Find out: When is right time to begin investing

Below is the verbatim transcript of Harsh Roongta.

Caller Q: Given the market is so volatile these days, should a small investor like me start investing now? Or is it better to wait as the market might fall even further?

A: For a lay investor or anybody who does not do investing for a living, I would say do not try and time the market. Market by the very nature is volatile. However, what serves investors well is a systematic investment. So, do not worry whether the market is in a bear phase or a bull phase. A small investor can continue investing in equities systematically. As long as your time horizon is seven-ten years, history shows, one will make money. Pick up a good mutual fund. That is the right way to invest. To reduce risks look at Nifty index fund or a bluechip fund.

Caller Q: I can invest Rs 5,000 per month. How should I divide this amount between mutual funds and gold?

A: Assuming five-six years as your time horizon and if you want to invest in gold then I would recommend strongly that you should do it through a gold fund because that has several advantages over investing in physical gold and even the gold investments should be systematic rather than one shot. So, if you have Rs 5,000 then do Rs 500 in gold fund on a monthly basis and for the balance Rs 4,500, I would recommend a balanced fund, which has about 70-80 percent in equity and 20-30 percent in debt.

The good thing about a balanced fund is automatic rebalancing, which means that when the equity markets are doing well the fund manager is forced to sell some equity to maintain the balance. Reverse when the markets are not doing well he is forced to buy equity. So, there is a contrarian impact inbuilt into the system structure itself. You get the benefit of debt, even the returns on debt is tax free when it is a balanced fund. So, I would say Rs 500 in a gold fund, Rs 4,500 in a balanced fund.

Hot Blue Chip Companies To Invest In 2014

As Federal Chairman Ben Bernanke concluded his two-day tour of Capital Hill today, and investors were handed a better-than-expected jobless claims report, both the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and the S&P 500 (SNPINDEX: ^GSPC  ) �set new all-time record highs. The blue chip index ended the session higher by 78 points, or 0.5%, and set a new all-time closing high at 15,548. It also set a new all-time high at 15,589 during today's session. The S&P 500 rose 8.46 points, or 0.5% and also set a new record closing high at 1,689, and a new intraday high at 1,693. While the Nasdaq didn't set any new records today, it did increase by 0.04%.�

The better-than-expected jobless claims number came in at 334,000 last week as analysts were expecting 345,000 for the week.�This report, along with a number of earnings reports, helped push stocks higher. This morning, I explained why three of the Dow's components were moving lower due to lackluster earnings results;�now let's take a look at a few of the Dow's components that ended as big winners as a result of strong earnings today.

Hot Blue Chip Companies To Invest In 2014: (BAJAJ-AUT.NS)

Bajaj Auto Limited manufactures and sells scooters, motorcycles, and three wheeler vehicles and spare parts in India and internationally. It sells its two wheeler products under Avenger, Pulsar, Discover, Platina, and Ninja brands. The company also provides three wheeler commercial vehicles, such as goods and passenger carriers. It sells its products and services through a network of two-wheeler and three-wheeler dealers. The company was founded in 1945 and is headquartered in Pune, India. Bajaj Auto Limited operates independently of Bajaj Holdings & Investment Limited as of May 28, 2008.

Advisors' Opinion:

• [By Admin]

  Unlike cars which are mostly bought through loans, three out of four two-wheelers are bought with own cash. Bajaj Auto would thus be able to bypass the interest rate impact as it seeks growth. After the exit of Honda from Hero Honda, the spotlight is on the second largest two-wheeler maker in the country. Investors who are bearish on Hero Honda could shift to Bajaj for the two-wheeler play. Under managing director Rajiv Bajaj, the company is focussing on a stronger product line and growth opportunity in emerging markets.

Hot Blue Chip Companies To Invest In 2014: Angoss Software Corp. (ANC.V)

Angoss Software Corporation provides predictive analytics software and solutions primarily to financial services, insurance, retail, health care, and information communication and technology organizations. The company�s products include KnowledgeHUB, a cloud-based analytical platform that combines technologies with deployment processes and professional services, which allows clients to convert analytical insight into action; KnowledgeCLOUD industry solutions, through KnowledgeHUB, deliver predictive analytics in the cloud for organizations in the areas of sales, marketing, and risk management; and KnowledgeSCORE, a cloud-based predictive sales analytics solution for customer relationship management. Its products also comprise KnowledgeEXCELERATOR, a visual data discovery and prediction tool for business analysts and knowledge workers; and KnowledgeSTUDIO, a predictive analytics solution, which along with text analytics integration enables mining and analyzing unstructured data, such as social media, call center logs, emails, and other forms of text-based communications, as well as KnowledgeSERVER, a deployment platform. In addition, the company offers other predictive analytics software, including KnowledgeSEEKER and StrategyBUILDER; and data mining consulting, engineering, and user-training services. It primarily operates in North America and Europe. Angoss Software Corporation is based in Toronto, Canada.

Top 10 Stocks To Invest In 2014: Essential Energy Services Ltd (ESN.TO)

Essential Energy Services Ltd., together with its subsidiaries, provides oilfield services that are related to the ongoing servicing of producing wells and new drilling activity for oil and gas producers in western Canada and Colombia. The company operates in two segments, Well Servicing, and Downhole Tools and Rentals. The Well Servicing segment offers well completion and production/workover services through its fleet of coil tubing rigs, nitrogen and fluid pumpers, service rigs, rod rigs, and hybrid drilling rigs. As of March 12, 2012, it had a fleet of 49 coil tubing rigs, 10 nitrogen pumpers, 15 fluid pumpers, 57 service rigs, 14 rod rigs, and 5 hybrid drilling rigs in Canada; and 2 coil tubing rigs, 2 nitrogen pumpers, 2 service rigs, and 3 rod rigs in Colombia. The Downhole Services and Rentals segment engages in the sale and rental of downhole tools, including the Tryton MSFS, retrievable and permanent packers, flow control accessories, liner hanger systems, bridge plugs, casing scrapers, cement retainers, and selective/straddle simulation tools for completion, production, and workover projects. This segment is also involved in the rental of oilfield equipment comprising drill pipe, heavy weight pipe, collars, degassers, blowout preventer rams, spools, pipe racks, handling tools, stabilizers, and reamers. Essential Energy Services Ltd. is headquartered in Calgary, Canada.

Newmont Posts 2Q Prelim Operational Update - Analyst Blog

Best Medical Stocks To Watch For 2014

Gold mining giant Newmont Mining Corporation (NEM) has declared its preliminary gold and copper production for the second quarter of 2013. The company has also reaffirmed its outlook for 2013.

Newmont's attributable gold production for second-quarter 2013 amounted to 1.167 million ounces compared with 1.182 million ounces registered in second-quarter 2012 and 1.165 million ounces in first-quarter 2013. Attributable copper production for second-quarter 2013 was 34 million pounds compared with 38 million pounds in both second-quarter 2012 and first-quarter 2013.

Attributable gold sales were 1.213 million ounces for second-quarter 2013 compared with 1.140 million ounces in both second-quarter 2012 and in first-quarter 2013. Attributable copper sales were 37 million pounds for second-quarter 2013 compared with 28 million pounds for second-quarter 2012 and 31 million pounds for first-quarter 2013.

Newmont also maintained its outlook for 2013 and anticipates attributable gold and copper production to be roughly 4.8 million to 5.1 million ounces and 150 million to 170 million pounds, respectively.

Newmont's revenues and profit declined by double digits in first-quarter 2013 hurt by lower grade and shipping delays. Adjusted earnings and sales missed the Zacks Consensus Estimates.

Attributable gold production fell due to lower production across North and South America. Weaker gold and copper pricing affected the results. Newmont may continue to face headwinds due to increasing mining and non-mining costs.

Newmont is focused on reviewing the potential opportunities to improve its cash flow and preserve financial flexibility under the dominant volatile metal price environment. It is slated to release its second-quarter 2013 results after the market closes on Jul 25.

Newmont currently carries a Zacks Rank #4 (Sell).

O! ther companies in the mining industry with favorable Zacks Rank are NovaGold Resources Inc. (NG), Pretium Resources Inc. (PVG) and Lake Shore Gold Corp. (LSG). All of them retain a Zacks Rank #2 (Buy).

Top Undervalued Companies To Watch In Right Now

“I don’t know why this strategy isn’t written about more in the press,” Marty Sass innocently remarked. “Maybe it sounds too complicated."

The strategy to which Sass referred is “covered call option writing against attractive equities with growing dividends combined with the purchase of index put options for downside protection.”

Not complicated at all.

While it might sound facetious, when the CEO and chairman of independent investment management firm MD Sass with $8 billion under management, explained the strategy, it really is easily understood.

“It has three ingredients,” Sass told ThinkAdvisor on Thursday. “The first is buying undervalued, high quality stocks with better yields than the S&P 500 delivers. The second is selling covered calls with attractive premiums out of the money. The last is buying index puts out of the money for additional downside protection.”

Top Undervalued Companies To Watch In Right Now: ISTA Pharmaceuticals Inc.(ISTA)

ISTA Pharmaceuticals, Inc., a pharmaceutical company, discovers, develops, and markets remedies for diseases and conditions of the eye in the United States. It offers products to treat allergy and serious disease of the eye; and therapies for ocular inflammation and pain, glaucoma, dry eye, and ocular and nasal allergies. The company provides BROMDAY for the treatment of postoperative inflammation and reduction of ocular pain in patients who have undergone cataract extractions; BEPREVE for ocular itching associated with allergic conjunctivitis; ISTALOL for the treatment of glaucoma; and VITRASE for use as a spreading agent. Its products under development include T-Pred for steroid responsive inflammation and allergic conjunctivitis; Strong steroid for ocular inflammation; REMURA for the treatment of dry eye syndrome; and BROMDAY (lower concentration) for postoperative inflammation and reduction of ocular pain. The company?s products under development also comprise Bepotast ine nasal and Bepotastine nasal combination for allergic rhinitis. In addition, it is developing iganidipine to enhance ocular nerve blood flow; prostaglandin, a formulation of latanoprost, for the treatment of glaucoma; and ecabet sodium for dry eyes. ISTA Pharmaceuticals, Inc. sells its products to drug wholesalers, retailers, and distributors, such as chain of drug stores, hospitals, clinics, and government agencies, as well as health maintenance organizations and other institutions. The company was formerly known as Advanced Corneal Systems, Inc. and changed its name to ISTA Pharmaceuticals, Inc. in March 2000. ISTA Pharmaceuticals, Inc. was founded in 1992 and is headquartered in Irvine, California.

