How to transform mis-buying/selling into a smart buying?

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Are you completely satisfied with the financial products you have bought or investments sold to you? If your answer is No, is it because of mis-selling or mis-buying?

Mis-selling means that you were given unsuitable advice, the risks were not explained to you or you were not given the information you needed, and ended up with a product that is not right for you while mis-buying means buyers' sheer ignorance towards the details and intricacy of the financial product.

There is this one example where one retiree and his wife went to financial planner to review their investment portfolio. To the planner's dismay, he found out that apart from 32 mutual funds-most of them NFOs launched in the past 3-4 years and a long list of equity shares, they had endowment policies, ULIPs and a pension plan. It is improbable the retired petroleum engineer and his homemaker wife understood the various charges and loads for these products before they bought them.

So who is to blame in this case? Five relationship managers of 3 banks who sold all these things or the couple?

Unfortunately, all the financial products in India are not bought but sold. In addition, there are these 3 reasons behind that:

1. Some people buy to please a friend, neighbor or a relative even though neither the client nor the salesperson understands the product.

2. Another reason is ego .Customer'sego does not allow him to admit that he does not understand the product.He convinces himself that if a big organization is selling and the product has been approved by Sebi or Irda and it must be good.

3. Moreover, 3rd reason is that most big purchases are made without professional input, as customers do not know whom to ask.

Among all these financial products, insurance is top rated. Still mis-selling of it is so common in India that our honorable finance minister once said, "because of this mis-selling, insurance is stumbling in India".

In actual, insurance should be bought to protect your financial life from unwelcome surprises and to cover your family needs when you are not around. However, most of the time it is bought to save the taxes.

Moreover, attention has not been paid towards the details like:

• Which type of cover it is providing? Regular income or lump sum amount post retirement or in case of death.

• Does this policy cover suffice to your requirement or not? If yes, then how much cover at which premium it is providing?

• How much commission seller is getting through this deal?

• Last but not the least what are the exclusions under which your claims will not be paid?

This ignorance of lack of knowledge makes you a mis-buyer where your seller is already considered as mis-seller.

Generally, a very thin line is there between mis-selling and fraud and mutual fund is no exception to it.

I can recount one case related to this where a retired person was convinced to invest a large amount in an equity linked savings scheme.

When market crashed, he could not even cut his losses because his money was locked-in for three years. Whereas for a retired person, liquidity is essential.

Can you tell who is who here? Either buyer is mis-buyer or seller is mis-seller?
Because

• Investor did not make enough enquire before approaching a seller for investment. He was not aware of the things like entry and exit load on Mutual Fund, then open ended and close-ended mutual funds.

• Distributor did not make him aware of these things (for his fat commission) despite of knowing his age and financial situation.

Therefore, there is really no end to the argument that buyer is mis-buyer or seller is mis-seller in case of financial products but what is most important is

The way out: In general, practice manufacturers of financial products have a bouquet of offerings, which suits the company, the distributor or the customer. Given the complexity of financial products and the vast choice before him, it is not easy for a customer to know which product best suits his needs. 

For that he needs to have a good financial advisor beside him who will decode the information provided by agent to you and enable you to choose the right option. Moreover, for that it is important that buyer learn that he needs a financial planner.

So, what are you waiting for?

The author is Ramalingam K, CFP CM is the Chief Financial Planner at holisticinvestment.in, a leading Financial Planning and Wealth Management company.

Goldman Sachs Resumes Coverage on Health Care REIT at “Neutral” (HCN)

Early on Tuesday, Goldman Sachs analysts resumed coverage on Health Care REIT, Inc (HCN), giving the company a tepid rating due to lower-than-average earnings growth expectations.

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The analysts rate HCN as “Neutral” and see shares reaching $61. This price target suggests a slight downside to the stock’s Monday closing price of $62.81.

Goldman Sachs analyst Andrew Rosivach said, “The price target is based on a target 2018E AFFO multiple in line with our sector average, which is warranted given the company's high-quality portfolio, but an estimated lower-than-average earnings growth.”

Health Care REIT shares were up 25 cents, or 0.40%, during early morning trading on Tuesday. The stock is up 2.37% year-to-date.

Bolting the Doors Against Inflation

Best Medical Stocks To Invest In 2014

A thief is a wealth destroyer against which we can take obvious precautions, such as locking the doors to the house. Adding an alarm system helps, too. But inflation is a much more insidious villain that requires a subtler defense.

Inflation acts as a hidden tax that doesn’t show up on your annual IRS return. In many ways it is a tax, because it largely results from flawed monetary or fiscal policies. We can “insure” ourselves against the effects of that stealth tax, but it can be tough to decide just how much insurance is necessary. Determining an appropriate portfolio allocation depends largely on where you are in life, your long-term goals and how much risk you can tolerate.

For instance, those in their 30s with at least another 20 working years ahead of them can afford to carry less inflation insurance. Their steady income provides a built-in inflation hedge, particularly if they are fortunate enough to receive at least an annual cost-of-living increase in their wages, and their 20 years of human capital should help them make up any losses.

Those in their late 40s to early 50s, however, must be much more concerned about the potential impact of inflation because they have fewer working years ahead of them. Inflation protection should be a paramount concern for someone in retirement who depends on a fixed income and savings for their financial security.

The trick at any age is determining just how much of your investable assets to allocate to inflation hedging, given that it should be a progressive process. Too small an allocation is no help and overweighting can do more harm than good. As with any specialized investment strategy, it simply shouldn’t consume your entire portfolio because inflation tends to run in cycles.

Consequentl! y, the inflation hedging sleeve of your portfolio should fall somewhere between 10 percent and 20 percent of your investable assets.

Younger investors should allocate at least 10 percent of investable assets to hedging, including a mixture of large- and small-cap stocks, foreign equities, some shorter-term bonds and a smattering of alternatives such as real estate investment trusts and commodities.

As they progress through their investment life cycle, they should gradually step up their allocation a few percentage points every few years, until reaching 20 percent at retirement. And while it’s impossible to be perfectly prescient in the short term, if the long-term inflation trend is running over 5 percent annually it would be worthwhile to increase your allocation until inflation slows back down.

Bank loans perform well in stable inflationary environments, thanks to steady economic growth and stable interest rates that make debt service an easier proposition. When inflation heats up, bank loans become slightly riskier because higher interest rates can trigger an uptick in default rates. Regardless, on average bank loans still return better than 5 percent.

The best performers in the midst of an inflationary spike are energy stocks, basic materials and commodities.

In times of stable inflation, energy stocks typically return about 10 percent as demand grows steadily along with the economy. Materials stocks and commodities usually average returns in the mid-single digits, largely due to the same underlying trends.

But as inflationary pressures build, so do their returns. That’s largely because spikes in commodity prices—due to generally higher demand and investors flooding into real assets—drive commensurate spikes in returns.

By including an inflation-hedging sleeve within a balanced portfolio, you help to ensure solid returns in times of both stability and peril without adding substantial additional volatility to your portfolio. If ! you make ! too small of an allocation, you realize little to no hedging benefit, while an overweight allocation can create performance peaks and valleys that just aren’t worth the sleepless nights.
 

American Funds to expand sales force aggressively

American Funds plans to increase its sales force by 25% in yet another step to win back investors.

Last week, the company announced that it would begin increasing the transparency around its investment process for the first time, including publishing reports about how its portfolio teams are created.

The sales team will grow to around 145, up from 115, over the next six to eight months to help the company cope with the evolving adviser business model, said Matt O'Connor, director of distribution in North America.

“The way advisers conduct business today is just fundamentally different,” he said. “Their expectations have gone up. They expect us to know more about them, more about their options and the platforms they use. It's much more of a consultative conversation.”

At the heart of the evolution is the trend toward fee-based compensation models.

Wirehouses and regional brokers, which traditionally have been American Funds' core clients, quickly adopting the fee-based model, which has changed the way they interact with asset management companies.

“It has absolutely changed the interaction with the adviser,” Mr. O'Connor said.

American Funds isn't the only asset management company that's been reacting to the shift toward fee-based advisers. The Vanguard Group Inc., which leapfrogged American Funds as the largest mutual fund company after the financial crisis, began the process of doubling its sales force to 220 last year.

