Top 5 China Stocks To Buy For 2014

New numbers came out yesterday for Nokia's (NYSE: NOK  ) sales in China -- and things aren't looking good. The company failed to benefit from a prime gift-giving holiday, and even the new Lumia 920T hasn't turned the tide in the country.

Nokia's been busy in China over the past few months, but unfortunately, not all of it has paid off. At the end of 2012, the company jumped on board with China Mobile�to sell it's Lumia 920T, a move I thought would help the company.�Having the China Mobile advantage could have boosted sales over the past few months, but apparently it didn't work out that way.

Source: Nokia.

Nokia announced its Q1 2013 numbers today, and the figures show device sales in China falling 26% from the previous quarter -- and a jaw-dropping 63% decline year over year.

Top 5 China Stocks To Buy For 2014: Bitauto Holdings Limited (BITA)

Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry primarily in the People?s Republic of China. The company offers subscription services to new automobile dealers that enable them to list pricing and promotional information on its bitauto.com Website and partner Websites, and to interact with consumers through its virtual call center, as well as provides advertising service to dealers and automakers on its bitauto.com Website. It also offers listing services to used automobile dealers, which enable them to display used automobile inventory information through its ucar.cn Website and partner Websites; and advertising services to used automobile dealers and automakers with certified pre-owned automobile programs on its ucar.cn Website. In addition, the company provides digital marketing solutions, including Website creation and maintenance, online public relationship, online marketing campaigns, and advertising agent service s. Bitauto Holdings Limited was founded in 2000 and is headquartered in Beijing, the People?s Republic of China.

Top 5 China Stocks To Buy For 2014: Qihoo 360 Technology Co. Ltd.(QIHU)

Qihoo 360 Technology Co. Ltd. provides Internet and mobile security products in the People's Republic of China. Its principal products include 360 Safe Guard, an Internet security product for Internet security and system optimization; 360 Anti-Virus, an anti-virus application to protect users? computers against trojan horses, viruses, worms, adware, and other forms of malware; and 360 Mobile Safe, a security program for the Google Android, Apple iOS, and Nokia Symbian smartphone operating systems. The company?s platform products comprise 360 Safe Browser, a Web browser; 360 Personal Start-up Page, a default homepage of 360 Safe Browser and a key access point to popular and preferred information and applications; 360 Application Store, a key access point to securely obtain and manage software and applications; and 360 Safebox, a solution that protects users against thefts of personal account information. It also provides online advertising services, including online marketi ng services and search referral services; and Internet value-added services comprising the operation of Web games developed by third-parties, remote technical support, and cloud-based services. The company was formerly known as Qihoo Technology Company Limited and changed its name to Qihoo 360 Technology Co. Ltd. in December 2010. Qihoo 360 Technology Co. was founded in 2005 and is based in Beijing, the People?s Republic of China.

Top High Tech Companies To Invest In Right Now: Home Inns & Hotels Management Inc.(HMIN)

Home Inns & Hotels Management Inc. develops, leases, operates, franchises, and manages a chain of economy hotels in the People?s Republic of China. The company operates its hotels under the Home Inn brand name. As of April 28, 2011, it had approximately 800 Home Inns in operation and 1,000 Home Inns sealed in franchise agreements. The company was incorporated in 2001 and is headquartered in Shanghai, the People?s Republic of China.

Advisors' Opinion:

• [By Jim Jubak]

   2013 is supposed to be a year in which China continues re-balancing its economy toward consumption and domestic growth. If that actually happens, Home Inns & Hotels Management (HMIN), with its 1,682 hotels in 243 cities, should be a major beneficiary, since spending on travel is one of the fastest-growing parts of the consumer economy.

  If, on the other hand, Chinese economic growth doesn't re-balance but merely perks up to 8% or better, the hotel company should still do very well. Home Inns has built up a loyal customer base, with 10.6 million unique active members in its frequent-guest program. And its third quarter showed a pickup in revenue, up 62% year over year, and RevPAR (revenue per available room), up to 157 yuan ($25.20) in the quarter from 149 yuan ($23.92) in the second quarter.

• [By Conrad]

  Home Inns & Hotels Management (HMIN) is the largest hotel chain in China. Growth is as easy as opening new hotels & hellip; the cookie-cutter growth model. The company has no debt, unlike most hotel chains, and profit margins were 19.6% in the latest quarter.

Top 5 China Stocks To Buy For 2014: Universal Travel Group(UTA)

Universal Travel Group, together with its subsidiaries, operates as a travel service provider offering air ticketing and hotel booking services, as well as domestic and international packaged tourism services via the Internet, customer representatives, and kiosks in the People?s Republic of China. It also provides technological solutions to travel reservations, and tour planning and tour guide services. In addition, the company operates TRIPEASY Kiosks, which are placed in hotels, office buildings, banks, shopping malls, and MTR stations for travel booking with credit cards or bank debit cards. Universal Travel Group is headquartered in Shenzhen, the People?s Republic of China.

Advisors' Opinion:

• [By Louis Navellier]

  As China’s economy grows, the Chinese middle class has taken flight — literally. Providing the travel arrangements for this newfound class of Chinese travelers is Universal Travel Group (UTA).

  The company provides domestic and international airline ticketing services, along with cargo transportation agency services. But it’s not just flights that UTA helps citizens book. The company also provides hotel reservations, tour planning, ground transportation, railway and express delivery and air delivery services.

  UTA is the travel agency in China, and considering the shares have booked a 190% gain over the past 12 months, it certainly seems like the sky is the limit for UTA.

  I rate UTA an A, making it a strong buy.

Top 5 China Stocks To Buy For 2014: New Oriental Education & Technology Group Inc.(EDU)

New Oriental Education & Technology Group Inc. provides private educational services primarily in the People?s Republic of China. It offers a range of educational programs, services, and products consisting primarily of English and other foreign language training; test preparation courses for admissions and assessment tests; primary and secondary school education; development and distribution of educational content; software and other technology; and online education. The company?s language training courses primarily consist of various types of English language training courses, and other foreign languages, including German, Japanese, French, Korean, and Spanish. It offers test preparation courses for language and entrance exams used by educational institutions in the United States, the People?s Republic of China, and commonwealth countries. The company also operates primary and secondary schools in Yangzhou. In addition, New Oriental Education & Technology Group Inc. deve lops and edits content for educational materials for language training and test preparation, such as books, software, CD-ROMs, magazines, and other periodicals. It distributes these materials through various distribution channels consisting of own classrooms and bookstores, as well as third-party distributors. Further, the company offers various online education programs on its Web site, koolearn.com. Additionally, it provides consulting services to help students through the application and admission process for overseas educational institutions, as well as post-secondary educational programs to help students seek career opportunities; and operates two pre-schools. The company offers educational services under the ?New Oriental? brand name. As of May 31, 2010, it offered education programs, services, and products through a network of 48 schools, 319 learning centers, and 25 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People?s Republic of China.

Advisors' Opinion:

• [By James K. Glassman]

  52-Week High: $29.19
  
  52-Week Low: $9.41
  
  Annual Revenue: $841 million
  
  Projected 2013 Earnings Growth: 30.4% 
  
  New Oriental Education & Technology Group (symbol: EDU), which I recommended for 2010, gained a lovely 48% over the following 12 months. For the past year, however, New Oriental -- which dominates the market for private educational services in China (55 schools and 726 learning centers) -- has taken a dive, as have many Chinese stocks. It's now close to its early-2010 price, even though revenues have doubled.

• [By Kevin1977]

  The demand for English-language education is particularly strong in China right now, and people are willing to pay a lot of money for training that will enable them to communicate and conduct business globally. As China’s largest private education services company, New Oriental Education & Technology (EDU) is the way to play this powerful trend.

• [By James K. Glassman]

   New Oriental Education & Technology Group (symbol: EDU), which I recommended for 2010, gained a lovely 48% over the following 12 months. For the past year, however, New Oriental -- which dominates the market for private educational services in China (55 schools and 726 learning centers) -- has taken a dive, as have many Chinese stocks. It's now close to its early-2010 price, even though revenues have doubled.

Ford's Q2 Earnings Blow Past Estimates

CEO Alan Mulally who helped turn the American icon Ford. Photo Courtesy of Ford.

Ford (NYSE: F  ) has made many investors happy this morning by hitting just about every positive note possible in its Q2 earnings report. It's just a continuation of the great turnaround story witnessed at the Blue Oval since CEO Alan Mulally took over in 2006. Ford beat analyst expectations on both pre-tax EPS and revenues. In addition to that, Ford also narrowed its loss in Europe significantly and improved drastically in China and South America. Here are the details.

By the numbers
Starting from the top-line revenue, Ford recognized a 15% increase to $38.1 billion, beating average estimates of a 12.5% increase to $35.23 billion. 

Next, looking at Ford's pre-tax profits, the company posted its 16th consecutive quarter of profitability; at $2.6 billion, or $0.45 cents per share, it drastically beat the average estimate of $0.37 cents per share. If you're comparing to numbers from a year ago, it's an improvement of $0.15 cents per share – very significant.

Down to the bottom line, Ford reported a net income of $1.2 billion, or $0.30 cents per share, which is an increase of $0.04 cents per share or $193 million compared to a year ago.

