Shutdown, Schmutdown: Midwest Business Activity Surges

Daniel Acker/Bloomberg via Getty Images WASHINGTON -- Business activity in the U.S. Midwest surged past expectations in October as new orders hit their highest level since 2004, countering recent evidence of soft economic growth. Weekly unemployment claims also fell, in welcome news for the nation's battered labor market after the impact of a government shutdown on furloughed federal workers diminished. The Institute for Supply Management-Chicago business barometer jumped to 65.9 from 55.7, the strongest reading since March 2011 and well above the most optimistic forecast in a Reuters poll. Initial claims for state unemployment benefits dropped by 10,000 to a seasonally adjusted 340,000, the Labor Department said on Thursday. The U.S. job market has apparently slackened in recent months, with private-sector employers hiring fewer workers in October after uncertainty caused by budget brinkmanship in Washington dented confidence among both consumers and businesses. Given that backdrop, analysts treated the ISM-Chicago numbers with some skepticism. "The report may be exaggerating the extent of economic growth momentum," said Millan Mulraine, director of research at TD Securities (TD). Financial markets showed little reaction to the figures, with stocks lower on investor caution following recent record highs. Treasury bonds were also down modestly. Other recent data on hiring, factory output and home sales in September have suggested the economy lost a step even before the government shut down. Readings on consumer confidence this month have shown the fiscal standoff rattled households. Anxious to maintain policy support while the economy works through this soft spot, the U.S. Federal Reserve on Wednesday extended its asset purchase campaign at a policy meeting that opted to keep buying bonds at a $85 billion monthly pace. A 16-day partial shutdown of the federal government had pushed up claims in recent weeks as furloughed workers applied for benefits, but this factor appeared to be diminishing. Claims filed by federal employees dropped 29,713 in the week ended Oct. 19 to 14,423. The shutdown ended Oct. 17. In addition, a Labor Department analyst said California, which had been dealing with a backlog, reported no carryover in claims last week from previous weeks. Technical problems as California converted to a new computer system have distorted the claims data since September, which had made it hard to get a clear read of labor market conditions. The four-week moving average for new claims, considered a better measure of labor market trends, increased 8,000 to 356,250. Federal Reserve officials are closely focused on improvements in the labor market, which they have made a condition for tapering their massive bond buying program, while stressing they will wait a considerable period before beginning to raise interest rates after asset purchases have halted. Markets have pushed out their expectations for a rate hike to June 2015, when the chance of a move was priced at 60 percent. Earlier this week, the Fed funds futures contract had signaled a 52 percent chance of a hike in April 2015. The government will publish October's employment report on Nov. 8. Payrolls gained 148,000 in September, with the unemployment rate hitting a near five-year low of 7.2 percent. But if average monthly jobs growth continues at less than 150,000, where it has been over the last three months, that would make it difficult for the jobless rate to fall further.

Is Marissa Mayer a Winner?

With shares of Yahoo! Inc. (NASDAQ:YHOO) trading at around $26.89, is YHOO an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock's Movement

Yahoo has made a bold move by planning to acquire Tumblr for $1.1 billion. That's a hefty price tag, but was it a necessary risk?

Tumblr reaches 700 million people globally, and it has a much younger demographic than Yahoo. For example, more than half of Tumblr's audience is 35 or younger whereas more than half of Yahoo's audience is 35 or older. As far as revenue goes, Tumblr only had $13 million in revenue last year, but that's from $0 in 2007, and this year's revenue is projected to be around $100 million. That's some serious growth. Tumblr has also rapidly increased its number of unique users. It now has 117 million unique users, which is a big improvement over the 58 million unique users it had one year ago.

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According to Alexa.com, Tumblr.com ranks #32 globally and #19 in the United States. That's a ton of exposure. On the other hand, the past three months haven't been great. Pageviews-per-user is down 11 percent, time-on-site is down 11 percent, and the bounce rate is up 6 percent. Some people might think that Yahoo will come to the rescue, but Yahoo CEO Marissa Mayer has already stated that she's not going to mess this up. In other words, Tumblr will continue to be run by CEO David Karp, who is bright and innovative. If the site is heading in the wrong direction, there's a good chance that he will come up with a solution to turn things back around. After all, this is a kid who chose to watch Steve Jobs documentaries over superhero movies when he was a kid. To him, Steve Jobs was the superhero. It's possible this is only the beginning of what we will see from David Karp.

