3 FTSE Dividends Lifted This Week

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) has suffered a bit of a reversal over the past week. After reaching a 13-year high of 6,876 on May 22, the index of top U.K. shares has since dropped 293 points to today's close of 6,583. But the fall has at least boosted the index's average forward dividend yield a little to 3.2%. But if you're investing for income, you can do probably better than that.

We take a look at three companies that have lifted their dividends this week.

Severn Trent (LSE: SVT  )
Severn Trent raised its full-year dividend by 8.2% to 75.85 pence per share on Thursday after reporting a 3.4% rise in full-year turnover, a 37.3% rise in pre-tax profits, and an 11.2% rise in adjusted earnings per share. The payment consists of a final dividend of 45.51 pence to be added to the earlier interim 30.34 pence.

On the current share price of 2,052 pence, the dividend represents a yield of 3.7%, which is pretty good for such a dependable payer. In fact, with Severn Trent's policy of growing its dividend by RPI plus 3% each year, the firm has already indicated an expected 80.4 pence for the year to March 2014 for a rise of 6%.

Tate & Lyle (LSE: TATE  )
Tate & Lyle also released full-year results on Thursday, revealing a 5% rise in sales. Adjusted pre-tax profit and adjusted earnings per share both gained 4%, allowing the firm to declare a final dividend of 18.8 pence per share, taking the full-year total up 5.2% to 26.2 pence. The shares are currently trading at 825 pence, giving a yield of 3.2%, which is bang on that FTSE average.

Forecasts for next year suggest another 4% rise in earnings and a 5% boost to the dividend to 27.5 pence per share. But those were made before this week's results, so we'll need to wait for any possible reevaluation.

Victrex (LSE: VCT  )
It was interim time for Victrex on Tuesday, and the plastics specialist told us of a modest rise in EPS from 41.6 pence to 41.7 pence. But that had no adverse effect on the company's "progressive dividend policy," and we saw the interim dividend raised by 15% to 10.35 pence per share -- and that comes after a 16% rise in the 2012 final dividend. We were told that the payment "reflects the Board's confidence in the future growth prospects for the business."

For the full year, analyst are currently forecasting a 10% rise in the total dividend to about 41.3 pence, which would provide a yield of 2.4% on the current share price of 1,702 pence.

Finally, if you're looking for top investment ideas, it could well pay to take a close look at what Neil Woodford is buying. The ace investor, whose Invesco Perpetual High Income fund would have turned £10,000 into £193,000 since its launch in 1988, remains bullish on the aerospace and defense sector. If you want to learn more, check out the Fool's latest examination of Woodford's holdings. But hurry, because the report will be available for a limited period only. Click here to enjoy your copy today.

Top 5 Recreation Stocks To Buy Right Now

Stocks have turned down to start the new week, and the Dow Jones Industrial Average (DJINDICES: ^DJI  ) has sunk into the red on this Monday. More than half of the blue chip index's members are falling so far, helping the Dow to lose 50 points, or around 0.4%, as of 2:15 p.m. EDT. News from the Federal Reserve's stimulus program has prompted some investors to back off of the recent run-up on the markets-here's what you need to know.

A slowdown ahead for the Fed?
On Friday, The�Wall Street Journal reported the Fed's plan to slowly decrease�its current $85 billion per month bond-buying measure, weaning the markets off of stimulus gradually while keeping an eye on employment and inflation. Investors had to know the stimulus program would end eventually, although considering how well stocks have performed on the back of easy money, any disappointment from Wall Street over a potential end to quantitative easing comes as little surprise. The Fed hasn't released any definitive start date for winding down its latest QE measure yet, but with unemployment recently falling to 7.5%, the central bank seems more confident in the economy's footing.

Top 5 Recreation Stocks To Buy Right Now: Accell Group NV (ACCG.AS)

Accell Group NV is a Netherlands-based holding company. The Company and its subsidiaries divides its business into two segments: Bicycle & Bicycle Parts, active in the design, development, production, marketing and sales of bicycles, bicycle parts and accessories; and Fitness, providing fitness equipment. It sells bicycles under the Batavus, Bremshey, Ghost, Haibike, Hercules, Koga, Lapierre, Loekie, Redline, Sparta, Staiger, Tunturi, Winora, XLC and Raleigh brands via specialist bicycle retailers as well as bicycle parts under the Juncker Bike Parts and Wiener Bike Parts brands and fitness equipment under the Bremshey Sport brand. The Company�� main markets are the Netherlands, Germany, France, and European countries. The Company has production facilities in the Netherlands, Germany, France, Hungary and Belgium. As of December 31, 2011, it operated through 21 wholly owned subsidiaries. On May 22, 2012, the Company acquired Raleigh Cycle Limited.

Top 5 Recreation Stocks To Buy Right Now: Accell Group NV (ACCEL)

Accell Group NV is a Netherlands-based holding company. The Company and its subsidiaries divides its business into two segments: Bicycle & Bicycle Parts, active in the design, development, production, marketing and sales of bicycles, bicycle parts and accessories; and Fitness, providing fitness equipment. It sells bicycles under the Batavus, Bremshey, Ghost, Haibike, Hercules, Koga, Lapierre, Loekie, Redline, Sparta, Staiger, Tunturi, Winora, XLC and Raleigh brands via specialist bicycle retailers as well as bicycle parts under the Juncker Bike Parts and Wiener Bike Parts brands and fitness equipment under the Bremshey Sport brand. The Company�� main markets are the Netherlands, Germany, France, and European countries. The Company has production facilities in the Netherlands, Germany, France, Hungary and Belgium. As of December 31, 2011, it operated through 21 wholly owned subsidiaries. On May 22, 2012, the Company acquired Raleigh Cycle Limited. Advisors' Opinion:

• [By Tom Konrad]

  Accell is a leading bicycle manufacturer and a leader in electric bikes based in the Netherlands with worldwide sales mostly in Europe but expanding rapidly in the United States and Asia.  The company's strategy is to leverage its strong distribution network by acquiring strong brands in a highly fragmented industry.  In 2012, they acquired Raleigh, which was a slightly larger than usual acquisition.  Integrating Raleigh took longer than management expected, and depressed third quarter earnings and the company's current share price.  The company has a variable annual dividend, but based on the last payment of 0.782 euros, it's currently trading at a 5.9% annual yield.  Stock appreciation in 2013 could be driven by the start of synergies from the Raleigh acquisition, increased adoption of electric bikes in the US, or easing of uncertainty in Europe.
  
  Because smaller investors may find Accell difficult to buy through their broker's foreign trading desk, they may want to substitute one of my upcoming alternative picks.

Hot Airline Stocks To Own Right Now: Smith & Wesson Holding Corp (SWHC.O)

Smith & Wesson Holding Corporation (Smith & Wesson), incorporated on June 17, 1991, is a manufacturer of firearms. The Company manufactures a range of handguns, modern sporting rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories for sale to a range of customers, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and globally. It sell its products under the Smith & Wesson brand, the M&P brand, the Thompson/Center brand, and the Walther brand. The Company manufactures its firearm products at its facilities in Springfield, Massachusetts and Houlton, Maine. On July 26, 2012, it sold all of the assets of Smith & Wesson Security Solutions, Inc.

Firearms

During the fiscal year ended April 30, 2012 (fiscal 2012), the Company intr oduced multiple new handgun and modern sporting rifle models, and one new bolt action rifle platform. The Company's rifle introductions included the addition of the M&P15 300 Whisper to the Company's line of modern sporting rifles. As of April 30, 2012, the Company participated in three categories of the long-gun market and both core categories of the handgun market.

Handguns

The Company manufactures an variety of handgun models that include revolvers and pistols. A revolver is a handgun with a cylinder that holds the ammunition in a series of rotating chambers that are successively aligned with the barrel of the firearm during each firing cycle. There are two general types of revolvers: single-action and double-action. The Company's small-frame revolvers have been carried by law enforcement personnel and personal defense-minded citizens. The Company's revolvers are available in a variety of models and calibers, with applications in virtually all pr ofessional and personal markets.

The Company� �! s M&P15 Series of modern sporting rifles are designed to satisfy the functionality and reliability needs of global military, law enforcement, and security personnel. These rifles are also popular as sporting target rifles and are sold to consumers through the Company's sporting good distributors, retailers, and dealers. The Company has a range of product portfolio of modern sporting rifles, which includes a lower price-point, sport model, a .22 caliber model, and a fully automatic model designed for the exclusive use of military and law enforcement agencies throughout the world.

Hunting Firearms

The Company manufactures three lines of bolt-action rifles under its Thompson/Center brand consisting of several models in each line. The Company's hunting rifles are offered in 16 different calibers. Bolt-action rifles operate by the cycling of a bolt handle that allows for both the loading and unloading of rounds through a magazine fed system.