As is usual with Ford, the main driver of its revenue and profits is North America, driven by multiple market factors such as improving transaction prices and increased sales with its redesigned models. Such factors have led both to Ford's best second quarter and first half profit in North America.

As always the F-Series, which is up 22% year to date, brought in huge profits; in combination with the Escape and Fusion, the truck model helped increase Ford's market share by 0.08% year to date. That's a huge gain in an industry were a fraction of a point is drastic, and it is the largest increase of any full-line automaker.

Outside of the phenomenal results in North America, Ford's Q2 report shows much progress has been made overseas. The Asia-Pacific-Africa region had its best quarterly profit and Ford recognized a return to profitability in South America. Perhaps the best piece of news was a decline in losses in Europe, which are down from $404 billion a year ago to $348 billion. That's also a $114 billion improvement from last quarter and it prompted Ford to lower guidance on its yearly losses from $2 billion to $1.8 billion – an excellent development for investors.

CEO Alan Mulally summed it up perfectly in a press release to Ford investors:

Our strong second quarter with improved results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum ... We remain absolutely committed to our plan of serving customers in all markets with a full family of vehicles offering the very best quality, fuel efficiency, safety, smart design and value. As we do, we are providing profitable growth for everyone associated with Ford.

Bottom line
This was a quick overview showing how profitable and strong Ford's Q2 really was – even better than my optimistic view. Ford's vehicles are selling well, the brand image is practically flawless, market share is increasing, and profitability is improving consistently – all while minimizing losses in Europe. The market responded favorably and promptly sent Ford's stock price up 3% in pre-market trading. There's even more great information packed into the report and the Motley Fool will bring more details throughout the day and the week regarding important factors most investors overlook – including Ford Motor Credit and pension obligations. Until then here's a hint: It's good stuff, as usual. 

Ford's Q2 report showed drastic improvement overseas, but is it enough to earn investors huge returns? China is already the world's largest auto market -- and it's set to grow even bigger in coming years. A recent Motley Fool report, "2 Automakers to Buy for a Surging Chinese Market", names two global giants poised to reap big gains that could drive big rewards for investors. You can read this report right now for free -- just click here for instant access.

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3 Stocks Near 52-Week Lows Worth Buying

Just as we examine companies each week that may be rising past their fair value, we can also find companies potentially trading at bargain prices. While many investors would rather have nothing to do with companies tipping the scales at 52-week lows, I think it makes a lot of sense to determine whether the market has overreacted to the downside, just as we often do when the market reacts to the upside.

Here's a look at three fallen angels trading near their 52-week lows that could be worth buying.

Powering up
It's pretty rare for stocks in the electric utility sector to see a prolonged dip given that electricity is a necessity product, but that's what we've seen from Mid-Atlantic electric utility provider Pepco Holdings (NYSE: POM  ) .

Three primary factors have been working against Pepco since the recession. First, a big need for infrastructure upgrades has required the company to spend an average of about $1.2 billion per year on maintenance and improvements. Second, over the past year, state energy regulators have been unwilling to approve needed rate increases to support the rapid expansion of these improvements. Finally, untimely and unexpected weather events like Superstorm Sandy socked electric utilities on the East Coast and necessitated big spending just to get things back in order.

The good news is that all three of these factors are likely short-term drivers of the share price and Pepco looks primed for a rebound. Although the weather can never be predicted with any accuracy, the chances of a repeat of a Superstorm Sandy-scale storm is historically pretty small for a while. In addition, energy regulators rarely have the upper hand for long when it comes to electric utility pricing. Pepco is seeking what I feel is a very reasonable 10.25% equity return rate, which is pretty consistent with the industry average. Expect these rate increases to be approved this year. Going in reverse, even its energy infrastructure upgrades should work in its favor. While this spending isn't likely to abate soon, the higher efficiency from already completed upgrades should begin lowering its costs and boosting its bottom line, making it easier to top Wall Street's expectations.

Although Pepco is projected to pay out what may be close to 100% of its total profits in the form of a dividend, I don't feel there's cause for concern yet that a dividend cut may be coming. In the meantime, shareholders are going to collect a better-than-5% yield for a utility priced only 20% above book value. It may not be ideal, but the catalysts for a turnaround are there!

Digging the chance for a rebound
If you've been keeping your eye on the oil and gas drilling sector lately, you'd be hard pressed to find poorly performing companies, but offshore services company McDermott International (NYSE: MDR  ) is one of the few that fits the bill.

As my Foolish colleague Travis Hoium pointed out in May, McDermott's problems have been primarily relegated to poor execution on its own part. The company reversed a year-ago profit into a loss in its Middle East operations and actually saw utilization rates for its fleet drop year over year. Yet for all the negatives surrounding McDermott, I see an incredibly intriguing value and a moat of opportunity.

For starters, McDermott still boasts a healthy backlog of $5.3 billion in orders. Even if short-term drivers like instability in the Middle East and a slowdown in GDP growth in China are hurting orders now, the long-run view of offshore drilling is still incredibly bright, with more than enough contracts to be won by all participants. According to PennEnergy, about one-third of the world's oil output is now coming from offshore sources, and this figure is only bound to increase as China and other emerging markets' needs for fuel sources rise.

Comparatively speaking, McDermott is also much cheaper than many of its peers. It trades at just half the industry average price-to-book (1.1 versus 2.2) and has a forward P/E of just nine compared to a trailing P/E average of 22 for the sector. Furthermore, while many of its peers are deeply in debt, McDermott is sporting $360 million in net cash.

This isn't a question of whether McDermott can find the work (because it's there); it's just a matter of how quickly it puts these short-term growth inhibitors in the rearview mirror.

Looking north for opportunities
As I head north to Canada in a few days for a vacation of my own, I can't help but think that the Canadian Imperial Bank of Commerce (NYSE: CM  ) , known better as CIBC, is getting a bad rap from shareholders in recent months, despite being one of Canada's most stable money center banks.

The key to its success has been in keeping its operations traditional, focusing on loan and deposit growth, as well as wealth management, to grow its bottom line. In its latest quarter, traditional retail and business banking revenue rose a modest 2%, but profits saw a nice boost from a 14% reduction in loan-loss provisions as credit quality improved on outstanding loans.

However, wealth management was the real bright spot, delivering 16% net income growth as the bank garnered more assets under management, and as more clients purchased long-term mutual funds. Furthermore, CIBC's Tier 1 common ratio came in at a healthy 12.2%, which is higher than many of its Canadian counterparts.

The real star here, though, might be CIBC's dividend, which, among Canada's six large banks, is the cream of the crop at a yield of 5%. Put another way, if CIBC's share price remained stagnant and all you did was reinvest the dividends, you'd double your money in less than 15 years! Although CIBC's quarterly payouts can be erratic, its average quarterly stipend is more than three times what it used to pay out a decade ago. Best of all, the payout ratio is still less than 50% of projected EPS this year, leaving further room to move even higher.

With its ample liquidity, a solid dividend, and a focus on core banking, CIBC is a name you should have a close eye on.

Foolish roundup
This week's theme is also about reassessing our expectations. Pepco, McDermott, and CIBC have all had their fair share of problems in the past, but each boasts identifiable catalysts and valuation advantages over their peers that make them intriguing buy options moving forward.

I'm so confident that these three names will bounce off their lows that I'm going to make a CAPScall of outperform on each one.

One company that's well off its lows and looking to head even higher is the recent selection of The Motley Fool's chief investment officer, who dubbed this stock his top pick for the year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

GM Shakes Up Europe Again

Late last week, General Motors (NYSE: GM  ) announced that its chief of Chevy and Cadillac sales in Europe, Susan Docherty, will be leaving the company to spend more time with her family. That might well be true -- but it's also true that Chevy sales in Europe have fallen off a cliff in recent months.

All automakers are struggling in Europe, where deep recessions have hammered new-car sales. But GM is suffering more than most, and CEO Dan Akerson has been determined to turn that around. In this video, Fool contributor John Rosevear looks at Docherty's departure in context -- and at what GM will have to do to get things turned around in troubled Europe.

Few companies provoke such strong feelings as General Motors, but ignoring emotions to make good investing decisions is a critical skill. The Fool's premium GM research service can help you understand the real risks facing General Motors -- and the real opportunities for investors. Just click here to get started now.

Why Clovis Oncology Shares More Than Doubled

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Clovis Oncology (NASDAQ: CLVS  ) , a biopharmaceutical company that's developing anti-cancer therapies, vaulted higher by as much as 136% (that's not a typo!) after reporting positive data on two early stage experimental treatments -- CO-1686 in EGFR-mutant non-small cell lung cancer (NSCLC) and Rucaparib in a monotherapy study of solid tumors -- at the American Society of Clinical Oncology's annual meeting.

So what: In the 37 patient Rucaparib trial, 21 patients had breast cancer, 10 ovarian cancer, and six others had different types of solid tumors. The data showed that Rucaparib provided an 89% clinical benefit to patients with ovarian cancer. Clovis is still in the process of determining the recommended dosage but plans on initiating late-stage trials in the drug as soon as the second half of this year.

For CO-1686, Clovis noted that three of the four patients with the dominant resistance mutation T790M had achieved a partial response in phase 1 studies, although maximum tolerated dosing studies are still ongoing. Thus far, 42 patients have been enrolled, and the treatment appears to be well-tolerated.

