Best House Insurance 2013: May 2014

Saturday, May 31, 2014

EPA carbon rules could speed U.S. shift from coal

The Obama administration's historic proposal to reduce carbon emissions from U.S. power plants, expected Monday, could accelerate the nation's shift from coal to natural gas and renewable energy.

Aimed at fighting climate change, the Environmental Protection Agency rules will require states to develop and implement plans to cut power plant emissions of heat-trapping carbon dioxide. They will give states a range of options to comply, including the trading of pollution credits. Critics, however, say they could drive up electricity prices and shutter plants nationwide.

"This is a colossal proposal that should achieve the biggest carbon pollution reductions ever undertaken by the United States," says Daniel J. Weiss of the Center for American Progress, a liberal-leaning think tank with close ties to the White House. "No president has ever proposed a climate pollution cleanup this big."

Thwarted by Congress' inability to pass a bill to lower U.S. carbon emissions, President Obama is pushing forward his own approach that could become one of the signature achievements of his administration.

Last June, he asked the EPA to use its power under the Clean Air Act to craft rules limiting CO2 emissions from existing power plants. These rules would go far beyond an EPA proposal last year to limit emissions from new plants, and their impact will also exceed the administration's 2011 requirement that new cars and light trucks double fuel efficiency by 2025.

The reason? Power plants account for the largest share, nearly 40%, of U.S. greenhouse gas emissions, and Obama has already pledged to slash emissions 17% from 2005 levels by 2020. Coal-fired facilities will be hardest hit because they emit more CO2 than other power plants.

Here are five things you need to know about the controversial rules:

1. They will not happen overnight. Opponents, including business groups and Republicans, will likely cast them as a costly "war on coal" and file lawsuits to challeng! e EPA authority. Recent legal rulings, though, have largely sided with the EPA. .

Obama has asked the EPA to finalize the rules in June 2015, after which states would have at least a year to submit plans for how they would achieve the reductions. The agency would then review those plans and, if states refuse to submit them, it could create its own plan.

"It will be a few years before we see changes from this rule," says Kyle Aarons, a senior fellow at the Center for Climate and Energy Solutions, a nonprofit group.

2. They will be flexible. The rules are expected to give a range of emission-reduction targets with varying deadlines and options to meet them.

So, states could comply by requiring plants to install pollution-control technology; setting up energy efficiency programs to reduce energy demand; or using more carbon-free energy such as solar and nuclear or cleaner-burning fuels like natural gas. They could also follow California and nine northeast states, which have created cap-and-trade programs that cap overall emissions but allow polluters to buy government-issued credits from clean-energy producers.

Obama's senior counselor, John Podesta, said the reductions will be made "in the most cost-effective and most efficient way possible." A key factor will be the baseline year or years that are used to set them, because U.S. carbon emissions were lower between 2008 and 2012 than in the early 2000s or last year.

3. They accelerate the shift away from coal. As natural gas prices have fallen, the coal industry has seen its share of U.S. electricity generation plummet from 52% in 2000 to 37% in 2012. In contrast, natural gas has seen its share double, from 16% in 2000 to 30% in 2012.

Even without the EPA carbon rules, the EIA projects coal's share will drop further and 60 gigawatts of coal-fired power — about one-fifth of the total U.S. coal capacity in 2012 — will retire by 2020. In recent years, dozens of old coal-fired plants have closed or announced the! ir retire! ments.

"This rule would accelerate that shift" away from coal, says Aarons.

The carbon limits could lead to "draconian changes" in the U.S. energy mix, says Karen Harbert, president of the U.S. Chamber of Commerce's Institute for 21st Century Energy.

4. Their impacts could vary by state. Harbert's group released a study that warns the rules could hike consumer electricity prices, reduce jobs and slow economic growth, adding the South will see the biggest increases in power costs.

"The Chamber has a long record of releasing reports that cry wolf (about EPA rules) and is invariably wrong," says David Doniger of the Natural Resources Defense Council, an environmental group. The NRDC's analysis says the rules could create hundreds of thousands of energy-efficiency jobs and, by lowering energy use, reduce consumer utility bills.

Some states that rely heavily on coal could struggle more than others to meet the EPA limits. Kentucky, Wyoming, West Virginia, Indiana and North Dakota have the highest carbon emission rates while Idaho, Vermont , Washington, Oregon and Maine have the lowest, according to a May report co-authored by Ceres, a non-profit research group that promotes corporate sustainability.

5. Their influence extends beyond the U.S. "This is clearly a pivotal moment that the world will be watching closely," says Mindy Lubber, Ceres' president, noting a new round of United Nations climate talks will take place next year in Paris.

Doniger says the EPA rules will show the United States is "in the game" and will help nudge other countries to make reductions.

Friday, May 30, 2014

Best Managed Healthcare Stocks To Buy For 2015

When choosing stocks it’s not often that you’re forced to pick one or the other. But let’s say you were, and, for the sake of argument, let’s say you had to choose between MetLife (MET) and Prudential (PRU), which would you pick?

Reuters

Janney’s Larry Greenberg and team made their choice today, when they raised MetLife to Buy from Neutral and cut Prudential to Neutral from Buy. They explain why:

The rationale for the switch towards [MetLife] is partly valuation and partly sentiment. With a higher percentage of market sensitive businesses, the operational environment for [Prudential] over the last year could not have been better.�[MetLife] now sells at 1.11 times ex [Accumulated other comprehensive income compared book value] to�[Prudential] at 1.51 times (adjusted for FX remeasurement). In addition, with a view that the impact of non-bank [systematically important financial institution] regulation will eventually converge for the two companies, we believe that from a capital management standpoint over the next couple of years, there is more opportunity for [MetLife], or alternatively, more risk for [Prudential]. While it is very difficult to predict when it will happen, we expect�[MetLife] to have that opportunity at some point and view this ��ption��as a potential catalyst.

Best Managed Healthcare Stocks To Buy For 2015: I.D. Systems Inc.(IDSY)

I.D. Systems, Inc. develops, markets, and sells wireless solutions for managing and securing enterprise assets, including industrial vehicles, such as forklifts, airport ground support equipment, rental vehicles, and transportation assets primarily in North America. The company offers integrated wireless solutions that enable customers to control, monitor, track, and analyze their enterprise assets. Its campus-based fleet management products include On-Asset Hardware, which provides an autonomous means of asset control and monitoring; Wireless Asset Managers that link mobile assets being monitored with customer?s computer network or to a remotely hosted server; Server Software, which manages data communications between the system?s database and either the Wireless Asset Managers or On-Asset Hardware; and Client Software, which restricts access and limits corruption of system information, as well as minimizes network bandwidth usage. The company?s remote asset management products comprise On-Asset Hardware, which addresses various remote asset types, such as dry van trailers, refrigerated trailers, domestic containers, and railcars, as well as customer-specific requirements; and VeriWise Intelligence Portal, a hosted Website that provides Internet access to client asset information. The company also offers direct feed of the data to customer through XML or Web services. In addition, it provides maintenance, customer support, and consulting services. I.D. Systems markets and sells its wireless solutions to a range of customers in the commercial and government sectors operating in various markets, such as automotive manufacturing, retailers, shippers, freight transportation companies, heavy industry, retail and wholesale distribution, aerospace and defense, homeland security, and vehicle rental directly, as well as through indirect sales channels, such as industrial equipment dealers. The company was founded in 1993 and is headquartered in Wo odcliff Lake, New Jersey.

Advisors' Opinion:

[By John Udovich]
Yesterday, small cap identity protection stock Lifelock Inc (NYSE: LOCK) surged 15.64% after reporting better-than-expected third quarter earnings thanks in part to playing on the security fears of consumers, meaning its probably time to take a look at it along with two other security stocks, I.D. Systems, Inc (NASDAQ: IDSY) and View Systems Inc (OTCBB: VSYM), which can also play up the fear factor:�

Best Managed Healthcare Stocks To Buy For 2015: Whiting Petroleum Corporation(WLL)

Whiting Petroleum Corporation engages in the acquisition, development, exploitation, exploration, and production of oil and gas primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast, and Michigan regions of the United States. As of December 31, 2010, its estimated proved reserves were 304.9 million barrels equivalent of oil; and had interests in 9,698 gross productive wells covering approximately 1,115,000 gross developed acres. The company sells its oil and gas to end users, marketers, and other purchasers. Whiting Petroleum Corporation was founded in 1983 and is Denver, Colorado.

Advisors' Opinion:

[By Monica Gerson]
Whiting Petroleum (NYSE: WLL) is projected to post its Q3 earnings at $1.06 per share on revenue of $678.69 million.

Skechers USA (NYSE: SKX) is expected to post its Q3 earnings at $0.61 per share on revenue of $518.22 million.
[By Joel South and Taylor Muckerman]
In the following video, Motley Fool energy analysts Joel South and Taylor Muckerman look at the bigger picture of what's happening with oil production in the Bakken today, and why Bakken oil sells for dramatically less of a discount to West Texas Intermediate than it did last year. Joel then tells us about Whiting Petroleum (NYSE: WLL ) , and what the tailwinds are for this company that make it is his favorite player in the Bakken today.
[By Lee Jackson]
Whiting Petroleum Corp. (NYSE: WLL) is ranked as the third largest producer�in the Bakken shale region. Over 2013, Whiting sold off significant amounts of its assets that are not in the Bakken, including its Postle Field enhanced oil recovery assets for $817 million and its acreage in the Delaware Basin for $150 million. The company in turn is using the cash from the sales and deploying more assets into the higher-return Bakken. The Merrill Lynch price target for the stock is $79, and the consensus figure is at $77.50.�Shares�closed at $60.73 on Monday.