< p>During fiscal 2012, the Company introduced the Dimension bolt action rifle platform. Under the Company's Thompson/Center brand, the Company also offers seven models of American-made single shot black powder, or muzzle loader, firearms. The Company offers eight models of interchangeable, single shot firearm systems that deliver numerous gun, barrel, caliber configurations, and finishes. These systems can be configured as a center-fire rifle, rim-fire rifle, shotgun, black powder firearm, or single-shot handgun for use across the entire range of big- and small-game hunting.

Handcuffs

The Company manufactures handcuffs and restraints in the United States. The Company fabricates these products from the carbon or stainless steel.

Smith & Wesson Academy

Through the Smith & Wesson Academy, the Company offers instruction designed to meet the training needs of law enforcement and security customers worldwide. Classes are conduct ed at the Company's facility in Springfield, Massachus! etts o! r! on loca! tion around the world.

Specialty Services

The Company's services include forging, heat treating, finishing, and plating. It provides services to third-party customers.

The Company competes with Ruger,Taurus, Beretta, Glock, Heckler & Koch, Sig Sauer, Springfield Armory, Bushmaster, Rock River, Stag Arms, DPMS, Browning, Marlin, Remington, Ruger, Savage, Weatherby, CVA, Traditions, and Winchester.

Top 5 Recreation Stocks To Buy Right Now: Smith & Wesson Holding Corp (SWHC)

Smith & Wesson Holding Corporation (Smith & Wesson), incorporated on June 17, 1991, is a manufacturer of firearms. The Company manufactures a range of handguns, modern sporting rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories for sale to a range of customers, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and globally. It sell its products under the Smith & Wesson brand, the M&P brand, the Thompson/Center brand, and the Walther brand. The Company manufactures its firearm products at its facilities in Springfield, Massachusetts and Houlton, Maine. On July 26, 2012, it sold all of the assets of Smith & Wesson Security Solutions, Inc.

Firearms

During the fiscal year ended April 30, 2012 (fiscal 2012), the Company introduced multiple new handgun and modern sporting rifle models, and one new bolt action rifle platform. The Company's rifle introductions included the addition of the M&P15 300 Whisper to the Company's line of modern sporting rifles. As of April 30, 2012, the Company participated in three categories of the long-gun market and both core categories of the handgun market.

Handguns

The Company manufactures an variety of handgun models that include revolvers and pistols. A revolver is a handgun with a cylinder that holds the ammunition in a series of rotating chambers that are successively aligned with the barrel of the firearm during each firing cycle. There are two general types of revolvers: single-action and double-action. The Company's small-frame revolvers have been carried by law enforcement personnel and personal defense-minded citizens. The Company's revolvers are available in a variety of models and calibers, with applications in virtually all professional and personal markets.

The Company�� M! &P15 Series of modern sporting rifles are designed to satisfy the functionality and reliability needs of global military, law enforcement, and security personnel. These rifles are also popular as sporting target rifles and are sold to consumers through the Company's sporting good distributors, retailers, and dealers. The Company has a range of product portfolio of modern sporting rifles, which includes a lower price-point, sport model, a .22 caliber model, and a fully automatic model designed for the exclusive use of military and law enforcement agencies throughout the world.

Hunting Firearms

The Company manufactures three lines of bolt-action rifles under its Thompson/Center brand consisting of several models in each line. The Company's hunting rifles are offered in 16 different calibers. Bolt-action rifles operate by the cycling of a bolt handle that allows for both the loading and unloading of rounds through a magazine fed system.

During fiscal 2012, the Company introduced the Dimension bolt action rifle platform. Under the Company's Thompson/Center brand, the Company also offers seven models of American-made single shot black powder, or muzzle loader, firearms. The Company offers eight models of interchangeable, single shot firearm systems that deliver numerous gun, barrel, caliber configurations, and finishes. These systems can be configured as a center-fire rifle, rim-fire rifle, shotgun, black powder firearm, or single-shot handgun for use across the entire range of big- and small-game hunting.

Handcuffs

The Company manufactures handcuffs and restraints in the United States. The Company fabricates these products from the carbon or stainless steel.

Smith & Wesson Academy

Through the Smith & Wesson Academy, the Company offers instruction designed to meet the training needs of law enforcement and security customers worldwide. Classes are conducted at the Company's facility in Springfield, Massachusetts or o! n locatio! n around the world.

Specialty Services

The Company's services include forging, heat treating, finishing, and plating. It provides services to third-party customers.

The Company competes with Ruger,Taurus, Beretta, Glock, Heckler & Koch, Sig Sauer, Springfield Armory, Bushmaster, Rock River, Stag Arms, DPMS, Browning, Marlin, Remington, Ruger, Savage, Weatherby, CVA, Traditions, and Winchester.

Dow Loses Luster as Treasuries Sparkle

After the Dow Jones Industrial Average (DJINDICES: ^DJI  ) charged to a new record high yesterday on the back of strong economic data, the blue chips gave back exactly all of those gains today, falling 106 points, or 0.7%. There was no major news dragging the Dow down, but fear of the Fed's curtailing its stimulus program has hung in the air for the past week, and investors also seem to feel the market rally may have gotten ahead of itself as major indexes are already up more than 15% this year.

Ten-Year Treasury Yields (INDEX: ^TNX) also climbed to as high as 2.23% last night, their highest mark in more than a year, which seems to have provoked a flight from dividend stocks to the safer T-notes. The Fed's murmurs on cutting its bond-buying program also seem to have prompted the rise in treasury yields as loose monetary policy is generally bad for bond investors since it can cause inflation. The benchmark bond yields are up more than 10% since Fed Chairman Ben Bernanke's speech last Wednesday.

The flight to bonds can be seen in the list of the Dow's biggest losers today as Coca-Cola (NYSE: KO  ) , Pfizer, Verizon, and Procter & Gamble all fell 2.4% or more. All four companies are considered defensive stocks as they pay high-yielding dividends and are relatively stable as their products are in demand regardless of the general macroeconomic climate.

Coke shares may also be sweating as a strike at a Venezuelan bottling plant seems to have intensified in its ninth day as today workers soldered the plant gates shut. Coke said the strike had so far cost the company 15% of its sales in the country of 30 million and called it "illegal," "arbitrary," and "crazy."

Alcoa (NYSE: AA  ) shares were essentially flat during the trading day, but dipped 1.3% after hours following Moody's decision to downgrade the aluminum maker's credit to junk status, dropping it from Baa3 to Ba1. The ratings agency cited lower aluminum prices as the motivation for the downgrade, though it kept its outlook for the manufacturer at "stable." Alcoa has $8.6 billion in debt on its balance sheet, and has struggled recently in the face of low commodity prices and the slowdown in China's construction boom. Despite the broad market rally, Alcoa shares are down 2.5% this year.

Finally, after hours today, Berkshire Hathaway's (NYSE: BRK-B  ) MidAmerican Energy said it would buy Nevada-based NV Energy (NYSE: NVE  ) for $5.6 billion, sending NV's shares up 23%. The companies said the deal will combine MidAmerican's expertise in renewable energy with NV's solar and wind capabilities. Pending approval by regulators and NV shareholders, the acquisition should close in the first quarter of 2014. Berkshire's shares were essentially unmoved after hours.  

Can Starbucks Stock Keep Growing?

In the past 25 years, Starbucks (NASDAQ: SBUX  ) has transformed itself from a local roaster and coffee shop chain in Seattle to a globally recognized brand with more than 18,000 cafes worldwide. This transformation has created a company with annual revenue of more than $13 billion. Nevertheless, Starbucks has continued averaging double-digit revenue growth. As a result, Starbucks stock has managed to maintain a generous P/E ratio above 30. Can the company keep growing fast enough -- and long enough -- to justify this valuation?

While Starbucks is already the biggest name in the coffee business, the company still has three big growth opportunities. First, it can expand geographically, by adding new cafes in underserved areas. Second, it will expand its reach beyond coffee. Third, it will expand its consumer packaged goods business, leveraging its global brand awareness. These three growth initiatives create significant upside for Starbucks stock over the next five to 10 years.

Starbucks keeps growing
While Starbucks already operates more than 18,000 cafes, the vast majority of these are in the Americas, and particularly the U.S. Nevertheless, the company continues to see opportunities to expand in its core markets, and plans to open more than 3,000 cafes in the Americas over the next five years, with more than half of those in the U.S. Domestic expansion has not caused any significant cannibalization of existing stores, as Starbucks continues to post healthy same-store sales growth.

Eventually, the company will saturate the U.S. market with its signature cafes. Fortunately for Starbucks stock owners, the company has plenty of room for growth overseas. China is the biggest opportunity: Starbucks plans to make this the company's biggest market outside the U.S. by doubling the number of cafes it operates in China to 1,500 by 2015.

At an investor conference last year, CEO Howard Schultz stated that while it took Starbucks 10 years to really connect with native Chinese customers, the company now has strong momentum there. One tool that has helped it connect with customers there has been localization of product offerings. Looking forward, Starbucks wants to use its portfolio of tea brands to capitalize on the popularity of tea in China and other Asian markets, thereby strengthening its popularity overseas.