Now what: While the data on Clovis' NSCLC drug is encouraging, today's move is all about the potential of Rucaparib -- especially with how effective it was in delivering a clinical benefit with regard to ovarian cancer. The drug is a PARP inhibitor with an affinity for being effective in patients with BRCA gene mutations and, assuming this data stays positive, could be in front of the FDA by as soon as the second half of 2014, by my best guess.

Personally, though, I think today's move is way overdone. Clovis' lead drug candidate in November was metastatic pancreatic cancer drug CO-101, and its development was halted following unsuccessful mid-stage trials. Clovis hasn't succeeding in bringing a drug to market yet, so it's burning cash and still has nothing more than a handful of early stage drug hopefuls to show for its now $2.1 billion valuation. If you've been lucky enough to catch a ride on this rocket, I would certainly suggest cashing in your chips and heading for the hills.

Craving more input? Start by adding Clovis Oncology to your free and personalized Watchlist so you can keep up on the latest news with the company. 

While you can certainly make huge gains in biotechs like Clovis Oncology, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Why CARBO Ceramics Shares Jumped

Top 10 Safest Stocks To Own Right Now

What kind of investor are you? If you don't know, you might have a problem. It's useful to have a handle on your investment strategy, so that you can better focus on it.

There are many different ways to categorize investing. For example, a Goldilocks-like approach might divide investing strategies into these groups:

Too-aggressive investing: This approach puts your dollars in danger. It can include any of a host of riskier-than-average types of investments, such as options, commodities, currency bets, penny stocks, and even lottery tickets. It's true that some options strategies can be conservative, but many are not, and it's very, very common for options to expire unexercised and worthless.

Too-cautious investing: It might seem smart to be very conservative with your money, but if you do that, it might not grow enough to support you in retirement. That's especially true these days, in our environment of ultra-low interest rates. With inflation historically averaging about 3% annually in the U.S., even earning 2% in your bank account or via a bond or CD will leave you losing purchasing power over time.

Just-right investing: For many people, a long-term portfolio mixed with both stocks and bonds is a sound way to grow your net worth.

The bond world features many kinds of bonds, such as government bonds, municipal bonds, and corporate bonds. Government bonds, such as U.S. Treasury bills, bonds, and notes, are the safest, backed by the U.S. government. They pay interest that's taxable on your federal tax return, but is exempt from state and local taxes. Municipal bonds can be riskier, as some local governments are on somewhat shaky ground, but they can therefore offer higher interest rates and their interest is exempt not only from state and local taxes, but also from federal taxes. Corporate bonds are issued by companies that want to raise money. They, too, offer rates higher than government bonds, and their interest is not tax-exempt. In general, the higher their interest rate, the lower their credit rating and healthiness.

Stock investing approaches
A sound stock investment strategy is hard to beat, for long-term growth. Here's a quick rundown of some key approaches. Note that many investors engage in one or more of them -- they're not all mutually exclusive.

Top 10 Safest Stocks To Own Right Now: Goldman Sachs Group Inc.(The)

The Goldman Sachs Group, Inc., together with its subsidiaries, provides investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. Its Investment Banking segment offers financial advisory, including advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense, risk management, restructurings, and spin-offs; and underwriting securities, loans and other financial instruments, and derivative transactions. The company?s Institutional Client Services segment provides client execution activities, such as fixed income, currency, and commodities client execution related to making markets in interest rate products, credit products, mortgages, currencies, and commodities; and equities related to making markets in equity products, as well as commissions and fees from executing and clearing institutional client transactions on stock, options, and fu tures exchanges. This segment also engages in the securities services business providing financing, securities lending, and other prime brokerage services to institutional clients, including hedge funds, mutual funds, pension funds, and foundations. Its Investing and Lending segment invests in debt securities, loans, public and private equity securities, real estate, consolidated investment entities, and power generation facilities. This segment also involves in the origination of loans to provide financing to clients. The company?s Investment Management segment provides investment management services and investment products to institutional and individual clients. This segment also offers wealth advisory services, including portfolio management and financial counseling, and brokerage and other transaction services to high-net-worth individuals and families. In addition, it provides global investment research services. The company was founded in 1869 and is headquartered in New York, New York.

Top 10 Safest Stocks To Own Right Now: Under Armour Inc.(UA)

Under Armour, Inc. develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States, Canada, and internationally. It offers products made from moisture-wicking synthetic fabrics designed to regulate body temperature and enhance performance regardless of weather conditions. The company provides its products in three fit types: compression (tight fitting), fitted (athletic cut), and loose (relaxed) extending across the sporting goods, outdoor, and active lifestyle markets. Its footwear offerings comprise football, baseball, lacrosse, softball, and soccer cleats; slides; performance training footwear; and running footwear. The company also provides baseball batting, football, golf, and running gloves, as well as licenses bags, socks, headwear, custom-molded mouth guards, and eyewear that are designed to be used and worn before, during, and after competition. Under Armour sells its products through retai l stores, as well as directly to consumers through its own retail outlets and specialty stores, Website, and catalogs. The company was founded in 1996 and is headquartered in Baltimore, Maryland.

Advisors' Opinion:

• [By Glenn]  

  Current Price: $27.27 12-month target: $37

  I see potential in opportunities for new product adjacencies, and expanding distribution worldwide. Footwear growth will continue to increase. Revenues for these products have increased over 69% in 2009. Adding to this I still see growth in Under Armour’s apparel sales, which are up 8%. Under Armor had yet to even break into the international market, which offers a plethora of new opportunities for this growing brand. I believe sales will rise drastically in 2010 driven by international sales, new women’s clothing line, and expansion within their own footwear line.
• [By Roger]

  Under Armour (NYSE:UA), a maker and designer of apparel, footwear and accessories that target sports enthusiasts, has more than doubled in one year. But despite the advance, many research firms still have a “strong buy” recommendation on the stock. And S&P recently revised its annual target to $93.

  Technically UA has advanced on a series of stair steps, sometimes called “base moves.”? These are very bullish formations that resemble cups. UA reversed up recently following a signal from our proprietary Collins-Bollinger Reversal (CBR) indicator. If the recent pullback to its 50-day moving average (blue line) holds, then the next move up should break the prior high with a target of $85.

  Traders could take risk positions now with a target of $85 to $90. But be careful and use stop-loss orders to protect against a violent reversal, which could drop prices back to support at $62 where this volatile stock could be bought again.

• [By Fernandez]

  Under Armour designs, develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth primarily in the United States and Canada.
  

  You’ve probably seen the company’s “Protect This House” or “Click-Clack” commercials, and probably seen anyone from the weekend warrior to professional sports teams wearing the company’s moisture-wicking synthetic fabrics, which are designed to keep perspiration away from the skin, and regulate body temperature regardless of weather conditions.

  I must admit for full disclosure that I am an Under Armour nut, and own about 20 pairs of their shorts, shirts and shoes.

  I can attest from personal experience as a natural bodybuilder and athlete that the Under Armour apparel are the best workout clothing I have ever worn, and they look pretty darn cool too.

  Now let me make a clear distinction between a great company, and a great stock.

  Up until recently, Under Armour was the former, but not the latter.

  It has now entered into a zone where the valuation metrics, even in the face of a consumer slowdown, is looking more and more attractive.

  In fact, Under Armour just released earnings Monday.

  They were pretty much in line with analyst’s expectations, and then Under Armour slightly lowered their forward guidance for the remainder of 2008 based on those same consumer headwinds.

  The market liked what it heard sending shares up 20% (of course, the overall market was up 10%, so…). Shares have since rebounded further are now up almost 50% from their lows just last week!

  This leads me to my investment thesis in shares of Under Armour.

  I believe that Under Armour represents one of the quintessential brands of this decade when it comes to sports apparel, the way Under Armour’s fiercest rival Nike (NYSE: NKE) dominated the 90’s.

  Until now the valuation of the company was not commensurate with the! projected profit and growth, which I thought were way too high, and still might be, along with certain inventory related problems that the company now seems to be getting a handle on.

  Still, with the spike in share price, along with the uncertainty in the market and overall economy, I feel that we will still be able to purchase shares of this great company at a great price in the near future and that we’re seeing a bit of a short squeeze in shares of Under Armour.

  Why I Like the Company: One of the quintessential brands of this decade; Valuation is reaching reasonable to “cheap” levels depending on direction of consumer market and Under Armour’s stock price; Dedicated and fully invested founder with over 77% voting power via class B shares; Improved business fundamentals via better inventory controls and operational structure, and new product offerings; Further expansion available outside the U.S.; Relatively higher margins than competition

10 Best Tech Stocks For 2014: Petroleo Brasileiro S.A.- Petrobras(PBR)

Petroleo Brasileiro S.A. primarily engages in oil and natural gas exploration and production, refining, trade, and transportation businesses. The company?s Exploration and Production segment involves in the exploration, production, development, and production of oil, liquefied natural gas (LNG), and natural gas in Brazil. This segment supplies its products to the refineries in Brazil, as well as sells surplus petroleum and byproducts in domestic and foreign markets. Its Supply segment engages in the refining, logistics, transportation, and trade of oil and oil products; export of ethanol; and extraction and processing of schist, as well as holds interests in companies of the petrochemical sector in Brazil. The Gas and Energy segment involves in the transportation and trade of natural gas produced in or imported into Brazil; transportation and trade of LNG; and generation and trade of electric power. In addition, the segment has interests in natural gas transportation and d istribution companies; and thermoelectric power stations in Brazil, as well engages in fertilizer business. The Distribution segment distributes oil products, ethanol, and compressed natural gas in Brazil. The International segment involves in the exploration and production of oil and gas, as well as in supplying, gas and energy, and distribution operations in the Americas, Africa, Europe, and Asia. Further, the company involves in biofuel production business. Petroleo Brasileiro was founded in 1953 and is based in Rio de Janeiro, Brazil.