Unlike Vanguard, however, American Funds has been dealing with a wave of redemptions across its mutual funds. Since 2008, investors have pulled out more than $240 billion, including $11.5 billion this year. Its total mutual fund assets had fallen to $993 billion as of the end of August, from $1.15 trillion in 2007, according to Morningstar Inc.

Mr. O'Connor said the changes were not caused by the outflows.

“This is not a reaction, it's a renewed commitment to advisers,” he said.

Neuralstem is Quietly Becoming a Monster Trade (CUR)

Nine times out of ten, I'd be hesitant to be bullish on a stock that's already made a 57% run up in just five months. Neuralstem, Inc. (NYSEMKT:CUR) is that one out of ten instances though, where there's plenty more room ahead to keep on running. In fact, I think CUR could almost double in value from where it is now before the rally effort ran out of gas.

For those to familiar, CUR is a biotech stock. Its claim to fame is its stem cell research specifically aimed to treatment nervous system disorders and damage. Neuralstem is the only company with a hippocampus stem cell line, which in simplest terms means its R&D is directly working on creating new neurons. It's an entirely new approach, but one with tremendous promise. And, investors are rightfully encouraged by the fact that the FDA approved this hippocampus stem cell platform's work so far by green lighting the company's ALS trials. That clinical test is now in Phase 2, and continues to hold promise. In fact, it's the enthusiasm regarding Phase 2 testing that jolted the stock back into a bullish mode late last year.

10 Best High Tech Stocks To Own Right Now

That being said, while the underlying science is fascinating, the call to arms is for traders, based on the way the chart of CUR has taken shape since late last year.

In simplest terms, Neuralstem, Inc. has dropped all the right hints of a bullish reversal, the biggest of which is the fact that it's been rallying well - and finding support in all the right places - since the volatile swing in August of last year. That sharp move lower followed by a sharp move higher (on a volume surge to boot) last August shook off all the weak holders and at the same time attracted a whole new batch of buyers. Some of both groups took action because of the deep and rapid selloff, and others in both groups took action because of the bullish spike. Whatever the reason, it was a proverbial changing of the guard for CUR, switching the environment from a net-bearish one to a net-bullish one.

More telling is the way Neuralstem shares have continued to walk higher, using the 100-day and 200-day moving average lines as a springboard when necessary [both lines were repeated resistance on the way down]. In the same way the selling was relentless between 2010 and 2012, the buying has been relentless since the stock stabilized in October of last year. The before-and-after from the September pivot are almost perfect mirror images of one another.

On that note (mirror images), we can reasonably assume the current rally is going to finish making the mirror image of the 2010-2012 selloff, and carry shares all the way back to the 2010 peak around $3.15. It won't be a perfectly smooth move. But, if there's one thing this CUR does well, it's stay in motion once set into motion.

Bottom line? Let's take the clues at face value, and assume this well-developed uptrend is going to last until further notice... or at least last until the prior high is met again. Just bear in mind it won't get there overnight.

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Sterne Agee Raises Price Target on International Game Technology; Maintains “Buy” Rating (IGT)

Analysts at Sterne Agee noted on Monday that International Game Technology’s (IGT) fiscal 2014 growth is stronger than it appears. As such, the analysts raised the price target on the casino gaming equipment manufacturer.

The analysts maintain a “Buy” rating on IGT and now see shares reaching $25, up from the previous target of $23. This new price target suggests a 23% upside to the stock’s Friday closing price of $20.32.

“Excluding FY13 Canadian VLT sales, which do not recur in FY14, consensus FY14 EPS growth is ~14% versus ‘in-print’ consensus EPS growth of ~4%,” Sterne Agee analyst David Bain said. “We believe IGT’s peer-low stock valuation is partly driven by a misinterpretation of forward growth using ‘in-print’ FY14 EPS projections.”

Futhermore, the firm raised IGT’s fourth quarter EPS estimates from 33 cents to 34 cents.

IGT shares were inactive during pre-market trading on Monday. The stock is up 43.4% year-to-date.

Crude Oil Supply Drops, but Prices Remain Tied to Syria

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report this morning. U.S. commercial crude inventories decreased by 1.8 million barrels last week, maintaining a total U.S. commercial crude inventory to 360.2 million barrels, and they remain near the upper limit of the five-year range for this time of the year.

Total gasoline inventories also decreased by 1.8 million barrels last week and remain in the upper half of the five-year average range. Total motor gasoline supplied (the EIA's measure of consumption) averaged 9.1 million barrels a day over the past four weeks — down by about 0.3% from the same period a year ago.

Distillate inventories rose by 500,000 barrels last week and remain near the lower limit of the average range. Distillate product supplied averaged 3.7 million barrels a day over the past four weeks, up by 6.9% when compared with the same period last year. Distillate production totaled about 5 million barrels a day last week.

The American Petroleum Institute last night reported that crude inventories fell by 4.2 million barrels last week, together with a decline of 387,000 barrels in gasoline supplies and a drop of 109,000 barrels in distillate supplies. Platts estimated a drop of 2.5 million barrels in crude inventories, a drop of 1 million barrels in gasoline inventories and an increase of 800,000 barrels in distillate inventories.

Crude prices were trading higher before the EIA report at around $107.70 a barrel and rose to around $107.90 shortly after the report was released.

For the past week, crude imports averaged about 8.3 million barrels a day, down about 119,000 barrels a day from the previous week. Refineries were running at 91.7% of capacity, with daily input of 15.9 million barrels a day, about 162,000 barrels a day more than the previous week.

Crude oil prices have fallen by about $2 a barrel since the prior week's report of a 3 million barrel increase in inventories. Price volatility is more a function now of how near traders think the U.S. is to taking military action against Syria. The current view is that President Obama's attempt at gathering congressional support will take until later next week. As we have noted before, Syria's impact on the global crude market is more political than physical; the country produces just 300,000 barrels of crude a day.

Gasoline prices rose again this week. According to the AAA Fuel Gauge report, a gallon of regular gasoline costs about $3.59 today, compared with about $3.56 a week ago. Last month the price was $3.61 a gallon, and one year ago the price of a gallon of regular gasoline was $3.82.

The United States Oil ETF (NYSEMKT: USO) is up 0.7%, at $38.60 in a 52-week range of $30.79 to $39.46.

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The United States Gasoline ETF (NYSEMKT: UGA) is down about 0.7%, at $60.48, in a 52-week range of $53.35 to $65.86.

The United States Brent Oil ETF (NYSEMKT: BNO) is up less than 0.1%, at $44.38 in a 52-week range of $36.88 to $45.05. The annual high was also set today.

Best Insurance Companies To Buy Right Now

In a pattern we've seen a lot lately, the Dow Jones Industrials (DJINDICES: ^DJI  ) has rebounded from early-session losses to head toward new record highs. Hearing relatively benign comments from St. Louis Federal Reserve President James Bullard on the need to continue the current round of quantitative easing, investors felt more comfortable getting back into stocks, and by 12:50 p.m. EDT the Dow was up by 46 points, or 0.3%, while the S&P 500 was up 0.18%.

But a few Dow stocks didn't join in the bullish party. Travelers (NYSE: TRV  ) has posted the largest decline, falling more than 2%. In the wake of the tornado that devastated an Oklahoma City suburb yesterday, Travelers and other property and casualty insurance companies will be tallying the financial damage. With past events elsewhere causing substantial losses to property, the Oklahoma tornado will likely spell the end of a nice respite from major catastrophic claims that Travelers has enjoyed over the past several months.

Best Insurance Companies To Buy Right Now: Unum Group(UNM)

Unum Group, together with its subsidiaries, provides group and individual disability insurance products primarily in the United States and the United Kingdom. It also provides a portfolio of other insurance products, including employer-and employee-paid group benefits, life insurance, long-term care insurance, and related services. Its products include group long-term and short-term disability; group life and accidental death, and dismemberment; individual disability; group long-term care; voluntary benefits; group life; accident, sickness, and disability; and cancer and critical illness insurance products. The company also provides individual life and corporate-owned life insurance, reinsurance pools and management operations, group pension, health insurance, and individual annuities. Unum Group markets its products primarily to employers interested in providing benefits to their employees. The company sells its products through field sales personnel, independent brokers, consultants, and agency sales force. Unum Group was founded in 1848 and is based in Chattanooga, Tennessee.