The big question on everyone's mind is whether the Tumblr acquisition will be a Bebo/MySpace or an Instagram/YouTube. Opinions have been strong on both sides, but what many people are missing is that even if it's a colossal failure, Yahoo can handle it. While the acquisition is a risk, it's a calculated risk. It's also a risk worth taking in order for Yahoo to broaden its demographic base.

Marissa Mayer showed she had some guts. That's a plus, but what do employees think of her? Marissa Mayer seems to be a winner. According to Glassdoor.com, 85 percent of employees approve of the job she's doing. That’s an excellent sign.

Below is a chart comparing fundamentals for Yahoo, Google Inc. (NASDAQ:GOOG), and AOL Inc. (NYSE:AOL).

	YHOO	GOOG	AOL
Trailing P/E	7.79	27.20	3.22
Forward P/E	17.55	17.10	20.60
Profit Margin	82.55%	20.92%	47.86%
ROE	29.98%	16.36%	48.17%
Operating Cash Flow	-360.33M	16.56B	386.30M
Dividend Yield	N/A	N/A	N/A
Short Position	2.80%	1.50%	11.10%

Let's take a look at some more important numbers prior to forming an opinion on this stock.

T = Technicals Are Strong

Yahoo has outperformed its peers over the past year.

	1 Month	Year-To-Date	1 Year	3 Year
YHOO	14.49%	35.03%	74.25%	77.98%
GOOG	13.38%	28.20%	51.04%	90.92%
AOL	0.16%	27.59%	68.36%	104.4%

At $26.89, Yahoo is trading above its averages.

50-Day SMA	24.82
200-Day SMA	21.37

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for Yahoo is stronger than the industry average of 0.10.

	Debt-To-Equity	Cash	Long-Term Debt
YHOO	0.00	3.01B	36.00M
GOOG	0.10	50.10B	7.38B
AOL	0.05	467.80M	104.20M

E = Earnings Have Been Steady

Earnings have been steady over the years. The big concern is revenue, which is why Yahoo must make aggressive moves.

Fiscal Year	2008	2009	2010	2011	2012
Revenue ($) in millions	7,209	6,460	6,325	4,984	4,987
Diluted EPS ($)	0.30	0.42	0.90	0.82	3.28

When we look at the last quarter on a year-over-year basis, revenue and earnings have both increased.

Quarter	Mar. 31, 2012	Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2012	Mar. 31, 2013
Revenue ($) in millions	1,221.23	1,217.79	1,201.73	1,345.81	1,140.37
Diluted EPS ($)	0.23	0.18	2.64	0.23	0.35

Now let's take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

T = Trends Might Support the Industry             

Top Canadian Stocks To Buy Right Now

Internet companies have been performing well due to innovation and acquisitions. However, this has also led to increased competition.

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Conclusion

Yahoo is a well-run company making strategic attempts at growth. Yahoo has quality debt management, solid margins, and the stock is trading at eight times earnings, whereas the industry is trading at 22 times earnings. One word of caution is that Yahoo isn't resilient to steep market corrections.

Stocks to Watch: Merck, Biogen, Roper Industries

Among the companies with shares expected to actively trade in Monday’s session are Merck(MRK) & Co., Biogen Idec Inc.(BIIB) and Roper Industries Inc.(ROP)

Merck’s third-quarter earnings fell 35% as the loss of exclusivity for asthma and allergy drug Singulair contributed to weaker sales. Revenue was just light of estimates, and ISI Group said sales from the diabetes franchise, animal health and the consumer segment were weaker than expected. Shares dropped 1.7% to $45.75 premarket.

Biogen Idec’s third-quarter earnings climbed 22% as sales for its multiple sclerosis treatment Tecfidera boosted the biotechnology company’s revenue. Results topped expectations, and the company again raised its full-year outlook, sending shares up 2.6% to $258.85 premarket.

Roper’s third-quarter earnings rose 17% as the maker of engineered products and communication technology posted a sharp rise in revenue from its medical and scientific imaging business following a major acquisition. But results missed views and the company cut its full-year earnings outlook, saying growth in energy and some other markets will be slower than expected in the fourth quarter. Shares edged down 1.5% to $131 in light premarket trading.

The Food and Drug Administration approved an extended-release version of the narcotic painkiller hydrocodone despite a recommendation by its advisory committee that the drug should be rejected because of its potential for abuse. The federal agency approved Zohydro ER from Zogenix Inc.(ZGNX), the first hydrocodone product not mixed with milder painkillers such as acetaminophen and also the first extended-release hydrocodone product. Shares rose 15% to $3.49 premarket.