Advisors' Opinion:

• [By Mark]

  ISTA Pharmaceuticals, Inc. is a commercial stage, multi-specialty pharmaceutical company developing, marketing and selling its own products in the United States. Its EPS forecast for the current year is 0.17 and next year is 0.54. According to consensus estimates, its topline is expected to grow 16.65% current year and 19.17% next year. It is trading at a forward P/E of 19.85. Out of three analysts covering the company, two are positive and have buy recommendations and the other has a hold rating.

Top Undervalued Companies To Watch In Right Now: Avino Silver & Gold Mines Ltd. (ASM.V)

Avino Silver & Gold Mines Ltd. engages in the acquisition, exploration, and development of mineral properties in Canada and Mexico. It primarily explores for gold, silver, copper, zinc, and lead deposits. The company holds interest in the Avino Silver mine covering approximately 4,364 hectares located in Durango, Mexico. It also owns 100% interest in the Eagle property located in the Yukon, Canada; and the Aumax, Olympic-Kelvin, and Minto properties situated in British Columbia, Canada. Avino Silver & Gold Mines Ltd. was founded in 1968 and is headquartered in Vancouver, Canada.

Best Casino Stocks To Watch Right Now: Kingsmen Creatives Ltd(5MZ.SI)

Kingsmen Creatives Ltd., an investment holding company, provides integrated marketing solutions. The company?s Exhibitions and Museums segment produces exhibition displays for trade shows and promotional events; interiors and displays for museums and visitor centers; and thematic and scenic displays for theme parks. Its Interiors segment provides interior fitting-out services to commercial and retail properties. Kingsmen?s Research and Design segment offers design works for up market specialty stores, departmental stores, eateries, museums, visitors? centers, corporate offices, showrooms, trade shows, events, promotional functions, and festivals. The company?s Integrated Marketing Communication segment involves in the provision of event management and branding consultancy services. It also provides electrical engineering, graphic design and production services, advertising, and design consultancy and planning management, as well as design and construction facilities to exhibitors. The company operates primarily in Singapore, Greater China, the United States, Canada, Malaysia, rest of Asia, Europe, Vietnam, Indonesia, and the Middle East. Kingsmen Creatives Ltd. was founded in 1976 and is based in Singapore.

Top 10 Heal Care Companies For 2014

Tomorrow, Adobe Systems (NASDAQ: ADBE  ) will release its latest quarterly results. Lately, investors have faced two very different visions of the software company, with backward-looking results pointing to steep contractions in revenue and earnings but the share price suggesting optimism about the company's future.

For many casual investors, Adobe's most commonly used products might seem like pure loss leaders, as many users don't pay for its ubiquitous PDF reader. But although some recent moves with its higher-value software packages are hurting revenue in the short run, they could pay off for the company quite nicely over time. Let's take an early look at what's been happening with Adobe Systems over the past quarter and what we're likely to see in its report.

Stats on Adobe Systems

Top 10 Heal Care Companies For 2014: Montefibre(MFBI.MI)

Montefibre S.p.A. produces and sells polyster and acrylic fibres in Italy. The company?s products are used in apparel and knitwear, automotive, medical and hygienic, building and geotex, filtration, outdoor fabrics, home textiles, oeko textiles, and interlining applications. It offers its products under the Lotan, Leacril, Myoliss, and Ricem names. The company was founded in 1918 and is headquartered in Milan, Italy. Montefibre S.p.A. is a subsidiary of Orlandi S.p.A.

Top 10 Heal Care Companies For 2014: Kohlberg Capital Corporation(KCAP)

Kohlberg Capital Corporation is a private equity and venture capital firm specializing in buyouts and mezzanine investments. It focuses on mature and middle market companies. The firm structures its investments through senior debt, second lien debt, secured and unsecured subordinated debt, mezzanine debt, and equity. It invests in all sectors except cyclical industries. The firm invests equity in both minority and control transactions alongside other equity investors. It invests through its own balance sheet. Kohlberg Capital Corporation is based in the New York, New York.

Hot Medical Companies To Invest In Right Now: Era Carbon Offsets Ltd (ESR.V)

ERA Carbon Offsets Ltd., through its subsidiary, ERA Ecosystem Restoration Associates Inc. engages in the development and supply of forestry-based carbon offsets to the carbon offset markets in Canada, the United States, Africa, South America, and Australasia. The company provides project development and co-development services, including carbon modeling, financing, and consulting. It offers project development consulting services in the areas feasibility assessments, forest modeling, and methodology development. The company focuses on afforestation/reforestation, improved forest management, and reducing emissions from deforestation and degradation projects. It works with independent landowners, regional and state governments, land trusts, conservation NGOs, and intermediaries for evaluating, implementing, verifying, and commercializing forest carbon projects. The company is headquartered in North Vancouver, Canada.

Top 10 Heal Care Companies For 2014: QR Energy LP(QRE)

QR Energy, LP, through its subsidiary, QRE Operating, LLC, engages in the acquisition, production, and development of onshore crude oil and natural gas properties in the United States. As of March 31, 2011, its properties consisted of working interests in 2,140 gross producing wells located in Alabama, Arkansas, Kansas, Louisiana, New Mexico, Oklahoma, and Texas. QRE GP, LLC operates as the general partner of the company. QR Energy, LP was founded in 2006 and is based in Houston, Texas.

Top 10 Heal Care Companies For 2014: GSI Group Inc.(GSIG)

GSI Group Inc. designs, develops, manufactures, and sells laser-based solutions, laser scanning devices, and precision motion and optical control technologies worldwide. The company?s Laser Products segment provides lasers and laser-based systems for photonics-based applications, such as cutting, welding, marking, engraving, micro-machining, and scientific research. Its Precision Motion and Technologies segment designs, manufactures, and markets air bearing spindles, encoders, thermal printers, laser scanning devices, and light and color measurement systems to original equipment manufacturers. The company?s Semiconductor Systems segment offers laser based production systems for semiconductor, microelectronics, and electronics manufacturing. This segment?s products comprise WaferRepair for dynamic random access memory, flash memory chips, and LCDs; WaferMark for silicon suppliers and integrated circuit factories; and WaferTrim and Circuit Trim for analog and mixed signal sensor and chip resistor devices, as well as for resistor devices. The company sells its products primarily through direct sales force, resellers, distributors, and system integrators. It serves industrial, electronics, automotive, medical, packaging, aerospace, scientific, semiconductor, lighting, military, and motion picture markets. The company was formerly known as GSI Lumonics Inc. and changed its name to GSI Group Inc. in 2005. GSI Group Inc. was founded in 1970 and is based in Bedford, Massachusetts.

Top 10 Heal Care Companies For 2014: Echo Global Logistics Inc (ECHO)

Echo Global Logistics, Inc. (Echo) is a provider of technology enabled transportation and supply chain management services. Its Web-based technology platform compiles and analyzes data from its network of over 24,000 transportation providers to serve its clients' shipping and freight management needs. Its technology platform, composed of Web-based software applications and a database, enables it to identify excess transportation capacity, obtain competitive rates, and execute thousands of shipments every day. It focuses on arranging transportation across truckload (TL) and less than truck load (LTL), and it also offers small parcel, inter-modal (which involves moving a shipment by rail and truck), domestic air, expedited and international transportation services. Its logistics services include rate negotiation, shipment execution and tracking, carrier management, routing compliance, freight bill audit and payment and performance management reporting, including executive dashboard tools. Effective January 1, 2011, the Company acquired Nationwide Traffic Services, LLC. (Nationwide) Effective July 1, 2011, the Company acquired Advantage Transport, Inc. (Advantage). Effective December 1, 2011, the Company acquired the stock of Trailer Transport Systems (TTS). In June 2012, the Company acquired Plum Logistics, LLC. In July 2012, it acquired all of the assets of Shipper Direct Logistics, Inc. In October 2012, the Company acquired Sharp Freight Systems, Inc.

The Company�� clients fall into two categories, enterprise and transactional. Its enterprise clients outsource their transportation management function to Echo. It enters into multi-year contracts with its enterprise clients. As part of its value proposition, it also provides core logistics services to these clients, including the management of both freight expenditures and logistical issues surrounding freight to be transported. It provides transportation and logistics services to its transactional clients on a shipment-by-shipment basis.! It is a non-asset-based provider of technology enabled transportation and logistics services. Through its carrier network, it provides transportation services using a range of modes of transportation.

Transportation Services

The Company provides Truckload (TL) services across all TL segments, including dry vans, temperature-controlled units and flatbeds. Using its LaneIQ technology, it provide advanced dispatch, communication and data collection tools and capacity information to its clients on a real-time basis. The Company provides less than truckload (LTL) services involving the shipment of single or multiple pallets of freight. Using its RateIQ 2.0 technology, it obtains real-time pricing and transit time information for every LTL shipment from its database of LTL carriers. It provides small parcel services for packages of all sizes. Using its EchoPak technology, it delivers cost saving opportunities to its clients. Inter-modal transportation is the shipping of freight by multiple modes, using a container that is transferred between ships, railcars or trucks. It offers inter-modal transportation services for its clients, which utilizes both trucks and rail. The Company provides domestic air and expedited shipment services for its clients when traditional LTL services do not meet delivery requirements. It uses ETM track and trace tools for up to date information to its clients through EchoTrak. The Company provides air and ocean transportation services for its clients, offering a comprehensive international delivery option to its clients.