Tea and crumpets
Starbucks has always had tea offerings, but the company made a big move to boost its tea profile last year with the acquisition of Teavana. For Starbucks stockholders, the Teavana acquisition is great news because it gives the company an opportunity to grow in a new market that is similar in size to the global coffee market.

While Teavana has traditionally focused on selling loose-leaf teas, Starbucks intends to open "tea bars" within Teavana shops to provide a Starbucks-like experience. Teavana beverages may also be sold inside regular Starbucks cafes.

The company is already increasing its non-coffee offerings within its cafes. In late 2011, it purchased Evolution Fresh, a fruit and vegetable juice maker. By the end of this year, bottled Evolution Fresh juices will be available in most U.S. Starbucks locations, replacing PepsiCo's Naked Juice.

Most important, Starbucks is in the midst of significantly upgrading its food offerings. Last year, the company bought La Boulange, a Bay Area bakery. Food currently represents just 19% of sales in domestic Starbucks cafes, and executives expect that La Boulange will open the door to offering a bigger selection of baked goods and sandwiches, while improving food quality.

Increasing food sales will allow Starbucks to leverage its fixed costs, like rent and utilities. On the other hand, food sales usually carry a lower gross margin than beverages. Nevertheless, Starbucks management expects the net effect to be higher operating margins and higher profit.

Beyond the cafe
The last, and potentially biggest, opportunity for Starbucks is consumer packaged goods. Starbucks believes that its "channel" business could one day be as big as its cafe business, despite representing less than 10% of revenue today. If this vision eventually comes to fruition, Starbucks stock will be a bargain at today's prices.

Starbucks plans to build all of the brands that it owns -- including its recent acquisitions -- into well-known, highly respected franchises. It is already the leading premium packaged coffee brand, but management wants to grow the company's packaged coffee market share while also creating a major presence in the tea and juice markets. The CPG channel offers higher margins than the cafe business, so it could become a significant profit driver for Starbucks as it grows.

Foolish conclusion
While Starbucks already seems ubiquitous, it actually has significant growth opportunities ahead. Starbucks stock does fetch a valuation premium to the market, but it has a talented management team lead by Schultz. There may be some bumps along the road, but the company's initiatives to diversify into new geographies (especially China), new product lines (tea, juice, and baked goods), and new distribution channels will position it for growth. For long-term investors, Starbucks stock looks like a solid investment opportunity.

More advice and analysis from The Motley Fool
PepsiCo has quenched consumers' thirst for more than a century. But recently, the company has left shareholders craving more. With increased competition and loss of market share, many investors wonder if this global snack food and beverage giant is simply fizzling out. Are more bland results ahead for PepsiCo? The Motley Fool's premium report on the company guides you through everything you need to know about PepsiCo, including the key opportunities and threats facing the company's future. Simply click here now to claim your copy today.

#pitch{ margin-bottom: 15px; }

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 Inflation Never Came

A generation of economists and students of macroeconomics were taught that the Quantity Theory of Money described the relationship between money and prices in the economy. The primary equation for the Quantity Theory of money is:

Where:

is the total amount of money in circulation on average in an economy during the period, say a year.

is the transactions velocity of money, that is the average frequency across all transactions with which a unit of money is spent. Velocity is derived from the Money Multiplier which arises from a fractional reserve banking system. When a bank lends money to a business from deposits its customers make, that money can be paid as salaries, re-deposited, and lent out again, and so on. So a given unit of money can change hands and take part in many more transactions than if all banks had to keep 100% of their deposits on hand.

and are the price and quantity of the i-th transaction.

is a column vector of the , and the superscript T is the transpose operator.

is a column vector of the .

This equation is often referred to in the form:

This equation was taken from Wikipedia and modified by me for brevity and clarity. Don't be put off by the math; this article doesn't require a high level of understanding of math. The equation says the amount of Money in circulation (M) times the (V)elocity of Money equals the sum of all the (P)rices times all the (Q)uantities for all transactions in the economy for a given time period. Money in circulation is sometimes call High Powered Money. You can see that if V and Q stay the same, P (Inflation when rising) will go up if M goes up.

The Quantity Theory of Money is now under fire in academia because changes in technology and innovations by financial institutions have rendered the theory a less than complete view of the world. This has many important implications for investors from a macro point of view. Here is a statement that describes the Quantity Theory of Money from the URL article by Singh and Stella that I will reference below.

"Textbook presentations of the actual US monetary policy transmission mechanism frequently characterize it as follows:

The Federal Reserve uses open market operations to inject or withdraw commercial bank reserves (High Powered Money, the "M" in MV=PQ).These banks then create money via the 'money multiplier'. "

The statement about High Powered Money in special font is mine.

Singh and Stella state in this article that the "Textbook presentations" have shown some real problems since the financial crisis of 2008 and they make their case in this article.

So let's take a step back here and try to understand the thought process that many intuitive investors and investors with more advanced training in finance and economics were having about inflation expectations. The Fed has been increasing High Powered Money for a long time, but I think many of us became very aware of it after 2008. One way you can be sure High Powered Money has been increasing is to look at ! the Fed B! alance Sheet. The Fed increases the money supply by buying Treasuries and MBS with money that did not previously exist. Up until 2008, the Fed never had more than a trillion dollars of Assets. As of the writing of this article the Fed balance sheet holds more than three trillion dollars of assets.

Basic intuition and the Quantity Theory of Money said that if Fed was printing money (Quantitative Easing), inflation would follow. Well-known investors like Schiff and Rogers thundered that the Fed was out of control and there would be hell to pay. Many of these investors thought that protection in terms of "hard" assets like GLD, SLV, and real estate was called for. Inflation (P going up in the formula) is always a component of interest rates (Nominal Interest Rate = Inflation + Real Interest Rate) so a derivative thought for those worried about the Fed increasing High Powered Money was that interest rates would go up. In a case like that, a product like TBT (short Treasuries) would be useful to own and being long bonds would be a bad idea. When the inflation didn't happen, many of us thought it was because Money Velocity was dropping. The Singh and Stella article addresses why we didn't see inflation and it wasn't just because Money Velocity was dropping.

I encourage you all to read the Singh and Stella article, but I will summarize it by saying that they feel that the influence of the legacy banks (Citibank, B of A, JPMorgan, etc.) is less important to money creation than it used to be. They claim there are a larger number of financial institutions that create money now and that good collateral serves more the role of the constraint on the money supply than the older High Powered Money. The article implies that the fundamental components and relationships on the left side of the equation (MV) have changed significantly in the last 20 years. My take on this is that advances in technology have made paper money less important, increased the speed at which money changes hands, all! ow people! surrogates for money like SPDR Gold Shares (GLD), iShares Silver Trust (SLV), and bitcoin, and led to people holding their money in more places than just a bank checking and savings account. To quote from their conclusion:

"Post-war US credit expansion - and, by inference, inflation-has not been dependent on an expansion of bank reserves and there is no reason to expect there will arise now a causal impact of the latter on the former. The liquidity fulcrum of a modern financial system is more complex than the monetary base and its size is determined by market conditions which continue to show signs of strain despite comparatively massive central bank injections of bank reserves."

So what does this mean for investors? I would not go out and buy bonds now. Even if Fed money printing does not cause inflation, the Fed withdrawing from its purchase of Treasuries and MBS to the tune of $85 billion a month will probably cause interest rates to go up. If you are short bonds Proshare Ultrashort 20+ Treasuries (TBT), waiting for inflation to appear, you may have a long wait. Timing the Fed withdrawal of QE may be more fruitful. If you are stock piling hard assets (long GLD, SLV, or physical precious metals) and waiting for inflation, this article implies that inflation may not come.

Many people say that all this money printing is what is behind the rise in the stock market. I personally have never read any compelling explanation of how the Fed printing money makes the stock market go up. The Singh/Stella article does talk about asset displacement when the Fed buys Treasuries/MBS for cash from money center banks but does not say how that affects the stock market. One theory in Finance is that stock prices represent the discounted present value of all future earnings for all publicly held corporations. If you believe the Fed can keep current interest rates this low for a long time (say 10 years), then you could argue that stock prices are up because the discount interest rate is down, d! riving th! e present value up. I haven't seen this argued in very many places.

Some of us question the integrity of a system where the Fed can create substantial money out of thin air for short-term political or economic gain. But as I have mentioned before, the ability of the Central bank that controls the world's reserve currency to create money may be substantial. This is not the free lunch it appears to be. If Reserve currency status were ever to be lost, there is a long period where the former reserve currency is repatriated to the issuing country that causes economic dislocation. This dislocation was suffered by the UK when the British Pound lost reserve currency status in the 1930's and 1940's.

The intuitive appeal that Fed money printing must have the bad consequence of inflation at some time seemed common sense to many of us. We waited a long time and that inflation did not appear. A new theory (Singh/Stella) is now being presented concerning the effects of Fed money printing. It's important that investors incorporate new ideas that explain the world as it is into their investing processes. Adjust your portfolios accordingly.