Best Insurance Companies To Buy Right Now: W.R. Berkley Corporation(WRB)

W. R. Berkley Corporation, an insurance holding company, operates as commercial lines writers in the property casualty insurance business primarily in the United States. The company operates in five segments: Specialty, Regional, Alternative Markets, Reinsurance, and International. The Specialty segment underwrites third-party liability risks, primarily excess, and surplus lines, including premises operations, professional liability, commercial automobile, products liability, and property lines. The Regional segments provide commercial insurance products to small-to-mid-sized businesses, and state and local governmental entities primarily in the 45 states of the United States. The Alternative Markets segment develops, insures, reinsures, and administers self-insurance programs and other alternative risk transfer mechanisms. This segment offers its services to employers, employer groups, insurers, and alternative market funds, as well as provides a range of fee-based servic es, including consulting and administrative services. The Reinsurance segment engages in the underwriting property casualty reinsurance on a treaty and a facultative basis, including individual certificates and program facultative business; and specialty and standard reinsurance lines, and property and casualty reinsurance. The International segment offers personal and commercial property casualty insurance in South America; commercial property casualty insurance in the United Kingdom and continental Europe; and reinsurance in Australia, Southeast Asia, and Canada. The company was founded in 1967 and is based in Greenwich, Connecticut.

Hot Safest Stocks To Invest In Right Now: Marsh & McLennan Companies Inc. (MMC)

Marsh & McLennan Companies, Inc., a professional services company, provides advice and solutions in the areas of risk, strategy, and human capital. It operates in two segments, Risk and Insurance Services, and Consulting. The Risk and Insurance Services segment provides risk management and insurance broking, reinsurance broking, and insurance program management services for businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Consulting segment offers advice and services to the managements of organizations in the area of human resource consulting, comprising retirement and investments, health and benefits, outsourcing and talent; and strategy and risk management consulting, such as management, economic, and brand consulting. The company also provides investment consulting services for endowments and foundations in the United States; health and benefit recordkeeping, and employee enrollment technology; human resource knowledge, data, and solutions for professionals in various industries; and Medicaid policy consulting services. It principally serves customers in the United States, the United Kingdom, the Asia Pacific, and Continental Europe. Marsh & McLennan Companies, Inc. was founded in 1871 and is headquartered in New York, New York.

Advisors' Opinion:

• [By CRWE]

  Marsh & McLennan Companies, Inc. (NYSE:MMC) held its annual meeting of shareholders, at which the Company announced that its Board of Directors has voted to increase the Company�� quarterly cash dividend by 5 percent to $.23 per share on outstanding common stock.

Best Insurance Companies To Buy Right Now: Sun Life Financial Inc.(SLF)

Sun Life Financial Inc., together with its subsidiaries, provides various life and health insurance, savings, investment management, retirement, and pension products and services to individuals and corporate customers. It offers individual life insurance policies, including individual term life, universal life, critical illness, disability, accident, and accidental death and dismemberment insurance policies; and group life insurance policies. The company also provides individual health insurance, long-term care insurance, group health benefits, dental benefits, and group insurance; and various individual and group annuity, retirement, and investment income products and services, such as mutual and pooled funds, variable and fixed annuities, savings, retirement and pension plans, and education savings. In addition, it offers asset management services for corporate retirement plans, separate accounts, public or government funds, and insurance company assets to institutional clients; and advisory services to individual investors. Further, the company provides run-off reinsurance services. Sun Life Financial Inc. distributes its products through direct sales agents, independent and managing general agents, financial intermediaries, broker-dealers, banks, pension and benefit consultants, and other third-party marketing organizations. The company operates primarily in Bermuda, Canada, China, Hong Kong, India, Indonesia, Ireland, the Philippines, the United States, and the United Kingdom. Sun Life Financial Inc. was founded in 1999 and is based in Toronto, Canada.

Best Insurance Companies To Buy Right Now: Berkshire Hathaway Inc (BRKB)

Berkshire Hathaway Inc. (Berkshire), incorporated on June 16, 1998, is a holding company owning subsidiaries engaged in a number of diverse business activities. The Company is engaged in the insurance businesses conducted on both a primary basis and a reinsurance basis, a freight rail transportation business and a group of utility, and energy generation and distribution businesses. Berkshire also owns and operates a number of other businesses engaged in a variety of activities. In October 2012, HomeServices acquired a 66.7% interest in the residential real estate brokerage franchise network in the United States. In May 2013, Berkshire acquired the remaining 20% stake in IMC International Metalworking Companies BV.

Insurance and Reinsurance Businesses

Berkshire�� insurance and reinsurance business activities are conducted through numerous domestic and foreign-based insurance entities. Berkshire�� insurance businesses provide insurance and reinsurance of property and casualty risks worldwide and also reinsure life, accident and health risks worldwide. The Company�� insurance underwriting operations are consisted of the sub-groups, including GEICO and its subsidiaries, General Re and its subsidiaries, Berkshire Hathaway Reinsurance Group and Berkshire Hathaway Primary Group. GEICO insurance subsidiaries include Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company, GEICO Casualty Company, GEICO Advantage Insurance Company, GEICO Choice Insurance Company and GEICO Secure Insurance Company. These companies primarily offers private passenger automobile insurance to individuals in all 50 states and the District of Columbia. In addition, GEICO insures motorcycles, all-terrain vehicles, recreational vehicles and small commercial fleets and acts as an agent for other insurers who offer homeowners, boat and life insurance to individuals. GEICO markets its policies primarily through direct response methods in which applications for insura! nce are submitted directly to the companies via the Internet or by telephone.

General Re Corporation (General Re) is the holding company of General Reinsurance Corporation (GRC) and its subsidiaries and affiliates. GRC�� subsidiaries include General Reinsurance AG, an international reinsurer based in Germany. General Re subsidiaries conduct business activities globally in 51 cities and provide insurance and reinsurance coverages throughout the world. General Re provides property/casualty insurance and reinsurance, life/health reinsurance and other reinsurance intermediary and risk management, underwriting management and investment management services.

Property/Casualty Reinsurance

General Re�� property/casualty reinsurance business in North America is conducted through GRC. Property/casualty operations in North America are also conducted through 16 branch offices in the United States and Canada. Reinsurance activities are marketed directly to clients without involving a broker or intermediary. General Re�� property/casualty business in North America also includes specialty insurers (primarily the General Star and Genesis companies). These specialty insurers underwrite primarily liability and workers��compensation coverages on an excess and surplus basis and excess insurance for self-insured programs. General Re�� international property/casualty reinsurance business operations are conducted through internationally-based subsidiaries on a direct basis (through General Reinsurance AG, as well as several other General Re subsidiaries in 23 countries) and through brokers (primarily through Faraday, which owns the managing agent of Syndicate 435 at Lloyd�� of London and provides capacity and participates in 100% of the results of Syndicate 435).

Life/Health Reinsurance

General Re�� North American and international life, health, long-term care and disability reinsurance coverages are written on an individual and group basis. Most! of this ! business is written on a proportional treaty basis, with the exception of the United States group health and disability business, which is predominately written on an excess treaty basis. Lesser amounts of life and disability business are written on a facultative basis. The life/health business is marketed on a direct basis.

The Berkshire Hathaway Reinsurance Group (BHRG) operates from offices located in Stamford, Connecticut. Business activities are conducted through a group of subsidiary companies, led by National Indemnity Company (NICO) and Columbia Insurance Company (Columbia). BHRG provides principally excess and quota-share reinsurance to other property and casualty insurers and reinsurers. BHRG�� underwriting activities also include life reinsurance and life annuity business written through Berkshire Hathaway Life Insurance Company of Nebraska and financial guaranty insurance written through Berkshire Hathaway Assurance Corporation.

BHRG writes catastrophe excess-of-loss treaty reinsurance contracts. BHRG also writes individual policies for primarily large or otherwise unusual discrete risks on both an excess direct and facultative reinsurance basis, referred to as individual risk, which includes policies covering terrorism, natural catastrophe and aviation risks. A catastrophe excess policy provides protection to the counterparty from the accumulation of primarily property losses arising from a single loss event or series of related events. Catastrophe and individual risk policies may provide amounts of indemnification per contract and a single loss event may produce losses under a number of contracts. BHRG also underwrites traditional non-catastrophe insurance and reinsurance coverages, referred to as multi-line property/casualty business.