Burger King Worldwide Inc.'s(BKW) third-quarter earnings soared from a year earlier as the fast-food chain posted significantly fewer operating expenses and as same-store sales increased in its international regions. Results beat Street estimates. Shares rose 1.2% to $20 premarket.

Dendreon Corp.(DNDN), maker of prostate-cancer drug Provenge, is seeking a buyer and is working with J.P. Morgan Chase(JPM) & Co. in the search for a suitor, Bloomberg News reported Saturday, citing people familiar with the matter. Spokesmen for Dendreon and J.P. Morgan declined comment to Bloomberg. Shares surged 17% to $2.95 premarket.

Mosaic Co. agreed to buy the Florida phosphate business of fellow fertilizer company CF Industries Holdings Inc.(CF) for $1.4 billion in cash, allowing Mosaic to significantly expand its biggest business by sales. Mosaic shares rose 2.5% to $47.09 premarket.

Drug maker Gilead Sciences Inc.'s(GILD) hepatitis C treatment won support from the Food & Drug Administration’s advisory committee, a recommendation that can be considered by the agency as it decides on approval. On Friday, Gilead said the advisory committee voted unanimously to show support for data that supports the approval of the experimental oral hepatitis C treatment, known as sofosbuvir.

J.P. Morgan Chase & Co. agreed to pay $5.1 billion to settle a lawsuit brought by the regulator of mortgage-finance companies Fannie Mae(FNMA) and Freddie Mac(FMCC). The pact with the Federal Housing Finance Agency includes $4 billion to settle a lawsuit alleging the bank misled Fannie and Freddie about the quality of securities J.P. Morgan and two other banks it later acquired had sold to the housing-finance giants during the housing boom.

Liberty Global(LBTYA) PLC has agreed to sell substantially all of its international content division Chellomedia to AMC Networks Inc.(AMCX) in a deal worth $1 billion, allowing the cable company to focus on its core markets.

Valeant Pharmaceuticals International Inc.(VRX.T) will pay $142.5 million to Anacor Pharmaceuticals Inc.(ANAC) to resolve all outstanding disputes between the two companies. The settlement resolves litigation over alleged breaches of contract involving Valeant units Dow Pharmaceuticals Sciences Inc. and Medicis Pharmaceutical Corp.

2 Health Care Stocks Rising on Big Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

With that in mind, let's take a look at several stocks rising on unusual volume today.

Alkermes

Alkermes (ALKS) is engaged in developing, manufacturing and commercializing medicines designed to yield better therapeutic outcomes and improve the lives of patients with serious diseases. This stock closed up 2% to $33.63 in Monday's trading session.

Monday's Volume: 3.14 million

Three-Month Average Volume: 1.51 million

Volume % Change: 98%

From a technical perspective, ALKS trended up here and broke out above some near-term overhead resistance at $34.30 with heavy upside volume. This move also pushed shares of ALKS into new 52-week-high territory, since the stock hit an intraday high of $34.74.

Traders should now look for long-biased trades in ALKS as long as it's trending above $31.50 and then once it sustains a move or close above Monday's high of $34.74 with volume that hits near or above 1.51 million shares. If we get that move soon, then ALKS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $43.

Actavis

Actavis (ACT) is a global, integrated specialty pharmaceutical company engaged in developing, manufacturing and distributing generic, brand and biosimilar products. This stock closed up 1.3% at $134.48 in Monday's trading session.

Monday's Volume: 2.44 million

Three-Month Average Volume: 1.76 million

Volume % Change: 59%

Shares of ACT spiked modestly higher on Monday after Leerink upgraded the stock to outperform from market perform, citing valuation and confidence in the company's ability to beat earnings expectations. The firm raised its price target to $155 from $133.

From a technical perspective, ACT trended up here and broke out above its 52-week and three-year highs at $133 with above-average volume. This breakout is coming off a major base and consolidation pattern for shares of ACT, since the stock had previously been trending range-bound between $118.68 on the downside and $133 on the upside.

Traders should now look for long-biased trades in ACT as long as it's trending above $130 or $128 and then once it sustains a move or close above its new 52-week high at $135.99 with volume that's near or above 1.76 million shares. If we get that move soon, then ACT will set up to enter new 52-week- and three-year-high territory, which is bullish technical price action. Some possible upside targets off that move are $140 to $145, or even $150 to $155.

To see more stocks rising on unusual volume, check out the Stocks Rising On Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

Jamba Follows Starbucks and Panera

It's going to be more rewarding to frequent your local Jamba (NASDAQ: JMBA  ) smoothie shop.