Logistics Services

In addition to arranging for transportation, the Company provides logistics services, either on-site (in the case of some enterprise clients) or off-site, to manage the flow of those goods from origin to destination. Its core logistics services include rate negotiation; procurement of transportation, both contractually and in the spot market; shipment execution and tracking; carrier management, ! reporting! and compliance; executive dashboard presentations and detailed shipment reports; freight bill audit and payment; claims processing and service refund management; design and management of inbound client freight programs; individually configured Web portals and self-service data warehouses; enterprise resource planning (ERP) integration with transactional shipment data, and integration of shipping applications into client e-commerce sites. Customers communicate their freight needs, typically on a shipment-by-shipment basis, to the individual or team responsible for their account. Customers communicate with it by means of telephone, fax, Internet, e-mail, or Electronic Data Interchange (EDI).

Technology Platform

The Company�� ETM technology platform allows it to analyze its clients' transportation requirements and provide customized shipping recommendations. It collects and store pricing and market capacity data in its ETM database from each interaction with carriers, and its database expands as a result of these interactions. It has also developed data acquisition tools, which retrieve information from both private and public transportation databases, including subscription-based sources and public transportation rate boards, and incorporate that information into the ETM database. Its clients communicate their transportation needs to it electronically through its EchoTrak web portal, other computer protocols, or by phone. ETM generates pricing and carrier information for its clients by accessing pre-negotiated rates with preferred carriers or using present or historical pricing and capacity information contained in its database. If a client enters its own shipment, ETM automatically alerts the appropriate account executive. After the carrier is selected, either by it or the client, its account executives use its ETM technology platform to manage all aspects of the shipping process.

The Company�� FastLane is an Internet-based Web portal, which allows its carriers! to view ! shipments available for tender, update equipment availability and preferred lanes, check on the status of all unpaid invoices, unbilled shipments, shipments in transit and other information used to resolve any billing discrepancies. There is also a mobile FastLane application, which allows carriers to view similar information remotely. eConnect is a set of tools, which allows the Company�� clients and carriers to interact directly with ETM electronically through any of several computer protocols, including EDI, extensible markup language (XML) and file transfer protocol (FTP). The eConnect tools serve as an electronic bridge between the other elements of its ETM technology platform and its clients' enterprise resource planning (ERP), billing, accounts receivable, accounts payable, order management, back office and e-commerce systems. Through eConnect, its clients are able to request shipping services and receive financial and tracking data using their existing systems.

EchoTrak is an Internet-based Web portal, which connects and integrates its clients with ETM. By entering a username and password, its clients are able to enter orders, display historical and active shipments in the ETM system using configurable data entry screens sorted by carrier, price, delivery date, destination and other relevant specifications. EchoTrak also generates automatic alerts to ensure that shipments are moving in accordance with the client specifications and timeline. There is also a mobile EchoTrak application, which allows customers to perform similar functions remotely. RateIQ2.0 is a pricing engine, which manages LTL tariffs and generates rate quotes and transit times for LTL shipments. RateIQ2.0 also provides integrated tools to manage dispatch, communications, data collection and management functions relating to LTL shipments. LaneIQ is a pricing engine, which generates rate quotes for TL shipments. LaneIQ also provides integrated tools to manage dispatch, communications, headhaul and backhaul data col! lection a! nd management functions relating to TL shipments. EchoPak is a small parcel pricing and audit engine. For each small parcel shipped, EchoPak audits carrier compliance with on-time delivery requirements and pricing tariffs. In addition, EchoPak tracks information for each parcel and is able to aggregate and analyze that data for clients. For instance, clients are able to view shipments by date, business unit, product line and location, and clients can access information regarding service levels and pricing.

The Company�� Shipment Tracking stores shipment information en-route and after final delivery. The shipment data is acquired through its carrier EDI integration, allowing its clients to track the location and status of all shipments on one screen, regardless of mode or carrier. Final delivery information is permanently archived, allowing it to provide its clients with carrier performance reporting by comparing actual delivery times with the published transit time standards.

Document Imaging allows the Company to store digital images of all shipping documents, including bills of lading and delivery receipts. CAS (Cost Allocation System) automatically audits carrier invoices against its rating engine and accounts payable accrual system. If the amounts match, the invoice is automatically released for payment. If the amounts do not match, the invoice is sent to various administrative personnel for manual processing and resolution. CAS also integrates to its general ledger, accounts receivable and accounts payable systems. Accounting includes its general ledger, accounts receivable and accounts payable functions. Accounting is integrated with CAS and EchoIQ. EchoIQ stores internally and externally generated data to support its reporting and analytic functions and integrate all of its core applications with ETM. ETM supports its logistics services, which it provides to its clients as part of its value proposition. Its ETM technology platform is able to track individual shipments ! and provi! de customized data and reports throughout the lifecycle of the shipment, allowing it to manage the entire shipping process for its clients. It also market Flex TMS.

The Company competes with C.H. Robinson Worldwide, Total Quality Logistics, UPS, FedEx, Schneider, Conway, JB Hunt and ABF.

Top 10 Heal Care Companies For 2014: Melbourne IT Ltd (MLB.AX)

Melbourne IT Limited, together with its subsidiaries, provides Internet domain name services, Web hosting, online brand protection and promotion, video content delivery, and managed IT services for small businesses, large enterprises, and governments worldwide. The company offers various digital brand services comprising professional services, which enable online brand creation, protection and management, and reputation optimization to public and private organizations; guidance and administration of global domain name portfolios; online brand monitoring, consulting, and enforcement; and analysis and development of Website traffic. It also offers enterprise services consisting of IT services, infrastructure management, and hosting and cloud based solutions; data base and application management services; and advanced solutions, including media content management and distribution, messaging and collaboration services, and a portfolio of on-demand managed services. In addition , the company develops software and hardware-based digital recording content management solutions for justice and public safety venues. Further, it offers global partner solutions, including registration of generic top level domain names, such as .com, .net, .org, .biz, .info, and .name; .au and .nz domain names through the reseller channels; and other country code domain names, including .us, .co.uk, .fr, .de, and .eu, as well as Web and application hosting services. Additionally, the company provides small and medium business (SMB) eBusiness solutions comprising registration of .au and .nz domain names, other country code domain names, and generic top level domain names; consultative and fulfillment services for search engine marketing, and Website design and development; Website and email application hosting; and other software and services suited to SMB and small office and home office. Melbourne IT Limited was founded in 1996 and is headquartered in Melbourne, Australia .

Top 10 Heal Care Companies For 2014: Claim Post Resources Inc (CPS.V)

Claim Post Resources Inc., a junior exploration company, engages in the acquisition, exploration, and development of mineral resource properties in Canada. The company primarily focuses on exploring and developing base metals and gold properties located in the Abitibi Greenstone Belt Region near Timmins in Ontario, Canada. It holds a 100% interest in the Kamiskotia property comprising 1,195 claim units located in the Godfrey, Turnbull, Jamieson, Robb, Cote, Massey, Mountjoy, and Bonar townships; and a 100% interest in the Dayton Porcupine claims consisting of 49 patented claims in Deloro and Ogden townships, as well as has an option to earn up to 100% interest in the Racetrack Project comprising 103 claim units and 12 patented claims located in Ogden township. Claim Post Resources Inc. was founded in 2005 and is headquartered in Toronto, Canada.

Top 10 Heal Care Companies For 2014: Western Forest Pro Com Stk Npv (WEF.TO)

Western Forest Products Inc. operates as an integrated softwood forest products company. The company is involved in the harvesting of timber; reforestation; forest management; manufacture and sale of lumber and wood chips; sale of logs; and lumber remanufacturing. It processes logs, including western red cedar, douglas fir, hem-fir, yellow cedar, and sitka spruce. Western Forest Products Inc. markets its products directly to lumber distributors, manufacturers, trading houses, and wholesale customers, as well as through sales agencies. The company sells its products approximately in 30 countries worldwide. Western Forest Products Inc. was founded in 1955 and is headquartered in Vancouver, Canada.

Top 10 Heal Care Companies For 2014: 888 holdings ord gbp0.005(888.L)

888 Holdings plc operates as an online gaming entertainment company in Europe, the Americas, and internationally. It owns proprietary software solutions that provide a range of virtual online gaming services over the Internet, including casino, poker, bingo, sport, and games to end users, as well as provides these services through its business to business unit to business partners. The company operates Casino-on-Net.com and ReefClubCasino.com that offer casino games; PacificPoker.com, which provides poker games; 888sport.com that offers sportsbook games; 888ladies.com and winkbingo.com, which provide bingo games; Betmate.com that offers betting exchanges; and 888.info, which allows customers to practice their gaming skills for fun through various casino and poker games. The company also offers social and mobile games; and payment, customer support, and online advertising services. The company was founded in 1997 and is based in Gibraltar, Gibraltar.

U.S. Remains Engine of Global Growth: Cerulli

Happy days are here again, at least according to a new report from Cerulli Associates.

The Boston-based research and consulting firm found global assets under management are set to cross $70.4 trillion by the end of 2013, a full $20 trillion higher than the industry's low point in 2008. It added that this is a conservative estimate that may need upward revision if the global financial markets continue to perform.

“The Cerulli Report: Global Markets 2013” covers both retail and retirement asset management globally, and reports that non-U.S. assets accounts for more than 50% of total assets, but the “engine of growth” remains the United States in the near term.

"It would be churlish not to feel a sense of optimism about the near- and medium-term outlook for the global asset management industry, especially when considering top-line growth," Shiv Taneja, Cerulli's London-based managing director, said in a statement. He adds that even Europe has managed to add $5.9 trillion in assets since 2008.

"The worry, however, is when considering bottom-line growth,” added Yoon Ng, associate director at Cerulli and one of the report's authors. “Here the picture is less well-defined, as many firms-large and small-continue to have to deal with the effects of the financial crisis and margin pressure. The sunny uplands may beckon, but a good guide is going to be essential."