The Berkshire Hathaway Primary Group is a collection of primary insurance operations that provide a range of insurance coverages to insureds located principally in the United States. NICO and certain affiliates underw! rite moto! r vehicle and general liability insurance to commercial enterprises on both an admitted and excess and surplus basis. This business is written nationwide primarily through insurance agents and brokers and is based in Omaha, Nebraska. U.S. Investment Corporation (USIC), through its four subsidiaries led by United States Liability Insurance Company, is a specialty insurer that underwrites commercial, professional and personal lines of insurance on an admitted and excess and surplus basis. Policies are marketed in all 50 states and the District of Columbia through wholesale and retail insurance agents. USIC companies underwrite and market 110 distinct specialty property and casualty insurance products. Medical Protective Corporation (MedPro) is based in Fort Wayne, Indiana. MedPro offers products and solutions through its subsidiaries, The Medical Protective Company and Princeton Insurance Company and is a primary healthcare malpractice insurance coverage and patient safety solutions to physicians, dentists, other healthcare providers and healthcare facilities. Other insurance operations include the Berkshire Hathaway Homestate Companies (BHHC), a group of six insurance companies that primarily offers standalone workers��compensation, commercial auto and commercial property coverages.

Railroad Business

Through Burlington Northern Santa Fe, LLC (BNSF) Railway, BNSF operates a railroad network in North America with approximately BNSF operates a railroad network in North America with approximately 32,500 route miles of track (excluding multiple main tracks, yard tracks and sidings) in 28 states and two Canadian provinces as of December 31, 2012. BNSF owns approximately 23,000 route miles, including easements, and operates on approximately 9,500 route miles of trackage rights that permit BNSF to operate its trains with its crews over other railroads��tracks. As of December 31, 2012, the total BNSF Railway system, including single and multiple main tracks, yard tracks and sidings,! consiste! d of approximately 50,500 operated miles of track, all of which are owned by or held under easement by BNSF except for approximately 10,500 miles operated under trackage rights.

BNSF is based in Fort Worth, Texas, and through BNSF Railway Company operates railroad systems in North America. In serving the Midwest, Pacific Northwest, Western, Southwestern and Southeastern regions and ports of the country, BNSF transports a range of products and commodities derived from manufacturing, agricultural and natural resource industries. Over half of the freight revenues of BNSF are covered by contractual agreements of varying durations. BNSF�� primary routes, including trackage rights, allow it to access major cities and ports in the western and southern United States, as well as parts of Canada and Mexico.

Utilities and Energy Businesses

MidAmerican�� businesses are managed as separate operating units. MidAmerican�� domestic regulated energy interests are consisted of two regulated utility companies serving more than three million retail customers, two interstate natural gas pipeline companies with approximately 16,600 miles of pipeline and a design capacity of approximately 7.7 billion cubic feet of natural gas per day and a 50% interest in electric transmission businesses. Its Great Britain electricity distribution subsidiaries serve about 3.9 million electricity end-users. In addition, MidAmerican�� interests include a diversified portfolio of domestic independent power projects, a hydroelectric facility in the Philippines, the residential real estate brokerage firm in the United States and the residential real estate brokerage franchise network in the United States.

PacifiCorp is a regulated electric utility company, serving regulated retail electric customers in portions of Utah, Oregon, Wyoming, Washington, Idaho and California. The combined service territory�� diverse regional economy ranges from rural, agricultural and mining areas to urban,! manufact! uring and government service centers. As a vertically integrated electric utility, PacifiCorp owns approximately 10,600 net megawatts (MW) of generation capacity.

MidAmerican Energy Company (MEC) is a regulated electric and natural gas utility company, serving regulated retail electric and natural gas customers primarily in Iowa and also in portions of Illinois, South Dakota and Nebraska. MEC has a diverse customer base consisting of urban and rural residential customers and a range of commercial and industrial customers. In addition to retail sales and natural gas transportation, MEC sells regulated electricity principally to markets operated by regional transmission organizations and regulated natural gas to other utilities and market participants on a wholesale basis and sells non-regulated electricity and natural gas services in deregulated markets. As a vertically integrated electric and gas utility, MEC owns approximately 7,400 net megawatts of generation capacity.

The natural gas pipelines consist of Northern Natural Gas Company (Northern Natural) and Kern River Gas Transmission Company (Kern River). Northern Natural is based in Nebraska and owns interstate natural gas pipeline system in the United States reaching from southern Texas to Michigan�� Upper Peninsula. Northern Natural�� pipeline system consists of approximately 14,900 miles of natural gas pipelines. Northern Natural also operates three underground natural gas storage facilities and two liquefied natural gas storage peaking units.

Kern River is based in Utah and owns an interstate natural gas pipeline system that consists of approximately 1,700 miles and extends from supply areas in the Rocky Mountains to consuming markets in Utah, Nevada and California. Kern River transports natural gas for electric utilities and natural gas distribution utilities, major oil and natural gas companies or affiliates of such companies, electricity generating companies, energy marketing and trading companies, a! nd financ! ial institutions. The Great Britain utilities consist of Northern Powergrid (Northeast) Limited (Northern Powergrid (Northeast)) and Northern Powergrid (Yorkshire) plc (Northern Powergrid (Yorkshire)), which own a substantial Great Britain electricity distribution network that delivers electricity to end-users in northeast England in an area covering approximately 10,000 square miles. The distribution companies primarily charge supply companies regulated tariffs for the use of electrical infrastructure. MidAmerican also owns HomeServices of America, Inc. (HomeServices), a full-service residential real estate brokerage firm in the United States. HomeServices offers integrated real estate services, including mortgage originations and mortgage banking primarily through joint ventures, title and closing services, property and casualty insurance, home warranties, relocation services and other home-related services. It operates under 27 residential real estate brand names with over 16,000 sales agents and in nearly 375 brokerage offices in 21 states.

Manufacturing, Service and Retailing Businesses

Berkshire�� numerous and diverse manufacturing, service and retailing businesses. Marmon Holdings, Inc. (Marmon) consists of approximately 140 manufacturing and service businesses that operate independently within 11 diverse business sectors. These sectors are distribution services, electrical and plumbing products, industrial products, crane services, engineered wire and cable, transportation services and engineered products, food service equipment, highway technologies, retail home improvement products, retail store fixtures, and water treatment.

Distribution Services supplies specialty metal pipe and tubing, bar and sheet products to markets, including construction, industrial, aerospace and many others. Electrical and Plumbing Products is engaged in the distribution, supplying electrical building wire primarily for residential and commercial construction, and copper tube for th! e plumbin! g, heating, ventilation, and air conditioning (HVAC), refrigeration and industrial markets, through the wholesale channel. Industrial Products consists of metal fasteners and fastener coatings for the construction, industrial and other markets, gloves for industrial markets, portable lighting equipment for mining and safety markets, overhead electrification equipment for mass transit systems, custom-machined aluminum and brass forgings for the construction, energy, recreation and other industries, brass fittings and valves for commercial and industrial applications, and drawn aluminum tubing and extruded aluminum shapes for the construction, automotive, appliance, medical and other markets.

Crane Services is engaged in providing the leasing and operation of mobile cranes primarily to the energy, mining and petrochemical markets. Engineered Wire and Cable is engaged in supplying electrical and electronic wire and cable for energy related markets and other industries. Transportation Services and Engineered Products includes manufacturing, leasing and maintenance of railroad tank cars, leasing of intermodal tank containers, in-plant rail services, manufacturing of bi-modal railcar movers, wheel, axle and gear sets for light rail transit and gear products for locomotives, manufacturing of steel tank heads, and services, equipment and technology for processing and distributing sulfur.

Food Service Equipment is engaged in supplying commercial food preparation equipment for restaurants and shopping carts for retail stores. Highway Technologies primarily serve the heavy-duty highway transportation industry with trailers, fifth wheel coupling devices and undercarriage products, such as brake parts and suspension systems, and also serving the light vehicle aftermarket with clutches and related products. Retail Home Improvement Products is engaged in supplying electrical and plumbing products through the home center channel. Retail Store Fixtures provides shelving systems, other merchandising di! splays an! d related services for retail stores, as well as work and garden gloves sold at retail. Water Treatment includes residential water softening, purification and refrigeration filtration systems, treatment systems for industrial markets including power generation, oil and gas, chemical, and pulp and paper, gear drives for irrigation systems and cooling towers, and air-cooled heat exchangers.