Advisors' Opinion:

• [By ETF Authority]  

  Current Price: $47.68 12-month target: $80

  PBR plans to invest $174 billion by 2013 to support the largest oil discovery in 30 years. PetroBras has both the backing of the Brazilian government who invested over $30 billion and the Chinese private investors who have pledged over $20 billion to PBR’s discovery. Brazils government proposed to make PBR the only operator of all new offshore pre-salt oil fields yet to be exploited. PetroBras expects oil production to increased from 2.4 million barrels a day to around 5.7 million barrels a day by 2020. PBR has long-term views and have been expanding renewable energy programs such as solar, biofuel, and energy. Biofuel production is expected to increase 18% by 2013.
• [By Dave Friedman]

  Institutional investors bought 78,663,680 shares and sold 101,125,380 shares, for a net of -22,461,700 shares. This net represents 0.23% of common shares outstanding. The number of shares outstanding is 9,872,826,100. The shares recently traded at $27.61 and the company’s market capitalization is $170,178,700,000.00. About the company: Petroleo Brasileiro S.A. – Petrobras explores for and produces oil and natural gas. The Company refines, markets, and supplies oil products. Petrobras operates oil tankers, distribution pipelines, marine, river and lake terminals, thermal power plants, fertilizer plants, and petrochemical units. The Company operates in South America and elsewhere around the world.

• [By David Sterman]

  Market Value: $173 billion
  Fall from 52-week high: 38%

  This Brazilian oil giant has lost $100 billion in market value since March 2011. That's a lot of dough. The sell-off is the result of a drop in oil prices, slightly stricter government policies regarding oil and gas royalties, and recent moves to issue more stock and debt to help fund business development. (Though the company now vows to stop issuing any more equity.)

  Indeed, this company has been sucking in cash for quite some time, generating a cumulative $40 billion in free cash flow loss in just the past two years. Pretty soon, though, losses will morph into outsized profits when the company's heavy investments to tap massive offshore oil fields finally bear fruit. In 2007, 2008 and again in 2009, Petrobras discovered three new offshore oil fields, known as Tupi, Jupiter, and yet-to-be-named site off of the state of Sao Paolo.

  It's the Tupi energy play that should pique your interest. It's the largest new find of oil since the Kashagan oil field was discovered in Kazakhstan in 2000 and instantly put Brazil's oil reserve base on par with industry giant Norway. Tally up all of its fields, and Petrobas' engineers estimate the country is sitting on more than 12 billion barrels of oil.

  The recent sell-off has put shares of Petrobras deep into bargain territory, trading at just 7.3 times projected 2011 profits and 1.2 times tangible book value.

Top 10 Safest Stocks To Own Right Now: Fluor Corporation(FLR)

Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction, maintenance, and project management services worldwide. Its Oil & Gas segment offers design, engineering, procurement, construction, and project management services to upstream oil and gas production, downstream refining, chemicals, and petrochemicals industries. This segment also provides consulting services comprising feasibility studies, process assessment, and project finance structuring and studies. The company?s Industrial & Infrastructure segment offers design, engineering, procurement, and construction services to the transportation, wind power, mining and metals, life sciences, manufacturing, commercial and institutional, telecommunications, microelectronics, and healthcare sectors. Its Government segment provides engineering, construction, logistics support, contingency response, management, and operations services to the United States government focusing on the Departme nt of Energy, the Department of Homeland Security, and the Department of Defense. The company?s Global Services segment offers operations and maintenance, small capital project engineering and execution, site equipment and tool services, industrial fleet services, plant turnaround services, temporary staffing services, and supply chain solutions. Its Power segment provides engineering, procurement, construction, program management, start-up and commissioning, and operations and maintenance services to the gas fueled, solid fueled, plant betterment, renewables, nuclear, and power services markets. The company also offers unionized management and construction services in the United States and Canada. Fluor Corporation was founded in 1912 and is headquartered in Irving, Texas.

8 Fascinating Reads

Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are eight fascinating ones I read this week.

21st-century problems
In Wired, Bill Gates talks progress:

Wired: Peter Thiel, expressing his dissatisfaction with technology's progress, recently noted, "We wanted flying cars, instead we got 140 characters." Do you agree with him?

 Bill Gates: I feel sorry for Peter Thiel. Did he really want flying cars? Flying cars are not a very efficient way to move things from one point to another. On the other hand, 20 years ago we had the idea that information could become available at your fingertips. We got that done. Now everyone takes it for granted that you can look up movie reviews, track locations, and order stuff online. I wish there was a way we could take it away from people for a day so they could remember what it was like without it.

New normal
Ruchir Sharma of Morgan Stanley writes about a shift in global commodity markets:

If the historical pattern holds, we are now entering a long period of falling commodity prices, which could last two decades. That is good for importers such as the U.S., as was the case in the 1980s and 1990s when commodity prices were falling. The current fall in retail gasoline prices should increase the purchasing power of the American consumer and offset the fiscal drag from the government sequestration cuts.

Never let a good crisis go to waste
CNNMoney writes about the lawyer and consultant fees extracted from the Bernie Madoff Ponzi scheme debacle:

It really does take money to make money. So far, lawyers and other consultants have racked up $701 million in fees as they work to recover the $17.5 billion lost to Bernard Madoff's Ponzi scheme.

For the curious, that works out to about $430,000 per day.

Big data
The Financial Times shows what Google (NASDAQ: GOOG  ) tells us about the market:

Searches of financial terms on Google can be used to predict the direction of the stock market, according to an analysis of search engine behaviour stretching back nearly a decade.

The findings appeared to show that people do more searches on terms such as "stocks", "portfolio" and "economics" when they are worried about the state of the markets, said Tobias Preis, associate professor of behavioural science and finance at Warwick Business School.

Rises in search volumes for such terms are generally followed by stock market declines, according to the research published in the journal Scientific Reports. By contrast, a fall in financial searches often points to greater optimism among investors, leading to a rising market.

I will add: Please don't try this at home.

Leave it to the pros
Every year, some of the world's smartest investors gather to pitch their best ideas at the Ira Sohn Investment conference in New York. Dan McCrum tallies last year's score card:

An investor who followed every top idea from the 12 speakers last year would have made 19 per cent, less than the 22 per cent gain available from a passive index fund tracking the U.S. stock market.

Crystal balls
Statistician superstar Nate Silver talks about predictions with Index Universe:

IU: What do you see as the common theme among bad predictions? What most often leads people astray?

Silver: A lot of it is overconfidence. People tend to underestimate what the uncertainty that is intrinsic to a problem actually is. If you have someone estimate what they think a confidence interval is that's supposed to cover 90 percent of all outcomes, it usually only covers 50 percent. You have upside outcomes and downside outcomes in the market certainly more often than people realize.

Haters
Josh Brown breaks down those who hate Berkshire Hathaway  (NYSE: BRK-B  ) and Warren Buffett:

Conspiracy theorists who can't let go of the fact that one of the world's richest men probably has some advantages and influence that others don't have. To which I say grow ... up, this is how the world works, read a book about the Roman Empire or the Renaissance or even the elitist philosophy of Confucianism circa 500 BC. Did not Nathan Mayer Rothschild have runners and messengers in boats speeding word to him of Napoleon's defeat at Waterloo? And did he not engineer a panic on the London bond market, first dumping consols and then scooping up everyone else's before the official news arrived at the marketplace? Did Buffett's viewpoint on rescuing the banks weigh on the TARP vote? Probably. Maybe. But it's not like Warren made it a secret that he was expecting this outcome. The New York Times op-eds about betting on America might have been your first clue, Sherlock.

The purveyors of complex investing products, sophisticated (read: expensive) strategies and short-term trading proponents who thrive on transactions and get paid when people turn greedy and fearful, buying and selling while generating turnover and commissions To them, the folksy, slow-money, common-sense approach that Buffett and Berkshire stand for are a constant obstacle in their never-ending quest to dazzle the public and, by extension, extract fees from them.

Too hard
Value investor Guy Spier discusses why he avoids retail investments:

Enjoy your weekend. 

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Will Nat-Gas Hikes Hurt Dow Chemical Earnings?

Dow Chemical (NYSE: DOW  ) will release its quarterly report on Thursday, and investors are hoping that the chemical giant will be able to break out of a long malaise in its stock price by posting good news. Yet while analysts see good things coming in the Dow earnings report, the longer-term question is how much natural gas will play a role in determining its growth potential in future years.

Like its biggest peers, Dow has diversified beyond pure chemical production to include agricultural products, although it still makes a relatively minor part of its business. As a result, Dow remains much more exposed to conditions in the energy markets, which define a substantial portion of its costs. Let's take an early look at what's been happening with Dow Chemical over the past quarter and what we're likely to see in its quarterly report.