Top 5 Financial Companies To Watch For 2015: Memorial Production Partners LP (MEMP)

Memorial Production Partners LP incorporated on April 4, 2011, is a limited partnership formed by Memorial Resource to own, acquire and exploit oil natural gas properties in North America. As of December 31, 2012, the Company�� total estimated proved reserves were approximately 609 Billions of Cubic Feet Equivalent (Bcfe), of which approximately 62% were natural gas and 59% were classified as proved developed reserves. As of December 31, 2012, the Company produced from 1,671 gross (731 net) producing wells across its properties, with an average working interest of 44%. On April 1, 2012, it acquired oil and natural gas producing properties in East Texas from Memorial Resource Development LLC. In May 2012, it acquired oil and natural gas properties in East Texas and North Louisiana. Effective April 1, 2012, the Company acquired certain oil and natural gas properties in East Texas from Memorial Resource Development LLC. In October 2012, the Company acquired oil and natural gas properties in East Texas from Goodrich Petroleum Corporation. On December 12, 2012, the Company acquired oil and gas producing properties offshore Southern California from Rise Energy Partners, LP. In March 2013, the Company announced that it has closed its acquisition of certain oil and natural gas producing properties in East Texas and North Louisiana from its sponsor, Memorial Resource Development LLC. In September 2013, Memorial Production Partners LP closed two separate transactions to acquire certain oil and natural gas properties from third parties in East Texas and in the Rockies. In October 2013, the Company acquired oil and natural gas properties in the Permian Basin, East Texas, and the Rockies.

The Company�� properties are located in South and East Texas and consist of mature, legacy onshore oil and natural gas reservoirs. The Partnership Properties consist of operated working interests in producing and undeveloped leasehold acreage and in identified producing wells in South and East Texas, and non-ope! rated working interests in producing and undeveloped leasehold acreage. As of December 31, 2012, approximately 58% of its estimated proved reserves and approximately 53% of its average daily net production were located in the East Texas/North Louisiana region. Its East Texas/Louisiana properties include wells and properties located in Navarro, Anderson, Wood, Upshur, Gregg, Harrison, Rusk, Panola, Leon, Polk, Smith, Tyler and Shelby Counties, Texas and De Soto and Lincoln Parishes, Louisiana. Its East Texas/North Louisiana properties include properties in the Joaquin and Carthage fields in Panola and Shelby Counties, the Willow Springs field located in Gregg County, the East Henderson field located in Rusk County, and the Terryville field located in Lincoln Parish.

As of December 31, 2012, approximately 27% of its estimated proved reserves and approximately 35% of average daily net production were located in the South Texas region. Its South Texas properties include wells and properties in numerous natural gas weighted fields located in McMullen, Live Oak, Duval, Jim Hogg, Webb and Zapata Counties, Texas, including the NE Thompsonville, Laredo and East Seven Sisters fields. The Company�� South Texas properties contained 167 Bcfe of estimated net proved reserves as of December 31, 2012. The Company�� Beta properties, consist of a 51.75% working interest and a 35.03% average net revenue interest in three Pacific Outer Continental Shelf blocks (P-0300, P-0301 and P-0306); a 4.575% overriding royalty interest in the Beta unit; a 51.75% undivided interest in two wellbore production platforms with permanent drilling equipment systems and one production handling and processing platform, and a 51.75% controlling equity interest in a 17.5-mile pipeline and an onshore tankage and metering facility. The Company�� Beta properties include a 51.75% undivided interest in Ellen and Eureka platforms. The Beta properties include a controlling interest in the San Pedro Bay Pipeline Company, which owns a! nd operat! es a 16-inch diameter oil pipeline.

Advisors' Opinion:

[By Robert Rapier]
VNR is one of 14 companies/partnerships that are categorized as exploration and production, or ��pstream.��Other notable entries in this category include BreitBurn Energy Partners (Nasdaq: BBEP), Linn Energy (Nasdaq: LINE), Memorial Production Partners (Nasdaq: MEMP), QR Energy (NYSE: QRE), Legacy Reserves (Nasdaq: LGCY), EV Energy Partners (Nasdaq: EVEP), and Mid-Con Energy Partners (Nasdaq: MCEP).

Best Managed Healthcare Stocks To Buy For 2015: Calamos Asset Management Inc.(CLMS)

Calamos Asset Management Inc. is a publicly owned investment manager. The firm provides investment advisory services to individuals including high net worth individuals, and institutions. It also manages accounts for family offices and private foundations. The firm manages separate client-focused equity and fixed income for its clients. It also launches and manages equity, fixed income, and balanced mutual funds for its clients. The firm invests in the public equity and fixed income markets across the globe. It also invests in alternative investments markets. The firm primarily invests in growth stocks of large-cap, mid-cap, and small-cap companies to make its investments. For fixed income, it invests in high yield bonds. The firm employs qualitative and fundamental analysis with a top-down and bottom-up stock picking approach to make its investments. It benchmarks the performance of its equity portfolios against the MSCI Indices, Russell Indices, and S&P 500 Index and its fixed income investments against the BofA Merrill Lynch Global 300 Convertible Index, BofA Merrill Lynch All U.S. Convertibles Ex-Mandatory Index, and CS High Yield Index. Calamos Asset Management Inc. was founded in 1977 and is based in Naperville, Illinois.

Advisors' Opinion:

[By GuruFocus]
Calamos Asset Management, Inc. (CLMS): Chairman, CEO & Global Co-CIO, 10% Owner John P Sr Calamos Bought 82,233 Shares

Chairman, CEO & Global Co-CIO, 10% Owner of Calamos Asset Management, Inc. (CLMS) John P Sr Calamos bought 82,233 shares during the past week at an average price of $11.50. Calamos Asset Management, Inc., is a global asset management firm that offers strategies to fulfill a range of asset allocation goals through a multi-team platform. Calamos Asset Management, Inc. has a market cap of $235.487 million; its shares were traded at around $11.50 with a P/E ratio of 19.20 and P/S ratio of 0.85. The dividend yield of Calamos Asset Management, Inc. stocks is 4.36%.
[By GuruFocus]
Director Eric Singer sold 343,410 shares of SIGM stock on 12/20/2013 at the average price of 5.5. Eric Singer owns at least 464,499 shares after this. The price of the stock has decreased by 15.45% since.
Calamos Asset Management, Inc. (CLMS): Chairman, CEO & Global Co-CIO, 10% Owner John P Sr Calamos Bought 74,505 Shares
Chairman, CEO & Global Co-CIO, 10% Owner of Calamos Asset Management, Inc. (CLMS) John P Sr Calamos bought 74,505 shares during the past week at an average price of $11.99. Calamos Asset Management, Inc., is a global asset management firm that offers strategies to fulfill a range of asset allocation goals through a multi-team platform. Calamos Asset Management, Inc. has a market cap of $245.547 million; its shares were traded at around $11.99 with a P/E ratio of 20.20 and P/S ratio of 0.88. The dividend yield of Calamos Asset Management, Inc. stocks is 4.18%.
[By David Sterman]

6. Calamos Asset Management (Nasdaq: CLMS) This asset manager's founder and CEO, John Calamos Sr., is a bit vexed right now. As I noted six weeks ago, he had been aggressively buying company stock. He kept doing so in late July and early August, buying more than $1 million more in stock at prices in the $10.50 to $10.75 range. Yet the market pullback has pushed this stock down below $10.
Calamos is in the process of shifting resources away from poorly performing funds and toward higher-performing ones. Recent signs are promising, though it appears as though the firm's founder is the only believer in this turnaround thus far.

Best Managed Healthcare Stocks To Buy For 2015: CommVault Systems Inc. (CVLT)

CommVault Systems, Inc., together with its subsidiaries, provides data and information management software applications and related services primarily in North America, Europe, Australia, and Asia. The company develops, markets, and sells a suite of software applications and services under the Simpana brand. Its Simpana software suite includes solution for the backup and restoration of enterprise data for file systems, applications, databases, and virtual machine systems; integrated data archiving solution that optimizes data tiering and improves information governance; and enterprise-wide storage optimization for email and files reducing space on primary storage. The company also provides solutions for protection of critical applications and data with snapshots and real-time replication; solutions to analyze, discover, track, trend, and report on physical and virtual storage usage; and Web browser, which allows search, sort, select, and retrieval of corporate files and in formation from online, archive, and backup data copies. In addition, it offers assessment and design, implementation and post-deployment, training, consulting, and customer support services. The company markets and sells its software applications and related services directly to large enterprises, small and medium sized businesses, and government agencies, as well as indirectly through a network of value-added reseller partners, systems integrators, corporate resellers, and original equipment manufacturers. It licenses its software applications to customers in various industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities, and energy. The company has strategic relationships with Dell, Inc.; Hitachi Data Systems; and NetApp. CommVault Systems, Inc. was incorporated in 1996 and is headquartered in Oceanport, New Jersey.

Advisors' Opinion:

[By Jake L'Ecuyer]
Top losers in the sector included CommVault Systems (NASDAQ: CVLT), off 28 percent, and Mellanox Technologies (NASDAQ: MLNX), down 13 percent.