The Jamba Juice parent announced this morning that it has chosen Spendgo to fuel the chain's new My Fruitful Rewards program after testing it out at 30 stores. When the program rolls out nationally during the first quarter of next year, guests will be able to just enter their phone number at a point-of-sale touchscreen to register and subsequently score reward points.

Unlike many loyalty programs that have universal rewards, My Fruitful Rewards will be able to customize rewards based on buyer behavior.

Jamba has turned to incentivizing smoothie sippers before. It has gone through scratch-off cards and even offering free smoothies to push gift cards. However, this is a smart way for Jamba to learn more information about individual loyal customers that it can then use in drumming up new promotions or product ideas.

Loyalty programs have become quick in the fast casual space. Panera Bread (NASDAQ: PNRA  ) and Starbucks (NASDAQ: SBUX  ) are retail darlings with their initiatives.

Panera revealed during May's annual shareholder meeting that it now has 14 million MyPanera cardholders. It's easy to see why MyPanera has proven so popular. It also bases rewards on user behavior, and it's free. Customers swiping their cards can wind up with free bakery items, previews, or even invitations to special events. It's the element of surprise that helps with retention, and Panera gets to know its customers better with every swipe.

My Starbucks Rewards offers users a free drink or food item on their birthday just for registering the card. After five swipes, they qualify for free refills, and regulars that log more than 30 visits in 12 months get upgraded to gold status with even more perks. Starbucks claimed during an investor conference last month that its loyalty program now accounts for 25% of its transactions in this country.

If that sounds like a lot, Panera claims that its program has even better penetration.

"Our transactions that are done on the card dwarfs what Starbucks does," Panera boasted in May's earnings call.

With the success that Panera and Starbucks have achieved, it's not a surprise to see Jamba following in their footsteps.

Jamba's holding up well. Store-level comps have been positive for the past two years, and shares hit a three-year high last month. One can only imagine what will be possible next month with a more engaged and loyal fan of blended fruit beverages.

You must be hungry for more food stock ideas
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Best Financial Stocks To Own For 2014

With shares of Morgan Stanley (NYSE:MS) trading around $27, is MS an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Morgan Stanley is a global financial services company that, through its subsidiaries and affiliates, provides its products and services to a range of clients and customers, including corporations, governments, financial institutions, and individuals. The company operates in three segments: institutional securities, global wealth management group, and asset management. Morgan Stanley provides financial advisory and capital-raising services; equity, fixed income, and alternative investments; and merchant banking services. It participates in an industry that powers most other types of businesses around the world.

Morgan Stanley shareholders were all smiles Thursday after the investment bank posted a billion-dollar profit and said it will repurchase up to 500 million shares of its stock.�As economies continue to grow, Morgan Stanley is at the stem of that growth, providing the products and services required to form solid operating bases well into the future.

Best Financial Stocks To Own For 2014: Atlantic Coast Federal Corporation(ACFC)

Atlantic Coast Financial Corporation operates as the bank holding company for Atlantic Coast Bank that provides various banking services to individual and business customers primarily in northeastern Florida and southeastern Georgia. Its deposit products include checking accounts, savings accounts, money market accounts, demand deposit accounts, time deposit accounts, and certificates of deposit. The company?s loan portfolio comprises one- to four-family real estate loans, home-equity loans, commercial real estate loans, commercial and residential construction loans, land and multi-family real estate loans, commercial business loans, and automobile and other consumer loans. It provides its services through 11 full service branch offices. The company was founded in 1939 and is based in Jacksonville, Florida.

Best Financial Stocks To Own For 2014: NBT Bancorp Inc.(NBTB)

NBT Bancorp Inc., a financial holding company, provides commercial banking and financial services to individuals, corporations, and municipalities in central and upstate New York, northeastern Pennsylvania, and the greater Burlington, Vermont area. The company accepts various deposit products that include demand deposit accounts, savings accounts, negotiable order of withdrawal accounts, money market deposit accounts, and certificate of deposit accounts. Its loan portfolio comprises residential real estate mortgages, commercial loans, commercial real estate loans, real estate construction and development loans, agricultural and agricultural real estate loans, consumer loans, home equity loans, and lease financing. NBT Bancorp also provides retirement plan consulting and recordkeeping services; and trust and investment, financial planning, and life insurance services, as well as enables customers to check balances, transfer funds, pay bills, view statements, apply for loans , and access various other product and service information online. As of December 31, 2010, the NBT Bank division had 86 divisional offices and 114 automated teller machines (ATMs) located primarily in central and upstate New York and Burlington, Vermont; and the Pennstar Bank division had 37 divisional offices and 50 ATMs located primarily in northeastern Pennsylvania. The company was founded in 1856 and is headquartered in Norwich, New York.

