing as PC sales decline, and the aggressive pricing Nadella has put in place, Office is becoming an even bigger part of Microsoft's business.

Last quarter, Office 365 Home and Personal subscriptions increased 25% sequentially, to 7 million. Since introducing Office for iPad, Home and Personal subscribers have increased by more than 50% in just more than six months.

But the opportunity for Microsoft is much bigger. Microsoft says Office has 1 billion users worldwide, including consumers and businesses. The end goal for Microsoft is to transition all of those users to Office 365 subscribers.

Last year, after Office revenue declined with the introduction of Office 365, Microsoft CFO Amy Hood noted her belief that the lifetime value of an Office 365 subscriber is much greater than a user who purchases the software suite. As a whole, Microsoft's Office systems revenue increased 5.8% in fiscal 2014, indicating the transition is already working.

Considering that Office accounts for 28% of Microsoft's total revenue, and it's one of its most successful products ever, the company should do everything it can to keep customers and transition them to Office 365. Meeting Office users where they already are -- i.e. Dropbox -- increases the odds to transition Office users -- some of whom may not have upgraded for years -- to Office 365 subscribers.

Businesses and now consumers
Microsoft is protecting its cash cow from all angles. Last week's announcement that Microsoft would provide unlimited storage for Office 365 subscribers was far more appealing to businesses than consumers. This week's announcement that Office 365 will work with Dropbox is very appealing to consumers.

Nadella stated upon taking over as CEO of Microsoft in February that his concentration will be on cloud and mobile. Office 365 -- and Office for iPad and Android by extension -- is one of the biggest pieces to Microsoft's cloud and mobile business, the future of Office, and Microsoft's biggest revenue generator. Therefore, Microsoft needs to do everything it can to maintain its position as the No. 1 productivity suite, and grow revenue.

The last two weeks have been very exciting for Office's prospects.

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Monday, December 22, 2014

How to Profit from Today's Biggest Activist Investors

Many investors would like to be able to get a piece of the success that activist investors like Bill Ackman and Carl Icahn enjoy.

Over the past decade, activist-run funds have returned nearly 267% - more than double that of the Standard & Poor's 500 index.

What many don't realize is that figuring out how to profit from the lucrative moves of these activist investors is easier than it looks.

And it's a way for retail investors to participate in a trend that continues to accelerate.

Activist Investors Rake in Record Profits how to profit

Last year, activist investors targeted 369 companies, a 12% increase over 2012. But activist investors are on pace to target about 440 companies this year - a 19% increase over 2013.

And even that could be a conservative estimate. The Wall Street Journal recently reported that many of the top activist investors have been stockpiling cash.

Daniel Loeb's Third Point LLC raised a jaw-dropping $2.5 billion in just two weeks in August, the Journal reported, with Nelson Peltz's Trian Fund Management LP, Ackman's Pershing Square Capital Management, and Barry Rosenstein's Jana Partners also loading up their war chests.

That means not only will we see more activist investor targets, but more high-profile targets.

Just within the past month, Carl Icahn won three board seats at Hertz Global Holdings Inc. (NYSE: HTZ), and Rosenstein snagged two board seats at Walgreen Co. (NYSE: WAG). Of course, Icahn also pushed Apple Inc. (Nasdaq: AAPL) last year to pay a bigger dividend and buy back stock.

Meanwhile, Peltz has turned up the heat in his campaign to drive E. I. Du Pont De Nemours and Co. (NYSE: DD) to break up.

Historically, retail investors have struggled to profit from these moves, because by the time they become public, the targeted stocks have already jumped higher.

But there are ways for retail investors to piggyback on the successes of the activist investors...

A Simple Way to Profit Like Big-Time Activist Investors

The best part about how to invest in stocks targeted by activist investors is that you don't actually have to invest in those individual stocks.

Instead, there are several funds that closely track the activity of the major activist investors. They do all the heavy lifting; all you need to do is buy the fund and enjoy your gains.

The primary option is the 13D Activist Fund (MUTF: DDDIX, DDDAX). The biggest difference between the two flavors of the 13D Activist Fund is the price of entry: the DDDAX has a minimum initial investment of $2,500, while for the DDDIX it's $1,000,000.