Top Headline
Ford Motor Co (NYSE: F) reported a drop in its first-quarter profit. Ford's quarterly profit slipped to $989 million, or $0.24 per share, versus a year-ago profit of $1.61 billion, or $0.40 per share. Its revenue rose to $35.9 billion versus $35.6 billion. However, analysts were projecting earnings of $0.31 per share on revenue of $34.54 billion.
[By Lee Jackson]
CommVault Systems Inc. (NASDAQ: CVLT) announced last week the industry’s first virtual machine (VM) intelligent archiving capability to help enterprises and service providers eliminate VM sprawl and regain control of virtual infrastructure resources. VM sprawl results from pervasive deployment and growth of virtual machines, some of which then sit unutilized long after their useful lives. The consensus price target for this intriguing mid cap name is $88.50.
[By Jake L'Ecuyer]
Top losers in the sector included CommVault Systems (NASDAQ: CVLT), off 28 percent, and Mellanox Technologies (NASDAQ: MLNX), down 13 percent.

Top Headline
Ford Motor Co (NYSE: F) reported a drop in its first-quarter profit. Ford's quarterly profit slipped to $989 million, or $0.24 per share, versus a year-ago profit of $1.61 billion, or $0.40 per share. Its revenue rose to $35.9 billion versus $35.6 billion. However, analysts were projecting earnings of $0.31 per share on revenue of $34.54 billion.
[By Alex Planes]
What: Shares of CommVault Systems (NASDAQ: CVLT ) were up by as much as 13% at the start of trading this morning after the company reported earnings that beat expectations. However, the stock has been sliding lower all morning, and has now returned to the same level it reached at the close of trading yesterday.

Best Managed Healthcare Stocks To Buy For 2015: Dominion Diamond Corp (DDC)

Dominion Diamond Corporation, formerly Harry Winston Diamond Corporation, incorporated on March 26, 2013, is focused on the mining and marketing of rough diamonds to the global market. The Company supplies rough diamonds to the global market from production received from its 40% ownership interest in the Diavik Diamond Mine (the Diavik Diamond Mine) and its 80% interest in the Ekati Diamond Mine (the Ekati Diamond Mine). Both mineral properties are located at Lac de Gras in Canada�� Northwest Territories. On March 26, 2013, the Company completed the sale of its Harry Winston luxury brand business to the Swatch Group Ltd.

The Diavik Joint Venture (the Joint Venture) is an unincorporated joint arrangement between Diavik Diamond Mines Inc. (DDMI - 60%) and Dominion Diamond Diavik Limited Partnership (DDDLP - 40%), where DDDLP owns an undivided 40% interest in the assets, liabilities and expenses. DDMI is the operator (the Operator) of the Diavik Diamond Mine. During 2012, production at the Diavik Diamond Mine was approximately 7.2 million carats, consisting of approximately 4.3 million carats produced from 1.2 million tons of ore from the A-418 kimberlite pipe, 1.9 million carats produced from 0.4 million tons of ore from the A-154 South kimberlite pipe, and 0.9 million carats produced from 0.5 million tons of ore from the A-154 North kimberlite pipe. The Diavik Diamond Mine has three ore bodies: A-154 South, A-154 North, and A-418. An additional body of mineralization, A-21, is classified as resource.

The Ekati Diamond Mine consists of the Core Zone, which includes the operating mine and other permitted kimberlite pipes, as well as the Buffer Zone, an adjacent area hosting kimberlite pipes having both development and exploration potential. It encompasses 176 mining leases, totaling 173,024 hectares, and hosts 111 kimberlite occurrences including the Koala, Koala North, Fox, Misery, Pigeon, and Sable kimberlite pipes. The Buffer Zone is held 58.8% by the Company. It contains! 106 mining leases covering 89,151.6 hectares, and hosts 39 known kimberlite occurrences including the Jay and Lynx kimberlite pipes. As of December 31, 2012, production from the Diavik Diamond Mine has totaled 76.6 million carats of diamonds. As of December 31, 2012, production from the Ekati Diamond Mine has totaled approximately 53.54 million carats of diamonds.

Advisors' Opinion:

[By Rich Smith]
Toronto-based diamond miner Dominion Diamond (NYSE: DDC ) -- the company formerly known as Harry Winston Diamond -- has completed its purchase of BHP Billiton's (NYSE: BHP ) stake in the Ekati Diamond Mine, "as well as the associated diamond sorting and sales facilities in Yellowknife, Canada, and Antwerp, Belgium," Dominion Diamond announced Wednesday.

Best Managed Healthcare Stocks To Buy For 2015: Ultra Petroleum Corp.(UPL)

Ultra Petroleum Corp., an independent oil and gas company, engages in the acquisition, exploration, development, production, and operation of oil and natural gas properties in the United States. It primarily focuses on developing a tight gas sand trend located in the Green River Basin of southwest Wyoming; and assessing, exploring, and developing its position in the Marcellus Shale and other horizons located in the north-central Pennsylvania area of the Appalachian Basin. As of December 31, 2011, the company owned interests in approximately 53,000 net acres in Wyoming covering approximately 190 square miles; 258,000 net acres in Pennsylvania; and 130,000 net acres in eastern Colorado?s Denver Julesburg Basin. Ultra Petroleum Corp. was founded in 1979 and is headquartered in Houston, Texas.

Advisors' Opinion:

[By Arjun Sreekumar]
Though drastic reductions in spending have weighed on Ultra Petroleum's (NYSE: UPL ) production, earnings, and stock price performance in recent years, the company's future looks a lot brighter. In addition to sharply improved earnings and cash flow expectations this year thanks largely to its acquisition of oil-rich acreage in Utah's Uinta basin, there is reason to believe that the company could be significantly undervalued on an enterprise value-to-proven reserves basis. Let's take a closer look.
[By Aaron Levitt]
Aside from a rising share price, OII stock investors have been treated to rising dividends as well. The latest increase was a 22.73% jump to its quarterly payout. Shares of OII stock now yield 1.5%.
Midcap Energy Stocks To Buy #5: Ultra Petroleum (UPL)
What a difference a few years can make. After getting killed by low natural gas prices, Ultra Petroleum (UPL) has bounced back with a vengeance. Yet more good times could be in store for the midcap energy stock.

Best Managed Healthcare Stocks To Buy For 2015: Ashland Inc. (ASH)

Ashland Inc. operates as a specialty chemicals company in the United States and internationally. Its Ashland Aqualon Functional Ingredients segment produces cellulose ethers; and specialty additives and functional ingredients. Its products offer functionality, such as thickening and rheology control; water retention; adhesive strength; binding power; film formation; protective colloid, suspending, and emulsifying action; foam control; and pH stability. The company?s Ashland Hercules Water Technologies segment manufactures papermaking chemicals and supplies specialty chemicals. It offers sizing agents, wet/dry strength additives, and crepe and release additives for tissue manufacturing; and deposit control agents, defoamers, biocides, and other process additives. This segment also provides specialized chemicals and consulting services for the utility water treatment; and performance-based feed and control systems; and monitoring devices and remote system surveillance. Its A shland Performance Materials segment manufactures and supplies specialty chemicals and customized services to the building and construction, transportation, metal casting, packaging and converting, and marine markets. It also offers unsaturated polyester and vinyl ester resins, and gelcoats; adhesives and specialty resins; and metal casting consumables and design services. The company?s Ashland Consumer Markets segment produces and markets packaged automotive lubricants, chemicals, appearance products, antifreeze, and filters to the private passenger car, light truck, and heavy duty markets. It also operates a quick-lube franchise under the name of Valvoline Instant Oil Change. The company was founded in 1918 and is headquartered in Covington, Kentucky.

Advisors' Opinion:

[By GuruFocus]
George Soros (Trades, Portfolio) just reported his first quarter portfolio. He buys Citrix Systems Inc, Baker Hughes Inc, Comcast Corp, Spansion Inc, etc during the 3-months ended 03/31/2014, according to the most recent filings of his investment company, Soros Fund Management LLC. As of 03/31/2014, Soros Fund Management LLC owns 305 stocks with a total value of $10.1 billion. These are the details of the buys and sells.New Purchases: BHI, CODE, CTRP, CLI, AVB, COMM, CNQ, AGO, AUY, ATML, ASH, BXMT, CSTM, AEM, CMA, ARE, CHKP, AUQ, BEAV, CX, ADSK, AALCP, BLK, AIG, BIIB, ADEP, AMRI, ARWR, ATHX, BALT, BCRX, BEAT, CFX, CLFD, CUR, CODE,Added Positions: CTXS, CMCSA, CNP, ALTR, BRCD, CBS, CRM, CHTR, CCJ, CIEN, BIDU, ALLE, ABT, CDNS, ACT,Reduced Positions: AAPL, CCI, AMT, ABBV, AAL, BITA, AL, ANGI, ARIA, CBST, BA, BIRT, EXAR,Sold Out: C, BAC, CRI, AMZN, AGN, CF, BRCM, COTY, BMY, AMCX, CAR, A, ADBE, AFL,For the details of George Soros (Trades, Portfolio)'s stock buys and sells, go to http://www.gurufocus.com/StockBuy.php?GuruName=George+SorosThis is the sector weightings of his portfolio:Technology18.9%Energy14%Healthcare8.3%Consumer Defensive8.2%Communication Services8.1%Consumer Cyclical5.4%Industrials5.1%Basic Materials4.9%Financial Services2.5%Real Estate1.9%Utilities0.5%These are the top 5 holdings of George Soros (Trades, Portfolio)1. Teva Pharmaceutical Industries Ltd (TEVA) - 10,310,041 shares, 5.4% of the total portfolio. Shares added by 10.67%2. Herbalife Ltd (HLF) - 4,901,337 shares, 2.8% of the total portfolio. Shares added by 52.9%3. EQT Corp (EQT) - 2,573,814 shares, 2.5% of the total portfolio. Shares added by 3.27%4. Adecoagro SA (AGRO) - 25,915,076 shares, 2.1% of the total portfolio.5. Halliburton Co (HAL) - 3,596,353 shares, 2.1% of the total portfolio. Shares reduced by 20.73%New Purchase: Baker Hughes Inc (BHI)George Soros (Trades, Portfolio) initiated holdings in Baker Hughes Inc. His purchase prices were between $51.82 and $65.27, with an estimated
[By Shauna O'Brien]
Jefferies reported on Thursday that it has cut its rating on chemical company Ashland Inc. (ASH).

