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Your Daily Profit

 

July 15, 2009

 

*****Small-cap Update

*****What China and Buffett Have in Common

*****Intel!

*****Newsletter Advisors Wednesday

 

Fellow Investor,

 

Stocks jumped today after consecutively back to back good reports from Goldman Sachs (NYSE:GS) and Intel (Nasdaq:INTC) as well as a surprise from Gannett (NYSE:GCI) that it beat profit estimates by 9 cents, driving shares up 28%.

 

Good news kept flowing as investors were treated to revisions from the Federal Reserve Open Market Committee that the economy will shrink from 1% to 1.5% in 2009 as opposed to its earlier prognostication of 1.3% to 2%. The committee raised its inflation projection for 2010 to a range of 1.2% to 1.8%.

 

The Dow was up sharply by 256 points to close at 8,616, the highest its been in a month. The Nasdaq closed up 63 points to 1,863 and the S&P 500 roared to 933, up 27 points from yesterday’s close at 906.

 

Small-cap stocks fared well with the Russell 2000 closing at 509, up 15 points.

 

Today’s volume leaders in the small-cap space include yesterday’s leader, CIT Group (NYSE:CIT) with over 74 million shares traded, although trading was halted before the close on impending news concerning discussion with the federal government. Other small-cap volume leaders include Huntington Bancshares (Nasdaq:HBAN), and Sirius XM Radio (Nasdaq:SIRI).

 

Small-cap gainers were lead by Targacept (Nasdaq:TRGT) up 137% after news broke that its depression treatment drug candidate, currently called TC-5214, was able to significantly outperform a placebo drug in testing on patients with major depression disorders. The company announced that it expects to start late-stage trials of the drug in Q2 2010 and is in talks with several potential partners to help complete the drug’s development.

 

Other small-cap gainers include a one-time holding with SmallCapInvestor PRO, Brigham Exploration (Nasdaq:BEXP) up 23%; Ferro Corporation (NYSE:FOE) up 35%; and beleaguered newspaper giant Gannett (NYSE:GCI) up 30%.

 

 

*****If you’ve ever wondered what it’s like to be Warren Buffett and have more cash than you can spend or invest, just ask China. China just announced that it has over $2 trillion in foreign reserves.

 

That is an unbelievable amount of cash to have accumulated. Bloomberg reports that China’s reserves doubled in less than 3 years.

 

This much money means two things: China can support it’s GDP growth as long as it chooses to; and, China will continue to buy Treasuries.

 

Sherman Chan, a Moody’s economist in Australia said, China has the strongest prospects out of all major economies, so it is not surprising that hot money is flowing back…China has certainly recovered from the downturn, and it is on a strong footing now.”

 

That’s why we’ve been loading up on Chinese stocks in SmallCapInvestor Pro. It’s not too late to profit from our top Chinese stocks. Click here for details.

 

*****Yesterday morning it was Goldman Sachs (NYSE:GS). Then last night, it was Intel (Nasdaq:INTC). The world’s biggest chip maker crushed earnings, but then did the unthinkable and offered a 3rd quarter revenue forecast that is as much as 14% higher than what analysts were expecting.

 

Between Goldman and Intel, I’ll take Intel. Intel is selling a product. And apparently, consumer demand for Intel’s product is stronger than anyone imagined. Sure, much of the strength is coming from Asia (back to my China comment above), but, so what? Revenue is revenue.

 

Other semiconductor companies were rallying in after hours, including Texas Instruments (NYSE:TXN) and Advanced Micro Devices (NYSE:AMD).  

 

As for Goldman, I didn’t think that stock will stay over $150. Not that it matters. TradeMaster’s Jason Cimpl has made money shorting Goldman. But as for me, Goldman is on the “Never Short” list along with Google (Nasdaq:GOOG) and Apple (Nasdaq:AAPL). They may have bad days, their stocks may get a beat-down once in a while, but these are solid companies with a penchant for finding profits no matter what the economy is doing.

 

*****Government actions are currently filling in for an actual economy. That’s how it is in our new “Managed America.” Most expect the heavy hand of government to be temporary, and that Managed America can end sooner than later. We’ll see…

 

I expect the conditions of Managed America – high unemployment, sluggish growth, more regulations, higher taxes, and inflation to last years instead of months. And I’ve outlined my expectations for investing under these conditions in my new Special Issue of Top Stock Insights. The article is titled Managed America: The New Economic Reality. It’s just been released today. You can sign up for Top Stock Insights and get my blueprint for profiting in Managed America. Click here for your copy now.

 

 

Ian Wyatt

Editor

Daily Profit

 

P.S. Do you hold GS, INTC, AMD, or TXN in your portfolio? How have your profits been? What made you decide to buy them when you did? I’d love to hear about your experience, and of course, respond to any questions you may have. Email me at editorial@247investor.com.





Posted 07-15-2009 4:24 PM by Ian Wyatt
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