The DDDIX version also delivers better performance; it was named a "Category King" by The Wall Street Journal last month. It ranked No. 2 out of 585 funds in the multi-cap growth equity category for the year ending July 31, in which it generated a return of 20.1%.

The philosophy here, says 13D fund manager Ken Squire, is to invest in as many activist situations as possible.

"Obviously, the activist is an important factor, but particularly with activism, the benefit comes from investing in a portfolio environment," Squire told Barron's. "You never know when a catalyst is going to hit, or which catalyst it is going to be. Some of them may never hit and some may hit in three years, so investing in just one is difficult. But, if you have a portfolio of 40 situations, catalysts are hitting more frequently. It is the best way to go."

A second, more nuanced choice went live in August: The Direxion iBillionaire Index ETF (NYSE Arca: IBLN). This fund doesn't track activist investors exclusively, but instead focuses on the hedge fund holdings of between five and 10 top billionaires.

In any given quarter, the roster can include several of the biggest activist investors, such as David Einhorn and Icahn, balanced out by names like George Soros and Warren Buffett.

Follow me on Twitter @DavidGZeiler.

UP NEXT: When it comes to billionaires, it pays to watch what they do. And Jim Rickards, who spent 35 years on Wall Street and worked for the CIA, believes that investors should be studying Warren Buffett's recent acquisitions as part of a four-part strategy to protect themselves from what he expects will be a 25-year depression. In a must-see interview, he explains why the economy is headed for trouble and what investors can do about it. You can't afford to miss this video.

Barron's: 13D Fund: Invest Like Carl Icahn and Other Corporate Raiders The Wall Street Journal: Activist Investors Build Up Their War Chests

Sunday, December 21, 2014

How Coca-Cola Built Up Its Business Way Beyond Soda

www.minutemaid.com As demonstrated by its recent purchase/asset-swap deal with energy drink company Monster Beverage (MNST), Coca-Cola (KO) is more than just a slinger of soda. The company draws billions of dollars in revenue from a other liquids, including Dasani water and Powerade sports drinks. That's par for the course in the sugary beverage industry. Coke's eternal rival PepsiCo (PEP) does a brisk business selling drinks that aren't soda, such as the Starbucks (SBUX) ready-made concoctions it offers in partnership with the coffee giant. PepsiCo, in fact, draws most of its revenue from food products. These include notable brands such as Doritos and Quaker Oats. Diversification is key in this business; there's only so much cola the world is willing to drink. With that in mind, here's a look at a trio of influential asset buys Coke made outside of its signature fizzy product line that have molded it into the behemoth we all know and love and will continue to shape the company. Minute Maid (1960) The history of Coca-Cola as a brand and company can be broken down roughly into three eras -- the soda fountain era (beginning when Coke was first served in 1886 to 1898), the bottle era (from 1899 to 1959), and what we can call the diversification era (from 1960 to the present). The latter began when Coke made its first non-soda buy that year. Through a stock swap it acquired the now-familiar line of orange juice products, notable for being the first such juice available in frozen concentrate form (making it available year-round no matter a customer's location). From then on, Coca-Cola became a company selling more than only carbonated beverages. This was a smart move -- these days, the firm boasts 11 non-soda brands that each take in more than $1 billion in revenue. They're Minute Maid (U.S.), Del Valle (South and Central America), Georgia (Japan), Aquarius (Japan), Powerade (U.S.), BonAqua (Hong Kong), Sokenbicha (Japan), Dasani (U.S.), Vitamin Water (U.S), Simply Orange (U.S.) and Minute Maid Pulpy (China). Columbia Pictures (1982) The early 1980s marked a brief era when Coke ventured far out of the beverage business to diversify. The target asset was Columbia Pictures, a storied Hollywood movie studio. Coke made an overwhelming bid for the company of $750 million, and just like that, it was in the film business. The results were mixed. The studio had success with several releases (like the enduringly popular underdog story "The Karate Kid"), but also unloaded the comedy "Ishtar" on the world. The expensive, poorly reviewed film became one of the most notorious bombs in Hollywood history. In spite of Columbia's wins (which also included TV hits thanks to Embassy Communications, a small-screen production outfit it bought in 1985), it couldn't escape the hit to its finances and reputation incurred by the $40 million loss from "Ishtar." It was time for Coke to return to fundamentals, and in 1989 it sold the bulked-up Columbia to a much more entertainment-oriented company, Japanese electronics giant Sony (SNE), for a fizzy $3.4 billion. Keurig Green Mountain (2014) Sometimes it's better to take an anchor stake -- and reach production, distribution and marketing deals with a target company -- rather than buy it outright. That seems to be the ambition for Coke with the Monster Beverage deal, as well as the arrangement it reached this past February with Keurig Green Mountain (GMCR). For $1.25 billion, Coke took a 10 percent stake in Keurig (later raised to 16 percent), maker of the K-Cup beverage pod brewing system. The two also signed a 10-year agreement to mutually develop Coke-branded offerings for the latter's Keurig Cold at-home drink-making device. Cold is a clear attempt by Keurig to grab some do-it-yourself-soft-drink market share from SodaStream (SODA), which has seen its sales grow robustly over the past few years. There's money to be made in this market, so Coke and Keurig are making a lunge for it. Expanding by Degrees Might this be the future for Coke: purchases of minority stakes and co-development deals? The company's acquisitions have historically been full-on buys rather than strategic purchases. The Monster Beverage and Keurig deals indicate a more cautious approach for the soda maker, as befits its stature as a conservative enterprise investors can rely on for profits and dividend income. Time will tell if this style of expansion will sweeten Coke's results or not. More from Eric Volkman
•Rental Car Prices Are Giving Us Sticker Shock •Whatever Happened to Celebrity-Sponsored Prepaid Debit Cards? •Why Hollywood Isn't Funny Anymore - but TV Is