The firm has downgraded ASH from “Buy” to “Hold,” and has lowered the company’s price target from $104 to $97. This price target suggests a 9% upside from the stock’s current price of $88.47.

Analyst Laurence Alexander commented: “Investor confidence in the asset shuffling thesis may not withstand 2-3 more rounds of downward revisions to EPS and FCF forecasts for 2014E-2016E.”

“Pension headwinds, incentive comp, Valvoline marketing expenses, sluggish end markets: in our view, it all adds up, and makes further multiple expansion more difficult.”

Looking ahead, the firm has reduced estimates for the fourth quarter from $1.70 to $1.59 per share. For FY2013, earnings estimates have been lowered from $6.25 to $6.15 per share. FY2014 estimates have been cut from $7.45 to $6.75 per share.

Ashland shares were mostly flat during pre-market trading Thursday. The stock is up 10% YTD
[By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Ashland (NYSE: ASH ) , whose recent revenue and earnings are plotted below.

Best Managed Healthcare Stocks To Buy For 2015: (NWBO)

Northwest Biotherapeutics, Inc., a development stage biotechnology company, engages in the discovery, development, and commercialization of immunotherapy products that generate and enhance immune system responses to treat cancer in the United States. Its technology platforms comprise dendritic cell-based cancer vaccines (DCVax) and monoclonal antibodies for cancer therapeutics. The company?s product candidates include DCVax-Prostate for the treatment of non-metastatic hormone independent prostate cancer, which cleared Phase III clinical trial; DCVax-Brain that is in Phase II clinical trial for the treatment of glioblastoma multiforme; and DCVax-LB, which cleared Phase I clinical trial for the treatment of non-small cell lung cancer. Its product candidates also comprise DCVax-Direct that cleared Phase I clinical trial for the treatment of ovarian, head, and neck cancer; and DCVax-L, which completed Phase I/II clinical trials for the treatment of resectable solid tumors. In addition, the company develops CXCR4 antibodies, which are involved in various phases of disease progression, including proliferation of the primary tumor, migration of cancer cells out of the primary tumor, and establishment of distant metastatic sites for the treatment of non-small cell lung cancer, breast cancer, glioblastoma multiforme, colon cancer, melanoma, prostate, pancreatic, kidney, ovarian, and certain blood cancers. Northwest Biotherapeutics, Inc. was founded in 1996 and is headquartered in Bethesda, Maryland.

Advisors' Opinion:

[By Smith On Stocks]
Using my assumptions, the common of Agenus might be worth about $7.00 per share in early 2014 based on the royalties from the Glaxo vaccines and the net operating loss carry forward even if every other asset in the company were valued at zero. However, there may be substantial value in Agenus' internal vaccine programs in recurrent and newly diagnosed glioblastoma and the genital herpes vaccine. Based on a comparison to peer companies like Northwest Biotherapeutics (NWBO) and ImmunoCellular Therapeutics (IMUC), I believe that the internal programs at Agenus currently may be worth $150 million or $4.45 per share. Adding this to the value of the MAGE A-3 vaccine could produce a stock price of $11.00 in early 2014.

Consumer Sentiment Falls in May, Wages Raise Concern

Nick Ut/AP NEW YORK -- A monthly gauge of U.S. consumer sentiment fell in May as a gloomy view on income growth clouded an otherwise positive economic outlook, a survey released Friday showed. The Thomson Reuters/University of Michigan's final May reading on the overall index on consumer sentiment came in at 81.9, down from 84.1 the month before. It was also below the expectation of 82.5 among economists polled by Reuters. However it did show a slight increase from the preliminary reading issued on May 16. "The slippage in consumer confidence came to a halt in late May," survey director Richard Curtin said in a statement. Curtin said the level may have declined by 2.2 points since April, but when averaging in the first four months of the year, the May figure was slightly above the average of 81.7. "At present, the economy was anticipated to be strong enough in the year ahead to produce the best change in job prospects since 2004," Curtin said, "The main concern expressed by consumers involved dismal prospects for wage growth, which for nearly half of all households meant anticipated declines in inflation-adjusted incomes and living standards during the year ahead," he added. Some 56 percent of consumers reported that the economy had improved, up from 49 percent in April. The survey's barometer of current economic conditions fell to 94.5 from 98.7 in April and below a forecast of 95.8. The gauge of consumer expectations slipped to 73.7 from 74.7 and fell short of an expected 74.0. The survey's one-year inflation expectation rose to 3.3 percent from last month at 3.2 percent, while the survey's five-to-10-year inflation outlook fell to 2.8 percent from 2.9 percent in April.

Is There Enough Fixed Income in Your Retirement Plan Lineup?

“While you don’t need as many fixed income choices as you probably want with the equity side, you need to have enough,” Matt Sommer, vice president and director of defined contribution and wealth advisor services with Janus Capital, told ThinkAdvisor on Wednesday.

“There’s so much focus on the equity side and not enough focus given to whether there’s ample choice and availability on the fixed income side so different participants at different stages of their lives can build a portfolio accordingly.”

There are three fixed income “staples” for 401(k) lineups to cover the risk-return spectrum, Sommer said: “U.S. intermediate-term, some sort of international diversified option and if you like high-yield, in addition to your money market or stable value option.”

Sommer said that U.S. intermediate-term bonds are so common that even plans that only have a few fixed income options have them. “It’s sort of like large-cap U.S. equity on the stock side,” he said.

Sommer said Janus has observed that plans adopt a “passive approach to fixed income, in all likelihood they’re using the U.S. Barclay’s Agg as the passive vehicle or the index option.” In those cases, advisors need to make sure plan sponsors understand that the duration for the U.S. Aggregate is 5.6, not three as it was before the crisis in 2008.

That’s important because the longer the duration, the more sensitive investments are to interest rates, he pointed out.

“We’re of the opinion that when interest rates do ultimately begin to creep back up, it’s not going to be a linear trend,” Sommer said. In fact, he added, “over the last several decades, we’ve been in a bull market for bonds when interest rates kept declining, but there were 22 periods since 1970 where interest rates actually picked up substantially.”

That’s what makes an active manager so valuable, Sommer said. “What an active manager is able to do is adjust the way the portfolio is managed relative to duration, to pick spots on the yield curve that offer the best risk-reward ratios, and also to evaluate sector and issue selection. It’s going to be a difficult environment, obviously, if the long trend in rates is upward, but there’s certainly opportunity especially for active managers who know how to exploit that.”

Advisors also need to consider how well the plan sponsor or investment committee actually understands the makeup of the bond funds in the plan and what the risk-return parameters are, Sommer said. “It’s been my experience that when you talk to most plan sponsors and most investment committees about their 401(k)’s U.S. intermediate-term bond fund and what their expectations are, it’s hardly ever yield. It’s not ‘I want the best return.’ It’s more often, ‘I’m really concerned about protecting principal.’”

One of the biggest challenges for advisors is finding the right balance of equities and bonds for clients. “Given people’s life expectancies and the impact of inflation,” Sommer said, and “the fact that people must live on after-tax cash flow, not pretax balances because of long-term capital gains […] it’s really important for advisors to have a balanced approach with those clients who aren’t in retirement. The right portion of equity is going to vary depending on the client and their risk tolerance, obviously, but equities are still a very big piece of the puzzle.”

“Some of the tenets that we believe in relative to the 401(k) world apply to the retail investor as well. Everyone is so hungry for yield,” Sommer said. However, say you have an 8% yield on an investment. “That sounds really good, but if the investment depreciates by let’s say 10%, your net return is negative 2%. We think that one of the best things that advisors can do for their clients, especially in the yield-starved environment that we’re in, is keep their focus on a total return approach.”

---

Check out PIMCO Brings Back McCulley on ThinkAdvisor.

Thursday, May 29, 2014

What Weak GDP? S&P 500 Trades New High; It Pays to Play With Your Food

Stocks rose today as jobless despite a weak GDP reading as jobless claims fell and merger mania gripped the food stocks. Shares of Tyson Foods (TSN), Hillshire Brands (HSH), Merck (MRK), Biogen Idec (BIIB), and SunEdison (SUNE) helped lead the market higher.

Getty Images

The S&P 500 rose 0.5% to 1,920.03–a record high–while the Dow Jones Industrial Average advanced 0.4% to 16,698.74. The Nasdaq Composite gained 0.5% to 4,247.95, while the small-company Russell 2000 finished up 0.3% at 1,140.07. The 10-year Treasury yield rose to 2.44%, while the CBOE Volatility Index, or Vix, fell to 11.57.

There’s funny stuff going on in food stocks. Tyson Foods jumped 6.1% to $43.25 today–the biggest gain in the S&P 500–after bidding more than $6 billion for Hillshire Brands. Hillshire surged 18% to $52.76, making it the big winner in the S&P 1500.