Top Medical Companies For 2014

The report shows that only Japan is slated to show slower asset growth than Europe over the next five years to 2017, but “there is no getting away from the fact that the United States is, and is likely to remain, the sweetest spot, from a global growth standpoint,” according to the report.

"Could it really get to be more than twice bigger than Europe, in asset terms, by 2017? It certainly appears so," Taneja said.

Cerulli's findings suggests that Asia ex-Japan will continue to show the highest growth rate over the five years to 2017, but this top-line figure “must be measured against the region's ability to generate consistently strongly bottom-line growth.”

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Check out Raymond James’ Saut: We’re Smack-Dab in the Middle of a Bull Market.

Dos and don'ts of corporate fixed deposits

10 Best Heal Care Stocks To Invest In 2014

When it comes to investments, all of us would like to earn higher and secured returns. If you also belong to the same category, corporate Fixed Deposits (FDs) pose a good option in these times of high inflation and inflation FD rates. However, one needs to look at following aspects of corporate FDs to understand the characteristics and nature of returns to understand this investment instrument.

Characteristics

1. Corporate FDs usually earn higher interest rates as compared to bank FDs.

2. Like bank FDs, they are good source of monthly, quarterly, half-yearly or yearly interest income.

3. The tenure is flexible, ranging from six months to seven years.

4. Also, there is no tax deduction at source for FDs earning interest of up to Rs 5,000 a year.

5. Unlike bank FDs, corporate FDs give you an option to choose a nominee for your investment.

6. In addition, the operational process is hassle-free, resulting in easy opening of corporate accounts. In some cases, even PAN card is not allowed.

7. On the other hand, corporate FDs are not as secured as bank FDs as all the returns shown are projected and not guaranteed. It means that even if the projected interest rate is of 9%, the returns actually received will be lesser, let�s say, 5% or so.

Comparison of Well-Known Corporate FDs

 

 

 

 

 

 

 

 

 

 

 

 

 

Rating Decoder

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed deposits are credit rated by independent credit rating agencies such as CRISIL, ICRA, etc. Credit rating agencies give ratings to debt instruments on basis of detailed study of the financial and non-financial performance of the company that issues fixed deposit schemes. The rating reveals whether the company will be able to repay the promised amount at maturity or not.

After decoding the ratings of corporate FD, it is important to decide on the basis of the following factors to ensure safety of your money:

1. If rating is same for more than one company, choose the one with better reputation. It necessarily gives an edge to choose a company with better market reputation and performance record, as it will increase the chances of getting good returns. Also, it further decreases the chances of default.

2. Check promoter�s credibility. Credibility, here, includes director and other key persons of the company. Persons known for bad credit discipline and companies with bad repayment track records should be kept away from portfolio.

3. Do not park huge amounts in one company. In case you have huge amount to invest in and find corporate FDs suitable enough, try to diversify your investments by investing in 2-3 different companies, with different investment horizons. This would minimize the chances of loss, even if one of those corporate FD is not giving good returns. Also, it would be advisable to find out whether the funds accumulated were used for stated purpose or not.

4. Invest only if no premature withdrawal is foreseen as premature withdrawal in corporate FDs is difficult to deal with. There are real time instances, where it has been more than 5 years of FD maturity, but the investors are still waiting for proceeds.

Here, if the goal is of utter importance, for which money cannot be compromised, it is advisable to invest in bank FDs, instead of corporate ones.

Issues With Corporate FDs

1. Default risk: These companies� FDs carry �Default Risk�, which means, at maturity they might not be able to return at projected interest rate and default in payment.

2. Unsecured investments: Bank fixed deposits are backed by RBI�s insurance for securing amount up to Rs 1 lakh. It means that in case you have invested in bank FD, you will get Rs 1 lakh, even if the bank defaults in paying you back. However, there is no security like this in corporate FDs, resulting in investor losing all his money.

3. Operational risk: Another problem with corporate FDs is that the companies are slow and irresponsible in maintenance and updation of FD holders� records. Because of this, there can be instances of delayed documentation like receipt of FD, other papers, etc. Also, it can cause problems in case of change of address, etc. as it may take longer.

4. High sales commission attached: The corporate houses, generally, pay hefty commissions to their sales agents to push their FDs well in market. As a result, sales agents do indulge in mis-selling, keeping investors� unaware of the critical aspects of the instrument.

Although we do not say that all the corporate fixed are bad, we only recommend you to take time and study the company before investing in their fixed deposits schemes. In case you have checked these facts and you find that the fixed deposit you are interested in scores good in all those parameters that mattered, your risk will be minimized.

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Salesforce Stays Neutral - Analyst Blog

On Jul 04, we retained our Neutral recommendation on the cloud computing and software company, Salesforce.com (CRM).

On May 24, Salesforce posted modest first-quarter 2014 results with revenues improving on a year-over-year basis and loss per share increasing compared to the year-ago quarter. The quarter's adjusted loss per share of 7 cents was greater than the Zacks Consensus Estimate of 1 cent loss per share.

Salesforce delivered a negative earnings surprise last quarter, which took the four-quarter average to a negative 244.4%. Currently, Salesforce has a Zacks Rank #3 (Hold).

Why a Neutral Stance?

Revenues moved up by 28.3% year over year, as the company witnessed continued demand across all geographies and all of its cloud solutions, supported by a decline in the attrition rate. The company witnessed an increase in revenues across all its business segments, with the Subscription and Support revenues increasing the most. Gross profit expanded 25.7% year over year to $683.6 million. Gross margin was 76.6%, down 160 basis points from the year-ago quarter, as cost of sales continues to increase.

However, continuous increase in research activities has resulted in the increase in R&D expenses. This was one of the main reasons for the 28.6% year over year increase in operating expenses to $728.2 million

The company provided a decent second-quarter 2014 guidance and expects to generate revenues in the range of $931.0 million to $936.0 million. Moreover, Salesforce expects GAAP net loss per share to be in the range of 7 cents to 6 cents. Apart from this, the company also expects non-GAAP earnings per share in the range of 11 cents to 12 cents.

We believe that the higher number of deal wins as well as the geographical contributions were encouraging. Also, the company's diverse cloud offerings and a better spending environment projected by Gartner are positive. On the other hand, the continued w! eakness in Europe, currency headwinds, continued operating margin contraction and the economic challenges in Japan are concerns for the company.

Estimate Revisions

Over the last 30 days, the Zacks Consensus Loss Estimate for fiscal 2014 widened by 1 cent to a loss per share of 8 cents. Again, for the fiscal year 2015, the earnings per share estimate droppedby 1 cent to a level of 2 cents.

Other Stocks to Consider

Other stocks in the technology sector that are currently performing well include CA Inc.(CA), Aspen Tech Inc. (AZPN) and ACI Worldwide (ACIW). All these companies carry a Zacks Rank #1 (Strong Buy).

Top 5 Dividend Stocks To Buy Right Now

Companies in the Dow Jones Industrials (DJINDICES: ^DJI  ) typically have not only solid profits but also create immense amounts of cash flow, much of which they turn around and return to investors. Through a combination of dividends and share buybacks, Dow companies demonstrate their commitment to treating shareholders right by taking multiple steps that will enhance the value of their investment.

To find out which Dow companies do the most for their investors, I looked at how much cash these companies have returned to shareholders in the form of dividends and share repurchases over the past 12 months, according to the latest available data from S&P Capital IQ. Here are the four companies that rose to the top of the list.

4. Pfizer (NYSE: PFE  ) , $17.8 billion in combined share buybacks and dividends over past 12 months
In the past year, drug giant Pfizer has spent $11.2 billion on share buybacks while also paying out $6.6 billion in dividends. That's especially impressive when you consider that the company has seen some of its biggest blockbuster drugs go off patent recently. But with newly approved blood-thinning drug Eliquis looking like a big performer for the future and other promising prospects in the pipeline, Pfizer should continue to retain the capacity to keep returning money to shareholders well into the future.

Top 5 Dividend Stocks To Buy Right Now: ONEOK Inc.(OKE)

ONEOK, Inc., a diversified energy company, operates as a natural gas distributor primarily in the United States. The company operates in three segments: ONEOK Partners, Distribution, and Energy Services. The ONEOK Partners segment engages in gathering, processing, fractionating, transporting, storing, and marketing natural gas and natural gas liquids (NGL) principally in the Mid-Continent and Rocky Mountain regions, which include Anadarko Basin of Oklahoma, Fort Worth Basin of Texas, Hugoton and Central Kansas Uplift Basins of Kansas, Williston Basin of Montana, and North Dakota and the Powder River Basin of Wyoming. This segment offers its services to oil and gas production companies; natural gas gathering and processing companies; petrochemical, refining, and NGL marketing companies; Local distribution companies (LDCs) and power generating companies; and natural gas marketing and NGL gathering companies, and propane distributors. The Distribution segment provides natural gas distribution services to residential, commercial, industrial, and transportation customers, as well as public authority customers, such as cities, governmental agencies, and schools in Oklahoma, Kansas, and Texas. The Energy Services segment delivers physical natural gas products and risk management services through its network of contracted transportation and storage capacity, and natural gas supply. This segment?s customers primarily comprise LDCs, electric utilities, and industrial end users. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.

Advisors' Opinion:

• [By GuruFocus] Tom Gayner initiated holdings in ONEOK, Inc.. His purchase prices were between $41.16 and $52.13, with an estimated average price of $46.98. The impact to his portfolio due to this purchase was 0.1%. His holdings were 70,000 shares as of 06/30/2013.
  
  New Purchase: Blackstone Group LP (BX)
  
  Tom Gayner initiated holdings in Blackstone Group LP. His purchase prices were between $19.1 and $23.45, with an estimated average price of $21.2. The impact to his portfolio due to this purchase was 0.09%. His holdings were 116,900 shares as of 06/30/2013.
  