Stats on Dow Chemical

Analyst EPS Estimate	$0.63
Change From Year-Ago EPS	14.5%
Revenue Estimate	$14.48 billion
Change From Year-Ago Revenue	(0.2%)
Earnings Beats in Past Four Quarters	2

Source: Yahoo! Finance.

Can Dow Chemical earnings pick up the pace this quarter?
In recent months, analysts have marked down their views on short-term Dow earnings, cutting their June-quarter estimates by about 10%. Longer-term views are more mixed, with slight boosts in full-year 2013 estimates offset by declines in 2014 calls, but the stock has ignored the potential problems and risen 15% since mid-April.

Dow has done a good job of realigning its business to take advantage of changing conditions in the chemical industry. Over the past four years, the company has sold off non-core operations that contributed a total of $8 billion toward revenue before being sold. Instead, the company has focused largely on agricultural sciences, which saw a 14% increase in sales for the division in the first quarter, leading Dow's six divisions in growth and helping contribute to 13% earnings growth.

That's consistent with what we've seen at Dow's rivals. Monsanto (NYSE: MON  ) has evolved to become primarily dependent on agriculture for its financial success. Even DuPont (NYSE: DD  ) , which still gets half its revenue from non-agricultural sources, is feeling the pressure to move more toward the high-margin business, having announced earlier today plans to seek strategic alternatives for its performance chemicals division.

But one interesting fight Dow has taken on is in trying to keep the recent glut of U.S.-produced natural gas within the nation's borders. Gas producers have sought ways to boost exports through liquefied natural gas terminals, but given the energy-intensive nature of chemical production and Dow's own need for nat-gas-based inputs, chemical companies would rather see prices remain low to give them a competitive advantage over foreign competitors. In particular, low ethane costs have boosted margins for Dow, DuPont, and other chemical-makers. Yet already, nat-gas prices have recovered somewhat from last year's lows, and that could increase input costs for Dow.

Another challenge for Dow and its peers comes from the labor force. Despite high unemployment, chemical companies are having trouble finding skilled workers able to perform the tasks it needs in a growing industry. If those pressures end up requiring higher wage costs, then Dow might struggle to keep its overall expenses in line.

In the Dow earnings report, watch to see how the company responds to DuPont's report from today. With most other companies focusing on agriculture, it'll be interesting to see if Dow follows suit or seeks to differentiate itself by remaining loyal to its chemical roots.

No matter what industry you like, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report, "3 Stocks That Will Help You Retire Rich", names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Click here to add Dow Chemical to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

5 Best Financial Stocks To Buy For 2014

Dallas-based Capital Southwest Corp. (NASDAQ: CSWC  ) will have a new CEO soon. The asset manager and venture capitalist says Chairman, President, and Chief Executive Officer Gary L. Martin will resign effective June 17 and be replaced by new President and CEO Joseph B. Armes, who currently serves as CEO of family investment vehicle JBA Investment Partners.

Martin joined Capital Southwest in 1972 as chief financial officer.

In a filing with the SEC, Capital Southwest disclosed that it will be paying Armes an annual base salary of $430,000, plus:

An annual cash bonus of up to 150% of base salary. 7,500 stock options vesting over five years. 1,250 shares of restricted stock. 6,000 "phantom stock options," which allow Armes to benefit from an appreciation in Capital Southwest's stock price (if it happens) as if he had exercised stock options and sold stock for a profit -- but do not require him to go through with the actual mechanics of such exercise and sale.

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5 Best Financial Stocks To Buy For 2014: Central Bancorp Inc(CEBK)

Central Bancorp, Inc. operates as the holding company for Central Co-operative Bank, which provides a range of banking products and services in the northwestern suburbs of Boston, Massachusetts. The company offers various deposit products, including demand deposit accounts, NOW accounts, money market deposit accounts, regular savings accounts, term deposit accounts, and retirement savings plans. Its loan portfolio comprises residential mortgage loans, commercial real estate and construction loans, home equity lines of credit, commercial and industrial loans, and consumer and other loans. The company also provides automated teller machines, Internet banking, preauthorized payment and withdrawal systems, tax-deferred retirement programs, and other miscellaneous services, such as money orders, travelers? checks, and safe deposit boxes. Central Bancorp operates nine full-service office facilities in Somerville, Arlington, Burlington, Chestnut Hill, Medford, Melrose, and Wobur n, Massachusetts; and a limited service high school branch in Woburn, Massachusetts. It also operated an automated teller machine in Somerville, Massachusetts. The company was founded in 1915 and is headquartered in Somerville, Massachusetts.

5 Best Financial Stocks To Buy For 2014: Associated Banc-Corp(ASBC)

Associated Banc-Corp, a bank holding company, offers various banking and financial services to individuals and businesses primarily in Wisconsin, Illinois, and Minnesota. Its Banking segment provides loans and deposit products to businesses, governments, and consumers. Its products and services include checking, savings, money market deposit, and IRA accounts, as well as certificates of deposit and safe deposit boxes; and home equity loans and lines of credit, residential mortgage loans and mortgage refinancing, education loans, and personal and installment loans. This segment?s products and services also include business checking accounts, business loans, real estate financing, construction loans, letters of credit, revolving credit arrangements, business credit cards, equipment and machinery leases, night depository, cash management, international banking, check clearing, safekeeping, and other banking-based services. The company?s Wealth Management segment provides va rious fiduciary, investment management, advisory, and corporate agency services for individuals, corporations, small businesses, charitable trusts, endowments, foundations, and institutional investors. This segment also offers life, property, casualty, and credit and mortgage insurance, as well as fixed annuities and employee group benefits consulting and administration services; investment brokerage, variable annuities, and discount and online brokerage services; and trust/asset/investment management, administration of pension, profit-sharing and other employee benefit plans, personal trusts, and estate planning services. The company offers its products through branch facilities, loan production offices, supermarket branches, a customer service call center, an interstate automated teller machine network, and Internet banking services. As of December 31, 2010, its banking subsidiary had 280 offices in approximately 150 communities. The company was founded in 1964 and is base d in Green Bay, Wisconsin.

Top Stocks To Buy Right Now: MFA Financial Inc (MFA)

MFA Financial, Inc., incorporated on July 24, 1997, is engaged in the business of investing, on a leveraged basis, in residential Agency mortgage-backed securities (MBS) and Non-Agency MBS. Its business objective is to generate net income for distribution to its stockholders resulting from the difference between the interest and other income it earn on its investments and the interest expense it pays on the borrowings, which it uses to finance its leveraged investments and its operating costs. Its operating policies require that at least 50% of its investment portfolio consist of ARM-MBS, which are either Agency MBS or rated in two rating categories by at least one of rating agency, such as Moody�� Investors Services, Inc., Standard & Poor�� Corporation (S&P) or Fitch, Inc. The remainder of its assets may consist of direct or indirect investments in other types of MBS and residential mortgage loans; other mortgage and real estate-related debt and equity; and other yield instruments.

The mortgages collateralizing the Company�� MBS portfolio are Hybrids, ARMs and 15-year fixed-rate mortgages. The Hybrids collateralizing its MBS typically have fixed-rate periods ranging from three to 10 years. Interest rates on the mortgage loans collateralizing its ARM-MBS reset based on specific index rates, which include London Interbank Offered Rate (LIBOR) or the one-year constant maturity treasury (CMT) rate. The mortgages collateralizing its ARM-MBS have interim and lifetime caps on interest rate adjustments. The Company�� Non-Agency MBS have been at discounts to face/par value.

5 Best Financial Stocks To Buy For 2014: Global Cash Access Holdings Inc. (GCA)

Global Cash Access Holdings, Inc., through its subsidiaries, provides cash access and data intelligence services and solutions to the gaming industry in the United States and internationally. Its cash access products and services include Casino Cash Plus 3-in-1 ATM, a cash-dispensing machine that offers patrons to access cash through ATM cash withdrawals, point-of-sale debit card transactions, and credit card cash access transactions; check verification and warranty services, which allow gaming establishments to manage and reduce risks on patron checks that they cash; QuikCash, a non-ATM cash access kiosks; and money transfer services. The company also offers cash access equipment, such as full service kiosks, a multi-function patron kiosk for cash access into self-service kiosks for slot ticket redemption and bill breaking services, as well as jackpot kiosks. In addition, it provides information services, such as Central Credit, a gaming patron credit bureau that allows g aming establishments in credit-granting decisions; QuikCash Plus Web and QCPXpress that are cash access transaction processing systems for cashier operations; QuikReports, a browser-based reporting tool that provide access and analysis of information on patron cash access activity; and QuikMarketing/Casino Share Intelligence database services, as well as various Xchange Xplorer products. Further, the company offers cashless gaming products comprising QuikTicket that allows cash access transaction to be completed with a bar coded ticket in lieu of cash. Global Cash Access Holdings, Inc. sells its products and services primarily through direct sales force to traditional land-based casinos, riverboats and cruise ships with gaming operations, gaming establishments operated on Native American lands, pari-mutuel wagering facilities, and card rooms. The company was founded in 1998 and is headquartered in Las Vegas, Nevada.

