Treasury bonds are the asset of choice for nervous investors these days. But Greg Gunner Guenthner says the best time to buy stocks is when everyone’s back is turned. And with global price-to-earnings ratios falling sharply, Greg says there are some excellent opportunities out there for contrarians.

This from Penny Sleuth:

Here in the United States, the household savings rate has stayed below 2.5% since 1999, according to our friends over at The Economist. Instead of stashing our money in savings accounts, we spent with reckless abandon and used our homes as savings, borrowing against their ever-increasing value whenever cash was needed.

But now that the stink has hit the fan, the once unstoppable American spender is doing something quite curious: playing it safe with his money. And he’s certainly not buying stocks. One look at the crashing yield curve says it all. No-interest 90-day T-bills are flying off the shelves…

Of course, the

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HIDDEN VALUE

Dear Value Seeker,

Christmas is almost upon us.

Business activity is winding down. In some cases, it’s stopping altogether.

According to the Financial Times, some of the biggest tech names in Silicon Valley will be shutting up shop over the holidays to cut costs.

Meanwhile, the bosses at Toyota have signaled that the automaker could post its first yearly operating loss.

Contrarian blogger Mish Shedlock warns that corporate losses may be the least of our worries. That’s because a new, highly-contagious fiscal virus is taking hold of the world economy.

“The primary symptom of FIV [Fiscal Insanity Virus] is irrational, often delusional fear of deflation. The virus has an uncanny ability to seek victims in positions of authority. Those afflicted with the virus start taking (or promoting) fiscally reckless actions guaranteed to damage the host country.”

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Master Limited Partnerships are a useful investment for minimizing your tax bill says Jim Nelson. They are trusts mainly comprised of natural resource, financial services, and real estate assets. Jim picks five small-cap MLPs that should provide steady income without the burden of double taxation.

This from Penny Sleuth:

In the corporate tax world, one dreaded phrase reappears when you talk about dividends: “Double Taxation”. All incorporated companies are taxed on the income they make. The shareholders are taxed again on any dividend distribution they receive from the company. So the same income is taxed twice. But, there is a way around it…

Master Limited Partnerships, or MLPs, are nearly identical to royalty income trusts. The only difference between them is double taxation.

Regular trusts must pay taxes on income before it is distributed to shareholders. Those shareholders also have to pay taxes on the already-taxed income when they receive it. MLPs, on the

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Market panic creates great opportunities for discilpined investors, says Greg Guenthner. A sense of fear and urgency is causing widespread sell-offs in the stock market. But this short-term relief from leaving the market also slams the door shut on long-term profit opportunities.

This from Penny Sleuth:

Investing in the stock market is an all-out war. No, we’re not referring to the madness on the trading floors or the tug of war between buyers and sellers. Investing is actually a war against our own impulses.

An e-mail exchange with a colleague of mine sums it all up perfectly: “Sure, the market may go lower,” he writes, “but the lesson is that people are always doing the opposite thing than what they should be doing.” I know you’ve heard this before — we all have. But no one ever listens while they are in panic mode.

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Announcing Agora Financial’s First-Ever “One-Time Dividend”…

Tell Me Where To Mail

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HIDDEN VALUE

Dear Value Seeker,

Yesterday, the “Big Three” automakers came to Washington with a plan: ask for even more money.

GM wants $18 billion, with $4 billion for December’s bills.

Chrysler says it needs $7 billion in the next few months.

Ford is after $9 billion…but only as a precaution. It feels pretty confident it can make it without help.

After all, Ford’s sales fell only 31% year-over-year in November. GM and Chrysler both saw sales for the same period tumble by over 40%.

In exchange for $34 billion in taxpayer money, the automakers promised major restructuring, reduced labor costs (that’s right, it’s promising to fire employees in return for taxpayer backing) and the sale of some product lines.

The CEOs even said they would even work for $1. (Never mind that their salaries only make up about 10% of their overall pay packages.)