  New Purchase: BlackRock Inc (BLK)
  
  Tom Gayner initiated holdings in BlackRock Inc. His purchase prices were between $245.3 and $291.69, with an estimated average price of $267.9. The impact to his portfolio due to this purchase was 0.08%. His holdings were 9,100 shares as of 06/30/2013.
  
  New Purchase: KKR & Co LP (KKR)
  
  Tom Gayner initiated holdings in KKR & Co LP. His purchase prices were between $17.8 and $21.15, with an estimated average price of $19.85. The impact to his portfolio due to this purchase was 0.08%. His holdings were 115,000 shares as of 06/30/2013.
  
  New Purchase: Eni SpA (E)
  
  Tom Gayner initiated holdings in Eni SpA. His purchase prices were between $40.39 and $48.96, with an estimated average price of $45.85. The impact to his portfolio due to this purchase was 0.04%. His holdings were 30,000 shares as of 06/30/2013.
  
  New Purchase: Ross Stores, Inc. (ROST)
  
  Tom Gayner initiated holdings in Ross Stores, Inc.. His purchase prices were between $59.26 and $66.5, with an estimated average price of $64.05. The impact to his portfolio due to this purchase was 0.04%. His holdings were 18,000 shares as of 06/30/2013.
  
  New Purchase: Carlyle Group LP (CG)
  
  Tom Gayner initiated holdings in Carlyle Group LP. His purchase prices were between $24.19 and $32.87, with an estimated average price of $29.56. The impact to his portfolio due to this purchase was 0.02%. His holdings were 20,000 sha! res as of 06/30/2013.
  
  Sold Out: EOG Resources (EOG)
  
  Tom Gayner sold out his holdings in EOG Resources. His sale prices were between $113.44 and $137.9, with an estimated average price of $128.22.
  
  Sold Out: State Street Corp (STT)
  
  Tom Gayner sold out his holdings in State Street Corp. His sale prices were between $56.51 and $67.44, with an estimated average price of $62.2.
  
  Sold Out: Bunge Ltd (BG)
  
  Tom Gayner sold out his holdings in Bunge Ltd. His sale prices were between $66.4 and $73.51, with an estimated average price of $70.39.
  
  Added: UnitedHealth Group Inc (UNH)
  
  Tom Gayner added to his holdings in UnitedHealth Group Inc by 45.25%. His purchase prices were between $58.54 and $66.09, with an estimated average price of $62.22. The impact to his portfolio due to this purchase was 0.4%. His holdings were 569,800 shares as of 06/30/2013.
  
  Added: Liberty Media Corporation (LMCA)
  
  Tom Gayner added to his holdings in Liberty Media Corporation by 102.38%. His purchase prices were between $108.75 and $130.01, with an estimated average price of $119.32. The impact to his por

Top 5 Dividend Stocks To Buy Right Now: Telular Corporation(WRLS)

Telular Corporation designs, develops, and distributes products and services that utilize wireless networks to provide data and voice connectivity among people and machines primarily in the United States and internationally. It provides machine-to-machine and event monitoring services, including Telguard that comprises a specialized terminal unit, which interfaces with commercial security control panels and communicates with event processing servers to provide real-time transport of alarm signals from residential and commercial locations to an alarm company?s central monitoring station; and TankLink solution that combines a cellular communicator, wireless data services, and a Web-based application into a single offering, which allows end-users to monitor the product level in a given tank vessel. The company also offers fixed cellular terminals for voice, fax, and Internet access over the wireless networks. It sells its products to security equipment distributors, cellular carriers, and value added resellers. The company was founded in 1986 and is headquartered in Chicago, Illinois.

Advisors' Opinion:

• [By Arohan]

  Telular provides wireless connectivity solutions to home alarm and industrial segments for monitoring, security and data applications. The $89 million market value company currently can be bought at 2.42 PE ratio and offers a 6.8% dividend yield. The company reported a revenue growth of 16.6% in the latest quarter and is expected to grow earnings 16.7% this year and 43% the next. The company does not have analyst following so a deeper due diligence is advised.

Top 5 Gold Stocks To Own Right Now: Kohlberg Capital Corporation(KCAP)

Kohlberg Capital Corporation is a private equity and venture capital firm specializing in buyouts and mezzanine investments. It focuses on mature and middle market companies. The firm structures its investments through senior debt, second lien debt, secured and unsecured subordinated debt, mezzanine debt, and equity. It invests in all sectors except cyclical industries. The firm invests equity in both minority and control transactions alongside other equity investors. It invests through its own balance sheet. Kohlberg Capital Corporation is based in the New York, New York.

Top 5 Dividend Stocks To Buy Right Now: China Nepstar Chain Drugstore Ltd (NPD)

China Nepstar Chain Drugstore Ltd. operates retail drugstores in the People?s Republic of China. The company?s drugstores provide pharmacy services and other merchandise, including prescription drugs; over-the-counter drugs; nutritional supplements, such as healthcare supplements, vitamins, minerals, and dietary products; herbal products, including drinkable herbal remedies and packages of assorted herbs for making soup; and private label products. Its stores also offer personal care products, such as skin care, hair care, and beauty products; family care products, including portable medical devices for family use, birth control products, and early pregnancy test products; and convenience products, such as soft drinks, packaged snacks, other consumables, cleaning agents, and stationeries, as well as seasonal and promotional items. The company operates its stores under the China Nepstar brand name. As of December 31, 2009, its store network comprised 2,479 retail drugstores located in approximately 71 cities in Guangdong, Jiangsu, Zhejiang, Liaoning, Shandong, Hunan, Fujian, Sichuan, and Hubei provinces, as well as in Shanghai, Tianjin, and Beijing municipalities of the People?s Republic of China. The company was founded in 1995 and is headquartered in Shenzhen, the People?s Republic of China.

Top 5 Dividend Stocks To Buy Right Now: Spectra Energy Corp(SE)

Spectra Energy Corp, through its subsidiaries, engages in the ownership and operation of a portfolio of complementary natural gas-related energy assets in the United States and Canada. The company operates in four segments: U.S. Transmission, Distribution, Western Canada Transmission and Processing, and Field Services. The U.S. Transmission segment engages in the transportation and storage of natural gas for customers in various regions of the northeastern and southeastern United States and the Maritime Provinces in Canada. Its natural gas pipeline systems consist of approximately 19,000 miles of transmission pipelines; and storage capacity comprises 305 billion cubic feet in the United States and Canada. The Distribution segment engages in the natural gas storage, transmission, and distribution in Western Canada and the United States. This segment has approximately 37,600 miles of distribution main and service pipelines serving approximately 1.3 million residential, comme rcial, and industrial customers. The Western Canada Transmission and Processing segment provides natural gas transportation, and gas gathering and processing services; and provides services to natural gas producers to remove impurities from the raw gas stream including water, carbon dioxide, hydrogen sulfide, and other substances. This segment serves local distribution companies, end-use industrial and commercial customers, marketers, and exploration and production companies. The Field Services segment gathers and processes natural gas, as well as fractionates, markets, and trades natural gas liquids. It engages in gathering raw natural gas through gathering systems located in nine natural gas producing regions consisting of the Mid-Continent, Rocky Mountain, east Texas-north Louisiana, Barnett Shale, Gulf Coast, South Texas, Central Texas, Antrim Shale, and Permian Basin. The company is headquartered in Houston, Texas.

Are you chasing FAST money or QUICK money?

Best Safest Companies To Invest In 2014

The dictionary meaning of 'fast' and 'quick' may be the same. But in "my" financial parlance they are totally different. In fact, so different that it becomes a matter of life and death- or a matter of poverty or prosperity- if you do not appreciate the distinction.

For example, Honda City runs faster than Maruti 800; Mercedes runs faster than Honda City; and Ferrari runs faster than Mercedes.  In short, "fast" as per my definition is inherent in the quality of the product.

For example, Banks FDs give more returns than Savings A/c; Company FDs give more return than Bank FDs; and Shares give more return than Company FDs. In short, there is a product-wise grading of the returns that you can expect from different investments.

If you are planning your investments suitably to earn "faster" returns- based on your risk-talking ability- you are doing fine. No problems at all!

The problem is when people chase "quick" money.

For example, people cut lanes in their Maruti 800 to go ahead of Honda City; Honda City breaks red signal to go ahead of Mercedes; or a Mercedes overtakes from the wrong side to go ahead of Ferrari. In short, "quick" as per my definition is the POOR and DANGEROUS quality of driving.

For example, people invest in FDs of dubious company to earn more returns than bank FDs; they invest in shares based on 'hot' tips to make more money than company FDs; and they trade in Futures and Options to make more money than shares. This is nothing but POOR and DANGEROUS quality of investing.

As you will appreciate, poor quality of driving is too risky. You may be lucky many times for many years. But one- just one- stroke of bad luck and you may not live to tell the tale.

As many incidents in the past- Harshad Mehta scam, C.R. Bhansali scam, Teak Plantation scam, StockGuru scam, Ketan Parekh scam, SpeakAsia Scam, Abhinav Gold scam, Home Trade scam and many more- prove that people lose crores and crores to poor quality of investing. And even if there is no scam, people are losing money every day in F&O trading and penny stocks.

I have always wondered, but the answer still eludes me- despite being aware of the grave risks, why are people so reckless and foolish with their driving habits? Why are people so reckless and foolish with their investing habits?

If I find the answer, I will surely share with you. But in the meantime, let me reiterate the obvious:

Look for fast returns as per your risk-appetite and with appropriate precautions, and Please desist from taking shortcuts to make quick money.

Market Valuations and Expected Returns as of June 2012

It is amazing how quickly things change on Wall Street. Everything suddenly turns from rosy to ugly in a matter of weeks. Both the Dow and S&P 500 lost more than 6% in May. At the time of this writing, the Dow lost more than 200 points for the day.

