By EconMatters �
�
Actively Monitor 401k Designations
The stock market is so corrupt, such a gamed enterprise it is comical and is no place for 401k type investors to have their life savings and only retirement funds at risk with the lunatics and absolute corruption of the US stock market.
I am an experienced market participant so I know all the tricks from the inside, and even I am fooled by Wall Street shenanigans from time to time, and I have seen it all and have historical data and sophisticated tools that the mom and pop investor has absolutely no ability to access.�
Take my advice and put your incredible gains - you have probably through dumb luck actually performed better than most hedge funds - but take these massive gains and park your capital in a nice and safe money market fund or cash equivalent instrument depending upon your company`s plan options.
Predictable Risk Aversion & Jobs Report
The recent trend has been to sell off the market before the job`s report, this is ultra-conservative smart money wanting to get out before the jobs number as the market sold off for five days, and as soon as the number comes out and there are no extreme deviations with market implications, to jump right back into the market, the exact same pattern happened last month the week before the release of the jobs number, the same thing happened this past week in markets. �The takeaway Markets are somewhat Predictable ��think of valuation levels in terms of Predictable Market Timing Strategy.
A Good Enough Level as Any for Exit to Safety
Accordingly take this opportunity of the rally to exit current market holdings and change your monthly 401k contributions which are going into bond and equity funds to now go into cash equivalents. This means all of your Retirement Accounts from IRAs to 401ks are effectively in Cash! These instruments aren`t going to pay you anything literally, and yes you are going to be losing value due to the effects of inflation, but you cannot look at investing in that manner given the current market valuations, your first priority since these are for most of you - your only retirement savings ��that Return Of Capital is your real true concern at this point. �� � Furthermore, given these valuations in financial assets and the bubbly market forces that have enabled considerably favorable scenarios to take place: From low-interest rates, 85 Billion of Monthly QE Injections, Bond Purchases by the Federal Reserve, Large Stock Buybacks, Lack of Investment Options in Emerging Markets; the associated risks are too great to take a chance on given these are your retirement funds. Put simply the risk versus the reward in financial markets is too great for these funds.
Same Market Forces Exist for Pushing Markets Higher
Yes the stock market via many models will continue to rise into the new year if recent patterns continue as fund managers like to push up markets the first four months of the new year to make their numbers, and with even a slight taper there is still going to be at least 60 Billion of Fed Liquidity injected into stock and bond assets each month, so there is more impetus for markets to go higher versus any natural selling pressure.
401k Concerns Different from Big Banks & Players
However, this is not your primary concern because you don`t know when to get out, and the insiders do, and the big players will decide when the party is over, and let me remind you that professional, large players can hedge entire portfolios for as cheap as 5%, something that mom and pop investors just will not be able to accomplish given their limited resources.�
Do These Valuation Levels Compare Favorably to Entry & Exit Points over last 15 Years?
Your primary concern as a 401k Investor should be: Are these valuation levels where I feel comfortable for the long haul holding given the history of the stock and bond markets over the last 15 years? Moreover, in looking back I would guess that most of your 401k has been halved or worse several times over the last 15 years, and some of you have been completely wiped out with many companies going out of business or on the verge of going out of business like Blackberry or JCPenny.
Multiple Expansion Means Not Cheap
�Let me reiterate these are not valuations built on outstanding earnings, these are valuations built pure and simple on ��ultiple expansion��which is a euphemism for QE Injections into stock markets via Asset Purchases; these are valuation levels that will not hold up over time.�
So sure the stock market can go up another 11% early next year before the full taper, and eventual stock re-pricing occurs, but the rewards of another 11% upside to your portfolio ��I mean life savings ��isn`t worth the potential of a 25% or more haircut ��meaning no return of your capital ��if and when the big boys decide to front run the exodus, which they can do at any time, and you will be the last to realize that no one is coming to buy this latest dip in markets.