5 Best Financial Stocks To Buy For 2014: American Municipal Income Portfolio(XAA)

American Municipal Income Portfolio, Inc is a closed ended fixed income mutual fund launched and managed by FAF Advisors, Inc. It is co-managed by Nuveen Fund Advisors, Inc. and Nuveen Asset Management, LLC. The fund invests in fixed income markets. It seeks to invest in fixed income securities including various municipal securities, which include municipal derivative securities, such as inverse floating rate and inverse interest-only municipal securities. The fund also invests in futures contracts, options on futures contracts, and options, as well as interest rate swaps, caps, and floors. American Municipal Income Portfolio, Inc was formed on June 25, 1993 and is domiciled in United States.

3 Reasons Women Make Great Investors

Millions of mothers will be doted on and deservedly celebrated this Mother's Day weekend. Moms provide us with love, support, and encouragement. They also give us plenty of advice, albeit sometimes unsolicited. But studies show that, when it comes to finances, we shouldn't ignore Mom's pearls of wisdom.

Ruler of the purse strings
Globally, women control more than $20 trillion in consumer spending. They have the final say in 91% of home purchases, 80% of health-care choices, and 66% of computer purchases. And these trends toward controlling the purse strings are likely to continue. By overseeing so much wealth, women have certainly picked up a thing or two about finances.

Let's look at three key reasons women make great investors.

1. Women stay the course during choppy markets
Vanguard analyzed the activities in nearly 3 million IRA accounts during the 2008 and 2009 financial crisis. The fund company found that women were more likely to leave their stock portfolios intact, not freak out and sell at exactly the wrong time. During the most recent chaos in the financial markets, women exhibited the enviable ability to hunker down and ride out the storm.

To the frustration of their male passengers, women often exemplify this tactic when driving a car, by picking one highway lane and sticking with it. Traffic may speed up in nearby lanes, but Mom knows that by staying the course she'll end up at her destination (with fewer dings in the bumper and better gas mileage, too).

2. Women are more focused on comprehensive planning
Sure, women like making money in the stock market. But that's not where financial planning ends for Mom. Instead of zeroing in solely on investment returns, women tend to take a more holistic approach to financial planning, since she's often left to deal with tough issues like estate planning and long-term care for loved ones.

Because of divorcing, outliving their spouses, keeping finances separate, or choosing a single life, at some point in their lives, roughly nine out of 10 women will be solely responsible for managing their finances. This fact really validates the importance women place on planning comprehensively for their financial futures.

3. Women save more of their income
A Fidelity study points out that, despite making less money than their male counterparts, women save more of their income. On average, women's salary deferrals for retirement savings are 8.5%, versus 7.9% for men. So while Mom might not bring home as much bacon as Dad, she certainly knows how to use it wisely.

Foolish final thoughts
Take time this Mother's Day to say thanks for all Mom does. Tell her how much you appreciate her advice (even though you may not always take it to heart). Buy her some flowers and take her to brunch. And don't forget to bring your 401(k) statement to have this household CFO take a look!

Mom gives you so much all year long. Repay her with a stock tip this Mother's Day. The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

FDA vs. Cheerios: The Weirdest Battle in History?

The Motley Fool's health-care show Market Checkup focuses this week on cholesterol, one of America's most notable health-care concerns.

According to the CDC, approximately 71 million Americans have high cholesterol, and less than 50% actually get treated. High levels of LDL cholesterol, commonly known as "bad" cholesterol, can lead to dangerous health problems, including heart disease and high blood pressure. In this week's show, health-care analysts David Williamson and Max Macaluso discuss the leading cholesterol drugs on the market and in development, but they kick off their discussion with a look back at one of the strangest battles in history: FDA vs. Cheerios.

In 2009, the FDA sent a letter to General Mills (NYSE: GIS  ) warning that marketing Cheerios as a product that could lower cholesterol meant that the popular breakfast cereal would have to go through the drug approval process. While investors weren't worried by the news (looking at historical prices, shares of General Mills were about flat after the warning letter became public), and the company was able to sort out this problem, it certainly helped the FDA distinguish between foods and drugs that have a proven therapeutic benefit. 

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Here's What This $4 Billion Winning Hedge Fund Company Has Bought and Sold

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at GMT Capital, a private investment company founded by Thomas Claugus in 1990 that manages several hedge funds and other accounts. Its reportable stock portfolio totaled $4.1 billionin value as of March 31, 2013. You don't generally grow that large without doing some things right. The company's Bay Resource Partners hedge fund was named one of the richest 100 in 2011 by Bloomberg. In its first 15 years, it averaged a 20% annual return, almost twice that of the S&P 500.

Interesting developments
So what does GMT Capital's latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Diana Shipping and Newport. Other new holdings of interest include energy concern Magnum Hunter Resources (NYSE: MHR  ) . The stock is has significant short interest, with many concerned about its significant debt and a delay in the filing of its year-end report (which is expected to be filed by the end of June). Meanwhile, the company has been shifting attention from low-priced natural gas toward oil and liquids, and is diversifying across several promising shale fields, such as the Utica.

Among holdings in which GMT Capital increased its stake was Canada-based uranium specialist Cameco (NYSE: CCJ  ) . The company's business is expected to improve as gas and coal prices eventually rise, and also due to new nuclear plants being built. My colleague Sean Williams likes Cameco's transparency, expects higher uranium prices, and notes that China is also expected to demand more uranium over time. Some see the stock having a fair chance to appreciate substantially.

GMT Capital reduced its stake in lots of companies, including Corning (NYSE: GLW  ) , which has struggled in recent years, in part due to low prices and demand for LCD substrates. The stock has pulled back a bit from a 52-week high and sports a P/E ratio of 13. Some worry that Corning's acclaimed Gorilla Glass is threatened by growing interest in sapphire, while others argue that it's clearly a bargain at recent levels, with a forward P/E around 10 and a 2.6% dividend yield, to boot. It's worth noting its major presence in the fiber-optics world, too.

Finally, GMT Capital's biggest closed positions included Harris and NII Holdings. Other closed positions of interest include Sequenom (NASDAQ: SQNM  ) and QuestCor Pharmaceuticals (NASDAQ: QCOR  ) . Sequenom, which makes molecular and genetic diagnostic tests, is a relatively small concern, with a market cap near $500 million. One of the company's tests checks for Down syndrome in a non-invasive manner, which should be of interest to many older women. Future tests might address conditions such as macular degeneration. Meanwhile, the company is expanding its reach abroad, but it's still posting widening losses along with strong revenue growth.

QuestCor is largely known for its multiple-sclerosis (MS) drug, Acthar, that has sold well in the past, and is being evaluated for many more indications. The stock yields 2.8%, and its dividend was hiked by 25% earlier this year. Questcor has its risks, though, such as an investigation into its marketing practices as well as competition. The stock is heavily shorted, but some see it as a bargain.

We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.

Questcor is one of the most debated names in all of biotech. Its premium priced drug, Acthar, is growing at a torrid pace -- and minting money in the process. However, recent events have created significant doubts about Questcor's future. Will insurance companies continue to cover the drug? Will a government investigation lead to huge fines? We highlight these high-profile issues inside our brand-new premium research report on Questcor. In it, you'll learn about the key opportunities and threats facing the company as well as multiple reasons to buy and sell the stock. So make sure to claim a copy today by clicking here now.

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More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Why Shanda Games Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Shanda Games (NASDAQ: GAME  ) have popped today by as much as 11% after the game maker launched a new title with early success.

So what: Shanda launched Million Arthur last night on Apple's iOS platform in China, and the company said it promptly rose the charts to become the No. 3 top grossing app across all categories within Apple's App Store in China. That climb occurred in less than eight hours.

Now what: The casual gaming market in China is growing quickly, and investors are optimistic about Shanda's new title getting such a warm reception. Shanda President Tunghai Chien said that Million Arthur grabbed more first-day daily active users in China than its combined total when it launched in Japan, Korea, and Taiwan. Separately, iPhone apps within the top 10 grossing spots have been estimated to generate at least $47,000 in revenue daily within the U.S. market. The figures are likely different for the Chinese market, but there's no doubting Million Arthur's strong showing out the gate.

Interested in more info on Shanda Games? Add it to your watchlist by clicking here.

The mobile revolution is still in its infancy, but with so many different companies it can be daunting to know how to profit in the space. Fortunately, The Motley Fool has released a free report on mobile named "The Next Trillion-Dollar Revolution" that tells you how. The report describes why this seismic shift will dwarf any other technology revolution seen before it and also names the company at the forefront of the trend. You can access this report today by clicking here -- it's free.

Ponzi Schemes Alive and Well in Massachusetts

The U.S. economy as a whole may still be stumbling along, too weak to support even a modest slowdown in government bond buying. But at least one business area is booming: Ponzi schemes.

On Friday, the U.S. Securities and Exchange Commission announced that this week, a federal judge in Massachusetts has found that investment manager Steven Palladino, and his Massachusetts-based company Viking Financial Group,, committed securities fraud.

This was a civil action. A criminal case is said to be also ongoing.

According to the details of the SEC release, Palladino and Viking set up a business in April 2011, whereby he promised some 33 investors interest rate payments of from 7% to 15% -- a month -- on investments in Viking. Viking promised its investors that it would use their money "to make to short-term, high interest loans to those unable to obtain traditional financing," securing these loans with "first interest liens on non-primary residence properties."