Disclaimer: This article is intended to be solely informational and does not represent a recommendation to buy or sell any security. The information in the article is believed to be accurate but you are advised to do your own research and exercise your own due diligence before taking any action that affects your financial future.

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...)

Additional disclosure: The author holds a hedge position of hard assets in his portfolio, not GLD or SLV.

T-Mobile's iPhone Was a Classic Bait And Switch

After years of waiting, T-Mobile (NYSE: TMUS  ) finally got its hands on the iPhone earlier this year. The No. 4 carrier has made plenty of headlines this year with its "Un-carrier" push, trumpeting the end of subsidies on its network.

However, T-Mobile's marketing attracted some negative attention, too, since its campaign was considered "misleading" as consumers are still effectively tied into two-year commitments. Customers are just tied to installment plans instead of service contracts, but the net result is the same. When CEO John Legere confidently told consumers that if T-Mobile's service was terrible in any given month they were welcome to drop service and switch, what he didn't mention was that consumers would have to pay off the balance on their smartphones, which could easily be upwards of $500.

Furthermore, T-Mobile hasn't actually killed subsidies entirely, since there was a $69 discrepancy between its pricing and Apple's (NASDAQ: AAPL  ) -- a discrepancy that had to be coming from somewhere. This pricing was merely a promotional arrangement and not meant for this world for long. T-Mobile just pulled a classic bait and switch.

What ever happened to "dramatically different?"
One of T-Mobile's biggest headline advantages when it launched Apple's flagship in April was that it was offering the device for just $99 up front, in addition to two years of $20 monthly payments. That effectively undercut larger rivals who were charging $200 on contract.

T-Mobile billed the pricing structure as "incredible," with Legere saying the company was the only one to offer a "radically simple, affordable iPhone 5 experience." Late last year, Legere similarly teased that the iPhone experience would be "dramatically different" than on other carriers, while hinting at the $99 down payment. At the press event in March, Legere echoed, "I've been telling you that when the iPhone came to T-Mobile, that it would be different."

That's a lot of bragging about the $99 upfront price. T-Mobile isn't being so loud with its iPhone pricing now, which has just jumped to $150 upfront (same $20 monthly payments). The promotional period has ended and T-Mobile is now charging a $150 down payment on the newest iPhone, with the total cost rising to $630. That's still cheaper than most rivals, but the company just closed the gap by a lot. Unsurprisingly, it did not issue a press release advising consumers of the bump, but quietly updated prices on its website.

With the move, Sprint Nextel becomes the cheapest iPhone carrier, thanks in large part to a $100 promotion that the carrier is offering for any smartphone customers that switch and port their number over. That puts Sprint's iPhone 5 at the subsidized price point of $100. Sprint also offers unlimited data with no strings attached while T-Mobile's entry-level "unlimited" plan throttles data speeds after a certain threshold.

T-Mobile's initial pricing is little more than an attention grab. Legere is very consciously going for headlines, in part by lacing his presentations with expletives, growing his hair out, and dressing differently (contrast Legere's look this January with Legere circa 2002). Still, T-Mobile's iPhone just got a lot less different.

Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Will Captain Kirk Be As Awesome As Iron Man?

Star Trek Into Darkness opens today in IMAX (NYSE: IMAX  ) theaters throughout the U.S. and then nationwide on Friday. There's plenty of enthusiasm for the film at Rotten Tomatoes, where 87% of critics have rated the film "fresh." But can it earn $1 billion at the worldwide box office, as Iron Man 3 is about to?

Perhaps it's an unfair question. In many ways, Captain Kirk and Iron Man are peers. Consider:

Stan Lee, Larry Lieber, Don Heck, and Jack Kirby created the Armored Avenger in 1963. Gene Roddenberry would bring Star Trek to TV just three years later.

Both depend on advanced technology to beat bad guys as they wow audiences.

Kirk and Iron Man's civilian persona, billionaire industrialist Tony Stark, played expertly by actor Robert Downey Jr., are well known for their romantic dalliances.

If there's a difference between the franchises, it's at the box office. All told, there have been 12 Star Trek films since 1979, grossing under $1 billion worldwide on an adjusted basis and nearly $1.9 billion domestically when accounting for inflation. By contrast, Iron Man has generated roughly $3.7 billion in receipts over four big-screen appearances including Marvel's The Avengers.

A more direct comparison might be 2008's Iron Man vs. 2009's Star Trek. Each film launched in May to lead off that year's summer movie season, and both did well. But the Armored Avenger did better, earning about $200 million more at the worldwide box office for Marvel Studios parent Walt Disney (NYSE: DIS  ) .

On the other hand, Viacom's (NASDAQ: VIA  ) Paramount Studios has been cashing in on the Star Trek TV series for four decades. Mix in revenue from all those episodes, and Iron Man's titanium alloy starts to look like a tin can in a head-to-head match.

Sources: Viacom/Paramount, Wikipedia.

Whichever film comes out on top -- I'm hoping both gross more than $1 billion -- I think it's already shaping up to the best summer movie season in IMAX history.

Do you agree? Will Star Trek Into Darkness perform as well as Iron Man 3 at the box office? Please vote in the following poll and then leave a comment to let us know what you thought of the films, and whether you'd consider buying IMAX at current prices.

Lights, camera, profit!
U.S.-based filmmakers with global ambitions offer just one way to profit from our increasingly global economy. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows other ways to cash in. Click here to get your free copy before it's gone.

Why Gordmans Stores's Earnings May Not Be So Hot

Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls.

Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline.

Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on Gordmans Stores (Nasdaq: GMAN  ) , whose recent revenue and earnings are plotted below.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. FCF = free cash flow. FY = fiscal year. TTM = trailing 12 months.

Over the past 12 months, Gordmans Stores burned $7.7 million cash while it booked net income of $23.5 million. That means it burned through all its revenue and more. That doesn't sound so great. FCF is less than net income. Ideally, we'd like to see the opposite.

All cash is not equal
Unfortunately, the cash flow statement isn't immune from nonsense, either. That's why it pays to take a close look at the components of cash flow from operations, to make sure that the cash flows are of high quality. What does that mean? To me, it means they need to be real and replicable in the upcoming quarters, rather than being offset by continual cash outflows that don't appear on the income statement (such as major capital expenditures).

For instance, cash flow based on cash net income and adjustments for non-cash income-statement expenses (like depreciation) is generally favorable. An increase in cash flow based on stiffing your suppliers (by increasing accounts payable for the short term) or shortchanging Uncle Sam on taxes will come back to bite investors later. The same goes for decreasing accounts receivable; this is good to see, but it's ordinary in recessionary times, and you can only increase collections so much. Finally, adding stock-based compensation expense back to cash flows is questionable when a company hands out a lot of equity to employees and uses cash in later periods to buy back those shares.

So how does the cash flow at Gordmans Stores look? Take a peek at the chart below, which flags questionable cash flow sources with a red bar.

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. Dollar values in millions. TTM = trailing 12 months.

When I say "questionable cash flow sources," I mean items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That's not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, investors ought to make sure to refer to the filings and dig in.

With 15.0% of operating cash flow coming from questionable sources, Gordmans Stores investors should take a closer look at the underlying numbers. Within the questionable cash flow figure plotted in the TTM period above, other operating activities (which can include deferred income taxes, pension charges, and other one-off items) provided the biggest boost, at 11.2% of cash flow from operations. Overall, the biggest drag on FCF came from capital expenditures.

A Foolish final thought
Most investors don't keep tabs on their companies' cash flow. I think that's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home-run stocks that provide the market's best returns.

Is Gordmans Stores the right retailer for your portfolio? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average retailing powerhouse. Click here for instant access to this free report.

We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service.

Add Gordmans Stores to My Watchlist.

Yahoo! Stock Is Hitting New Highs

It seems a terrible understatement to say Yahoo!  (NASDAQ: YHOO  ) CEO Marissa Mayer has been busy over the past year.

Of course, earlier this week Yahoo! stock touched the highest levels investors have seen in nearly five years, so apparently she's been doing something right. In fact, since Mayer was named CEO on July 16, 2011, shares of Yahoo! have nearly doubled, trouncing the otherwise respectable performance of the S&P 500:

YHOO Total Return Price data by YCharts.

So what, exactly, has happened since Mayer took the helm?

In short, she has worked tirelessly to secure Yahoo!'s place as a permanent fixture in the lives of millions of netizens, primarily through the company's involvement in roughly a dozen of its users' "daily habits." Those habits include (among others) performing web searches, checking email, watching videos, and viewing daily news, sports, and finance feeds.

Bold moves
Of course, Mayer hasn't shied away from controversy along the way, most notably taking flack for her much-publicized decision to ban telecommuting at Yahoo! in February.

Naturally, many employees and outsiders alike were angered by the decision, especially as Mayer reportedly constructed a nursery next to her office -- at her own expense, mind you -- to be nearer to her own infant son while at the same time enabling her to work longer hours.