Even Sharks Get Eaten Alive in Financial Markets
Wall Street skewers even some of the most sophisticated investors at the drop of a hat, i.e., look at how the big banks and hedge funds made John Paulson liquidate some of his gold holdings in late June of this year during a shorting attack on Gold, and as soon as they covered these short positions Gold went right back up to where it was before the short shark attack at the 1400 level. Gold is retesting these Paulsen Liquidation levels once again in another concerted Gold Shorting attack and even the experts don`t have any real notion of how low Gold can fall if certain technical support levels fail.�
Don`t Fall in Love with Market Exposure
This is just an example to show how one never gets wedded to positions, lines have to be drawn, risk parameters have to be established, and cost benefit analysis has to be modeled even for 401k investors, and the future risks just don`t justify having your retirement savings in equities or bonds at these levels of valuations.�
Safety Concerns & Valid Risk Assessment Means Leaving Potential Profits on the Table
Sophisticated investors can have a better feel for when to get out based upon their vast inside knowledge, market experience and key technical levels but a mom and pop investor who occasionally checks their portfolio once a month at best has no chance of perfectly timing the inevitable market exodus.�
401k Folks Need To Be Out of Market Before Big Wales Start Exiting
The really big players will know when to get out because they are the ones moving the market with their selling, no need to market time when you are big enough to actually move the market, these guys never lose, trust me when they decide to sell, they have puts and derivatives in place to capture immense profit on their exodus of positions.
Therefore, not only does the 401k investor get hit by the big guys exiting large positions in the market, but these guys are shorting the market at the same time, causing selloffs to the market and the 401k investor`s retirement portfolio to be exacerbated and magnified on the way down.�
Yes these guys don`t play fair 401k investor ��this is not a safe place or good spot to have your life savings at risk with these sharks playing in your fresh water pond. Salt be damned, your portfolio will see more red in your quarterly statement than you could possibly imagine in such a short amount of time ��financial markets often take the escalator up, and the freight elevator down!
Hardest Lesson to Learn ��Risk Mitigation Strategy
So sure the market could potentially go up another 11% the first half of the year but just juxtapose this upside scenario versus all the time your 401k has become a 201k over the last 15 years, your AIG and Citi stake has been completely wiped out, and these were legitimate fortune 500 companies not some risky penny stocks.
Markets are corrupt, markets are corrupt, markets are corrupt ��this is the first lesson to take to heart as a market participant Mr. and Mrs. 401k Investor ��Caveat emptor ���protect yourself at all times!
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Top 10 Penny Companies To Buy Right Now: Empresas Ica Soc Contrladora (ICA)
Empresas ICA, S.A.B. de C.V., through its subsidiaries, engages in the construction and related activities in Mexico. The company?s Civil Construction segment focuses on infrastructure projects that include the construction of roads, highways, mass transit systems, bridges, dams, hydroelectric plants, tunnels, canals, and airports; and on the construction, development, and remodeling of multi-storied urban buildings, such as office buildings, hotels, multiple-dwelling housing developments, and shopping centers. This segment also engages in demolition, clearing, excavation, de-watering, drainage, embankment fill, structural concrete construction, concrete and asphalt paving, and tunneling activities. Its Industrial Construction segment focuses on the engineering, procurement, construction, design, and commissioning of manufacturing facilities comprising power plants, chemical plants, petrochemical plants, fertilizer plants, pharmaceutical plants, steel mills, paper mills, d rilling platforms, and automobile and cement factories. Empresas ICA?s Rodio Kronsa segment engages in sub-soil construction involving the construction of tunnels, underpasses, and retaining walls. The company?s Housing Development segment engages in the development, trading, ownership, sale, assistance, operation, and administration activities. Its Infrastructure segment involves in the operation and maintenance of concessioned airports, highways, bridges and tunnels, water supply systems, and waste treatment systems. The company also provides a range of services that include feasibility studies, conceptual design, engineering, procurement, project and construction management, construction, maintenance, technical site evaluation, and other consulting services. It serves public and private sector clients. Empresas ICA, S.A.B. de C.V. was founded in 1947 and is based in Mexico.
Advisors' Opinion: - [By Michael Lewis]
It's been said plenty of times that our neighbor to the south is home to a burgeoning, debt-light economy that offers emerging-market growth with an element of domestic risk and valuation. China is very much "last season" when it comes to manufacturing, and Mexico offers a fantastic answer, with geographical superiority and an eager work force. One company based in Mexico, Empresas ICA (NYSE: ICA ) , is a heavy-construction firm with a market cap of $1 billion that was as recently as April worth nearly $2 billion. The causes for the haircut includes a collapsed deal and lousy first-quarter earnings. But with a strong outlook for Mexican infrastructure spending, and an apparent case of market negligence, Empresas ICA might be an undervalued pick with substantial upside potential.