The market plunging shouldn't surprise the readers who have been following our monthly market valuation comment. The market has been overvalued for a while. When it is overvalued, it may still go up. Just the risk is much higher and the possible returns will be much lower. The market plunging may hurt a lot of people. But it is good news for those who are prepared. It is hard to hold cash sometimes. But it is a discipline required for long-term successful investing.

It is a good thing to see the market going in the direction of more reasonable valuation. Though it is still not enough to be fair valued or give satisfactory future returns.

GuruFocus hosts three pages about market valuations. The first is the market valuation based on the ratio of total market cap over GDP; the second is the measurement of the U.S. market valuation based on the Shiller P/E. These pages are for the U.S. market. We have also created a new page for international markets. You can check it out here. All pages are updated at least daily. Monthly data is displayed for international markets.

Why is this important?

As pointed out by Warren Buffett, the percentage of total market cap (TMC) relative to the U.S. GNP is "probably the best single measure of where valuations stand at any given moment."

Knowing the overall market valuation and the expected market returns will give investors a clearer head on where we stand for future market returns. When the overall market is expensive and positioned for poor returns, the overall market risk is high. It is important for investors to be aware of this and take consideration of this in their asset allocation and investing strategies.

Please keep in mind that the long-term valuations publ! ished here do not predict short-term market movement. But they have done a good job predicting the long-term market returns and risks.

Howard Marks also pointed out that investors should always know where we are with the market. Predicting the direction of the market is hard. But investors can always make educated decisions based on current conditions.

Why did we develop these pages?

We developed these pages because of lessons we learned over years of value investing. From the market crashes in 2001 to 2002 and 2008 to 2009, we learned that value investors should also keep an eye on overall market valuation. Many times value investors tend to find cheaper stocks in any market. But a lot of times the stocks they found are just cheaper, instead of cheap. Keeping an eye on the overall market valuation will help us to focus on absolute value instead of relative value.

The indicators we develop focus on long term. They will provide a more objective view on the market.

Ratio of Total Market Cap over GDP - Market Valuation and Implied Returns

The information about the market valuation and the implied return based on the ratio of the total market cap over GDP is updated daily. The total market cap as measured by Wilshire 5000 index is now 91% of the US GDP. The stock market will barely return 4.7% a year in the coming years. As a comparison, at the beginning of the year, the ratio of total market cap over GDP was 87.4%, it was likely to return 5.7% a year from that level of valuation. The first quarter gain of 12% has reduced the future gains by about 1.7% a year.

For details, please go to the daily updated page. In general, the returns of investing in an individual stock or in the entire stock market are determined by these three factors:

1. Business growth

If we look at a particular business, the value of the business is determined by how much money this business can make. The growth in the value of the business comes from the growth of the earn! ings of t! he business growth. This growth in the business value is reflected as the price appreciation of the company stock if the market recognizes the value, which it does, eventually.

If we look at the overall economy, the growth in the value of the entire stock market comes from the growth of corporate earnings. As we discussed above, over the long term, corporate earnings grow as fast as the economy itself.

2. Dividends

Dividends are an important portion of the investment return. Dividends come from the cash earnings of a business. Everything being equal, a higher dividend payout ratio, in principle, should result in a lower growth rate. Therefore, if a company pays out dividends while still growing earnings, the dividend is an additional return for the shareholders besides the appreciation of the business value.

3. Change in the market valuation

Although the value of a business does not change overnight, its stock price often does. The market valuation is usually measured by the well-known ratios such as P/E, P/S, P/B etc. These ratios can be applied to individual businesses, as well as the overall market. The ratio Warren Buffett uses for market valuation, TMC/GNP, is equivalent to the P/S ratio of the economy.

Putting all three factors together, the return of an investment can be estimated by the following formula:

Investment Return (%) = Dividend Yield (%)+ Business Growth (%)+ Change of Valuation (%)

From the contributions we can get the predicted return of the market.

The Predicted and the Actual Stock Market Returns

This model has done a decent job in predicting the future market returns. You can see the predicted return and the actual return in the chart below.



The prediction from this approach is never an exact number. The return can be as high as 10% a year or as long as -2% a year, depending where the future market valuation will be. In general, investors need to be cautious when the expected return is low.
Sh! iller P/E - Market Valuation and Implied Returns

The GuruFocus Shiller P/E page indicates that the Shiller P/E: 20.5. Shiller P/E is 25% higher than the historical mean of 16.4. Implied future annual return: 3.5%. As a comparison, the regular trailing twelve month P/E is 15, slightly lower than the historical mean of 15.8. That is also why many media pundits are saying that the market is cheap.

The Shiller P/E chart is shown below:



Over the last decade, the Shiller P/E indicated that the best time to buy stocks was March 2009. However, the regular P/E was at its highest level ever. The Shiller P/E, similar to the ratio of the total market cap over GDP, has proven to be a better indication of market valuations.

Overall, the current market valuation is more expensive than the most part of the last 130 years. It is cheaper than most of the time over the last 15 years.

To understand more, please go to GuruFocus' Shiller P/E page.

John Hussman's Peak P/E:

John Hussman uses the peak P/E ratio to smooth out the distortion of the corporate profits caused by the fluctuations of the profit margins. The current market return projected by his model is 4.4% a year. This agrees with the returns projected by the ratio of total market cap over GDP and Shiller P/E. This is the chart of the actual S&P 500 10-year annual total return and the projected return by John Hussman:

[ Enlarge Image ]

In all the three approaches discussed above, the fluctuations of profit margin are eliminated by using GDP, the average of trailing 10-year inflation-adjusted earnings, and peak-P/E. Therefore they arrive at similar conclusions: The market is overvalued, and it is likely to return only 2-4% a year in the future years.

Jeremy Grantham's 7-Year Projection:

Jeremy Grantham's firm GMO publishes a monthly 7-year market forecast. The latest 7-year for! ecast pub! lished by GMO is below:

Asset Class	Annual Real Return
US Large Cap	-.2%
US Small Cap	-1.70%
US High Quality	3.9%
International Large Cap	4.6%
International Small Cap	3.3=40%
Emerging Market	5.2%
US Bonds	0.9%
International Bonds	-1.80%
emerging Debt	0.80%
Index Linked Bonds	-1.10%
Cash	0.1%

GMO expected US large cap real return is -.2%. This number agrees with what we find out with market/GDP ratio and Shiller P/E ratio. The US high quality will have higher return. The return is expected to be 4.4% a year.

Insider Trends

As indicated by the three different approaches discussed above, the best buying opportunities over the last five years appeared when the projected returns were at their highest level from October 2008 to April 2009, when investors could expect 10% a year from the U.S. market.

If average investors missed this opportunity, corporate insiders such as CEOs, CFOs and directors did not. As a whole they purchased their own company shares at more than double the normal rate from October 2008 to April 2009. Many of these purchases resulted in multi-bagger gains. This confirmed again the conclusions of earlier studies: The aggregated activities of insiders can serve a good indicator for locating the market bottoms. Insiders as a whole are smart investors of their own companies. They tend to sell more when the market is high, and buy more when the market is low.

As of May, we observed more insider buying activities. This is the current insider trend for S&P 500 companies:



The latest trends of insider buying are updated daily at GuruFocus' Insider Trend page. Data is updated hourly on this page. The in! sider tre! nds of different sectors are also displayed in this page. The latest insider buying peak is at this page: September of 2011, when the market was at recent lows.

Conclusion: The market is not cheap, although it is about 8% cheaper than a month ago. It is positioned for about 3-5% of annual returns for the next decade. By watching the overall market valuations and the insider buying trends investors will have a better understanding of the risk and the opportunities. The best time to buy is when the market valuation is low, and insiders are enthusiastic about their own company's stocks.

Investment Strategies at Different Market Levels

The Shiller P/E and the ratio of total market cap over GDP can serve as good guidance for investors in deciding their investment strategies at different market valuations. Historical market returns prove that when the market is fair or overvalued, it pays to be defensive. Companies with high quality business and strong balance sheet will provide better returns in this environment. When the market is cheap, beaten down companies with strong balance sheets can provide outsized returns.

To summarize:

1. When the market is fair valued or overvalued, buy high-quality companies such as those in the Buffett-Munger Screener.
2. When the market is undervalued, buy low-risk beaten-down companies like those in the Ben Graham Net-Net Screener. Buy a basket of them and be diversified.
3. If market is way over valued, stay in cash. You may consider hedging or short.

10 Best Energy Stocks To Buy Right Now

Related links:The daily updated pageGuruFocus' Shiller P/E pageYou can check it out hereWarren BuffettHoward MarksJohn HussmanJeremy GranthamThe conclusions of earlier studiesGuruFocus' Insider Trend pageBuffett-Munger ScreenerBen Graham Net-Net Screener

Top 10 Clean Energy Companies To Invest In Right Now

Cleveland-based TransDigm Group (NYSE: TDG  ) is buying a piece of GE.

On Friday, as trading wound down for the week, TransDigm announced a deal to buy the Electromechanical Actuation Division of General Electric (NYSE: GE  ) Aviation for $150 million, cash. The business, which makes proprietary, highly engineered aerospace electromechanical motion control subsystems for civil and military applications, counts all three of the world's biggest airplane manufacturers -- Boeing, Airbus, and Brazil's Embraer -- among its clients, and Sikorsky and General Atomics, as well, on the military side.

Annual revenues at the unit approximate $80 million, which puts about a 1.9 price-to-sales valuation on the transaction -- a significant discount to the 4.5 P/S ratio of TransDigm's own shares.

Top 10 Clean Energy Companies To Invest In Right Now: Aedes(AEDI.MI)

Aedes SpA operates in the real estate sector in Italy and internationally. The company owns buildings; manages owner-occupied urban and suburban retail malls, and offices; develops metropolitan and industrial areas, and commercial and residential properties; and purchases and resells apartment complexes. It also provides management services for various phases of real estate projects comprising asset management, fund management, advisory, finance and administrative, treasury, corporate governance, intermediation, and shopping mall management services. The company was founded in 1905 and is headquartered in Milan, Italy.