Tyson’s bid came just a couple of days after Hillshire Brands received a bid from Pilgrim’s Pride (PPC), and while it seems like ancient history now, Hillshire made its own bid for Pinnacle Foods (PF) earlier this month. Pilgrim’s Pride dropped 1.1% to $25.09 today, while poor jilted Pinnacle Foods gained 1% to $31.68.

Health care stocks also had a big day. Merck rose 2.3% to $57.70–making it the biggest gainer in the Dow Jones Industrial Average–on hopes for its cancer-fighting drug, while Biogen Idec advanced 3.6% to $319.85–making it the second-biggest winner in the S&P 500–after the biotech giant was upgraded to Overweight from Neutral at JPMorgan. SunEdison climbed 5.3% to $20.50 after reports that it’s planning the IPO of its “yieldco.”

US jobless claims fell to 300,000 last week, well below forecasts for 319,000, while first-quarter GDP shrunk by 1%, new revisions to previous data show. Maketfield’s Michael Shaoul favors the latter over the former:

Although this morning’s downwards revision to GDP will garner the headlines we would pay little attention the statistical representation of a brutal winter. More than enough Q2 data has already been released to show that a rebound in activity took place as soon as the weather turned while the overall strength of Q1 corporate earnings suggests that the negative growth of -1% is an overstatement of the weakness encountered.

We are much more interested in the Initial Claims report which is the latest in a long string of strong readings from a key real-time economic indicator…It should be remembered that this improvement has taken place in what has been the toughest seasonal period for official data in recent years with Claims data tending to move higher in the weeks following Easter (see seasonal chart). This makes the strength of the data a little more impressive and continues the trend of Claims data running ahead of other employment metrics and suggests that employment markets continue to tighten across the country.

Still, there are always reasons to distrust the market’s gains. One of the big ones right now: The ultra-low Vix. Only problem: SunTrust’s Keith Lerner says the low Vix is “not sounding an alarm.” He explains:

[The] VIX traded below 12 for a good portion of the period between late 1992 through 1995. During that period, stocks rose about 42%. Similarly, the VIX traded consistently below 12 from late 2004 through early 2007. During that period, stocks rose approximately 23%. There were also VIX reading below 12 in March and August 2013, and 2013 was still a good year for equities. So while this indicators does not dismiss the possibility of a correction this year, by itself, low VIX readings have not necessarily been a bad omen for equities.

And what about those record-high profit margins at U.S. corporations? Capital Economics’ John Higgins doesn’t think they’re likely to be a problem. He explains why:

The ratio of domestic profits after tax to gross value added (GVA) in the US non-financial corporate sector hit its highest level in 63 years in Q1 according to data published on Thursday by the Bureau of Economic Analysis. Equity bears may cite this as evidence margins are unsustainably high. But we think they are unlikely to revert to their long-run average any time soon.

A key reason why the ratio is now 68% above its average since 1950 is a collapse in the taxation of profits. The profit tax liability of non-financial firms has fallen from more than 50% of their pre-tax profits in the early 1950s to around 20% today.

There’s no need to get silly with the risk taking, however. Matarin Capital recommends favoring high-momentum stocks that also have “demonstrably good [businesses] and [are] available at an affordable price:”

When you break down those 100 top momentum stocks into those that have been generating positive free cash flow and those which have been burning cash, the cash-generative high momentum stocks have been outperforming the cash-burning ones by nearly 9% since the March 19th turning point.

When you break down the top 100 momentum stocks into the 50 cheapest and the 50 most expensive (for the purposes of our study, we focused on price-to-sales although other metrics will yield similar results), the cheaper stocks coming into mid-March are now outperforming the most expensive by over 16% since the turning point.

How’s that for high-flying?

This post has been updated for the close.

Papa Johnâ€™s Loss Is Krispy Kremeâ€™s Gain

This month, we got the news that Anthony Thompson would be leaving his post as president and chief operating officer of Papa John's International (NASDAQ: PZZA ) to become the new president and CEO of Krispy Kreme Doughnuts (NYSE: KKD ) . He had been with Papa John's since 2006 and has more than 25 years of experience in the food and beverage industry. For investors, what does this mean for Papa John's and Krispy Kreme?

Source: Krispy Kreme Doughnuts

Why the move?
In all likelihood, Thompson is taking the job because he wants to be a CEO. At Papa John's, Founder John Schnatter does not look to be going anywhere or retiring any time soon. Matter of fact, after Thompson left the company, Schnatter added the role of president to his title. He is now founder, chairman, president, and chief executive officer of the company. He did not, however, take the role of chief operating officer. For that role, he promoted Steve Ritchie from senior vice president to chief operating officer.

Source: Papa John's

For Krispy Kreme, Executive Chairman James Morgan will continue to work for the company full time. So investors benefit with Thompson joining the company and Morgan continuing to help oversee strategy while mentoring Thompson. This works out well because Morgan is 66 years old, while Anthony Thompson is only 47.

What's on the plate at Krispy Kreme?
Krispy Kreme remains focused on new doughnut flavors and international expansion. Krispy Kreme just finished its promotion for Krispy Kreme Key Lime Pie and Caramel Dutch Apple Pie Doughnuts. Krispy Kreme's latest promotion is for Birthday Cake Batter and Brownie Batter Doughnuts. Krispy Kreme describes the Birthday Cake Batter Doughnut as "a blend of Kreme and birthday cake batter filling in a yeast shell, topped with yellow icing and bright confetti sprinkles." The Brownie Cake Batter Doughnut consists of a "chocolate yeast shell with a rich brownie batter filling, topped with chocolate icing and mini chocolate chips."

Source: Krispy Kreme Doughnuts

Krispy Kreme also succeeded in opening its 600th international location on May 17. Krispy Kreme opened the location in Carolina, Puerto Rico with its local franchise partner, Caribbean Glaze. The two have been operating in Puerto Rico since 2008. Krispy Kreme can now be found in more than 20 countries in North America, Latin America, Asia, Europe, and the Middle East.

Source: Krispy Kreme Doughnuts

What's Papa John's up to?
Papa John's posted a 9.6% gain in comparable sales for its North American operations in the first quarter. The company's Double Cheeseburger Pizza promotion and having Peyton Manning as a spokesperson contributed to this performance. Papa John's also benefited from being the official sponsor of the NFL during Manning's record-breaking season. The Double Cheeseburger promotion was particularly successful for the company in that it was at the higher price point of $12. This proved that the company can offer higher priced items, and its customers are willing to pay for a premium product.

Source: brandeating.com

Papa John's newest promotion involves Indiana Pacers forward Paul George. He is promoting Papa John's new Sweet Chili Chicken Pizza. This pizza features pineapple, onions, red peppers, and breaded white meat chicken with a sweet chili sauce instead of pizza sauce. The Sweet Chili Chicken Pizza costs $12, the same price as the Double Cheeseburger Pizza.

How the new CEO could help Krispy Kreme
One area where Papa John's excels is with online ordering. Here, Anthony Thompson was instrumental in helping make Papa John's a digital leader. Krispy Kreme can use some of his expertise since the company has lacked a digital strategy for the longest time. This month, Krispy Kreme hired VML to help map out its digital strategy.

How do shares compare?

Market Cap

Forward P/E

PEG Ratio

1 Year Return

Krispy Kreme	$1.23B	20.20	0.95	38.16%
Papa John's	$1.76B	20.86	1.58	32.80%

Source: Yahoo! Finance

Foolish final thoughts
I think Thompson is a talented executive, and it's great news for Krispy Kreme shareholders that he's the company's new CEO. Papa John's is still in great shape, but I wonder if Papa John himself is wearing too many hats. He needs to let go of some of the reins and start grooming a successor.

For investors, I think Krispy Kreme is the better bet right now. It's got a new CEO, and its price-to-earnings-to-growth ratio is less than 1, which signifies that the company may be undervalued based on its growth prospects. I see Krispy Kreme shares continuing to outperform the market going forward.

Your credit card may soon be completely worthless
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Costco earnings up, but not enough for Wall St.

Costco Wholesale net income rose 3% in the third-quarter as the warehouse club operator's sales and membership fees improved.

A key sales figure rose both in the U.S. and abroad, but its earnings fell short of Wall Street expectations. Its shares slipped in pre-market trading Thursday.

Costco's stores offer members the ability to buy items in bulk at low prices.

Net income for the 12 weeks ended May 11 rose 3% to $473 million, or $1.07 per share. That compares with net income $459 million, or $1.04 per share. Analysts expected $1.09 per share, according to FactSet.

Revenue rose 7% to $25.79 billion from $24.08 billion last year. Analysts expected $25.68 billion.

Revenue in stores open at least one year rose 5% in the U.S. and 3% internationally. Excluding gas prices and foreign currency fluctuation, the figure rose 6% in the U.S. and 8% internationally.

Costco, based in Issaquah, Wash., operates 655 warehouses, including 464 in the United States and Puerto Rico, 87 in Canada, 33 in Mexico, 25 in the United Kingdom, 19 in Japan, 10 in Taiwan, 10 in Korea, six in Australia, and one in Spain.

Its shares were trading between $112.85 and $113.80 ahead of market opening today, down from the previous day's close of $113.87.