- [By Roberto Pedone]
One under-$10 name that's starting to trend within range of triggering a big breakout trade is Empresas ICA SA (ICA), which is engaged in construction and related activities, including the construction of infrastructure facilities as well as industrial, urban and housing construction. This stock is off to a decent start in 2013, with shares up 11.8%.
If you take a look at the chart for Empresas ICA SA, you'll notice that this stock has been trending sideways inside of a consolidation chart pattern for the last two months, with shares moving between $7.94 on the downside and $9.73 on the upside. Shares of ICA are now starting to push back above its 50-day moving average of $8.75 a share, and the stock is quickly moving within range of triggering a big breakout trade. That trade will hit if ICA manages to take out the upper-end of its recent sideways trading chart pattern.
Traders should now look for long-biased trades in ICA if it manages to break out above some near-term overhead resistance levels at $9.34 to $9.73 a share and then once it clears its 200-day moving average at $9.94 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 527,965 shares. If that breakout triggers soon, then ICA will set up to re-test or possibly take out its next major overhead resistance levels at $11.50 to $12 a share. Any high-volume move above those levels could then put its 52-week high at $13.73 into focus for shares of ICA.
Traders can look to buy ICA off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $8 a share, or around $7.94 a share. One can also buy ICA off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.
Top 10 Penny Companies To Buy Right Now: Teleflex Incorporated(TFX)
Teleflex Incorporated designs, manufactures, and distributes specialty medical devices for a range of procedures in critical care and surgery worldwide. It offers disposable medical products for critical care that includes medical devices used in critical care procedures for vascular access, respiratory care, anesthesia and airway management, treatment of urologic conditions, and other specialty procedures; and devices used in the treatment of patients with severe cardiac conditions, including intra aortic balloon pump systems and intra aortic balloon catheters and accessories. The company also provides surgical devices and instruments used in general and specialty surgical procedures, such as ligation and closure products, including appliers, clips, and sutures; access ports used in minimally invasive surgical procedures comprising robotic surgery; fluid management products for chest drainage; and hand-held instruments for general and specialty surgical procedures under t he Deknatel, Pleur-evac, Pilling, Taut, and Weck brand names. In addition, it offers cardiac care products, including diagnostic catheters and capital equipment; instruments and devices for other medical device manufacturers; and customized medical instruments, implants, and components to original equipment manufacturers. The company sells its medical products through its sales forces, and independent representatives and distributor networks. Teleflex Incorporated was founded in 1938 and is based in Limerick, Pennsylvania.
Shelton Greater China Fund is a close ended equity mutual fund launched and managed by CCM Partners, LP. The fund is co-managed by Nikko Asset Management Co. Ltd. It primarily invests in public equity markets of Taiwan. The fund seeks to invest across diversified sectors. It benchmarks the performance of its portfolio against the Taiwan China Strategy Index, TAIEX, and MSCI Taiwan Index. The fund was formerly known as Taiwan Greater China Fund. Shelton Greater China Fund was formed in July 1988 and is domiciled in the United States.
Top 10 Penny Companies To Buy Right Now: Magic Software Enterprises Ltd.(MGIC)
Magic Software Enterprises Ltd. develops, markets, and supports software development and deployment technology and applications. It offers uniPaaS, an application platform for developing and deploying business applications; and iBOLT, a platform for business and process integration. The company?s uniPaaS and iBOLT platforms enable enterprises to accelerate the process of building and deploying applications to customize and integrate with existing systems. It also provides information technology (IT) professional services in the areas of infrastructure design and delivery, application development, and technology planning and implementation services, as well as supplemental staffing services. In addition, the company offers consulting services in connection with installation assurance, application audits and performance enhancement, application migration, and application prototyping and design; maintenance contracts; technical support; and training on its development tools. Magic Software Enterprises Ltd. provides its products and services through a network of regional offices, independent software vendors, system integrators, distributors, and value added resellers, as well as through original equipment manufacturers and consulting partners in approximately 50 countries worldwide. It serves finance, insurance, government, health care, logistics, manufacturing media, retail, and telecommunications industries. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. Magic Software Enterprises Ltd. was founded in 1983 and is headquartered in Or Yehuda, Israel. Magic Software Enterprises Ltd. is a subsidiary of Formula Systems (1985) Ltd.
