406 Days Until This Market Crashes…

by Robert Williams, Publisher Friday, November 20, 2009

David Fessler has a sector that warrants your attention. But first, I want to officially raise a red flag in another market.

Something’s amiss in the municipal bond market. Year-to-date, “munies” have behaved more like momentum stocks than their intended purpose of providing a safe yield.

Consider this: A handful of closed-end muni funds have averaged a 46% return so far this year.

The rally, of course, was borne out of the financial crisis, when investors and institutions alike went furiously scrambling to safety.

The novice move was into cash. But the smart money flowed strategically into the bond market. And a lot of the action was in municipal bonds. (The junk bond market is similarly overheated.)

What’s noteworthy, however, is that when the market’s

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As U.S. Refiners Recover, This Company Aims to Jump to the Next Level

by Sheena Martin, Contributing Editor

Even as U.S gas prices climb, petroleum traders still have no interest in buying right now.

And why would they? The summer driving season is at an end. Consumers are still trying to save cash, especially with the holidays approaching. And inventories are still bearish.

Last week, the Department of Energy (DOE) said gasoline demand is at 8.844 million barrels per day – the lowest number since late January 2009. And with practically no demand, refiners are still running at only 80% capacity, on average.

So with refinery woes persisting, it might seem odd to devote attention to investments in the industry. However, that’s precisely why you should. A contrarian strategy often pays dividends – and the recent challenges have shaken out

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Where’s That Cracking Sound Coming From?

by Robert Williams, Publisher
Wednesday, November 18, 2009

When I saw the latest cover of BusinessWeek – “Why the Commercial Real Estate Crisis Looks So Scary” – I immediately fired off a text to my friend and Investment U colleague, David Fessler.

“We scooped ‘em by six whole months,” I texted.

Dave’s been tracking (and cautioning us about) the commercial real estate market for the better part of a year now. (You can read Dave’s June article on the commercial real estate fallout or his April article on the commercial real estate sector.)

“Last year, commercial real estate sales fell off a cliff, plunging 73%… But it’s going to get worse… much, much worse,” asserted Dave, months ago.

He nailed it. The market is indeed cracking.

BusinessWeek reported that $6.4 billion worth of commercial real

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Is Warren Buffett Signaling a Housing Recovery?

by Robert Williams, Publisher Thursday, November 5, 2009

Warren Buffett is teaming-up with Goldman Sachs as the investment bank attempts to buy $3 billion of tax credits from taxpayer-owned mortgage firm Fannie Mae.

According to The Wall Street Journal, investments in low-income housing tax credits has waned dramatically in the face of the credit crisis.

Credits are being sold for between 65 cents and 79 cents on the dollar. By comparison – at the height of the real estate boom – developers were fetching 95 cents on the dollar.

(Property developers receive tax credits – worth between 30% and 60% of a project’s cost – to encourage building in low-income areas and to hold rents down. They typically then sell the credits to large financial institutions for the tax benefits they offer.)

Although Buffett and Sachs surely intend

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Two Investments to Add to Your “Green” Portfolio

by Louise Harris, Investment U Research

Green investing can be tricky.

That was evidenced after oil prices dropped last year and alternative energy companies saw their profits fall just as quickly.

Naturally, investor enthusiasm followed, as green ETFs like Claymore/Mac Global Solar Energy Index (NYSE: TAN) and Market Vectors Solar Energy (NYSE: KWT) have tumbled 45% over the past 12 months.

Similarly, the broad alternative energy portfolio PowerShares WilderHill Clean Energy (NYSE: PBW), has declined by an average of 13.5% annually for the last three years.

But despite those woes, the alternative energy sector still has a few things going for it…

Popularity: The more scientists talk about climate change and how to prevent greenhouse emissions, the more popular alternative energies become. This is especially true in Europe, ...

When Freshwater Meets Seawater, Look Out!

by Robert Williams, Publisher

Get this. Energy is now being generated from the collision of seawater and river water. It’s called osmotic power. And the world’s very first plant to generate such power is expected to open next month at Tofte, outside of Oslo by Norway’s state-owned electricity company, Statkraft.

It’s ingenious. The power is generated by energy retrieved from the difference in the salt concentration between seawater and river water.

How’s it work?

Both components – saltwater and freshwater – are funneled into separate chambers, divided by an artificial semi-permeable membrane. The salt molecules in the seawater pull the freshwater through the membrane, increasing pressure on the seawater side.

The pressure comes in the form of a 120-meter water column or waterfall that can be utilized in a power-generating turbine. (Read the entire article

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What do Cisco Systems (Nasdaq: CSCO), IBM (NYSE: IBM), AT&T (NYSE: T) and Intel (Nasdaq: INTC) all have in common?

The obvious answer is that they’re four of the most successful technology companies on the planet.

But they’re also heavily involved in the modernization plans for America’s “Smart Grid” – a topic I introduced in a previous column.

Make no mistake, with a decade-long project as monumental as modernizing the country’s “Smart Grid,” the devil is truly in the details. And the Commerce Department released the finer details of the initiative last week.

Until now, one of the big problems with the “Smart Grid” was the lack of set standards. Without them, each power company would be free to do as it pleases, resulting in a hodge-podge of small grids that, in all likelihood, wouldn’t work together.

To put this in perspective, just imagine how well

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America’s Smart Grid: Four Companies Set to Profit from a Federal Cash Injection

by David Fessler, Advisory Panelist

What do Cisco Systems (Nasdaq: CSCO), IBM (NYSE: IBM), AT&T (NYSE: T) and Intel (Nasdaq: INTC) all have in common?

The obvious answer is that they’re four of the most successful technology companies on the planet.

But they’re also heavily involved in the modernization plans for America’s “Smart Grid” – a topic I introduced in a previous column.

Make no mistake, with a decade-long project as monumental as modernizing the country’s “Smart Grid,” the devil is truly in the details. And the Commerce Department released the finer details of the initiative last week.

Until now, one of the big problems with the “Smart Grid” was the lack of set standards. Without them, each power company would be free to do

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Debunking The Paradox of Thrift: Why Consumer Spending Won’t Save Our Economy

by Mark Skousen, Contributing Editor

“America’s saving rate has leaped ahead – and it’s sending America to the poorhouse.” – David Fessler

An Investment U column attacking the virtue of thrift – surely not?

Yet there it was – an article from David Fessler on September 12, entitled, “The Paradox of Thrift: How a Better Savings Rate is Fueling the Recession.”

David Fessler is a friend and smart investment analyst, so I was surprised that he fell for one of the biggest myths in economics today – the so-called “paradox of thrift” that Keynesian economists spout all the time.

Here’s the problem with the theory, plus a few stocks that are front-and-center of the opposite argument…

The Keynesian Way

Let’s start with the facts, as David correctly noted. During the

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The Paradox of Thrift: How a Better Savings Rate is Fueling the Recession

by David Fessler, Advisory Panelist

We’ve all heard this from our parents: “Spend what’s left after saving, instead of saving what’s left after spending.”

Or perhaps this was drummed into your head: “Always save for a rainy day.”

The idea of saving didn’t just start with our parents’ generation, however. Ben Franklin was giving advice on saving way back in 1732 in Poor Richard’s Almanac: “If you would be wealthy, think of saving as well as getting. Creditors have better memories than debtors.”

As the recession of 2008 hit, Americans suddenly stopped spending, paid down their debts and started saving – some for the first time in their lives…

As a result, America’s savings rate – as a percent of disposable income – has leapt from a little over 1%

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