What fewer people have realized is that Mayer also recently doubled the paid maternity leave for her employees to 16 weeks, while at the same time introducing a policy to allow new fathers to take up to eight weeks of paid leave. In addition, parents who adopt are now allowed to take eight paid weeks off from work, and new parents are given $500 to spend on baby items and related services.

Mayer explained her telecommuting ban in April by simply saying, "People are more productive when they're alone, but they're more collaborative and innovative when they're together. Some of the best ideas come from pulling two different ideas together."

And Mayer would know, especially after more than 13 years at Google  (NASDAQ: GOOG  )  which just so happens to have topped Fortune's list of the 100 Best Companies to Work For in both 2012 and 2013. In fact, at the time she instituted the ban, Google was generating almost $932,000 in revenue per employee, compared to just under $345,000 per employee at Yahoo!. Curiously enough, that gap has narrowed since then to about $993,000 and $419,000 in revenue per employee for Google and Yahoo!, respectively.  

Then again, while I still think it's naive to believe Yahoo! (or any other company, for that matter) will ever be able to surpass Google's more than 80% market share in search, their supplementary efforts could very well morph the company into an equally thriving long-term business.

To its credit, Yahoo! is finally being perceived as a better place to work. Last month, for instance, Mayer stated nearly twice as many people are currently applying for jobs at Yahoo! compared to the same time last year, while the rate of "top talent" leaving the company has been reduced by about half.

On redesigns and acquisitions
In addition, Yahoo! Mail enjoyed a design refresh late last year, and the company acquired Summly -- a slick little news summarization app -- for around $30 million in March.

Then on Monday, Yahoo! unveiled a dramatic redesign of its massively popular photo sharing site, Flickr.com, while simultaneously announcing its $1.1 billion acquisition of blogging specialist Tumblr.

Tumblr, for its part, boasts more than 105 million different blogs visited by 300 million unique users each month, and while it remains to be seen exactly how the folks at Yahoo! plan to further monetize their new prize, some sources say Tumblr is expected to grow annual revenue from just $13 million last year to $100 million in 2013.

Mayer also wasted no time promising Yahoo! wouldn't "screw it up," and further explained Yahoo! covered its bases by performing multiple valuation analyses -- all of which apparently supported the $1.1 billion valuation. While time will tell how it all turns out, at least one of my fellow Fools already thinks Tumblr is big a win for Yahoo!.

Foolish final thoughts
In the end, the folks at Yahoo! have moved startlingly fast to stabilize their faltering business. Thanks to low expectations in the face of strong competition, investors holding Yahoo! stock have been rewarded handsomely as a result. Assuming Mayer can continue building on her achievements, I see no reason to believe the outperformance by Yahoo! stock won't continue.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

GameStop Has 2,500 Days to Live or Die

GameStop has recently benefited from the announcement that the Xbox1 and PS4 PlayStations will support GameStop game cells. This gives GameStop time to not only generate easy revenues from its game cells but also to figure out what to do with itself after the Internet likely replaces game cells as a source of video games.

The current life expectancy of GameStop's game cells is around seven years, or 2,500 days, so if it looks ahead to the challenge of marketing Internet downloads, long-term prospects are good. If GameStop rests on its laurels or old business model, it could be in for a rude shock.

Right now, the company produces $500 million in free cash flow or a 10% cash flow relative to its market cap, the business is cheap, and there's a 33% short position on the company that could turn into a short squeeze if this Christmas brings a successful launch of its new products.

For the next three years, GameStop looks good. Beyond that, it depends on how the company adapts to the changes in the market. 

What does the future of gaming mean for Microsoft?
It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In a new premium report on Microsoft, a Motley Fool analyst explains that while the opportunity is huge, so are the challenges. The report includes regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.

#pitch{ margin-bottom: 15px; }

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.

Did Intel Just Score a Big Mobile Win?

Thus far in the mobile revolution, Intel (NASDAQ: INTC  ) has been a non-player. The chip giant has made big pushes in recent years, including its Medfield Atom that debuted last year, but has little to show for it in the way of design wins or consumer mindshare. The handful of Google (NASDAQ: GOOG  ) Android devices that it's powered haven't been blockbusters by any measure, such as the Motorola RAZR i.

Well, Intel may have just scored a big mobile win. Online benchmark results from GFXBench have been spotted that suggest that Intel may have won a spot in an upcoming Samsung tablet, likely the Galaxy Tab 3 10.1. For those unfamiliar with Samsung's bizarre naming methodology, that's the unreleased 10.1-inch version of the South Korean company's third-generation tablet that could be sporting Intel silicon inside.

Galaxy Tab 2 10.1. Source: Samsung.

Specifically, investors could be looking at a dual-core Clover Trail Atom under the hood, a notable departure from the Samsung Exynos or Qualcomm (NASDAQ: QCOM  ) Snapdragons typically utilized in similar devices. Previous benchmarks that have popped up put the Galaxy Tab 3 10.1 on performance par with the Snapdragon 600 and Exynos 5 Octa. The predecessor Galaxy Tab 2 10.1 featured an OMAP processor from Texas Instruments, who has since ditched the sector.

Much like in smartphones, Samsung is rising as Apple's biggest threat in tablets, currently occupying the No. 2 spot in the market behind the Mac maker. Samsung has a wide range of devices, so Intel scoring one a spot in one of these wouldn't be a game changer by any stretch of the imagination. It could, however, be the start at chipping away at both Qualcomm and Apple as two of the dominant forces in mobile chips today.

Intel's current mobile success hinges upon Microsoft (NASDAQ: MSFT  ) Windows 8, as its current tablet spots are predominantly Windows tablets. Windows 8 continues to see tepid adoption at best, and even longtime Windows OEMs are hedging their bets on the platform by exploring alternatives. For instance, Hewlett-Packard just launched its SlateBook x2, an Android convertible running on an NVIDIA Tegra processor -- decidedly as un-WinTel as it gets.

Perhaps the biggest challenge will be app performance on Intel's x86 architecture. Android is built in a way that is relatively architecture agnostic for most apps, but apps that are ARM-native (such as many 3-D games) may see some performance issues. Even if Intel scores a spot, the real test will be if the Galaxy Tab 3 10.1 sells.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, a Motley Fool analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.

#pitch{ margin-bottom: 15px; }

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.

Lockheed Martin Gives FBI a Helping "Hand"

Lockheed Martin (NYSE: LMT  ) is more than just fighter jets. It's also, apparently, a bona fide crime fighter.

On Tuesday, the world's largest pure-play defense contracting firm announced that it has just deployed Increment 3 of the FBI's Next Generation Identification fingerprinting system. NGI is said to give the FBI "significant improvement in latent fingerprint search accuracy and a new nationwide palm print identification system to help solve cold cases and improve crime-solving capabilities."

Lockheed is upgrading the FBI's biometric identification capabilities in a series of "phased upgrades." This latest, Increment 3, involves adding "powerful matching algorithms" to the bureau's computers to improve, by as much as three times, investigators' ability to match suspect fingerprints with those in the FBI's database. Additionally, for the first time ever, Increment 3 gives the FBI the ability to search for palm prints on a national database.

News of the success helped to allay lingering concerns about the effect of defense spending sequestration on the defense contractor -- and helped to add 1.2% to Lockheed's stock price in Wednesday trading. Lockheed shares closed at $104.05.

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.

The Magic Words Every Trader Says Over and Over

Stansberry & Associates: Brian, you claim "five magic words" are the secret to getting rich in the markets and through investments. You claim every rich investor or trader says these words over and over. Can you share those magic words?

 

Brian Hunt: Sure... The five magic words – and this works with real estate investing, small business investing, blue-chip stock investing, or even short-term trading – are: "How much can I lose?"

 

The rich, successful investor is always focused on how he can lose money on a deal, a stock, or an option position. He is always focused on risk. Once he has the risk taken care of, he can move on to the fun stuff... making money.

 

Almost everyone who is new to the markets or new to making investments is 100% about making money... the upside. They're always thinking about the big gains they'll make in the next Big Tech stock or currency trade or their uncle's new restaurant business.

 

They don't give a thought to how much they can lose if things don't work out as planned... if the best-case scenario doesn't play out. And the best-case scenario usually doesn't play out. Since the novice investor never plans for this situation, he gets killed.

 

I've found, through years of investing and trading my own money – and through years of hanging out with very successful businesspeople and great investors – that when presented with an idea, the great investor or trader reflexively asks early in the discussion, "How much can I lose?"

 

Like I say, this can be a real estate deal, a small business investment, a quick trade, a stock position, or a commodity investment. The concern is always, "How much can I lose? What happens if the best-case scenario doesn't pan out?"

 

S&A: It's along the lines of Warren Buffett's famous rules of successful investment. Rule one: Never lose money. Rule two: Never forget rule one.

 

Hunt: Right. Buffett is probably the greatest business analyst to ever live... the greatest capital allocator to ever live. He's worth over $50 billion because of his ability to analyze investments.