Top 10 Penny Companies To Buy Right Now: PIMCO California Municipal Income Fund III(PZC)
PIMCO California Municipal Income Fund III is a close ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. It is co-managed by Pacific Investment Management Company LLC. The fund invests in fixed income markets. Its investment portfolio include California municipal bonds, and other municipal bonds and notes; California variable rate notes and other variable rate notes; California variable rate demand notes and other variable rate demand notes; U.S. treasury bills; and call options written and put options written. Allianz Global Investors Fund Management LLC serves as an investment Manager to the fund. PIMCO California Municipal Income Fund III was formed in 2002 and is based in New York City.
Top 10 Penny Companies To Buy Right Now: Cedar Shopping Centers Inc (CDR)
Cedar Shopping Centers, Inc., real estate investment trust, engages in the ownership, operation, development and redevelopment of supermarket-anchored community shopping centers and drug store-anchored convenience centers in the United States. As of December 31, 2007, it owned 118 properties, aggregating approximately 12.0 million square feet of gross leasable area primarily in Pennsylvania, Massachusetts, Virginia, Ohio, Connecticut, New Jersey, Maryland, Michigan, and New York. Cedar Shopping has elected to be treated as a REIT for federal income tax purposes and would not be subject to federal income tax, if it distributes at least 90% of its REIT taxable income to its stockholders. The company was founded in 1984 and is based in Port Washington, New York.
Advisors' Opinion: - [By Bill Smith]
Valuation
Lastly, because of the negative perception the entire industry has received, prices in this sector have been absolutely pummeled. ESI now trades at the lower end of all of its historical valuation bands: P/E, P/B, and P/S.
Bullish Points
Guru ownership and avg price: ESI owned by Hussman ($76.15), Weitz ($75.32), and Greenblatt ($73.29)Over 35% of shares are short, potential short squeezeStock buyback plan: ESI reduced outstanding shares by 19% yoy at the end of the 4th quarter. They repurchased 370K shares in 3Q11.The business model is scalable; the incremental cost to educate each additional student is low, leading to high marginsESI acquired Daniel Webster College, giving them a regional accreditation which they can use to broaden their reach in online classes
Bearish Points
High costs of education, in general, rightly or wrongly attract government intervention and could squeeze margins over time. Total student debt surpassed credit card balances, and sits at $1 Trillion as of the end of 2011.Subject to compliance with Dept of Education's 90/10 rules, which states a college can't collect more than 90% of revenue from students participating in federal loan programs.Cohort Default Rate (CDR): for-profit colleges must monitor the federal loan default rates of students who graduate or leave the school. If a school's CDR exceeds 25% for 3 consecutive years, or 40% in any one year, its students won't be eligible for federal financial aid.ESI competes on quality of product which is measured by graduation rates and ability to secure employment. For 2010, 70% of ESI graduates got employment in positions using skills taught in their program of study within 1 year. As of Oct 2011, this rate was 600 bp higher. The average annual salary reported by employed 2011 grads was $32K, compared to $32.4K for 2010 grads.With an improving economy, there's a potential ESI would see declining new student enrollmentsOver 35% of shares are short
Summary
Top 10 Penny Companies To Buy Right Now: China Pharma Holdings Inc.(CPHI)
China Pharma Holdings, Inc. develops, manufactures, and markets generic and branded pharmaceutical products primarily to hospitals and private retailers in the People?s Republic of China. Its products include Bumetanide to treat edema diseases; Gastrodin injection for tiredness, loss of concentration, poor sleep, and traumatic syndromes of brain; Cerebroprotein Hydroloysate injection for the treatment of memory decline and attention deficit; Buflomedil Hydrochloride for blood vessel diseases; Propylgallate and Ozagrel Sodium for the treatment of cerebral thrombosis, coronary heart disease, and thrombus deep phlebitis; and Alginic Sodium Diester injection for ischemic heart, cerebrovascular, and lipoprotein blood diseases. The company also offers Cefaclor Dispersible tablets for tympanitis, lower respiratory tract, urinary tract, and skin/skin tissue infection; Roxithromycin dispersible tablets for pharyngitis and tonsillitis; Clarithromycin granules and capsules for nasoph arynx, respiratory tract, and skin tissue infections; Naproxen Sodium and Pseudophedrine Hydrochloride Sustained Release tablets to relieve cold, sinus, and flu symptoms; Cefalexin capsules for acute tonsillitis; and Anhydroandrographolide for ischemic heart, cerebrovascular, and lipoprotein blood diseases. In addition, it provides Hepatocyte growth-promoting factor to treat viral hepatitis symptoms; Tiopronin to treat acute chronic Hepatitis B and relieve liver injury; Omeprazole to treat gastroesophageal reflux disease; Granisetron Hydrochloride injection for nausea and vomiting; Vitamin B6, an vitamin supplement; Thymopolypetides injection for treating diseases and tumors of various cells with reduced immunological function; and Recombined Human Fibroblast Growth Factor for the production of cosmetics. The company distributes its products through independent regional distributors and sales representatives. China Pharma Holdings, Inc. is based in Haikou, the People?s Repub lic of China.