McLane Company, Inc. (McLane) provides wholesale distribution and logistics services in all 50 states and internationally in Brazil to customers that include convenience stores, discount retailers, wholesale clubs, drug stores, military bases, quick service restaurants and casual dining restaurants. Operations include grocery distribution, foodservice distribution, beverage distribution, international logistics and software development. McLane�� foodservice distribution unit, based in Carrollton, Texas, focuses on serving the quick service restaurant industry. Operations are conducted through 18 facilities in 16 states. The foodservice distribution unit services more than 19,000 chain restaurants nationwide.

Other Manufacturing, Other Service and Retailing Businesses

Berkshire�� apparel manufacturing businesses include manufacturers of a range of clothing and footwear. Businesses engaged in the manufacture and distribution of clothing products include Fruit of the Loom, Inc. (Fruit), Russell Brands, LLC (Russell), Vanity Fair Brands, LP (VFB), Garan and Fechheimer Brothers. Berkshire�� footwear businesses include H.H. Brown Shoe Group, Justin Brands and Brooks Sports. Fruit, Russell and VFB (together FOL) is primarily a vertically integrated manufacturer and distributor of basic apparel, underwear and athletic apparel and products. Products, under the Fruit of the Loom and JERZEES labels are primarily sold in the mass merchandise and wholesale markets. In the VFB product line, Vassarette, Bestform and Curvation are sold in the mass merchandise market, while Vanity Fair and! Lily of ! France products are sold in the mid-tier chains and department stores. FOL also markets and sells athletic uniforms, apparel, sports equipment and balls to team dealers; college licensed tee shirts and fleecewear to college bookstores and mid-tier merchants; and athletic apparel, sports equipment and balls to sporting goods retailers under the Russell Athletic and Spalding brands. Additionally, Spalding markets and sells balls in the mass merchandise market and dollar store channels.

Garan designs, manufactures, imports and sells apparel primarily for children, including boys, girls, toddlers and infants. Products are sold under its own trademark Garanimals and private labels of its customers. Garan also licenses its registered trademark Garanimals to independent third parties. Garan conducts its business through operating subsidiaries located in the United States, Central America and Asia. Fechheimer Brothers manufactures, distributes and sells uniforms, principally for the public service and safety markets, including police, fire, postal and military markets. Fechheimer Brothers is based in Cincinnati, Ohio.

Justin Brands and H.H. Brown Shoe Group manufacture and distribute work, rugged outdoor and casual shoes and western-style footwear under a number of brand names, including Justin, Tony Lama, Nocona, Chippewa, Carolina, Sofft, Double-H Boots, Eurosoft, and Softspots. Acme Building Brands (Acme) manufactures and distributes clay bricks (Acme Brick and Jenkins Brick), concrete block (Featherlite) and cut limestone (Texas Quarries). In addition, Acme distributes a range of other building products of other manufacturers, including glass block, floor and wall tile, wood flooring and other masonry products. Acme also sells ceramic floor and wall tile, as well as marble, granite and other stones through its subsidiary, American Tile and Stone. Benjamin Moore & Co. (Benjamin Moore) is a formulator, manufacturer and retailer of a range of architectural coatings, available principa! lly in th! e United States and Canada. Products include water-thinnable and solvent-thinnable general purpose coatings (paints, stains and clear finishes) for use by the general public, contractors and industrial and commercial users. Products are marketed under various registered brand names, including Regal, Super Spec, MoorGard, Aura, Nattura, ben, Coronado, Insl-x and Lenmar.

Johns Manville (JM) is a manufacturer and marketer of products for building insulation, mechanical insulation, commercial roofing and roof insulation, as well as fibers and nonwovens for commercial, industrial and residential applications. JM serves markets that include aerospace, automotive and transportation, air handling, appliance, HVAC, pipe insulation, filtration, waterproofing, building, flooring, interiors and wind energy. The Shaw Industries Group, Inc. (Shaw) is a carpet manufacturer based on both revenue and volume of production. Shaw designs and manufactures over 3,000 styles of tufted carpet, tufted and woven rugs, laminate and wood flooring for residential and commercial use under about 30 brand and trade names and under certain private labels. Shaw also provides installation services and sells ceramic and vinyl tile along with sheet vinyl. Forest River, Inc. (Forest River) is a manufacturer of recreational vehicles, utility, cargo and office trailers, buses and pontoon boats. Albecca Inc. (Albecca) does business primarily under the Larson-Juhl name. Albecca designs, manufactures and distributes a range of products, including wood and metal molding, matboard, foamboard, glass, equipment and other framing supplies in the United States, Canada and 15 countries outside of North America.

FlightSafety International Inc. (FSI) is engaged in professional aviation training services to individuals, businesses (including certain commercial aviation companies) and the United States. Government. FSI primarily provides training to pilots, aircraft maintenance technicians, flight attendants and dispatchers who op! erate and! support a range of business, commercial and military aircraft. NetJets Inc. (NJ) is a provider of fractional ownership programs for general aviation aircraft. TTI, Inc. (TTI) is a specialty distributor of passive, interconnect, electromechanical and discrete components used by customers in the manufacturing and assembling of electronic products. TTI�� customer base includes original equipment manufacturers, electronic manufacturing services, original design manufacturers, military and commercial customers, as well as design and system engineers. TTI services a range of industries, including telecommunications, medical devices, computers and office equipment, aerospace, automotive and consumer electronics.

Finance and Financial Products

The Company�� finance and financial products businesses include manufactured housing and finance (Clayton Homes), transportation equipment leasing (XTRA), furniture leasing (CORT), as well as various miscellaneous financing activities. Clayton Homes, Inc. (Clayton) is a vertically integrated manufactured housing company. As of December 31, 2012, Clayton operated 34 manufacturing plants in 12 states. Clayton�� homes are marketed in 48 states through a network of 1,441 retailers, including 323 company-owned home centers. XTRA is a transportation equipment lessor operating under the XTRA Lease brand name. XTRA manages a diverse fleet of approximately 82,000 units located at 58 facilities throughout the United States and two facilities in Canada. The fleet includes over-the-road and storage trailers, chassis, temperature controlled vans and flatbed trailers. CORT Business Services Corporation is a provider of rental relocation services, including rental furniture, accessories and related services in the rent-to-rent segment of the furniture rental industry.

Best Insurance Companies To Buy Right Now: Iamgold Corporation(IAG)

IAMGOLD Corporation, together with its subsidiaries, engages in the exploration, development, and production of mineral resource properties worldwide. It primarily explores for gold, silver, zinc, copper, niobium, diamonds, and other metals. The company holds interests in eight operating gold mines, a niobium producer, a diamond royalty, and exploration and development projects located in Africa and the Americas. Its advanced exploration and development projects include the Westwood project in Canada; and the Quimsacocha project, which consists of 3 mining concessions covering an aggregate area of approximately 8,030 hectares in Ecuador. The company was formerly known as IAMGOLD International African Mining Gold Corporation and changed its name to IAMGOLD Corporation in June 1997. IAMGOLD Corporation was founded in 1990 and is based in Toronto, Canada.

Advisors' Opinion:

• [By Christopher Barker]

  Although I have not shed my long-standing contention that Yamana Gold offers one of the more deeply discounted vehicles for long-term gold exposure, lately my outlook for IAMGOLD has turned particularly bullish. With a looming spin-off of a 10% to 20% stake in the company's reliably profitable Niobec niobium mine, and the recent sale of its interest in a pair of high-cost gold operations in Ghana for $667 million, IAMGOLD finds itself in terrific financial shape to execute an aggressive $1.2 billion expansion imitative at existing operations.

  Considering the $1.6 billion net asset value (after tax) that IAMGOLD recently assessed for the Niobec mine alone, and a presumed hoard of more than $1.2 billion (in cash, cash equivalents, and gold bullion held for investment), at a market capitalization of $6.9 billion I find extreme comfort in the market's resulting valuation for IAMGOLD's 15.2 million ounces of attributable gold reserves.