Saturday, December 20, 2014

There's no place like the economy

NEW YORK (CNNMoney) Forget lions, tigers, and bears. For market watchers this week it's all about the Fed, GDP, and jobs, oh my!

The curtain is about to be pulled back to reveal some key economic data. Here's what you need to know.

It's the economy, stupid: Investors will have to wait until Friday for the main event of the week: the all-important July jobs report.

The key thing to watch is whether robust jobs growth is continuing into the second half of the year. In June, the government said 288,000 jobs were added, bringing the total number of jobs added in the first six months of 2014 to 1.4 million. That was the strongest six months for job growth since 2006.

Meanwhile, the unemployment rates stands at 6.1%, which isn't far off from what many economists consider full employment.

Yellen on human toll of unemployment

But before the jobs report, Wall Street will get a first read on second quarter gross domestic product (GDP) Wednesday morning. GDP is the most comprehensive gauge of how the economy is doing, and a majority of GDP comes from consumer spending.

Analysts mostly believe that the first quarter's 2.9% contraction was a blip due primarily to unusually harsh weather, but this week's GDP report should provide more clarity on how the economy is faring.

Then there's the Federal Reserve. The central bank will release a statement outlining its latest monetary policies on Wednesday afternoon.

It's widely believed that the Fed will announce another $10 billion pullback in monthly bond purchases, but investors will be scrutinizing every word of the statement for clues as to when the Fed plans to raise interest rates.

Summertime earnings vibes: A slew of corporate earnings reports may also provide some hints about how the economy is doing.

Investors will pay close attention to earnings from UPS (UPS) on Tuesday. The shipping giant and FedEx (FDX) rival blamed its poor first quarter performance on tha! t nasty winter weather, but market strategists are expecting the company's earnings picked up steam last quarter along with the economy.

Procter & Gamble (PG) earnings, also considered a good gauge of economic health because it owns big consumer brands like Tide, Gillette, Crest and Pampers, will come out Friday.

Momentum stocks will also be in focus when Linkedin (LNKD, Tech30) and Tesla (TSLA) report results after the closing bell on Thursday.

Tesla's stock is up 50% this year as investors continue to be excited about Elon Musk's electric car company.

Linkedin is a more complicated story. Shares of the social career network are down almost 20% in 2014, but jumped over 10% this week on news that it acquired ad marketing platform Bizo for $175 million. Strong earnings from Facebook (FB, Tech30)also helped.

Big oil earnings are also in the pipeline. Chevron (CVX) and Exxon (XOM) release earnings Thursday and Friday, respectively. While it's probably still too early to tell what, if any, effects the geopolitical turmoil in Ukraine and the Middle East are having on their finances, investors will be looking for guidance about their profits and oil prices.

Wednesday, December 17, 2014

Paul Lountzis on the Margin of Safety

Source: The Manual of Ideas

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