Top 10 Penny Companies To Buy Right Now: Ellsworth Convertible Growth and Income Fund Inc.(ECF)
Ellsworth Fund Ltd. is a close ended equity mutual fund launched and managed by Davis-Dinsmore Management Company. It invests in equity markets of the United States. The fund primarily in convertible securities. It benchmarks the performance of its portfolio against the Merrill Lynch All Convertibles Index, the S&P 500 Index and the Lehman Aggregate Bond Total Return Index. The was formerly known as Ellsworth Convertible Growth and Income Fund, Inc. Ellsworth Fund Ltd. was formed on April 30, 1986 and is domiciled in the United States.
Top 10 Penny Companies To Buy Right Now: Prospect Capital Corporation(PSEC)
Prospect Capital Corporation is a mezzanine finance and private equity firm that specializes in late venture, middle market, mature, mezzanine, buyouts, recapitalizations, growth capital, development, and bridge transactions. It makes secured debt and equity investments. The firm typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. The firm prefers to invest in the United States and Canada. It seeks to invest between $5 million to $50 million in companies with EBITDA between $$ million and $75 million, sales value up to $500 million, and enterprise value of up to $250 million. The firm also co- invests for larger deals. It seeks control acquisitions by providing multiple levels of the capital structure. Prospect Capital Corporation was founded in 1988 and is based in New York, New York.
Advisors' Opinion: - [By Rick Munarriz]
We can start with Prospect Capital (NASDAQ: PSEC ) .
The business development company declared its next four monthly distributions on Monday of last week, a day before posting fresh financials. Prospect Capital will be increasing its rate every month -- yes, it pays monthly distributions -- from June through at least September.
- [By Dan Caplinger]
But one concern is that investors are paying too much for BDCs. Like Ares, peers Prospect Capital (NASDAQ: PSEC ) and Fifth Street Finance (NASDAQ: FSC ) also carry share prices that are higher than the net value of the assets on their books. Yet Ares trades at a substantially higher premiums to NAV than Prospect or Fifth Street, suggesting that they're more comfortable with the quality of Ares' assets compared to its rivals.
- [By Amanda Alix]
Similarly, Prospect Capital (NASDAQ: PSEC ) recently announced�the next four months' worth of dividends, showcasing a yield of 12.7%. Further, management noted that its liabilities are locked in for the next 30 years, while its loans float with LIBOR, putting them in the catbird seat as far as rising interest rates are concerned.
- [By Rich Duprey]
Business development company�Prospect Capital (NASDAQ: PSEC ) announced today�that based on its earnings expectations for the rest of the year it set dividends for the following four months:
Top 10 Penny Companies To Buy Right Now: NET Servicos de Comunicacao S.A.(NETC)
Net Servicos de Comunicacao S.A., through its subsidiaries, provides cable television, Internet access, and voice services in Brazil. It offers cable television services under the ?NET? brand name through various cable networks located in the largest cities of Brazil. The company also offers broadband Internet access services under the ?NET VIRTUA? brand name by using Embratel's IP backbone infrastructure. In addition, it provides voice services under the ?NET FONE VIA EMBRATEL? brand name jointly with Embratel. Further, the company offers integrated video, broadband, and voice services. Net Servicos de Comunicacao S.A. was founded in 1994 and is headquartered in Sao Paulo, Brazil.
Michael Steinberg, a portfolio manager with SAC Capital Advisors, exits federal court with attorney Barry Berke, right, in New York, U.S., on Wednesday. Bloomberg News