Will Verizon Continue This Bull Run?

With shares of Verizon (NYSE:VZ) trading around $51, is VZ an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Verizon is a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies. It operates in two primary segments: Verizon Wireless and Wireline. Verizon Wireless' communications products and services include wireless voice and data services and equipment sales, which are provided to consumer, business and government customers across the United States. Wireline's communications products and services include voice, Internet access, broadband video and data, Internet protocol network services, network access, long distance and other services. As consumers and companies strive to communicate at increasing rates, Verizon stands to see a rising profits as a main provider. Look for rising communications, information, and entertainment to drive profits for Verizon.

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T = Technicals on the Stock Chart are Strong

Verizon stock has been on an explosive run in recent years. In fact, the stock has saw a strong breakout just last year and looks to be getting ready to test previous all-time high prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Verizon is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Verizon options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Verizon Options	16.53%	10%	9%

What does this mean? This means that investors or traders are buying a small amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
June Options	Flat	Average
July Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Verizon’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Verizon look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	15.25%	-107.21%	14.29%	12.28%
Revenue Growth (Y-O-Y)	4.17%	5.66%	3.92%	3.69%
Earnings Reaction	2.76%	0.58%	2.37%	-2.94%

Verizon has seen increasing earnings and revenue figures over most of the last four quarters. From these figures, the markets have been pleased with Verizon’s recent earnings announcements.

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P = Average Relative Performance Versus Peers and Sector

How has Verizon stock done relative to its peers, AT&T (NYSE:T), Sprint Nextel (NYSE:S), T-Mobile (NASDAQ:TMUS), and sector?

	Verizon	AT&T	Sprint Nextel	T-Mobile	Sector
Year-to-Date Return	19.92%	8.99%	29.28%	25.42%	14.21%

Verizon has been an average performer, year-to-date.

Conclusion

Verizon provides essential communications products and services to a growing audience across the nation and around the world. The stock has recently broken above a multi-year range and may be getting ready to test previous all-time high prices. Over the last four quarters, earnings and revenue figures have increased with has kept investors pleased. Relative to its peers and sector, Verizon has been an average performer, year-to-date. Look for Verizon to OUTPERFORM.

Uralkali To Challenge Canpotex

This morning Russian potash giant OJSC Uralkali (URALL.PK) presented first half 2013 financial and operating results and more importantly, much anticipated comments on the strategy of the company and the state of the international potash industry, the latter blind-sided by the leading potash company company's split with marketing partner JSC Belaruskali of Belarus.

I never thought Uralkali would get back together with Belaruskali as I expressed in this article written a day before the break-up roiled the fertilizer world, causing 20% plunges in the stocks of major producers such as Potash Corp (POT), Mosaic Company (MOS) and Israel Chemicals Ltd (ISCHY.PK).

At the time, other pundits pooh-poohed the spat and claimed it was a minor domestic spat. Even the CEO of Potash Corp, Mr. Bill Doyle, tried to assuage investor nerves by declaring in mid August that "this sort of thing has happened before" and that "everything would be fine."

But comments by Uralkali's Chairman Alexander Voloshin and senior management (with the acutely felt absence of CEO Vladimir Baumgertner still locked up in a Belarusian jail) confirmed what I forecasted - Uralkali has no intention of patching it up with Belaruskali, and is determined to embark on a bold plan to favor volume in export potash sales over price control, banking on its lowest cost position.

Uralkali is special in that it is a pure potash mining and selling company unlike competitors, who often sell other fertilizers or chemicals. Uralkali's results are instructive, and the numbers released this morning were particularly so. They were ugly. And they could be a glimpse of what kind of potash numbers members of the Canadian potash marketing agency Canpotex could be facing in the future, the members other than Potash Corp being Mosaic and Agrium Inc. (AGU).

In the first half of 2013, Uralkali exported 3.3 million tons of potash, down 20% year over year, and this followed a relatively strong first quarter so the second q! uarter was terrible. Domestic potash tons were flat at 1 million.

Uralkali's financial results are presented in USD (IFRS standards) and were reported by acting COO and CFO Viktor Belyakov. Export prices were down 17% to $316/ton from $380/ton last year. Total revenues were down 28%. EBITDA dropped 40% from $1.45 billion USD to $876 million. However, EBITDA margin dropped only nine points to 65%, a reflection of Uralkali's low cost structure (wages are very low relative to North American standards) and the low Russian Ruble against the USD.

Overall first half net profit was down 32% to $397 million versus $842 million year over year. The policy of the company is to pay out at least 50% of profits as dividends, which amounted to about 40 Rubles per 5 share GDR last year. An interim dividend for 2013 would be declared in November.

But there was one clear message that came through during the one hour conference call, which featured statements by the chairman and independent director Gordon Sage, reaffirming the new sales strategy of the company: it was only a remote possibility that Uralkali would engage in discussions with Belaruskali to reform the alliance.

What are the repercussions of this for other players in the industry?

In my view, short term (as in the next 12 months) - negative. The question is, how long will the bad news be superseded by better news, that the potash market has expanded to allow the strong to benefit, leaving the weaker players licking their financial wounds? My view is the rosier view will take at least two to three years to play out.

The Russians are fed up with giving up market share to other major potash producers. Uralkali had 22% of the world market in 1H 2012, but this dropped to 17% in 1H 2013. Alternatively, POT/Canpotex, as it is called, aggressively went after business in Brazil and Southeast Asia, and raised its world share to 32% from 27%.

Other players, such as K+S (KPLUY.PK), Israel Chemicals and APC, Belaruskali and Soquim! ich (SQM)! maintained their world shares at Uralkali's expense.

Uralkali's Director of Sales and Marketing, Oleg Petrov, made it clear the Russian company would go after the volume lost trying to maintain both a stable potash price and their hard-to-control minority partner, Belaruskali. As I had correctly deduced, this was not a power play by the Russian government, although the Russians have long had their eye on controlling Belaruskali, either outright with majority equity control or through the joint marketing company, Belarusian Potash Company.

Petrov expects global potash consumption to grow from 55 million tons to the 59-60 million ton range in 2014, half from lower price stimulated consumption by India and China, and the rest from consumers in Brazil, the US and others.

Normally, this would be relatively good news. The lower price would ultimately (and quickly according to Petrov) result in more potash consumption, achieving perhaps peak profits for some producers according to the elasticity curve of supply and demand we all know.

But some analysts expressed skepticism that Uralkali could deliver greater potash demand as long as buyers believe the price will continue to decline. In my view, a dramatic drop in price, to $250, all at once, would open those floodgates. Petrov gave no indication such a dramatic move was in the offing. Perhaps to allay some criticism of Baumgertner's statement that potash would fall to $300 per ton, Petrov suggested the price could only touch $300 but would soon bounce back up.

This makes no sense of course, because in an oversupplied market the price tends to decline to at least below the highest marginal cost producer, and most if not all would still be making money at $300. Another law of microeconomics is you don't shut down your plant until sales are no longer making a cash contribution to your fixed overhead. Overhead could be a lot lower than $300 for many producers.

It is instructive to compare the first half results of Potash Corp's! potash s! egment against Uralkali's dismal performance in 2013, because these positions could easily be reversed when the Russian bear ups its sales to match the "full capacity" production of 13 million tons it says it currently is achieving.

Potash Corp's offshore first half potash sales were 3.14 million tons, up 12% unlike Uralkali. Export potash price declined from $409 to $328, down 20%, similar to Uralkali. So offshore sales revenues were down 10% to $1.03 billion but overall potash revenues including North America were up 2.5% to $1.72 billion.

Potash Corp's all in cost of goods sold for potash was $114/ton, versus Uralkali's declared $58 cash cost per ton.

One can see where this is going. Uralkali expects to sell 2.5 million more tons in 2014 than its guided sales of 10.5 million, the latter some analysts felt was optimistic, given it would require selling 6.2 million tons in the second half of 2013 in a relatively stagnant market.

A 2.5 million ton increase in sales may not be enough to roil the market if demand picks up. There could be enough volume for all to be happy with. However, it is a crap shoot whether low crop prices will stimulate such a big jump in potash demand, unless as I said, a dramatic price chop is executed. The Indian currency crisis continues making purchasing difficult.