But decades of waste and mismanagement aren’t forgotten

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Zenergy Power Plc (LON:ZEN) could be onto something big in the energy sector, says Tom Bulford. The small cap firm produces High Temperature Semiconductors (HTS) that are more energy efficient than copper. As it moves closer to cracking large markets in the US, Tom says the stock has serious long-term potential. This from Penny Sleuth: Karen Chandler opened her bag and took out a chunky strip of copper and placed it on the table. Next to it she put a slim ribbon of something else I didn’t recognise at all. The second had been made by depositing layers of substances that I had never heard of – such as Lanthanum Zirconate and Yttrium – onto a base of textured nickel tape.

The finished item is a High Temperature Semiconductor (HTS) and is apparently a ceramic rather than a metal. The important thing about it is that it

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In the end, value wins out says Chris Mayer. Nearly every asset class has been taken down by this credit crisis. But the wide gaps between stock prices and tangible business value will close. That’s why Chris says investors should get ready for a major rally in resource stocks.

This from Penny Sleuth:

Question: Where is the price of petroleum going? Eric Sprott: Long term, up… I can see it hitting $200 or $300 or $400 a barrel. — Barron’s, Aug. 18, 2008

Eric Sprott runs the Sprott Offshore Fund, a fund that’s delivered sizzling returns of 32% per year since 2002. Certainly, timing is important, as 2002 was the last great bottom. Even so, it’s not so easy. Lots of people have done a lot worse than average 32% since 2002. Sprott, a 63-year-old billionaire, has been on the money when it comes to calling the resource markets. That’s his

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Sometimes the worst markets hide the best profit opportunities. And you don’t get much worse than the housing market at the moment. Jonas Elmerraji says prefab manufactured housing is making a big comeback in devastated real estate industry. He says investors can play this emerging trend with small cap firms like Skyline Corp (NYSE:SKY) and Champion Enterprises (NYSE:CHB).

More from Penny Sleuth:

While most investors look for industries they expect to boom in the future, there’s a solid investment case to be made for buying stocks in bad industries.

Jeremy Siegel, one of Wall Street’s best investment minds, said that, “Some of the most successful investments of the last thirty years have come from industries whose performances have been utterly horrendous.”

And if ever there was a horrendous market, housing’s it. The housing industry has sunk almost 40% this year, sending most investors heading for the hills…but not all…

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Does $2.00 for a

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As the market price of crude oil falls, it reaches a point where the cost of new exploration projects exceeds the potential rewards. And that point is dangerous for small cap GETECH (LON:GTC), which provides specialist geographical data to the oil industry. Tom Bulford says the company may be undervalued, given its strong assets and customer base. But uncertainty over oil prices remains a key risk to operations.

More from Penny Sleuth:

News that Shell is to halt development of its vast Canadian tar sands project is a sign of changing times in the oil industry – and one that will not be well received at the AIM-listed provider of data to the oil industry, GETECH (LON:GTC). This is a pity because last week’s annual results statement revealed a share that looked extremely cheap and prompted an 80% rise in its price from 16p to 30p.

The question that affects ...

HIDDEN VALUE

Dear Friend,

A new month brings a new batch of depressing headlines from the real economy.

U.S. factory activity fell to its lowest level for 26 years in October. Circuit City says it plans to close 155 stores and slash its workforce by 17%, all before the end of the year. And Fitch says credit card losses will likely surpass historical peaks in 2009.

Meanwhile, Jeffrey Lacker, president of Richmond’s Federal Bank, says the government’s response to problems in financial firms may have added to market turmoil.

Still, that won’t stop it from trying to ‘fix’ things.

There are rumors of a $500 billion guarantee for distressed mortgages. There could even be another economic stimulus package in the pipeline in time for Christmas shopping. The markets are in a hesitant mood today. The leading U.S. indexes have all tiptoed around

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