Top 10 Clean Energy Companies To Invest In Right Now: Bunge Limited(BG)

Bunge Limited, through its subsidiaries, engages in the agriculture and food businesses worldwide. Its Agribusiness segment is involved in purchasing, storing, transporting, processing, and selling agricultural commodities and commodity products, such as oilseeds and grains, primarily comprising soybeans, rapeseed or canola, sunflower seed, wheat, and corn. This segment serves animal feed manufacturers, wheat and corn millers, third party edible oil processing companies, and other oilseed processors, as well as livestock, poultry, and aquaculture producers. The company?s Sugar and Bioenergy segment produces and sells sugar and ethanol; generates electricity from burning sugarcane bagasse; and trades and merchandises sugar. As of December 31, 2011, this segment had a total installed capacity of approximately 144 megawatts; and sugarcane plantations of approximately 183,000 hectares under cultivation. Its Edible Oil Products segment offers packaged vegetable, including pack aged and bulk oils, shortenings, margarines, mayonnaise, and other products to baked goods companies, snack food producers, restaurant chains, foodservice distributors, and other food manufacturers. The company?s Milling Products segment produces and sells various wheat flours and bakery mixes; corn-based products; corn milling products primarily comprising dry milled corn meals, flours, and grits, as well as soy-fortified corn meal and corn-soy blend; and packaged milled rice. This segment serves industrial, bakery, and foodservice companies; and companies in food processing sector. Its Fertilizer segment produces, blends, and distributes nitrogen, phosphate, and potash formulations used for the cultivation of soybeans, corn, sugarcane, cotton, wheat, and coffee. This segment also produces single super phosphate; and ammonia, urea, and liquid fertilizers for the agriculture industry. Bunge Limited was founded in 1818 and is headquartered in White Plains, New York.

Advisors' Opinion:

• [By Portfolio Grader]

  Bunge’s (NYSE:BG) ratings are looking better this week, moving up to a C from last week’s A. Bunge is a global agribusiness and food company that operates in the farm-to-consumer food chain. 

Top 5 Blue Chip Stocks To Buy Right Now: Insight Enterprises Inc.(NSIT)

Insight Enterprises, Inc. provides information technology (IT) hardware, software, and service solutions to businesses and public sector clients. Its solutions help companies enable, manage, and secure their IT environments. The company offers solutions for data center, network and security, unified communications and collaboration, office productivity, virtualization, mobility, cloud, and data protection domains. Its hardware offering categories include desktop, notebook and tablet, network and power, server and storage, and print and consumables. The company provides software and licensing technology products for office productivity, virtualization, creativity, and data protection categories. It also offers a suite of consulting, technical, and managed services for planning, deployment, operations, warranty, and maintenance. In addition, the company offers a portfolio of software asset management (SAM) services, including SAM consultation, assessment of ISO standard atta inment, and license reconciliations. It operates in North America, Europe, the Middle East, Africa, and the Asia-Pacific. The company was founded in 1988 and is headquartered in Tempe, Arizona.

Top 10 Clean Energy Companies To Invest In Right Now: California Nanotechnologies Cor (CNO.V)

California Nanotechnologies Corp., a development stage company, engages in the research, development, and production of nano-structured components and materials. The company produces powders, billets, wire, and precision forged components from nano, near-nano, ultrafine, and conventional advanced materials. Its products include precision cold forged components consisting of fasteners, bolts, pins, caps, and other components; thermal spray powders comprising WC-based materials and titanium powders; nano light alloy powders that include aluminum, titanium, magnesium, and their alloys; nano alloy billets; nano super alloy powders; and cemented carbides. The company also offers component manufacturing services for in-house and customer-designed components using Cal nano materials. It serves customers in aerospace, defense, automotive, medical, and sports and recreation industries. California Nanotechnologies Corp. is headquartered in Cerritos, California.

Top 10 Clean Energy Companies To Invest In Right Now: Stroud Resources Ltd.(SDR.V)

Stroud Resources Ltd. operates as a mineral exploration company in Mexico and Canada. The company primarily holds interest in the Santo Domingo epithermal silver-gold project located in central Mexico. It also holds interests in the Hislop and Leckie/Penrose gold projects in northern Ontario, Canada; and Compania Minera project located in the state of Jalisco, Mexico. In addition, the company holds approximately 3.75% interest in six oil and gas producing wells in Alberta. Stroud Resources Ltd. was founded in 1983 and is based in Toronto, Canada.

Top 10 Clean Energy Companies To Invest In Right Now: Lydian Intl Ltd He Company] (LYD.TO)

Lydian International Limited operates as a mineral exploration and development company focusing on eastern Europe. The company�s principal project is the Amulsar project located in Armenia, which is a gold exploration and development project. It also holds a combined mining-exploration license at Zoti in Georgia; and a pipeline of early-stage gold and base metal exploration projects in the Caucasus regions. The company was formerly known as Dawson Creek Capital Corporation and changed its name to Lydian International Limited in December 2007. Lydian International Limited was founded in 2005 and is headquartered in St. Helier, the Channel Islands.

Top 10 Clean Energy Companies To Invest In Right Now: Oxford Industries Inc.(OXM)

Oxford Industries, Inc. engages in designing, sourcing, and marketing apparel products primarily in the United States and the United Kingdom. The company?s apparel products comprise a portfolio of company-owned lifestyle brands, as well as company-owned and licensed brands of tailored clothing and golf apparel. Its owned and licensed brands include Tommy Bahama, Lilly Pulitzer, Ben Sherman, Billy London, Oxford Golf, Nickelson, and Arnold Brant. The company also holds licenses to produce and sell various categories of apparel products under the Kenneth Cole, Dockers, and Geoffrey Beene brand names. Its primary product line includes the Tommy Bahama brand men's and women's sportswear and related products for affluent men and women with age of 35 and older; the Lilly Pulitzer brand women's and girl's dresses, sportswear, and other products for young women, young mothers and their daughters, and women; the Ben Sherman brand men's sportswear and related products for men ages 25 to 40; and branded and private label men's suits, sport coats, suit separates, and dress slacks. In addition, the company licenses its Tommy Bahama, Lilly Pulitzer, and Ben Sherman brand names for various products categories, including apparel, accessories, footwear, watches, jewelry, luggage, rugs, wall coverings, fragrances and toiletries, shampoos and soaps, gift products, furniture, ceiling fans, stationery, bedding and home fashions, and table top accessories. Further, it operates restaurants under the Tommy Bahama brand name. It distributes company-owned lifestyle branded products through department stores, specialty stores, company-owned and licensed retail stores, and its e-commerce Websites; and branded and private label tailored clothing products through department stores, specialty stores, national chains, specialty catalogs, mass merchants, and Internet retailers. Oxford Industries, Inc. was founded in 1942 and is based in Atlanta, Georgia.

Top 10 Clean Energy Companies To Invest In Right Now: Merrimack Pharmaceuticals Inc (MACK)

Merrimack Pharmaceuticals, Inc., incorporated in 1993, is a biopharmaceutical company discovering, developing and preparing to commercialize medicines paired with companion diagnostics for the treatment of serious diseases, with an initial focus on cancer. The Company�� product candidates include MM-398, MM-121, MM-111, MM-302 and MM-151. As of June 31, 2011, the Company owned approximately 74% interest of Silver Creek.

The Company�� Network biology is an interdisciplinary approach to drug discovery and development that enables the Company to build functional and predictive computational models of biological systems based on quantitative, kinetic, multiplexed biological data. The Company provides its scientists with insights into how the complex molecular interactions that occur within cell signaling pathways, or networks, regulate cell decisions and how dysfunction within these networks leads to disease. The Company applies network biology throughout the research and development process, including for target identification, lead compound design and optimization, diagnostic discovery, in vitro and in vivo predictive development and the design of clinical trial protocols.

MM-398

MM-398 is a stable nanotherapeutic encapsulation, or enclosed sphere carrying an active drug, of the marketed chemotherapy drug irinotecan. MM-398 achieved its primary efficacy endpoints in Phase 2 clinical trials in pancreatic and gastric cancer. In an open label, single arm Phase 2 clinical trial of MM-398 as a monotherapy in 40 metastatic pancreatic cancer patients who had previously failed treatment with gemcitabine, patients treated with MM-398 achieved median overall survival of 22.4 weeks. Additionally, 20% of the patients in this Phase 2 trial survived for more than one year, and the Company observed a disease control rate, meaning patients exhibited stable disease or partial or complete response to treatment, of 47.5% at six weeks.

The Company focuses on initiati! ng a Phase 3 clinical trial of MM-398 for the treatment of patients with metastatic pancreatic cancer who have previously failed treatment with gemcitabine. The trial is expected to enroll approximately 250 patients and is designed to compare the efficacy of MM-398 as a monotherapy against the combination of the chemotherapy drugs fluorouracil, or 5-FU, and leucovorin. There are multiple ongoing Phase 1 and Phase 2 clinical trials of MM-398. In July 2011, the United States Food and Drug Administration (FDA) granted MM-398 orphan drug designation for the treatment of pancreatic cancer.

MM-121

MM-121 is a fully human monoclonal antibody that targets ErbB3, a cell surface receptor, or protein attached to the cell membrane that mediates communication inside and outside the cell, that the Company�� network biology approach identified as a target in a range of cancers. A monoclonal antibody is a type of protein normally produced by cells of the immune system that binds to just one epitope, or chemical structure, on a protein or other structure. MM-121 is designed to inhibit cancer growth directly, restore sensitivity to drugs to which a tumor has become resistant and delay the development of resistance of a tumor to other agents. In collaboration with Sanofi, the Company focuses on testing MM-121 in combination with both chemotherapies and other targeted agents across a range of spectrum of solid tumors, including lung, breast and ovarian cancers. The Company partnered MM-121 with Sanofi after it initiated Phase 1 clinical development of the product candidate.