My best guess is Belaruskali will try to get the Indian government to take an equity position in return for a firm off-take agreement. China will cannily wait until the last minute to firm up 2014 contracts (Petrov says Q4 2013 but some analysts were skeptical). Brazil remains the only real growth market for producers.

Of course the potash equities have recently rallied and the momentum has been on the long side lately. However, the results of the Uralkali conference call indicate that the future will be difficult for major potash sellers as the Russian bear comes alive.

At approximately 12 times $2.50 2013 EPS estimate, Potash Corp looks reasonably cheap to most pe! ople. The! y should note however, that the company bought back 225,000 shares every day in August, so some of the price support is artificial. And I recall a time when potash prices were very low (2009) and the company earned just north of $1 per share.

Source: Uralkali To Challenge Canpotex

Disclosure: I am long AGU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

YuMe Video Advertising IPO Gets Mixed Marks

YuMe Inc. (NYSE: YUME) is supposed to be in a hot space for digital video brand advertising solutions, but its initial public offering (IPO) is coming with some mixed fanfare. YuMe sold some 5,125,000 shares of common stock at $9.00 per share, and the company is selling all the shares itself rather than insiders and VC-backers cashing out as we have seen in so many other offerings.

Citigroup, Deutsche Bank Securities and Barclays are acting as joint book-running managers for the offering. The co-managers were Needham & Company and Piper Jaffray. The underwriting syndicate has been granted a 30-day option to purchase up to an additional 768,750 shares of common stock at the IPO price, although we would point out that the shares allocated for overallotments actually are from certain selling stockholders.

What investors need to know here is that this is a small uptick in shares, but it is a huge drop in the price. Originally the price range was $12 to $14 per share, so a $9 share price is not going to be the most exciting price for the company. That being said, apparently investors are treating it as if the stock went on sale, because YuMe shares are trading up 5.5% at $9.50 on almost 500,000 shares as of 9:48 a.m. EST.

There is a solid list of venture capital players behind YuMe. Its investor site shows Accel Partners, BV Capital, DAG Ventures, Intel Capital, Khosla Ventures, Menlo Ventures, TransLink Capital, Samsung Ventures and WestSummit Capital as backers. YuMe launched an advertising technology solution in 2007 to properly monetize, distribute, traffic and report against digital video.

Is Alcoa a Risky Investment?

With shares of Alcoa (NYSE:AA) trading around $8, is AA an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Alcoa is engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined, through its participation in technology, mining, refining, smelting, fabricating, and recycling. Alcoa's products are used worldwide in aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, consumer electronics, and industrial applications. The company's operations consist of four worldwide segments: Alumina, Primary Metals, Flat-Rolled Products, and Engineered Products and Solutions. As economies worldwide expand, raw material suppliers like Alcoa stand to see rising profits. Growth in developing countries is key to a rising stock price for Alcoa, so watch that as this growth continues.

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T = Technicals on the Stock Chart are Mixed

Alcoa stock has not been a big positive mover over the last several years. The stock has been struggling as of late and may stay this way for the next few months. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Alcoa is trading above its flat key averages which signal neutral price action in the near-term, at best.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Alcoa options may help determine if investors are bullish, neutral, or bearish.

	Best Tech Stocks To Invest In 2014 Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Alcoa Options	33.06%	80%	79%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
July Options	Steep	Average
August Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bearish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Alcoa’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Alcoa look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	44.44%	221.89%	-186.67%	-100.00%
Revenue Growth (Y-O-Y)	-2.88%	-1.52%	-9.13%	-9.45%
Earnings Reaction	0.00%	-0.21%	-4.60%	-4.10%

Alcoa has seen improving earnings but decreasing revenue figures over the last four quarters. From these numbers, the markets have not been too excited about Alcoa’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

How has Alcoa stock done relative to its peers, Aluminum Corporation of China (NYSE:ACH), BHP Billiton (NYSE:BHP)), Noranda Aluminum (NYSE:NOR), and sector?

	Alcoa	Aluminum Corp. of China	BHP Billiton	Noranda Aluminum	Sector
Year-to-Date Return	-5.65%	-23.09%	-19.42%	-34.62%	-11.33%

Alcoa has been a relative performance leader, year-to-date.

Conclusion

Alcoa is a provider of aluminum products and services to companies operating in a multitude of industries worldwide. The stock has struggled, in recent years, and looks poised to continue this trend. Over the four quarters, earnings have improved a bit while revenue figures have been on the decline which has not excited investors in the company. Relative to its very weak peers and sector, Alcoa has led in year-to-date performance, albeit negative. STAY AWAY from Alcoa stock for now.

A Young Investor's DGI Plan And Portfolio

The one constant I have noticed when viewing articles and profiles from popular DGI contributors is the fact that most of these contributors are near, if not at, retirement. Provided their articles lay the framework for the premise in the Dividend Investing Primer, I always find myself trying to picture another twenty-something incorporating these strategies and trying to perfect them. While there are some brilliant younger DGI contributors, Tim McAleenan, Dividend Growth Machine and Eli Inkrot come to mind, there are few 'youngsters' out there who are sharing their strategies and results. With that, I am hoping to start a journey of not only educating younger investors about DGI, but also sharing results.

If you are even a casual browser of dividend growth investing articles, you have likely come across DGI business plans from some of the top DGI contributors. David Van Knapp presented the initial "treat-yourself-as-a-business" plan, found here, and Bob Wells did a magnificent job in adapting and constructing off DVK's using his own guidelines and personal strategies. I will attempt to do the same: laying the foundation for prudent and (hopeful) unemotional investing into the future.

Business Name: Erik's Dividend Growth Portfolio

Business Goal: Construct a steadily increasing stream of dividends paid by excellent, low-risk companies.

Business Model (Strategies)

Stock Selection:

Majority of stocks will come from David Fish's Champions, Contenders, and Challengers listAdditional stock selection may occur based on the following parameters: Price at least $5 per share.Minimum projected yield at least 1.5% (investment horizon is 30+ years).Dividend growth rate over past 5 years at least 7% annually.Positive annual total returns in three of past five years (2008-2012).Increased dividend payout in each of past 5 years.An understandable and sustainable business model with meaningful competitive advantages.Strong fundamental business metrics.

Stock Valua! tion:

Purchase initial positions in stocks with "Fair" or better valuations. Valuation will be determined by Price-to-Earnings multiples based on 5-10 year averages, future estimates and industry comparison. Additional valuation tools will include F.A.S.T. Graphs, Analyst Recommendations, and other, respected Seeking Alpha contributors.

(A Dollar-Cost-Average and Dividend Reinvestment approach will be implemented so cost basis will fluctuate as additional purchases and reinvestment's are made.)

Portfolio Construction:

Initial construction will allow for mutual funds/ETFs (based on current make up of the portfolio) and stocks with an emphasis on converting the entire portfolio to individual stocks.Diversify across sectors, industries, geographies, and different ranges of yields and growth rates.Limit the number of stocks owned to a maximum of 15. (Limit may increase as the strategies are implemented and better understood.)Equal portfolio weighting is the early goal. Adjustments in proportion will occur as prices change, dividends are reinvested, and perceptions of risk and reward develop.Hold no more than 15 percent of the portfolio's value in a single stock. If a position exceeds 15 percent, consider selling the excess and re-distributing the capital.The focus of the portfolio is on dividends and not share prices. The goal of the portfolio is to be 94-97% invested. A dollar-cost-average approach will be initially implemented. Cash reserves may appear over-weight early in the portfolio's life.The dollar-cost-average will occur in monthly increments until cash reserves are fairly weighted in the portfolio. (3-6%)

Dividend reinvestment:

Dividends will be automatically reinvested for each stock owned. As this plan becomes better understood, a change to an "accumulate and redistribute" strategy may be adopted.

Selling Guidelines:

1. Investigate and seriously consider selling any stock for these reasons:

It cuts, freezes, or suspends its dividend.It bub! bles or b! ecomes seriously overvalued.Significant changes impacting the company or industry.It is going to be acquired or merged.It announces plans to split itself up or to spin off a separate company.It underperforms the market in total returns (price + dividends) for three years running.

2. Conduct a thorough portfolio review at minimum, twice per year. Quarterly financial and management monitoring will be conducted with each subsequent 10-Q release.