 

When they ask the old man his secret, he doesn't talk about the intricacies of balance sheets or cash flow analysis. The first thing he recommends to folks who want to make money in the market is to not lose money in the market. He's obsessed with finding out how much he could potentially lose on a stake. Once he's satisfied with that, he looks at what the upside is.

 

So Buffett is your great investor. Now take Paul Tudor Jones, an incredible trader with a net worth in the billions. His interview in the trading bible Market Wizards is the most important thing any new trader can read. His interview is filled with how he's obsessed with not losing money... with playing defense.

 

Tudor's famous quote is the trader's version of Buffett's investment quote. Tudor says the most important rule of trading is playing great defense, not offense.

 

If a new investor or trader taped Buffett's quote in a place he'd see it every day... and if he read Tudor Jones' interview once per month... and if he reflexively asks himself, "How much can I lose?" before investing a penny in anything, he'd be worlds ahead of most people out there. He'd set himself up for a lifetime of wealth.

 

S&A: OK, that covers the theory. How can we put "how much can I lose" into everyday practice?

 

Hunt: Well, if you're putting money into a startup business, a speculative stock, an option position, or anything else that is on the riskier end of the spectrum, the answer to "how much can I lose?" is usually, "Every last dollar."

 

While speculative situations can be tremendous wealth-generators, they're best played with small amounts of your overall portfolio. Or if you're a conservative investor, not played at all. Let's say you're buying a speculative gold-mining stock or a speculative tech company with just one potential "big hit" product.

 

With speculative positions, there is always the possibility that your money could evaporate. This is where the concept of position sizing comes into play. In a speculative situation, you're going to want to put just 0.5% or just 1% of your overall portfolio into that idea. That way, if the situation works out badly, you only lose a little bit of money. You certainly don't want to put 5% or 10% of your portfolio into a speculative position. That's way too big.

 

S&A: How about advice for conservative investors?

 

Hunt: I think conservative investors should stick to Warren Buffett-type investments... owning incredible companies with great brand names, like Johnson & Johnson or Coca-Cola. These are the safest, most stable companies in the world.

 

When you buy companies like this at cheap prices, when they are out of favor for some reason, it's very hard to lose money on them. They are such incredible profit generators that their share prices eventually rise and rise.

 

My friend and colleague Dan Ferris, who writes our Extreme Value advisory, provides advice on how and when to buy these dominant companies better than anyone in the business. He knows exactly what they are worth... and he watches them like a hawk to find the right buy-points for his readers.

 

If a conservative investor can buy a super world-dominating company like Johnson & Johnson or Coca-Cola or Intel for less than eight or 10 times its annual cash flow, it's very hard to lose money in them. Eight to 10 times cash flow is often a hard floor for share prices of elite businesses. They don't go down past that.

 

S&A: How about the concept of "replacement cost"? Do you think that's important in the quest to not lose money?

 

Hunt: A while back, I had lunch with a successful professional real-estate investor who raved about some of the values he found on the east coast of Florida.

 

The market was wrecked there. There are a lot of sellers who needed to dump right then and ask questions later... So he's found tons of properties that are selling for less than the cost it would take to build the structures if they weren't there in the first place. He's bought properties for less than that rock-bottom value... for less than replacement cost.

 

Since he is focusing on not losing money... and buying below replacement cost... it's going to be easy for him to make money on his properties. Mind you, he's not raving about price-appreciation potential. His eyes lit up because his downside was so well-protected.

 

That's the mindset the new investor needs to cultivate. He needs to realize the time to start raving is when he's found a situation where it's going to be difficult for him to lose a lot of money. The upside will take care of itself.

 

S&A: How about commodities? I know you like to trade commodity stocks.

 

Hunt: Oh, I love to trade commodity-related stocks... copper producers, oil-service companies, uranium, gold, silver, agriculture. They boom and bust like crazy. And you can make money both ways. I like to say they are "well behaved."

 

The key to not losing money – which leads to making terrific money – in commodity stocks is to focus your buying interest in commodities that have been blown out... that are down 60% or 80% from their high. Find commodities that have suffered brutal bear markets. The longer the bear market, the better. This is the time that the risk has been wrung out of them.

 

Every commodity has what's called a "production cost." This is how much it costs to produce a given unit of that commodity. It's similar to the concept of "replacement cost."

 

After a big bear market in a commodity, you'll often find it trading for below its replacement cost. Sentiment toward the asset will be so bad that nobody wants it. So producers get out of the business... and demand for that commodity increases because it is so cheap. This sows the seeds of a big bull market.

 

But to get back to covering your downside in commodities, focus on markets that have suffered a terrible selloff or bear market. In these situations, the answer to "how much can I lose?" is often, "Not much... It's already selling at rock-bottom levels."

 

You can certainly make money in commodities that have been trending higher for a long time, but the sure way to not lose money is to focus on the commodities that have absolutely been blown out.

 

Gold and gold stocks were a classic case of this in 2001. Gold and gold stocks were such bad investments for so long that everyone who bought in the 1980s or '90s had sold their holdings in disgust. They finally got so cheap and hated that they couldn't go any lower. Then they skyrocketed.

 

S&A: Good advice... Any parting shots?

 

Hunt: When you start out in this game, you're as bad as you're going to get. So take supertrader Bruce Kovner's advice and "undertrade."

 

Make really small bets to get the hang of things... to get the hang of handling your emotions. If you have $10,000 to get started, set aside $7,000 and trade with $3,000 for the first six or 12 months.

 

But even after going through a training period like this, it's tough to learn not to lose money unless you actually feel the pain of losing a lot of money. It took me touching several very hot stoves and suffering several big losses early on in my career before I learned this.

 

If I am a skilled trader and investor nowadays, it is only because I have made every boneheaded mistake you can think of and learned not to repeat it. I've learned that you can make great money in the market simply by not making stupid mistakes... by playing great defense.

 

S&A: Winning by not losing. It works for Buffett and Paul Tudor Jones... So it's probably worth focusing on. Thanks for your time.

 

Hunt: My pleasure.

Was Questcor's Q1 as Bad as It Looks?

Questcor Pharmaceuticals (NASDAQ: QCOR  ) reported first-quarter results after the market closed on Tuesday -- and they didn't look great. Shares fell 3% in after-hours trading, but were things really as bad for Questcor as they might seem? Let's take a look.

By the numbers
Non-GAAP earnings for the quarter were $0.76 per diluted share, up nearly 25% from $0.61 per share in the same period last year. That result fell far short, though, of the average analysts' estimate of $0.96 per share.

Questcor reported GAAP earnings of $0.65 per diluted share. This reflects a 12% increase over the $0.58 per share earnings from the first quarter of 2012.

First-quarter net sales totaled $135.1 million, up 41% year over year from $96 million reported in 2012. However, analysts expected sales of around $157 million -- 16% above what Questcor delivered.

The company held cash, cash equivalents, and short-term investments of $156.3 million as of April 19. That amount is up slightly from the $155.3 million on hand at the end of 2012.

Behind the numbers
It's not hard to find the reason behind Questcor's disappointing quarterly results. Shipments of its Acthar gel were clearly below expectations. The company's steady sales growth pattern for Acthar has now been broken.

Source: Company press release and 10-Q reports.

Some have predicted a bleak outlook for the company for quite a while now. Does this decline reflect gloomy days ahead for Questcor?

Let's look at the big elephant in the room: a 17% sequential drop in multiple sclerosis prescriptions for Acthar. This decrease follows an 8% sequential drop in the fourth quarter. Questcor says that insurance coverage for Acthar still appears favorable. Assuming this is the case, what's going on?

For one thing, the seasonality effect on multiple sclerosis flare-ups that I noted after last quarter's results were announced could still be a factor. Research supports the idea that there are fewer MS relapses in colder months.

Questcor also launched a new reimbursement support center during the first quarter. Since most new prescriptions for multiple sclerosis require assistance from the company to navigate the insurance reimbursement process, this transition likely affected figures to some extent.

The company noted that Acthar shipments in April set a record high of 2,550. Questcor CEO Don Bailey said in the earnings conference call that MS prescriptions in April appear to be especially strong.

Looking ahead
My view is that next quarter will be where the rubber meets the road for the supposition that the decline in Acthar prescriptions for multiple sclerosis is only temporary. If the strength that the company reported for April continues, second-quarter results should be solid.

Multiple sclerosis will increasingly take a less prominent role, though. New paid prescriptions for rheumatology indications shot up 58% sequentially with a beefed-up sales force. I expect continued strong growth in this area.

Questcor has a super-high short interest at just shy of 60%. A lot of people are betting this stock will fall. Maybe they're right, but that seems like a risky longer-term bet -- at least until second-quarter results come out.

If Acthar shipments return to the strong growth trajectory from past quarters, Questcor looks like one of the cheapest pharmaceutical plays in the market. I suspect this summer will tell whether the stock is cheap for a reason -- or just cheap for a season.