In actual fact, few such loans were ever made.

Instead, in classic Ponzi scheme fashion, Palladino and Viking used new money from new investors to pay "interest" to earlier investors. The rest of the funds, said the SEC, were used to pay for "the Palladino family's substantial personal expenses, including cash withdrawals and hundreds of thousands of dollars spent on gambling excursions, vacations, luxury vehicles and tuition."

The court has ordered that Palladino and Viking "temporarily" disgorge $3.1 million received from their Ponzi scheme. Further civil penalties are pending as the court seeks to determine whether other victims exist, and awaits the verdict in the defendants' criminal case.

Top 10 Small Cap Stocks To Watch For 2014

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ICU Medical (NASDAQ: ICUI  ) �-- a medical device maker in the fields of infusion therapy, oncology, and critical care -- soared as much as 17% on a report that the company could be exploring a sale.

So what: According to a Bloomberg News report that cites people familiar with the matter, ICU Medical has employed JPMorgan Chase�to help it explore a sale that could yield a buy price of greater than $1 billion. As you might expect, neither ICU Medical nor JPMorgan Chase could be reached for comment.

Now what: Almost two years ago to the day that I included ICU Medical as one of my 10 small caps to rule them all because of its history of consistent growth, the opportunity that an aging population would present in terms of future growth, its large cash pile, and the potential that it may attract a buyer. Thus far that prognostication has been spot on with the share price having doubled and rumors swirling that it may indeed be looking to be purchased. This is a win-win for shareholders either way, because they either get the immediate pop of a buyout, or -- as I predicted -- ICU will continue higher over the long run as an aging population requires greater medical device usage.

Top 10 Small Cap Stocks To Watch For 2014: Voyager Oil & Gas Inc.(VOG)

Voyager Oil & Gas, Inc. engages in the exploration and production of oil and gas in the United States. It primarily focuses on oil shale resource prospects in Montana, North Dakota, Colorado, and Wyoming. As of May 17, 2011, the company controlled approximately 141,500 net acres in the five primary prospect areas comprising 28,000 net acres targeting the Bakken/Three Forks in North Dakota and Montana; 14,200 net acres targeting the Niobrara formation in Colorado and Wyoming; 800 net acres targeting a Red River prospect in Montana; 33,500 net acres in a joint venture targeting the Heath Shale formation in Musselshell, Petroleum, Garfield, and Fergus counties of Montana; and 65,000 net acres in a joint venture in the Tiger Ridge gas field in Blaine, Hill, and Chouteau counties of Montana. It supplies energy and fuel for industrial, commercial, and individual consumers. The company is based in Billings, Montana.

Advisors' Opinion:

• [By SmallCap Investor]

  Shares of this explorer, which has operations in the Western U.S., crossed back above $3 and have risen 40 percent in the past month, amid increasing investor interest in companies drilling in the Bakken region.

Top 10 Small Cap Stocks To Watch For 2014: Rackspace Hosting Inc(RAX)

Rackspace Hosting, Inc. operates in the hosting and cloud computing industry. It provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. The company?s service suite includes dedicated hosting comprising customer management portal and other management tools that manage data center, network, hardware devices, and operating system software; and cloud computing that enables customers to provide and manage a pool of computing resources, as well as delivery of computing resources to business when they need them. It offers cloud servers, cloud files, and cloud sites, as well as cloud applications, such as email, collaboration, and file back-ups; and hybrid hosting that provides a combination of dedicated hosting and cloud computing services. The company also offers customer support services. It sells its service suite through direct sales teams, third-party channel partners, an d online ordering. The company was formerly known as Rackspace.com, Inc. and changed its name to Rackspace Hosting, Inc. in June 2008. Rackspace Hosting, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

Advisors' Opinion:

• [By Sherry Jim]  

  This computing specialist that provides web-based IT systems has soared 60%+ in the past year.  With a P/S above 3 and Price to Cash of 10 this stock is poised to continue to soar and outperform it’s peers. $25 in a year is a realistic bet.

Best Stocks For 2014: ATA Inc.(ATAI)

ATA Inc., through its subsidiaries, provides computer-based testing services in the People?s Republic of China. It offers services for the creation and delivery of computer-based tests utilizing its test delivery platform, proprietary testing technologies, and testing services; and provides logistical support services relating to test administration. The company?s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology (IT) services, banking, securities, teaching, and insurance. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests ranging from test form compilation to test scoring, and results analysis. ATA also provides career-oriented educational services, such as single course programs, degree major course programs, and pre-occupational training programs focusing on preparing students to pass IT and other vocational certification tests; test preparation and training programs and services to test candidates preparing to take professional certification tests in securities, futures, banking, insurance and teaching industries; online test preparation and training platform for the securities and banking industries; and test preparation software for the teaching industry. In addition, the company offers HR select employee assessment solution, an online system that utilizes its proprietary software and an inventory of test titles to help employers improve the efficiency and accuracy of their employee recruitment process. As of March 31, 2010, it had contractual relationships with 1,988 ATA authorized test centers. The company serves Chinese governmental agencies, professional associations, IT vendors, and Chinese educational institutions, as well as individual test preparation services. ATA Inc. was founded in 1999 and is based in Beijing, the People?s Republic of China.

Advisors' Opinion:

• [By Wyatt Research Staff]

  The Chinese-based educator spiked higher recently after it exceeded analysts' expectations. Revenue and adjusted earnings soared 78% and 269%, respectively. Its long-term annual growth rate is 15%.

  Analysts at Zacks Investment Research upgraded shares from "neutral" to "outperform". 

Top 10 Small Cap Stocks To Watch For 2014: Panera Bread Company(PNRA)

Panera Bread Company, together with its subsidiaries, owns, operates, and franchises retail bakery-cafes in the United States and Canada. Its bakery-cafes offer fresh baked goods, sandwiches, soups, salads, custom roasted coffees, and other complementary products, as well as provide catering services. The company also manufactures and supplies dough and other products to company-owned and franchise-operated bakery-cafes. As of March 29, 2011, it owned and franchised 1,467 bakery-cafes under the Panera Bread, Saint Louis Bread Co., and Paradise Bakery & Cafe names. The company was founded in 1981 and is based in St. Louis, Missouri.

Advisors' Opinion:

• [By Sy_Harding]

  Panera is a great growth story that continues to get better. Panera is thriving in the casual dining arena with fellow Chipotle Mexican Grill (CMG). Quick food that is good and good for you. The company is now moving into cities, which provides another strong revenue stream for the company and continues to build up their image. It has the potential for a lot more stores, and we believe the company is ready to move into new markets. We have a $170 PT on the company, and we see this stock as a growth story about to take off even further in 2012.

  Allocation: $2000

  Entry: $137.00

  Target: $150, $170

Top 10 Small Cap Stocks To Watch For 2014: FuelCell Energy Inc.(FCEL)

FuelCell Energy, Inc., together with its subsidiaries, engages in the development, manufacturing, and sale of high temperature fuel cells for clean electric power generation primarily in South Korea, the United States, Germany, Canada, and Japan. The company offers proprietary carbonate Direct FuelCell Power Plants that electrochemically produce electricity from hydrocarbon fuels, such as natural gas and biogas. Its fuel cells operate on a range of hydrocarbon fuels, including natural gas, renewable biogas, propane, methanol, coal gas, and coal mine methane. The company also develops carbonate fuel cells, planar solid oxide fuel cell technology, and other fuel cell technologies. It provides its products to universities; manufacturers; mission critical institutions, such as correction facilities and government installations; hotels; and natural gas letdown stations, as well as to customers who use renewable biogas for fuel, including municipal water treatment facilities, br eweries, and food processors. The company was founded in 1969 and is headquartered in Danbury, Connecticut.

Advisors' Opinion:

• [By Roberto Pedone]

   Fuelcell Energy (FCEL) designs, manufactures, sells, installs and services ultra-clean, highly efficient stationary fuel cell power plants for distributed baseload power generation. This stock is trading up 7.2% to $1.01 in recent trading.

  Today’s Range: $0.94-$1.01

  52-Week Range: $0.83-$1.95

  Volume: 1.27 million

  Three-Month Average Volume: 1.04 million

  From a technical perspective, FCEL is ripping higher here right above its 50-day moving average of 92 cents per share with above-average volume. This move is quickly pushing shares of FCEL within range of triggering a near-term breakout trade. That trade will hit if FCEL manages to take out its 200-day moving average at $1.05 and then once it takes out more overhead resistance at $1.06 with high volume.

  Traders should now look for long-biased trades in FCEL as long as it’s trending above its 50-day at 92 cents per share, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.04 million shares. If that breakout hits soon, then FCEL will set up to re-test or possibly take out its next major overhead resistance level at $1.18. Any high-volume move above $1.18 will then put $1.39 into range for shares of FCEL.

• [By SmallCap Investor]

  The developer of stationary fuel cells used by commercial and government customers might be headed for a rebound from a pullback that began this spring - which has left the stock down 39 percent year-to-date.

