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1) Will This Spinoff Spin Out? + Vic Wisemann’s Thoughts on: ZQK, TWX, AOL, BRK.A, GOOG, YHOO
Vic Wisemann
Contributor |
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There are two ways to build a business. Either you grow organically or you do it through acquisitions. Most companies use a combination of both. It's easy for investors to analyze organic growth. It's a lot tougher when acquisitions are involved because success or failure often takes years to assess. Understanding the difference between good deals and bad ones is a key factor to making money on your investments. Knowing when to walk away is critical to your success.
Two excellent examples of spectacularly poor judgment are Quiksilver (ZQK), which bought ski brand Rossignol in 2005 and three years later sold it for a pre-tax loss of $212.3 million, and Time Warner (TWX), which sold itself 10 years ago to AOL (AOL) for $164 billion in ridiculously expensive stock.
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Back in 2005 I had a relatively small holding in Quiksilver stock and, even though everything I read indicated merging a hard goods business with a soft goods business was incredibly difficult, I hung in there for another year until it was painfully obvious the deal was a disaster. This experience taught me a very valuable lesson: logic should always win over emotion.
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The second deal is dubbed by many as probably the worst in corporate history. Only in January did former Time-Warner CEO Gerald Levin admit the deal was a colossal mistake. Bad deals do happen. Even Berkshire Hathaway (BRK.A) CEO Warren Buffett admits to making them. In the case of Time Warner and AOL, it was pretty clear from the time the deal was announced the two corporate cultures wouldn't mix. There may be a bigger reason for acquisitions turning out badly, but I can't think of it. Remember, synergy is critical for success. Even when products and services complement, classing culture will always sour the deal
Read on to see how you can spin some profits from a standalone AOL
2) Learn from the Experts |
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Ian Cooper
WealthDaily.com |
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Matthew Buckley
Options
University.com |
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Dan Passarelli
MarketTaker.com |
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The Backdoor Trade on LED
Some analysts aren't the brightest bulbs in the box...
While they were busy panning Cree and the LED boom in late 2007, we were backing up the truck — recommending Cree at $20, the cheapest the stock would ever be again...
Click here for full article » |
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Beware Government Bearing “Reform”
I recently railed against the insane compensation Robert Rubin received at Citi (C) for doing nothing. Just ask him.
As a shareholder, could you imagine walking up to an executive of a firm you’re invested in and asking...
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Goldman Sachs, the VIX and You
After a significant rise in volatility took place on Friday’s April option expiration, Monday had option traders shaking their heads as market volatility crashed lower by more than 5% as measured by the VIX...
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3) 26 Cheap Stocks to Sell |
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Cheap stocks have been on a tear recently, but nine out of 10 cheap stocks are circling the drain! Get the names of 26 cheap stocks to sell right now, plus the five red flags for buying cheap stocks - click here to learn more!
* See Disclaimer Below
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4) Expert Articles Recap — In Case You Missed It The First Time… |
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04/22/10 |
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TheGlobalGuru.com's Nicholas Vardy - The Next BRIC Economies: Vietnam.
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04/22/10 |
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Fabian.com's Doug Fabian - ETF Talk: Ready to Ride Banking’s Rebound? Read Story... |
04/19/10 |
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BigTrends.com's Price Headley - MOVING FROM STOCKS TO OPTIONS
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5) Feature Articles |
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This Week: What Do Investors Need To Know About Earnings Season Story Stocks? Strategies, Insights, And Trade Ideas For Stocks and ETFs Like, AOL, V, ADP, & EEM…
- Does an independent AOL have a better chance than one tied up inside Time-Warner and what bearish strategy can investors use play AOL for up to a 114% annualized target return with over 8% downside protection?
- What recent trends could indicate a stable or rising price for Visa’s (V) stock and what bullish strategy can investors use play V for up to a 94.7% annualized target return with over 9% downside protection?
- Which ETF should be on your radar right now? HINT: It offers a low-cost trade targeting up to a 71% annualized return with over 10% downside protection.
Get this week’s feature articles by our portfolio analysts. Expect the options and hedge strategies, tactics, insights, and specific trade ideas that could give you an inside edge. This weeks articles are titled:
Stocks Covered: Visa (V), AOL (AOL), Automatic Data Processing (ADP)
Target Returns: Up to 12.4% or 80.6% Annualized*
Downside Protection: Up to 10.4%
Investor Level: Beginner to Advanced
Risk Level: Low to Moderate Relative Risk
6) InvestorsKeyhole Market Information |
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Get today’s breaking news and tips from a network of floor traders, company executives, experts, analysts and timely information resources. This service has had over an 89% success rate over the last 5 years.
Stock Covered: Caterpillar Inc. (CAT)
Target Return: 13.6% and 91.9% Annualized*
Downside Protection: Up to 12.0%
Investor Level: Beginner to Advanced
7) Portfolio Update Conservative Covered Call Plus portfolio |
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Last week, we posted a new set of positions on GE and JCI for the May portfolio month, plus we also brought in $2,000 cash by placing follow-on trades for MRK and GIS positions from previous months whose sold calls expired in Apirl. This service points out a series of covered call trades along with a companion series of hedged trades using the same underlying stocks requiring much less capital. These are hedged investments so returns are protected even if the stock drops in price. Get a rebate if you sign up for this service today.
Stocks Covered Recently: General Electric (GE), Johnson Controls (JCI)
Target Returns: $1,816 or 7.5%
Investor Level: Beginner to Advanced
Risk Level: Moderate Relative Risk
8) Exclusive Special Report! Where Is The Safest Place To Invest In The Market Today? |
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Be one of the first to read and reap from this options trade based report.
Summary: Over the past year, the market has gone from being one of the scariest markets ever to one of the most boring ever. After hitting multiyear lows then going on a historic ten-month rally, it looks like we could be headed for an extended period of market stagnation coupled with one of the weakest economic recoveries in American history. Where can investors turn for a safe investment with modest but reliable returns? We may have found an answer to that question in the utility industry. With a stable business model, steady dividend payments, and a promising future, this oft forgotten industry could be a new source of profits for savvy investors.
Stocks Covered: Xcel Energy (XEL), Dominion (D), Wisconsin Energy (WEC), FPL Group (FPL),Center Point (CNP), Duke Energy (DUK), and more…
Target Returns: Up to 12.4% or 43.8% Annualized*
Downside Protection: Up to 15.7%
Investor Level: Beginner to Advanced
Risk Level: Moderate Relative Risk
All stocks and options shown are examples only. These are not recommendations to buy or sell any security. Any pricing or potential profitability shown does not take into account your trade size, brokerage commissions or taxes which will affect actual investment returns. Annualized returns are shown to assist in comparing investment of different durations only. Stocks and options involve risk and are not suitable for all investors and investing in options carries substantial risk. Prior to buying or selling options, a person must receive a copy of Characteristics and Risks of Standardized Options available at: http://www.cboe.com/Resources/Intro.aspx. Stock recommendations and comments presented are solely those of the analysts, experts, or information source quoted. They do not represent the opinions of Investors Observer or InvestorsKeyhole on whether to buy, sell or hold shares of a particular stock or option. Investors should be cautious about any and all stock or option recommendations and should consider the source of any advice on stock or option selection. Various factors, including personal or corporate ownership, may influence or factor into an expert's stock analysis or opinion. All investors are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock or option performance is no guarantee of future price appreciation or depreciation. Those involved with the preparation and distribution of this report may have had in the past, currently hold, or may purchase in the future stock and/or options in companies discussed in this report. It is expected that the limited distribution of this report to a relatively small number of investor will not materially affect the price of this widely held stock.
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