Questcor is one of the most debated names in all of biotech. Its premium priced drug Acthar has grown at a torrid pace -- and minted 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.

Of Apple Stores and Automakers

On this day in economic and business history ...

The first Apple (NASDAQ: AAPL  ) Store opened to the public at 10 in the morning on May 19, 2001. Situated in the luxe Tysons Corner Center in McLean, a Virginia suburb of Washington, D.C., it was Apple's beachhead to the retail market, and three hours later it was joined by a second Apple store in Glendale, Calif. It was also seen as a big risk.

Apple was coming off several straight quarterly losses and was still just a computer company -- the first iPod wasn't released until later that year. PC competitors were closing their own dedicated stores as the dot-com bust crunched profits and dented interest. It took a certain boldness to open stores dedicated to a very narrow product lineup, consisting then of Macs and iMacs. Tech journalist Joe Wilcox was there to experience the first Apple Store for himself, and here are some of his key takeaways:

I was surprised at the time that Apple didn't locate in the posher [Tysons Galleria, or Tysons II] mall, which seemed to click more with the Mac demographic. But Tysons I had more foot traffic. When Apple Store opened, Tysons Corner Center averaged about 57,000 customers a day -- or more than 21 million shoppers a year.

Apple Store's look was unique and quite distinctive in 2001, particularly for a shop selling computers. Here's how I described it 10 years ago today: "The store sports hardwood floors, high ceilings, bright lights and clean lines -- similar to the look of the trendy clothing retailer Gap (NYSE: GPS  ) . The similarity is not surprising, considering Mickey Drexler, CEO of the Gap, is a member of Apple's board." San Francisco-based Fisher Development, which also constructed Gap stores, built the first Apple retail shops. "Contributing to the clean look of the store is the lack of network cables connecting computers to the Internet, as Apple has incorporated AirPort wireless networking to link Macs and other products to the Net."

Some of the first store's features now seem positively quaint. With only one primary product -- computers -- Apple divided the store into quadrants, each devoted to a different computing tier. There was a "software alley" that included some non-Apple peripherals. You could burn CDs in the store! Now you can't even find a DVD drive, let alone a CD drive, on most Apple computers.

Those first two stores welcomed 7,700 visitors in their first two days of operation and sold $600,000 worth of Apple products during those two days. Even then, the fanaticism of Apple fans was evident, as several hundred people camped out hours before the opening to be the first inside. After a decade of Apple Stores, the company had grown its retail footprint to 323 locations in 11 countries, which had welcomed a total of 1 billion visitors through their doors since the first store opened. By then, Apple Stores had become by far the most efficient retail locations in the world in sales per square foot of space, trouncing second-place contender Tiffany by roughly 2-to-1. Tiffany's $3,000 in sales per square foot was once the gold standard, but Apple earned just over $6,000 per square foot in every store for 2012.

The first General of the automakers
Buick was incorporated on May 19, 1903. When General Motors (NYSE: GM  ) was founded five years later, Buick became its first nameplate -- General Motors was, in fact, originally created as a holding company for Buick. By this point, founder David Buick had been pushed out of the company, and its new owner installed William C. Durant to manage the growing automaker. Under Durant's leadership, Buick and GM grew to become America's largest automaker in the days before Ford (NYSE: F  ) pioneered the assembly line. This success enabled a GM to go on a buying spree, and before long the company amassed several familiar nameplates: Oldsmobile and Cadillac were added by 1909, and Durant's ouster and later return during the 1910s brought Chevrolet into the mix as well.

However, GM began falling behind Ford following the development of the assembly line. Ford's commitment to one low-cost model, churned out by the millions, outpaced GM's complex (but forward-thinking) strategy of developing different brands and models to appeal to different segments of the population. By 1923, GM had built a million Chevys, but a year later Ford built its 10 millionth Model T. Even though GM trailed Ford for years, it became the first automaker ever added to the Dow Jones Industrial Average (DJINDICES: ^DJI  ) in 1915 (and began its tenure as the longest-serving component automaker when re-added in 1925) thanks to Durant's embrace of the public markets, in stark contrast to Ford's reluctance -- the Model T maker didn't go public until 1956.

Through it all, Buick was on the forefront of automotive design -- a 1904 model is still considered optimally engineered a century later, and Buick also produced closed-body cars before Ford and would advance engine technology throughout the '20s and '30s -- but its near-luxury marquee (second only to Cadillac in prestige) kept it from ever becoming a true mass-market brand. A century after Buick's incorporation, Chevrolet remains by far the leading GM nameplate, with about 10 times as many vehicle sales as Buick in any given month.

Apple has a history of cranking out revolutionary products ... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

3 Risks Facing Boston Beer

In this video, Fool analyst Isaac Pino reviews three risks for Boston Beer (NYSE: SAM  ) . First, the craft beer market is getting competitive with local brewers and seasonal brewers vying for consumers' attention. Given the "fashion" nature of craft brews, customer loyalty is spotty, as consumers like to experiment. Second, commodity prices could drive up costs for everything from hops to packaging. Lastly, the company is selling at 30 times earnings, but already holds 18% of the craft beer market. While this translates into 1% of the overall beer market, a big question is how they are going to grow, especially given the worrisome trend of increasing costs and declining revenues. 

Boston Beer's Samuel Adams brand helped to redefine beer and kick off the craft beer revolution in the United States. Success breeds competition, though, and while just a few years ago Boston Beer had claim over most of the craft beer shelf, today the field is crowded. Can Boston Beer rise above the rest, or will it be squeezed between small local breweries on one side and global beer giants on the other? To help you decide, we've compiled a premium research report filled with everything you need to know about Boston Beer's risks and opportunities. Just click here now to find out whether Boston Beer is a buy today.

#pitch{ margin-bottom: 15px; }

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.

Were Cisco's Earnings Really That Good?

On Wednesday, Cisco (NASDAQ: CSCO  ) posted solid results for the fiscal third quarter. Investors reacted positively and its stock price jumped 13%, nearing its 52-week high. After such a great run, is Cisco still a sound value play?

A few specs
There may have been a lingering hangover heading into Cisco's earnings release after IBM's (NYSE: IBM  ) less-than-stellar first-quarter results. IBM isn't just a bellwether for the industry. IBM, like Cisco, is in the process of shifting its business focus to high-growth areas, like cloud computing. After a rather paltry 3% increase in non-GAAP income compared to the prior year -- which missed analyst estimates -- investors were unimpressed with IBM's transition efforts, and a $20-a-share sell-off ensued.

Cisco shareholders needn't have worried. CEO John Chambers recognizes the future is "cloud, mobility and video all coming together," and it's beginning to pay off. Not only did fiscal Q3's non-GAAP net income of $0.51 a share beat analyst estimates -- expectations were for $0.49 -- Cisco also notched its ninth straight quarter of record revenue. Cisco maintained its run of positive cash flows, too, boosting what was already a rock-solid balance sheet, including $47.4 billion in cash and equivalents.

The icing on the cake was Cisco's stock repurchases. After the cheering subsides, many stock buyback programs end up being little more than good PR. But in keeping with its strong Q3, Cisco nailed that, too. By the end of the quarter, Cisco had purchased (and retired) a total of 3.8 billion shares at an average price of $20.35 a share; that compares to its closing price of $23.89 on May 16. That's the way share buybacks are supposed to work.

Going forward
After its nice run-up, concerns regarding Cisco's value relative to its competitors are legitimate; shares aren't trading in the high-$16 range anymore.

But even after its 13% jump in share price, Cisco's trailing P/E of 13.95 remains the lowest in the sector, and its forward P/E of just over 11 is even more attractive. For some perspective, Cisco is trading at about a one-third of Ericsson's trailing earnings, and its operating margin is three times that of Juniper Networks and close to five times Ericsson's.

As Chambers said, "Cisco is executing at a very high level," and yet it remains one of the cheapest alternatives around. More proof? Juniper is down over 9% this year, while Cisco shareholders have enjoyed a 21% jump, yet Cisco still trades at a lower multiple than Juniper.

And let's not neglect Cisco's income component. Of its primary competitors, only Ericsson's 3.47% dividend yield can match Cisco's 2.85%. Juniper Networks, with its $9 billion market cap, (wisely) sinks what it can back into the business, not into shareholders' pockets via a dividend. Even IBM, with its 1.86% yield, can't touch Cisco from a dividend perspective.

Some Cisco shareholders might be tempted to take gains after Thursday's run-up, but long-term Fools shouldn't be tempted. At $16.80 a share in November, Cisco was an absolute steal. At $24 a share today, nothing much has changed: Cisco remains a strong growth and income alternative.

Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool's premium report. Click here now to get started.

#pitch{ margin-bottom: 15px; }

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.

Top India Companies To Buy Right Now

LONDON -- Fashion retailer�SuperGroup� (LSE: SGP  ) announced a solid trading performance in Q4 in a trading update this morning, with total group sales increasing by a healthy 15.8% to 86.6 million pounds.