Wednesday, May 28, 2014

Exit Strategy - John Hussman

The S&P 500 set a marginal new high on Friday, in the context of a broad rollover in momentum thus far this year that we view as likely – though of course not certain – to represent a broad cyclical peak of the sort that we observed in 2000 and 2007, as distinct from spike-peaks like 1987. Valuation measures remain extreme, with the market capitalization of nonfinancial stocks pushing 130% of GDP (relative to a pre-bubble norm of about 55%), the S&P 500 price/revenue ratio at 1.7, versus a pre-bubble norm of 0.8, and the Shiller P/E near 26 – which while lower than the 2000 extreme, exceeds every pre-bubble observation except for a few months approaching the 1929 peak. We presently estimate 10-year nominal total returns for the S&P 500 Index averaging just 2.3% annually, with zero or negative total returns on every horizon shorter than about 7 years.

A side note about valuations and profit margins – my concern about record profit margins here is emphatically not centered on what profit margins may do over the next few quarters or years. The relationship between cyclical movements in earnings and stock prices is simply not very strong. Rather, as I noted in The Coming Retreat in Corporate Earnings, "my present concern is much more secular in nature. It can be expressed very simply: investors are taking current earnings at face value, as if they are representative of long-term flows, at a time when current earnings are more unrepresentative of those flows than at any time in history. The problem is not simply that earnings are likely to retreat deeply over the next few years. Rather, the problem is that investors have embedded the assumption of permanently elevated profit margins into stock prices, leaving the market about 80-100% above levels that would provide investors with historically adequate long-term returns."

In other words, we should not be concerned about extremely elevated profit margins because earnings are likely to weaken and stock prices might follow over the next couple of years (although that may very well occur). We should be concerned because investors are pricing stocks as a multiple of current earnings. They are implicitly using current earnings as if they are representative and proportional to theentire stream of future earnings going out over the next five decades or more. That's what it means to use a valuation multiple. It means that you take some fundamental as a sufficient statistic for the stream of cash flows that the security will deliver into the hands of investors for decades to come. If you think you know what wage rates, competitive pressures, interest rates and tax policy will be 10, 20, 30, 40 and 50 years from now, and that the present situation is representative and permanent, good luck with that. Otherwise, investors should recognize that because of the variability of profit margins over the long-term, valuation measures that adjust for variations in profit margins have been dramatically more reliable than unadjusted measures over time (see Margins, Multiples, and the Iron Law of Valuation)

Low volatility and suppressed short-term interest rates are a breeding ground for yield-seeking speculation. This reach for yield has now driven junk bond yields to about 5%, which is interesting given that yields are now near or below typical historical default rates. Meanwhile, the majority of new debt issuance today is taking the form of leveraged loans to already highly-indebted borrowers, with "covenant lite" features that provide little recourse in the event of default. This is the sort of behavior that should wake investors up like a triple Espresso. It doesn't because they have been conditioned to focus on yield alone, without considering the minimal amount of capital loss that would wipe that yield out. This is not a new dynamic, and precisely because it is not a new dynamic, one can always find solace from the same Broadway kick-line of dancing clowns that reassured investors that credit was sound, subprime was contained, and stocks were still cheap in 2000 and 2007.

Meanwhile, overbought measures also remain extreme, as investors have become conditioned to a perpetually diagonal advance like those that brought stocks to similarly overvalued, overbought, overbullish pinnacles throughout history (see The Journeys of Sisyphus). As I've often noted, there are countless ways to operationalize the concept of "overvalued, overbought, overbullish" depending on the severity of the condition one wishes to capture. Conditions that capture less severe market peaks also tend to include various false signals, while more restrictive conditions limit the set to the worst pre-crash peaks in history, but will tend to miss cyclical peaks that were less extreme). The following set of criteria falls into the more restrictive category, and limits the set to the 1929, 1972, 1987 peaks, three tech-bubble instances (the peak before the 1998 Asian crisis, a pre-correction peak in 1999, and the 2000 top), the 2007 peak, and of course, a solid band of warnings today. From our perspective, this time is different only in the extended period over which these and similar conditions have been sustained in recent quarters without consequence.

Continue reading here.

Also check out: John Hussman Undervalued Stocks John Hussman Top Growth Companies John Hussman High Yield stocks, and Stocks that John Hussman keeps buyingAbout the author:Canadian Valuehttp://valueinvestorcanada.blogspot.com/

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S&P 500 Extends Winning Streak to Six Days; Dow Makes the Most of Big Changes

So much for a scary September.

Agence France-Presse/Getty Images

Markets rallied again today, and if a downer of a month is destiny, we’ll have to wait a wee bit longer. The S&P 500 gained 0.7% to 1,683.99 today, while the Dow Jones Industrial Average rose 0.9% to 15,191.06 on a day when big changes were announced for the index.

Today’s rally continued a trend that has belied September’s bad reputation. Consider: Six trading days into the month–and nearly a third of the way through–the S&P 500 has gained 3.1%, and has yet to finish in the red. That’s it’s longest winning streak since July. The Dow Jones Industrial Average, meanwhile, rose fifth time this month, only interrupted by Friday’s 0.1% decline. It’s now up 2.6% so far this month.

Yes, investors are finally feeling some love for risky assets, as the big risks appear to be subsiding. A hard landing in China? Not yet. A U.S. attack on Syria? How about we give peace a chance? Even the beginning of the end for the Fed’s bond buying might not be such a worry if much of the potential damage is already priced in.

Or maybe not. I spoke with Barclays’ Barry Knapp today and he believes September could get a whole lot tougher. That’s because when the Federal Reserve begins tightening monetary policy–and yes, the end of QE qualifies–the market almost always falls, usually about 7% to 9%. “The market will turn more negative next week as it becomes clear the Fed will start to taper,” Knapp says. “I don’t think September is over.”

And even if that correction doesn’t occur this month, recent history suggest that the big September gains–or losses–in the S&P 500 come early in the month. According to my own admittedly shaky math, the S&P 500 gained 1.9% during the first six days of September in 2012, only to rise 2.6% for the entire month. In 2011, the benchmark fell 5.3% during the first six days of the month and finished down 7%. And in 2010, the S&P 500 gained 5.2% during the first six-trading days and closed September up 9%, a big gain, yes, but more than half the return was earned during the first third of the month.

Who’s feeling like a little risk taking?

Not investors in Restoration Hardware (RH). Its shares have dropped 2% in after-hours trading after it reported a profit of 49 cents a share, above forecasts for 43 cents, but offered mixed guidance. Oxford Industries (OXM) is off 7.3% at $60 after it announced a profit of $1.01, ahead of 98 cents consensus forecasts, but lowered its 2013 guidance. Shares of SunEdison (SUNE) have dropped 5.4% to $7.90 after it announced a secondary offering.

But it hasn’t been all bad news. Lannett (LCI) has gained 1.9% to $16.00 after it reported a profit of 12 cents, above the 7 cents forecast by analysts. And shares of Krispy Kreme (KKD) are unchanged after the company said it would earn 59 cents to 63 cents in the slides for a presentation tomorrow. Considering what happened the last time Krispy Kreme opened its mouth, that has to be considered good news.

Investors yank record $20 billion from ETFs

Investors bailed out of bond funds in August as long-term Treasury rates spiked. But investors pulled out of stock funds too due to fears about the Fed and Syria.

NEW YORK (CNNMoney) Investors yanked more than $20 billion out of exchange-traded funds in August, according to Morningstar. That's the largest monthly outflow since the first ETF launched 20 years ago.

Although stocks have been surging for most of the year, August was the worst month of 2013. Stocks fell as traders worried about the potential impact of the Federal Reserve scaling back its stimulus program sooner rather than later. Fears about a U.S. military strike against Syria didn't help either.

Investors pulled more than $15 billion out of U.S. stock ETFs alone. The SPDR S&P 500 (SPY), the largest and most liquid ETF, was the biggest loser.

ETFs are most heavily used by hedge funds and other big institutional investors, but individual investors have been also shifting out of traditional mutual funds into ETFs to take advantage of the lower fees.

This has been the case for both stock funds and fixed-income funds. But bond ETFs were hit hard last month too. Investors withdrew $6.7 billion from bond funds. That's nearly 3% of the assets in these funds.

The Pimco Total Return ETF (BOND), which is managed by Pimco co-founder Bill Gross, suffered its fourth consecutive month of outflows. Investors withdrew $94.6 million from the fund.

The $260 billion Pimco Total Return fund (PTRAX), which the ETF is based on, lost $7.5 billion, according to Morningstar.

Meanwhile, investors pulled $1.1 billion from rival bond fund manager Jeffrey Gundlach's $36.7 billion DoubleLine Total Return Bond Fund (DBLTX), according to Morningstar.

The losses in these major bond funds have taken place as Treasury yields have begun to spike. Bond prices and rates move in opposite directions.

An unprecedented $1.2 trillion was poured in to bond mutual funds and exchange-traded funds since the financial crisis according to TrimTabs. It seems that investors may no longer view bonds as secure investments at a time when the Fed may be looking to slow down the pace of its asset purchases.

Economists have been speculating that the Fed could begin pulling back on its controversial $85 billion a month bond-buying program at its meeting next week.

"Now that these 'safe' investments have delivered losses for four consecutive months ... investors are scrambling for the exits," said analysts at TrimTabs.

Bond yields hitting 3%? Not so fast!

But even if the Fed does begin to taper next week, TrimTabs CEO David Santschi believes it will be a relatively small reduction, as the economic recovery and bond market are fragile.

Plus, there's little chance that that the Fed would want to rock the boat too much before chairman Ben Bernanke leaves his post in January.

Some investors may already be taking that into account. While bond yields have continued to rise so far in September, stocks have bounced back sharply. The S&P 500 is up more than 2% in just the first few days of the month.