Business Plan Discussion

If you had a chance to view DVK's or Bob Well's business plan, you will see a number of similarities, including much of the same verbiage. I did not feel it was necessary to reinvent the wheel and create a plan from scratch as DVK provided an excellent framework to build upon. However, everyone's investing business plan should have differences based upon your age and investment horizons; personal risk assessments; and the defining goal of your ''business''.

One other issue pertaining to your business plan is the review of the plan itself. As any prudent manager will tell you, plans and policies should not be set in stone and a periodic review must be conducted on the overall business direction. I will be reviewing my DGI business plan on an annual basis and making updates in accordance with my life changes. I will be getting married in late August and my future wife will have to be brought up to speed with my portfolio. Adjustments will have to be made in accordance with providing retirement income for two individuals through the wonder years.

I have included the initial structure of my current portfolio and the steps I've taken to align it with my business plan. While it will take some time (the backbone of DGI) to achieve proper portfolio alignment, my business plan has outlined the procedures and steps I need to take. Now I just have to implement them.

"The Portfolio"

For some slight background on the specifics of this portfolio, I have listed a number of frameworks defining the foundations! of the p! ortfolio itself:

All positions in this portfolio are held in an after-tax Roth IRA.The portfolio is granted 100 commission-free trades, resetting on an annual basis. Automatic dividend re-investment is also provided free by my brokerage.I am slowly initiating positions and have not yet added $2,500 of my 2013 $5,500 contribution.Once I develop full positions in my Roth, I have two additional securities accounts each with 100 commission-free trades.

Erik's Dividend Growth Portfolio:

Stocks	Symbol	Shares	Curr. Yield	Mkt Value	Weighting
Aflac	AFL	37.2	2.34%	$2,227	7%
Chevron	CVX	22.0	3.38%	$2,602	8%
Coca Cola	KO	58.4	2.90%	$2,257	7%
ConocoPhillips	COP	43.8	4.18%	$2,890	9%
CSX Corp	CSX	115.8	2.42%	$2,874	9%
Johnson & Johnson	JNJ	18.2	2.94%	$1,633	5%
McDonald's	MCD	25.2	3.23%	$2,406	8%
Wal-Mart	WMT	41.4	2.57%	$3,030	10%
Walgreens	WAG	30.4	2.58%	$1,481	5%
Wells Fargo	WFC	35.3	2.82%	$1,502	5%
Total Stocks				$22,902	74%
TRP Equity Income	PRFDX	135.3	1.79%	$4,166	13%
Total Mutual Funds				$4,166	13%
Total Cash				$4,026	13%
Portfolio Totals			2.83%	$31,095	100%

If you compare my current portfolio with my DGI business plan, two distinct items should pop out from this portfolio. One, nearly 15% of my portfolio is held in a mutual fund. This was an initial purchase that I made when I first started my dividend-investing journey back in late 2011. I am looking at a number of companies on my watchlist to initiate a new position. In the meantime, I will reinvest the dividends as I do not prefer a 26% cash weighting (It took me over a full year to initiate a position in my first DGI company, Coca-Cola). The second discrepancy you've probably noticed is the one company not found on the current CCC list, WFC. These shares were rolled over from my Wells Fargo Roth 401K and I will describe my thoughts on WFC in a future article. (figures as of 8/20/13)

My business plan calls for increasing positions through dollar-cost-averaging and this has left me with an over-abundance of cash in my portfolio. The goal is to DCA until cash reserves are 3 to 6%. With my remaining 2013 IRA contribution of $2,500 not included yet in the portfolio, I might - with board approva! l of cour! se (you, the Seeking Alpha readers) - spread some additional cash to my current positions and initiate a few more. This action looks even more appealing as Mr. Market has a few recent stock sales. I will also be looking to rid my portfolio of PRFDX as dividend growth has been inconsistent and I am paying additional fund fees.

The End of the Beginning

As I wrap up this article about the thoughts, procedures, and processes of my DGI portfolio, I find myself extremely excited for this multi-decade journey I'm about to embark on. As a 26-year old, I feel truly blessed to understand the basics of finance and the power of time and compounding. The Seeking Alpha community has provided me a basis for investing and I can only hope to do the same for others my age. Once again, I want to thank this amazing community for plotting this course toward retirement. While this may be the end of the beginning, I can't help but think - it's really the beginning of the end (retirement).

(For some anecdotal reading on how this young investor started in the world of investing, check out my introductory instablog.)

Source: A Young Investor's DGI Plan And Portfolio

Disclosure: I am long AFL, CVX, KO, COP, CSX, JNJ, MCD, WMT, WAG, WFC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

PepsiCo: Recent Expansion In Thailand Will Only Strengthen The Company's Fundamentals

On Friday, August 30, it was announced that Pepsi-Cola (Thai) Trading, the local producer and distributor of PepsiCo's (PEP) global beverage and snack brands in Thailand, has increased production capacity to meet growing demand for its products, with the US-based parent seeing Thailand as a high-potential market with a positive business outlook in the long run. The three additional production lines at PepsiCo's beverage plant located within the Amata City Industrial Estate will increase its maximum beverage production capacity by 81%. In the wake of Friday's announcement, I wanted to take a closer look at a number of fundamental catalysts behind my decision to remain bullish on the parent company's stock.

Company Profile

Headquartered in Purchase, New York, PepsiCo, Inc. states that it is the company's mission to be the world's premier consumer products company focused on the sale and distribution of convenient foods and beverages. The company is also actively seeking a number of ways to produce financial rewards for its investors and create opportunities for growth and enrichment for its employees and business partners that are located within the multitude of local communities in which they operate.

Catalyst #1 - Performance and Trend Status

On Friday, shares of PepsiCo -- which currently possess a market cap of $122.80 billion, a P/E ratio of 18.71, a forward P/E ratio of 16.78, and a forward yield of 2.86% ($2.27) -- settled at $79.73. As of June 30, 2013, and from a cash and debt perspective, Goldcorp (GG) had a total of $8.14 billion in cash and a total of $29.51 billion in debt on its books. Based on Friday's closing price of $29.92, shares of PepsiCo are trading 2.50% below their 20-day simple moving average, 3.60% below their 50-day simple moving average, and 3.40% above their 200-day simple moving average. These numbers indicate a short and mid-term downtrend and a moderate long-term uptrend for the stock, which generally translates into somewhat of a buying ! mode for most traders.

(click to enlarge)

Catalyst #2 - Dividend Behavior

Since March 2, 2011, PepsiCo has increased its regular quarterly distribution three times in the last ten payable quarters. From an income perspective, the company's forward yield of 2.86% ($2.27) coupled with its continued distribution increases make this particular stock a very viable income option for long-term investors in search of a moderate-yielding play in the food & beverage sector.

(click to enlarge)

Catalyst #3 - Peer-Based Ratio Comparison

When it comes to any company's price-to-free-cash-flow ratio (P/FCF), price-to-sales ratio (P/S) and its PEG ratio I always think it's best to do a side-by-side comparison with some of its top competitors, which in the case of PepsiCo, I did a side-by-side comparison using Coca-Cola (KO). When it comes to each company's P/FCF ratio, PepsiCo's P/FCF ratio of 29.62 is 44.34% lower than that of Coca-Cola's current P/FCF ratio of 53.21. In terms of each company's P/S ratio, PepsiCo clearly takes the cake as the company possesses a 1.87 P/S ratio vs. Coca-Cola's P/S current ratio of 3.57. When it comes to each company's PEG ratio, both could use some serious improvement even though PepsiCo (2.27) has a slightly better PEG ratio than that of Coca-Cola (2.56).

Conclusion

For those of you who may be considering a position in PepsiCo, I'd keep a watchful eye on a number of catalysts over the next 12-24 months as they could contribute quite nicely to the company's long-term growth. These catalysts include but are not limited to the company's near-term performance and trend status, the sustainability of its dividend, and its abil! ity to fu! ndamentally outpace its competitors. If PepsiCo can continue to expand its global footprint while cutting costs and creating jobs, I see no reason why investors should continue to avoid establishing a long-term position in the company.

Source: PepsiCo: Recent Expansion In Thailand Will Only Strengthen The Company's Fundamentals

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PEP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)