Total retail sales rose 10.9% on Q4 2011-12, to 拢43.8m, while wholesale sales for the quarter soared 20.2% to 43 million pounds, with SuperGroup "well placed to deliver underlying profit before tax in line with market expectations."

Across the 52 weeks to 28 April 2013, total group sales increased by 14.7% to 360.1 million pounds, with retail seeing sales growth of 18.3% for the year and the wholesale division reporting sales growth up 9.2%.

The owner of the Superdry label has strong international demand for the brand, too, with the portfolio of franchised locations increasing by five during the quarter to 144, with two stores opened apiece in France and Spain, and one each in Denmark, India, and Lebanon (with stores closing in Italy and Jordan).

Top India Companies To Buy Right Now: (JAINIRRIG.BO)

Jain Irrigation Systems Limited, an agri-business company, primarily engages in the manufacture and sale of irrigation systems, piping products, agro processed products, and plastic sheets. It offers irrigation systems and components comprising drip irrigation systems, sprinkler irrigation systems, plastic control and safety valves, fertigation systems and chemigation equipment, and water filters; PVC pipes, PE pipes and PE pipe fittings, HDPE pipes, cable duct pipes, and gas pipes; and PVC plastic sheets and poly carbonate sheets. The company also provides food processing products, such as dehydrated onions and vegetables; and agriculture products, including biofertilizers, green houses plant nurseries, and tissue cultures, as well as processed fruits. In addition, it offers solar water heating systems, solar photovoltaic systems, and biogas power plants; hybrid and grafted plants; and poly and shade houses, as well as provides services turnkey project services, and agric ultural and engineering consultancy services. Jain Irrigation Systems Limited offers its solutions and services for the urban household, urban housing, community development, mining, plant tissue culture, chemical, oil and gas exploration, optic fiber ducting, advertisement and signage, landscaping, water shed development, waste land development, fruit and vegetable processing, and farm production and management markets, as well as for small farmers, green houses, and sugar factories. It primarily operates in India, Europe, and North America. The company was founded in 1963 and is based in Jalgaon, India.

Advisors' Opinion:

• [By Matthews]

  Jain Irrigation Systems Ltd headquartered in Jalgaon, Maharashtra manufactures drip and sprinkler irrigation systems and related components. The company also makes PVC, polyethelene, piping systems, processed fruits, dehydrated onions and vegetables, greenhouses, bio-fertilizers; solar water heating systems and solar photovoltaic appliances (Solar lighting systems) etc. All the products are made bearing in mind the need to conserve nature's precious resources through substitution or value addition.

  Jain Irrigation Systems is the largest irrigation company in India and also the world’s second largest. The company has the largest pool of agricultural scientists, engineers and technicians in the private sector.

Top India Companies To Buy Right Now: (RELIANCE.NS)

Reliance Industries Limited, together with its subsidiaries, engages in the exploration, development, and production of oil and gas in India and internationally. It also produces and markets petrochemical products, such as polyethylene, polypropylene, polyvinyl chloride, poly butadiene rubber, polyester yarn, polyester fiber, purified terephthalic acid, ethylene glycol, olefins, aromatics, linear alkyl benzene, butadiene, acrylonitrile, caustic soda, and polyethylene terephthalate. In addition, the company involves in refining petroleum products, including liquefied petroleum gas, propylene, naphtha, gasoline, jet/aviation turbine fuel, kerosene, high speed diesel, sulphur, and petroleum coke, as well as engages in lubricants and petroleum retail business. Further, it offers chemicals, such as linear alkyl benzene; and polyester and fiber intermediates, such as paraxylene, purified terephthalic acid, and mono ethylene glycol, as well as staple fiber filament yarns, texturi sed yarns, twisted/dyed yarns, stretch yarns, cotton yarns, hollow fibers, secondary reinforcement products, and polyethylene terephthalate. Additionally, the company produces textiles, such as suitings, shirtings, readymade garments, as well as ready-to-stitch, take away fabrics. It also operates retail stores, including food and grocery specialty stores; mini hypermarkets; hypermarkets; electronics specialty stores; Apple stores; apparel specialty stores; health, wellness, and pharma specialty stores; footwear specialty stores; jewelry specialty stores; convenience shopping; books, music, toys, gifts, kitchen solutions, furniture, furnishing and home ware, and automotive services and products specialty stores, as well as offers transportation fuels, fleet management services, highway hospitality services, and vehicle care services. In addition, the company focuses on SEZ development and telecom/broadband businesses. Reliance Industries Limited was founded in 1966 and is ba sed in Mumbai, India.

Advisors' Opinion:

• [By Roger]

  The Reliance Group, founded by Dhirubhai H. Ambani is India's largest private sector enterprise. Starting with textiles in the late seventies, Reliance are now into polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. Group's annual revenues are in excess of US$ 44 billion.

  The flagship company, Reliance Industries Ltd, is a global Fortune 500 company and is the largest private sector company in India. Reliance industries have grown to giant proportions and if you wish your money to grow likewise, you can invest in Reliance – and your money will be safe.

Top 10 Communications Equipment Stocks To Buy For 2014: (TECHM.NS)

Tech Mahindra Limited provides information technology (IT) services to the telecommunications industry worldwide. Its IT solutions comprise consulting services, such as strategy planning, assessment, procurement, and re-engineering solutions, as well as planning, audits, and best practices; system integration and transformation services; managed services, including application management, infrastructure management, revenue management, and mobile virtual network enabler services; application development, maintenance, and support services; B/OSS solutions; and business intelligence and data management solutions. The company also offers network solutions and services, including network lifecycle, network integration and testing, data quality management, managed network, and network solutions; and infrastructure management services comprising data centre, managed network, application support, and end user services. In addition, it provides security services, such as security g overnance and compliance, application security consulting, network and system security, business continuity and DR consulting, identity and access management, managed security, security products, and cloud security solutions; business process outsourcing (BPO) services, including customer relationship management, F and A, data analytics, and human resources and enterprise management; value added services comprising enterprise mobility, content, and embedded services; and product engineering services consisting of signaling and switching, wireless infrastructure, hardware and embedded systems, and network management, as well as access, datacom, and transport. Further, the company offers business process management, cloud computing, SAP, and applications testing services, as well as portal solutions. It serves telecom service providers, telecom equipment manufacturers, BPOs, independent software vendors, and non telecom vertical customers. The company was founded in 1986 and i s based in Pune, India.

Advisors' Opinion:

• [By ChemTrade]

  Satyam, renamed as Mahindra Satyam was bought by Tech Mahindra in April last year after being heavily damaged by India's biggest corporate scandal.

  The company is a provider of information technology services to the telecoms industry. Its net profit in January-March, its fiscal fourth quarter, fell to 2.27 billion rupees ($51 million) from 2.30 billion reported a year ago.

  Tech Mahindra Ltd (TEML.BO) has reported a 1.3 percent fall in quarterly profit, weighed down by interest costs on borrowings to fund its acquisition of Satyam Computer Services. Although there are some setbacks, the company is in the process of recovery and backed by the powerful and consistently successful Mahindra group and the company will bounce back to add to shareholders wealth.

Top India Companies To Buy Right Now: (WIPRO.NS)

Wipro Limited provides information technology (IT) products and services, and consumer care and lighting products primarily in India, the United States, and Europe. The IT Services segment provides IT and IT enabled services, including software application development, application maintenance, research and development services for hardware and software design, data center outsourcing services, and business process outsourcing services. The IT Products segment sells a range of personal desktop computers, servers, and notebooks. This segment provides computing, storage, networking, security, and software products. It also acts as a value added reseller of desktops, servers, notebooks, storage products, networking solutions, and packaged software for various brands, as well as delivers hardware, software products, and other related deliverables. This segment serves enterprises in the government, defense, IT and IT-enabled services, telecommunications/telecom service providers , manufacturing, and banking sectors. The Consumer Care and Lighting segment manufactures, distributes, and sells personal care products, baby care products, lighting products, and hydrogenated cooking oils. It provides products in the toilet soaps, toiletries, deodorants, wellness, skincare, and hair care categories; and commercial lighting, office modular furniture, and security solutions. The company also manufactures cylinders and truck hydraulics; distributes hydraulic steering equipment and pumps, motors, and valves for international companies; and provides water solutions business, as well as provides consulting on renewable energy solutions. Wipro Ltd. has a strategic partnership with Red Hat, Inc. Wipro was founded in 1945 and is headquartered in Bangalore, India.

Advisors' Opinion:

• [By Bill]

  Wipro is headquartered at Bangalore and its core business areas covers infrastructure solutions, consumer care and certain professional and business solutions. The company, for long, was known as one of the largest independent R&D Services provider in the world.

  Highlights of the Results for the Quarter ended March 31, 2010 speak volumes about the company’s splendid performance. IT Services Revenue in constant currency was $1,180 million, with a sequential increase of 4.7%. On a year to year basis, total Revenues were Rs. 69.83 billion ($1.55 billion1), representing an increase of 8% over the same period last year.