Tuesday, May 27, 2014

11 Retailers to Dump Now

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It has been an awful year for retail stocks, and there's no two ways about it.

down arrow1 11 Retailers to Dump Now First, we started the year with a spate of bad weather that depressed both hiring and spending trends. Then, after what seemed like a snap-back in March, we were greeted by a meager 0.1% rise in April retail sales according to the latest data.

And the icing on the cake has been the ugly earnings reports lately from retailers across the board, typically including crumbling sales and very negative forward guidance.

So, with a very gloomy narrative for a few months weighing on sentiment and a very gloomy forecast going forward, it's not surprising than many retail stocks have declined by double-digits or more year-to-date in 2014 even as the S&P 500 flirts with all-time highs.

So which retailers stink the worst? Here's a list of 11 dogs, and some data on stock performance and sales numbers to illustrate just how ugly things are:

Staples (SPLS)

Staples 11 Retailers to Dump Now Returns since 1/1/14: -28% vs. 3% gains for the S&P 500.
Returns since 1/1/11: -50% vs. 51% gains for the S&P 500.
Revenue Growth Last Year: -5% ($24.4 billion in FY13 to $23.1 billion for FY14)

If you want to find something good to say about Staples (SPLS), you could note that the company is comfortably profitable while some retailers aren't and that SPLS has a decent e-commerce engine. Staples.com is the #2 e-commerce player in the U.S., according to Internet Retailer data.

But the cons far outweigh the pros. The company has a painfully stagnant top line, share price has fallen like a rock and the company just announced plans to close another 225 underperforming stores.

Expect further pain for shareholders and right-sizing for this brick-and-mortar office supply store.

PetSmart (PETM)

PetSmart185 11 Retailers to Dump Now Returns since 1/1/14: -24%
Returns since 1/1/11: +38%
Revenue Growth Last Year: 2% ($6.8 billion in FY13 to $6.9 billion for FY14)

PetSmart (PETM) isn't as ugly as some of these other big-box retailers in the long-term, with 38% returns in the last three years or so. But what little momentum PETM stock has had in recent years has evaporated in a hurry as revenue has stalled and pressure mounts.

PetSmart just posted weak Q1 numbers and slashed forward guidance in its May earnings report, causing the stock to tumble 5% in short order. Same-store sales declined, and the CEO admitted a "challenging" market is out there for the pet retailer going forward. That bodes very poorly for the future of PETM stock.

Dicks Sporting Goods (DKS)

dicks 11 Retailers to Dump Now

Returns since 1/1/14: -25%
Returns since 1/1/11: +15%
Revenue Growth Last Year: 6% ($5.8 billion in FY13 to $6.2 billion for FY14)

Dicks Sporting Goods (DKS) is at least growing revenue modestly, which is better than some of the ugly stocks on this list.

On the other hand, that growth isn't enough to please Wall Street — as evidenced by the crash of 18% in Dicks stock right after its recent May earnings report. In addition to missing on profits and sales, the company dramatically moved its guidance lower.

Traders dumped shares, and a lot of firms including Morgan Stanley and Goldman Sachs downgraded the stock as a result, hinting that the worst is far from over.

American Eagle (AEO)

AmericanEagle 11 Retailers to Dump Now Returns since 1/1/14: -24%
Returns since 1/1/11: -24%
Revenue Growth Last Year: -4% ($3.5 billion in FY13 to $3.3 billion for FY14)

American Eagle Outfitters (AEO) is facing pressure on all sides. Americans still are pretty tightfisted with their discretionary income, mall traffic continues to decline thanks to e-commerce trends, and consumer tastes have moved away from the clothing retailer.

It all adds up to big declines for AEO stock, continued revenue shortfalls and a gloomy outlook for the forseeable future. No wonder AEO just announced it would be shuttering 150 locations in an effort to right the ship.

Abercrombie (ANF)

Abercrombie185 11 Retailers to Dump Now Returns since 1/1/14: +13%
Returns since 1/1/11: -35%
Revenue Growth Last Year: -9% ($4.5 billion in FY13 to $4.1 billion for FY14)

Abercrombie & Fitch (ANF) used to be at the top of the teen retail space. if you simply look at performance since January, you may be convinced the company is in the middle of a turnaround … but don't believe it.

Revenue declines have been steep in the last year, and the big reason for outperformance this year was a double-digit run in February after the company reported sales still slipped … but less than expected. Since then, Abercrombie has slowly given back part of those gains, and skeptical traders are still watching the company very closely. There's a chance ANF's comeback may be real … but given the secular pressures on every other retailer on this list, I highly doubt it.

Buckle (BKE)

Buckle 185 11 Retailers to Dump Now Returns since 1/1/14: -15%
Returns since 1/1/11: +19%
Revenue Growth Last Year: flat ($1.1 billion for both FY13 and FY14)

The Buckle (BKE) is a smaller teen retailer, operating just 450 or locations and with a market value of about $2.1 billion. That doesn't leave a lot of room for error since it doesn't have the scale of some larger peers … and BKE stock has paid the price lately as a result.

In its most recent earnings report, The Buckle noted same-store sales declined 0.9%, and gross margins fell. With the already troubling long term trend of flatlining revenue, those disappointing metrics have only given investors one more reason to sell — and rightly so.

JCPenney (JCP)

JCPenney185 11 Retailers to Dump Now Returns since 1/1/14: -2%
Returns since 1/1/11: -72%
Revenue Growth Last Year: -9% ($13.0 billion in FY13 to $11.9 billion for FY14)

What can you say about JCPenney (JCP) that the numbers don't already show? The stock has simply imploded since 2011, after former Apple (AAPL) retail guru Ron Johnson made changes that scared away customers in droves. Not only is revenue down 9% in the last year, but its down a staggering 33% since fiscal 2011!

Johnson was fired, but the bleeding has continued as the company continues to operate at a loss. There has been a small glimmer of hope lately, with a one-day pop of 25% on hopes that cost-cutting would succeed and revenue declines had finally bottomed … but the end of bad news is not the start of growth, so don't believe the turnaround hype just yet.

Sears (SHLD)

Sears185 11 Retailers to Dump Now Returns since 1/1/14: -24%
Returns since 1/1/11: -45%
Revenue Growth Last Year: -9% ($39.8 billion in FY13 to $36.2 billion for FY14)

If you think it can't get worse than JC Penney, just check out Sears (SHLD) — a stock that has equally ugly performance in both the short-term and long-term, but without the glimmer of false hope.

Revenue is down 16% since fiscal 2011 and 9% year-over-year. The company is bleeding cash even faster than JCP. CEO Eddie Lampert is notorious for running Sears in a cutthroat fashion, intending to harvesting as much as possible from the retailer as quickly as he can, regardless of the long-term pain it creates.

You'd think such a philosophy would result in, you know, some kind of profits that could be harvested…. But if you own Sears stock these days, you know it hasn’t amounted to much.

Bed, Bath & Beyond (BBBY)

BedBathAndBeyondLogo 11 Retailers to Dump Now Returns since 1/1/14: -23%

Returns since 1/1/11: +23%

Revenue Growth Last Year: +5% ($10.9 billion in FY13 to $11.5 billion for FY14)

Bed, Bath & Beyond (BBBY) isn't all bad. The company has managed to squeak out modest revenue growth, and is seeing profits rise, too. And long-term returns, while they don't keep pace with the broader market, aren't as abysmal as other retailers on this list.

But when you look at recent trends, the pain could be just getting started at BBBY. Profits declined year-over-year in the company's fiscal fourth-quarter earnings report. Furthermore, the growth rates the company has enjoyed in past years have slowed dramatically as the rebound in home sales has also slowed.

If you believe that household formation or real estate transactions will snap back, then maybe take a flier on BBBY stock. But without those secular tailwinds then Bed, Bath and Beyond could remain under pressure for some time.

Target (TGT)

Target 11 Retailers to Dump Now Returns since 1/1/14: -12%
Returns since 1/1/11: -7%
Revenue Growth Last Year: -1% ($73.3 billion in FY13 to $72.6 billion for FY14)

Target (TGT) stock is reeling in the short-term from the fallout of a very public data breach late last year that cost the company billions and broke consumer confidence in the retailer. But the issues at Target go much deeper than the loss of some customer info.

Take, for instance, the $1 billion loss attributable to disappointing Canadian operations and over-expansion there. Or consider the fact that longer-term, absent the recent privacy concerns, Target had already been pressured by stagnant top-line performance.

If there is a consumer-driven recovery in store for us soon, then perhaps Target can turn around. But given investor negativity and recent revenue trends, I wouldn't bet on it.

Best Buy (BBY)

Best Buy 11 Retailers to Dump Now Returns since 1/1/14: -32%
Returns since 1/1/11: -11%
Revenue Growth Last Year: -14% ($49.6 billion in FY13 to $42.4 billion for FY14)

Best Buy (BBY) got a lot of press in 2013 as a turnaround tale that investors loved, with roughly 245% returns on the year to make it one of the best stocks of 2013 among S&P components.

And while BBY stock is still up based on its pricing from early last year, you can't cherry pick just a 10-month window as proof that Best Buy is back. Long-term, the issue for BBY is the fact that revenue an margins are severely under pressure — and shares reflect this in a big way.

Sure, shares are rallying mildly after its most recent earnings report. However, the earnings "beat" is just a sucker's rally. Revenue fell for the ninth consecutive quarter, and headwinds remain fierce for the big-box electronics store in the age of e-commerce.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

Five top stressors in retirement and how to cope

Oh, the retirement years — hours of relaxation, visiting family and doing many of the activities you've always wanted to do. Stress-free at last. Or maybe not.