Top 10 Small Cap Stocks To Watch For 2014: Sify Technologies Limited(SIFY)

Sify Technologies Limited provides enterprise and consumer Internet services primarily in India. The company offers various corporate network/data services comprising e-commerce and network connectivity solutions, such as end-to-end services network, application, and security services; voice origination and termination services; co-location and managed hosting services; and system integration services for data centre build, hardware distribution, security solutions, and turnkey projects. It also provides application services, including SLEMS and Microsoft Exchange messaging platforms; I-test for online assessment and LiveWire, which enable management of training processes across the organization; document management system for the management of documents electronically; and Forum, a forward supply chain solution. In addition, the company operates e-Ports that offer browsing, chat, email, gaming, utility bill payment, travel ticketing, hotel booking, mobile recharge, Intern et telephony, and online share trading services; and portals, which provide news, views, reviews, interactions, and services in the areas of movies, sports, finance, food, videos, astrology, online games, shopping, and travel, as well as offers content offerings and broadband services. Further, it provides infrastructure management services, such as network management, datacenter and helpdesk outsourcing, desktop and storage outsourcing, IT security outsourcing, LAN and WAN outsourcing, database and telecom outsourcing, and application monitoring and management services to automotive, chemical, media, and financial enterprises; and virtualization design, integration, and deployment services for servers, storage, networks, and end user clients. Sify has approximately 1,278 e-Ports in 200 towns and cities; and serves 1,06,000 broadband subscribers through 1500 cable TV Operators. The company, formerly known as Sify Limited, was founded in 1995 and is based in Chennai, India. Advisors' Opinion:

• [By Wyatt Research Staff]

  Shares of SIFY skyrocketed last week after the company announced a new partnership with Saudi telecom. SIFY will provide ICT services to the Middle East's largest telecom carrier.

  Shares of the Indian-based internet and network services have doubled over the past four months.

Top 10 Small Cap Stocks To Watch For 2014: Texas Instruments Incorporated(TXN)

Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company?s Analog segment offers high-performance analog products comprising standard analog semiconductors, such as amplifiers, data converters, and interface semiconductors; high-volume analog and logic products; and power management semiconductors and line-powered systems. Its Embedded Processing segment includes DSPs that perform mathematical computations to process and enhance digital data; and microcontrollers, which are designed to control a set of specific tasks for electronic equipment. The company?s Wireless segment designs, manufactures, and sells application processors and connectivity products. Its Other segment offers smaller semiconductor products, which include DLP products that are primarily used in projectors to create high-definition images; and application-specific integrated circuits. This segment also provides handhe ld graphing and scientific calculators, as well as licenses technologies to other electronic companies. The company serves the communications, computing, industrial, consumer electronics, automotive, and education sectors. Texas Instruments Incorporated sells its products through a direct sales force, distributors, and third-party sales representatives. It has collaboration agreements with PLX Technology Inc.; Neonode, Inc.; and Ubiquisys Ltd. The company was founded in 1938 and is headquartered in Dallas, Texas.

Advisors' Opinion:

• [By Fabian]

  Texas Instruments investment returned 46.3% during the past year. The amount of investment is $403 Million. Miller reduced his TXN holdings by 25% during the last quarter of 2010. Since then the stock returned 11.1%. David Tepper also bought TXN during the third quarter.

• [By Paul Goodwin]  

  How do they make their money? TXN makes the PA Duplexer Module and the CDMA PA that goes into every iPhone. With a PEG ratio of 0.2 reveals huge discount compared to peers. This is a cash rich company and one I feel will be a strong performer within the next year.

Top 10 Small Cap Stocks To Watch For 2014: InterDigital Inc.(IDCC)

Interdigital, Inc. engages in the design and development of digital wireless technology solutions. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. It holds patents related to the fundamental technologies that enable wireless communications. The company licenses its patents to equipment producers that manufacture, use, and sell digital cellular and IEEE 802-related products; and licenses or sells mobile broadband modem solutions, including modem IP, know-how, and reference platforms to mobile device manufacturers, semiconductor companies, and other equipment producers that manufacture, use, and sell digital cellular products. InterDigital?s solutions are incorporated in various products comprising mobile devices, such as cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; and components, dongles, and modules for wireless devices. The company was founded in 1972 and is headquartered in King of Prussia, Pennsylvania.

Advisors' Opinion:

• [By SmallCap Investor]

  The wireless technology company said it's exploring its options, including a possible sale, following last month's successful auction of Nortel Networks intellectual property which brought in $4.5 billion. IDCC owns about 1,300 patents related to mobile phone technology.

Top 10 Small Cap Stocks To Watch For 2014: Petroquest Energy Inc(PQ)

PetroQuest Energy, Inc. operates as an independent oil and gas company. It engages in the acquisition, exploration, development, and operation of oil and gas properties in Oklahoma, Arkansas, and Texas, as well as onshore and in the shallow waters offshore the Gulf Coast Basin. As of December 31, 2009, the company had estimated proved reserves of 1,931 thousand barrels of oil and 167,361 million cubic feet equivalent of natural gas. It owned working interests in 9 net producing oil wells and 277 net producing gas wells. PetroQuest Energy was founded in 1983 and is headquartered in Lafayette, Louisiana.

Advisors' Opinion:

• [By SmallCap Investor]

  Shares traded sharply higher after the oil and gas explorer issued an operational update that revealed details of a discovery at its La Cantera site in Louisiana. Raymond James analysts bumped the stock rating to market perform based on the new findings and an improving balance sheet.

Top 10 Small Cap Stocks To Watch For 2014: OmniVision Technologies Inc.(OVTI)

OmniVision Technologies, Inc. designs, develops, and markets semiconductor image-sensor devices. The company offers CameraChip image sensors, which are single-chip solutions that integrate various functions, such as image capture, image processing, color processing, signal conversion, and output of a processed image or video stream for use in various consumer and commercial mass-market applications; and CameraCube imaging devices that are image sensors with integrated wafer-level optics. It also provides companion chips used to connect its image sensors to various interfaces, including the universal serial bus and other industry standard interfaces; and companion digital signal processors that perform compression in standardized still photo and digital video formats. In addition, the company designs and develops software drivers for Linux, Mac OS, and Microsoft Windows, as well as for embedded operating systems, such as Blackberry OS, Palm OS, Symbian, Windows CE, Windows Embedded, and Windows Mobile. Its products are used in mobile phones, notebooks, Webcams, digital still and video cameras, commercial and security and surveillance, and automotive and medical applications, as well as in entertainment devices. The company sells its products directly to original equipment manufacturers and value added resellers, as well as indirectly through distributors worldwide. OmniVision Technologies, Inc. was founded in 1995 and is based in Santa Clara, California.

Advisors' Opinion:

• [By Karim]  

  They make the 5-megapixel sensors in the camera of every iPhone. Along with this they carry a strong balance sheet and upbeat earnings expectations boding well for future growth.

Bernanke Is Underwriting The Wealthy: Part 2

On February 24, 2013, I posted a piece called "Bernanke is Underwriting the Wealthy".

Confirming evidence has just been published on Bloomberg.

Matthew C. Klein, the author of the piece, writes:

"…there is no academic consensus about the distributional impact of monetary policy as it is currently conducted. Researchers at the International Monetary Fund studied the impact of "monetary policy shocks" in the U.S. since 1980. They found that 'a contractionary monetary policy shock raises the observed inequality across households.' This was true even when the early 1980s were removed.

On the other hand, when the Bank of England studied the impact of its recent asset-purchase programs, it admitted that the bulk of the benefits went to wealthier households. Markus Brunnermeier and Yuliy Sannikov, two economists at Princeton, have argued that asset purchases work precisely because they redistribute wealth to banks and other holders of long-duration instruments.

Amir Sufi, an economist at the University of Chicago, has argued that the wave of foreclosures during the downturn has limited the benefits of lower mortgage rates and higher house prices over the past two years to a relatively small group of well-off Americans. Finally, Adam Posen, a former monetary policymaker at the Bank of England and now the president of the Peterson Institute of International Economics, argued in the Financial Times earlier this week that monetary policy always has 'distributive effects.' According to him, central bankers should 'confront this reality rather than run from it.'"

In my post cited above, I support the idea that the "wealthy" can take advantage of governmental policies. For example, I point to where Henry Kravis and George Roberts and KKR took advantage of liquidity events created by monetary policy and made exceptional returns on them. I also wrote about how George Soros made lots of money off of situations created by gover! nmental policy. I examine how people have taken advantage of the credit inflation of the past fifty years and made lots of money. I cite the words of Charles (Chuck) Prince when he says: "As long as the music is playing, you've got to keep dancing."

My argument: smart, wealthy people can "go with the flow" and take advantage of what the Federal Reserve is doing. I write, "In most cases it is the less wealthy individuals that are the last movers."

Does Mr. Bernanke get this? Mr. Klein reports, "Today, Federal Reserve Chairman Ben Bernanke was twice asked by members of the House Financial Services Committee whether the central bank's policies have been responsible. Both times, Bernanke denied that the Fed was favoring Wall Street over Main Street."

The conclusion Mr. Klein reaches: "If monetary policymakers want to avoid this sort of criticism in the future, they should find new ways to affect the economy that don't rely on interactions with the financial system."

And, the greater the action, the greater the effects on inequality.

Remember: Don't fight the Fed!

Source: Bernanke Is Underwriting The Wealthy: Part 2

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)