MM-111

MM-111 is a bispecific antibody designed to target cancer cells that are characterized by overexpression of the ErbB2 cell surface receptor, also referred to as HER2. A bispecific antibody is a type of antibody that is able to bind simultaneously to two distinct proteins or epitopes. The Company�� network biology approach identified that ligand-induced signaling through the complex of ErbB2 ! (HER2) an! d ErbB3 is a promoter of tumor growth and survival than previously appreciated.

MM-302

MM-302 is a nanotherapeutic encapsulation of doxorubicin with attached antibodies that are designed to target MM-302 to cells that over express the ErbB2 (HER2) receptor. The Company is conducting a Phase 1 clinical trial of MM-302 in patients with advanced ErbB2 (HER2) positive breast cancer.

MM-151

MM-151 is an oligoclonal therapeutic consisting of a mixture of three fully human monoclonal antibodies designed to bind to non-overlapping epitopes of the epidermal growth factor receptor (EGFR). EGFR is also known as ErbB1. An oligoclonal therapeutic is a mixture of two or more distinct monoclonal antibodies. The Company has designed MM-151 to block signal amplification that occurs within the ErbB cell signaling network. The Company has submitted an investigational new drug application (IND), to the FDA for MM-151 in July 2011.

Top 10 Clean Energy Companies To Invest In Right Now: Telus Corporation(TU)

TELUS Corporation provides telecommunications products and services primarily in Canada. Its telecommunications products and services include wireless, data, Internet protocol (IP), voice, and television. The company operates through two segments, Wireless and Wireline. The Wireless segment provides digital personal communications, equipment sales, and wireless Internet services. The Wireline segment offers voice local and voice long distance services; data services, which include television, and managed and legacy data services, as well as Internet, enhanced data, and hosting services; and other telecommunications services. TELUS Corporation was founded in 1993 and is based in Burnaby, Canada.

Top 10 Clean Energy Companies To Invest In Right Now: Sears Canada Inc Com Npv(SCC.TO)

Sears Canada Inc. operates as a multi-channel retailer in Canada. The company operates department stores that offer appliances, home furnishings and mattresses, home decor, lawn and garden, hardware, electronics and leisure, seasonal products, nursery products, cosmetics, jewelry, footwear, and accessories, as well as women?s, men?s, and children?s apparel; home stores, which provide home improvement products; and home dealer stores that offer furniture, home electronics, outdoor power equipment, and merchandise. It also operates outlet stores, which provide clearance merchandise; appliances and mattresses stores that offer appliances, mattresses and box-springs, and products of private label and various national brands; operates and franchises appliance specialty stores under the Corbeil name; and floor covering centers that offer an assortment of broadloom and hard floor coverings. In addition, the company provides a range of home services, including the sale, install ation, maintenance, and repair of heating and cooling equipment, roofing, doors and windows, flooring, window coverings, energy audits, kitchen and bathroom renovations, carpet and upholstery cleaning, and duct cleaning; and travel and logistics services. Further, it offers products directly through telephone, mail, fax, and online at sears.ca, as well as in person through its stores and catalogue agents. As of May 24, 2012, the company operated 196 corporate stores, 278 hometown dealer stores, 29 home services showrooms, 1,500 catalogue and online merchandise pick-up locations, and 105 Sears Travel offices, as well as a home maintenance, repair, and installation network. Additionally, it has joint venture interests in 12 shopping centers in Canada. The company was formerly known as Simpsons-Sears Limited and changed its name to Sears Canada Inc. in May 1984. The company was founded in 1952 and is headquartered in Toronto, Canada. Sears Canada Inc. is a subsidiary of Sears H oldings Corporation.

Think Like Warren Buffett

10 Best Oil Stocks To Own Right Now

Back in 1999, Robert G. Hagstrom wrote a book about the legendary investor Warren Buffett entitled "The Warren Buffett Portfolio". What's so great about the book, and what makes it different from the countless other books and articles written about the "Oracle of Omaha", is that it offers the reader valuable insight into how Buffett actually thinks about investments. In other words, the book delves into the psychological mindset that has made Buffett so fabulously wealthy.

Although investors could benefit from reading the entire book, we've selected a bite-sized sampling of the tips and suggestions regarding the investor mindset and ways to improve stock selection that will help you get inside Buffett's head.

1. Think of Stocks as a Business
Many investors think of stocks and the stock market in general as nothing more than little pieces of paper being traded back and forth among investors. This might help prevent investors from becoming too emotional over a given position, but it doesn't necessarily allow them to make the best possible investment decisions.

That's why Buffett has stated he believes stockholders should think of themselves as "part owners" of the business in which they are investing. By thinking that way, both Hagstrom and Buffett argue that investors will tend to avoid making off-the-cuff investment decisions, and become more focused on the longer term. Furthermore, longer-term "owners" tend to analyze situations in greater detail, and then put a great deal of thought into buy and sell decisions. Hagstrom says this increased thought and analysis tends to lead to improved investment returns.

2. Increase the Size of Your Investment
While it rarely - if ever - makes sense for investors to "put all of their eggs in one basket", putting all your eggs in too many baskets may not be a good thing either. Buffett contends that over-diversification can hamper returns as much as a lack of diversification. That's why he doesn't invest in mutual funds. It's also why he prefers to make significant investments in just a handful of companies.

Buffett is a firm believer that investors must first do their homework before investing in any security. But after that due diligence process is completed, investors should feel comfortable enough to dedicate a sizable portion of assets to that stock. They should also feel comfortable in winnowing down their overall investment portfolio to a handful of good companies with excellent growth prospects.

Buffett's stance on taking time to properly allocate your funds is furthered with his comment that it's not just about the best company, but how you feel about the company. If the best business you own presents the least financial risk and has the most favorable long-term prospects, why would you put money into your 20th favorite business instead of adding money to the top choices?

3. Reduce Portfolio Turnover
Rapidly trading in and out of stocks can potentially make an individual a lot of money, but according to Buffett, this trader is actually hampering his or her investment returns. That's because portfolio turnover increases the amount of taxes that must be paid on capital gains and boosts the total amount of commission dollars that must be paid in a given year.

The "Oracle" contends that what makes sense in business also makes sense in stocks: An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.

Investors must think long term. By having that mindset, they can avoid paying huge commission fees and lofty short-term capital gains taxes. They'll also be more apt to ride out any short-term fluctuations in the business, and to ultimately reap the rewards of increased earnings and/or dividends over time.

4. Develop Alternative Benchmarks
While stock prices may be the ultimate barometer of the success or failure of a given investment choice, Buffett does not focus on this metric. Instead, he analyzes and pores over the underlying economics of a given business or group of businesses. If a company is doing what it takes to grow itself on a profitable basis, then the share price will ultimately take care of itself.

Successful investors must look at the companies they own and study their true earnings potential. If the fundamentals are solid and the company is enhancing shareholder value by generating consistent bottom-line growth, the share price, in the long term, should reflect that. (To learn how to judge fundamentals on your own, see What Are Fundamentals?)

5. Learn to Think in Probabilities
Bridge is a card game in which the most successful players are able to judge mathematical probabilities to beat their opponents. Perhaps not surprisingly, Buffett loves and actively plays the game, and he takes the strategies beyond the game into the investing world.

Buffett suggests that investors focus on the economics of the companies they own (in other words the underlying businesses), and then try to weigh the probability that certain events will or will not transpire, much like a Bridge player checks the probabilities of his opponents' hands. He adds that by focusing on the economic aspect of the equation and not the stock price, an investor will be more accurate in his or her ability to judge probability.

Thinking in probabilities has its advantages. For example, an investor that ponders the probability that a company will report a certain earnings growth rate over a five- or 10-year period is much more apt to ride out short-term fluctuations in the share price. By extension, this means that his investment returns are likely to be superior, and that he will also realize fewer transaction and/or capital gains costs.

6. Recognize the Psychological Aspects of Investing
Very simply, this means that individuals must understand that there is a psychological mindset that the successful investor tends to have. More specifically, the successful investor will focus on probabilities and economic issues and let decisions be ruled by rational, as opposed to emotional, thinking.

More than anything, investors' own emotions can be their worst enemy. Buffett contends that the key to overcoming emotions is being able to retain your belief in the real fundamentals of the business, and don't get too concerned about the stock market.

Investors should realize that there is a certain psychological mindset that they should have if they want to be successful, and try to implement that mindset.

7. Ignore Market Forecasts
There is an old saying that the Dow "climbs a wall of worry". In other words, in spite of the negativity in the marketplace, and those who perpetually contend that a recession is "just around the corner", the markets have fared quite well over time. Therefore, doomsayers should be ignored.

On the other side of the coin, just as many eternal optimists argue that the stock market is headed perpetually higher. These should be ignored as well.

In all this confusion, Buffett suggests that investors should focus their efforts on isolating and investing in shares that are not currently being accurately valued by the market. The logic here is that as the stock market begins to realize the company's intrinsic value (through higher prices and greater demand), the investor will stand to make a lot of money.

8. Wait for the Fat Pitch
Hagstrom's book uses the model of legendary baseball player Ted Williams as an example of a wise investor. Williams would wait for a specific pitch (in an area of the plate where he knew he had a high probability of making contact with the ball) before swinging. It is said that this discipline enabled Williams to have a higher lifetime batting average than the average player.

Buffett, in the same way, suggests that all investors act as if they owned a lifetime decision card with only 20 investment choice punches in it. The logic is that this should prevent them from making mediocre investment choices and hopefully, by extension, enhance the overall returns of their respective portfolios.

Bottom Line
"The Warren Buffett Portfolio" is a timeless book that offers valuable insight into the psychological mindset of the legendary investor Warren Buffett. Of course, if learning how to invest like Warren Buffett were as easy as reading a book, everyone would be rich! But if you take that time and effort to implement some of Buffett's proven strategies, you could be on your way to better stock selection and greater returns.