Although some research suggests that retirees experience less stress than when they were working, a lot depends on the person, experts say.

Stress in retirement is linked to two key factors: health and financial status, says geriatric expert Richard Schulz, director of the University of Pittsburgh Center for Social and Urban Research. "People who have health problems continue to experience the stresses associated with these problems; financial difficulties also contribute to a stressed retirement experience.

"Involuntary retirement — due to health problems, downsizing, being fired — is associated with a more negative retirement experience," he says.

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Amit Sood, author of The Mayo Clinic Guide to Stress-Free Living, says the keys to lowering your stress include creatively tackling your stressors, having an attitude of gratitude, accepting people, especially your spouse, for who they are, and being kind to others and yourself.

Socialization is also a great way to ward off stress, says Steve Brody, a psychologist in Cambria, Calif., who works with retirees. He's the co-author of Renew Your Marriage at Midlife written with his wife, Cathy Brody. "We are social creatures, so we need to stay connected with others."

It's important to deal with stressors because your chances of a heart attack, stroke, cancer or early death are lower if you have less stress, says Sood, a professor of medicine at the Mayo Clinic in Rochester, Minn.

Five common stressors in retirement and ways to cope with them:

1. Financial concerns. Many retirees experience stress from living on a fixed income, Brody says. They worry that they won't be able to take care of themselves or t! heir family.

Stress-reduction strategy: Beware of "awfulizing and catastrophizing your situation," Brody says. Change your way of thinking. Instead of telling yourself, you won't be able to make ends meet, think, "I don't have as much money as I'd like, but I have $2,500 a month, and I can live on that."

Adds Sood: Be grateful for what you have, and if necessary, simplify your life. You might consider getting a smaller home — it's less expensive and easier to maintain. Consider getting a part-time job.

2. Health worries. Health problems and changes in insurance coverage can create enormous stress, Sood says.

Stress-reduction strategy: Take care of your body by eating a healthful diet, exercising regularly, getting enough sleep and getting preventive care, Sood says. Don't become overly focused on your health and spend all your time obsessing about it, he says. Play the hand you have. Embrace life's uncertainties by letting go of the uncontrollable, he says. "We have to accept the changes happening in the body and be grateful for the good health we have and the medical care we have received."

3. Caregiving. You may have to deal with the ill health of your spouse, a parent or other relative, Schulz says. Being a caregiver, particularly for illnesses such as Alzheimer's disease that involve cognitive impairment, has been shown to be extremely stressful. The stress tends to accumulate for long periods of time, years typically, and affects the health and functioning of the retired individual.

Stress-reduction strategy: The No. 1 strategy is getting help from others, including relatives, friends and professionals, Schulz says. You should become informed about the condition and how to deal with it. On the positive side, you know you are easing the suffering of someone close to you.

4. Relationship issues. Some people have not reconciled their differences with their spouse or learned to accept the other person for who they are, Sood says. Some retirees feel lonely and! isolated! after leaving colleagues, and others don't get to spend as much time with their kids and grandkids as they'd like, Brody adds.

Stress-reduction strategy: Learn to accept your spouse and others for who they are, Sood says. Work on forgiveness. You don't want to close your life with lots of hurts, he says. "The magic of retirement is having the time to nurture relationships."

One of the keys to interacting with kids and grandkids is give them space, and when you are with them try to help and support them with their daily chores, he says.

Adds Brody: Adult children have a lot going on in their lives. Being aware of that can be help you adjust your expectations so you don't end up nagging them or getting depressed over not seeing them enough.

5. Super-charged changes. This is a time of enormous change. You are leaving your job and friendships with colleagues and finding new things to do, Sood says.

Stress-reduction strategy: Realize that your brain's reward center likes variety, so give yourself a variety of experiences, Sood says. "Let your best friends not be the TV, refrigerator or couch. Let your best friends be real people, books and sports shoes."

Treat your first year in retirement as if you are "interning" to give yourself time to readjust and set new expectations, he says. Find meaning in new passions, including possibly using your work skills in a new job or volunteer work.

Brody says three keys to a successful retirement are finding a sense of purpose for yourself, structuring your day and replacing the social connections you lost when you retired. Also, if you can retire gradually, going to a half-time job for a year before fully retiring, it's easier to acclimate, he says.

Nurture your spiritual values, which may mean developing a deeper connection with your faith, Sood says. "Live your life fully, and say your 'I love yous' every day." Most importantly, do not postpone joy and do not bypass kindness."

Monday, May 26, 2014

Use 'Em or Lose 'Em: Your Rewards Points Aren't Really Yours

Hand removing the wallet from a man's pocket Peter Dazeley, Getty Images Earlier this month, PerkStreet, an online bank that provided cash-back rewards for using your debit card, announced that it would be shutting down. That was disappointing news for account holders, but nobody lost their life savings: Their funds were all FDIC-insured, so they can still retrieve their money. However, the same could not be said of their rewards. PerkStreet executives remorsefully explained that they "just didn't have the financial capability to pay out perks earned," so anyone with an unclaimed rewards balance as of the announcement lost their accrued cash-back. Many account holders had spent months or years earning rewards with their debit cards, so some customers lost a significant amount of money. "I just lost $500 in perks with no warning," wrote one angry user. "I've been saving those for a long time, for special occasions and to treat myself." "We were sitting on almost $300 in perks saving it for an anniversary cruise," complained another user. Yet another said he'd lost $500 that he'd planned to use to buy Christmas presents. Unfortunately, there's nothing these customers can do about it, because they don't actually own their rewards points. That may come as a surprise to most people, because federal law provides ample protection for consumers in their banking transactions: Whether your bank goes bust or your credit card gets stolen, your money is safe. But even though rewards are presented in commercials as the primary reason to open a new credit card, they're treated in the fine print as an add-on that can be changed or taken away at any time. "The credit card companies' viewpoint about rewards programs is that they are just an extra benefit that they offer at their discretion, and they're doing you a favor," says Odysseas Papadamitriou of credit card tracking site CardHub.com. "But for a significant portion of the customer base, the main reason they use the card is the rewards. It's like a hotel saying that having a shower is just a luxury they give you, and if the shower doesn't work, you should shut your mouth about it." And, frustrating as it may be, there are several ways that your hard-earned rewards points can disappear on you. You don't pay your bill. This is the one that makes the most sense. It may seem like you're earning rewards every time you use your card, but keep in mind that you haven't actually spent any money until you've paid off your bill for that time period. "If you miss the payment period, they'll hold the rewards," says Alex Matjanec, co-founder of MyBankTracker. As he explains, though, your rewards aren't permanently wiped out -- American Express, for instance, will give you the rewards you earned if you pay off your whole debt and a $35 fee. You somehow violate the terms of your cardholder agreement. There are numerous ways that you can game the system to get more credit card rewards. But if your issuing bank figures out that you're doing something fishy, it could cancel your account, blocking access to your rewards in the process. That's what happened to this man, who had more than $2,400 in rewards points revoked by Chase after it apparently raised an eyebrow at what he had to spend to earn them. Only after intervention by local media did the bank give him the rewards he'd earned. "The terms and conditions say they can close the account at their own discretion for any reason," says NerdWallet's Anisha Sekar, who points to illegal activity like online gambling as one reason a bank might shut you down. "You pretty much serve at the mercy of the bank." The rewards program decides to devalue its points. In April, CardHub's Papadamitriou got a letter from American Express with some bad news: The travel rewards points he'd accrued with his Hilton HHonors Card were being devalued. The good news was that he had about a month and a half too book travel at the current rate before the new system kicked in. But once June 15 rolled around, he would need more points to get a free hotel stay. That wasn't an isolated incident, by the way: Earlier this year, the three major hotel chains -- Marriott, Hilton and Starwood -- all made it more expensive to use credit card rewards points to book hotel stays. Cardholders still got the same amount of points for their purchases, but they were no longer worth as much as they used to be. The bank shuts down. This is what happened to PerkStreet, though it must be said that this is a rare occurrence. PerkStreet was a startup, and was thus heavily reliant on securing funding to keep its doors open. A major bank like Chase, Citi or Bank of America is incredibly unlikely to suddenly shutter its operations. Still, big banks aren't the only platforms that allow you to earn rewards -- there are, for instance, a number of deal sites that provide rewards when you buy a product after following a link from their site. While there's no reason to believe that any of these sites are in danger of going under, just bear in mind that not everyone who provides rewards is as secure as the titans of the banking industry. Your account is inactive. If it's been several months since you've earned any Hilton HHonors points, expect to get an email that goes something like this: "We haven't noticed any activity on your HHonors account in more than nine months. Remember, to keep your account active, you must earn HHonors points at least once every 12 months. Otherwise, all of your points may be forfeited." Hilton is hardly alone in requiring regular account activity for customers to keep the rewards they've earned. Credit.com points to the BarclayCard's NFL ExtraPoints Card, which will close your account if you go six months without charging anything to it. And it also notes that points and miles can expire if not used within a certain time frame. So how can you avoid forfeiting your hard-earned points? As always, start by reading the fine print, where you'll find all sorts of information on expiration dates and unauthorized account activity. But your best bet is to just redeem your points on a regular basis so you never build up a large balance that can be taken away. "People are treating their rewards points as a savings account, and they shouldn't be thinking about it that way," says Matjanec. "I think it's just the excitement of seeing that number grow." But if something goes wrong, you also have to deal with the despair of seeing that number disappear. So, if you have a significant stash of unused reward points, use them to buy something -- or cash them in and stash the bonus dough in the secure confines of a a savings account.