5 Best Low Price Stocks To Invest In 2014: Access National Corp (ANCX.W)

Access National Corporation (ANC) operates as a bank holding company. The Company has two wholly owned subsidiaries: Access National Bank (the Bank) and Access National Capital Trust II. The Bank is the operating business of the Company. The Bank provides credit, deposit, and mortgage services to middle market commercial businesses and associated professionals, primarily in the greater Washington, D.C. Metropolitan Area. The Bank offers a range of financial services and products and specializes in providing customized financial services to small and medium sized businesses, professionals, and associated individuals. The Bank provides its customers with personal customized service utilizing the latest technology and delivery channels. The Bank�� business is serving the credit, depository and cash management needs of businesses and associated professionals. The products and services offered by the Bank include accounts receivable lines of credit, accounts receivable col lection accounts, growth capital term loans, business acquisition financing, online banking, checking accounts, money market accounts, sweep accounts, personal checking accounts, savings /money market accounts and certificates of deposit.

The Bank�� revenues are derived from interest and fees received in connection with loans, deposits, and investments. The Bank operates from five banking centers located in Chantilly, Tysons Corner, Reston, Leesburg and Manassas, Virginia and online at wwwaccessnationalbank.com. The Mortgage Corporation specializes in the origination of conforming and government insured residential mortgages to individuals in the greater Washington, D.C. Metropolitan Area, the surrounding areas of its branch locations, outside of its local markets through direct mail solicitation, and otherwise. The Mortgage Corporation has offices throughout Virginia, in Fairfax, Reston, Roanoke, and McLean.

Lending Activities

The Bank�� lending activities involve commercial real estate ! ! loans, residential mortgage loans, commercial loans, commercial and residential real estate construction loans, home equity loans, and consumer loans. These lending activities provide access to credit to small to medium sized businesses, professionals, and consumers in the greater Washington, D.C. Metropolitan Area. Loans originated by the Bank are classified as loans held for investment. At December 31, 2011 loans held for investment totaled $569.4 million. At December 31, 2011 unsecured loans were comprised of $2.9 million in commercial loans and approximately $124 thousand in consumer loans and collectively equal approximately 0.5% of the loans held for investment portfolio.

The Bank�� commercial real estate loans-wner Occupied represented 30.14% of our loan portfolio held for investment, as of December 31, 2011. Its commercial real estate loans-non-owner occupied loans represent ed18.44% of its loan portfolio held for investment, as of December 31, 2011. The Bank�� residential real estate loans represented 22.56% of the loan portfolio, as of December 31, 2011.

These loans fall into one of three situations: loans supporting an owner occupied commercial property; properties used by non-profit organizations, such as churches or schools where repayment is dependent upon the cash flow of the non-profit organizations, and loans supporting a commercial property leased to third parties for investment. Its residential real estate loans category includes loans secured by first or second mortgages on one to four family residential properties, extended to the Bank clients.

As of December 31, 2011, commercial loans represented 23.15% of the Bank�� loan portfolio held for investment. These loans are to businesses or individuals within its market for business purposes. As of December 31, 2011, real estate construction loans consisted of 5.22% of loans held for investment loan portfolio. These loans in clude loans to construct owner occupied commercial buildi! ngs! ; lo! ans t! o individuals; loans to builders for the purpose of acquiring property and constructing homes for sale to consumers, and loans to developers for the purpose of acquiring land, which is developed into finished lots for the ultimate construction of residential or commercial buildings. As of December 31, 2011, consumer loans made up approximately 0.49% of its loan portfolio.

Investment Activities

The Company�� investment securities portfolio is consisted of the United States Treasury securities, the United States Government Agency securities, municipal securities, Community Reinvestment Act (CRA) mutual fund, and mortgage backed securities issued by the United States Government sponsored agencies and corporate bonds. At December 31, 2011, securities totaled $85.8 million. . The securities portfolio is comprised of $45.8 million in securities classified as available-for-sale and $40.0 million in securities classified as held-to-maturity.

Sources of Funds

As of December 31, 2011, deposits totaled $645.0 million. As of December 31, 2011, deposits consisted of noninterest-bearing demand deposits in the amount of $113.9 million, savings and interest-bearing deposits in the amount of $182.0 million, and time deposits in the amount of $349.1 million. The Bank also uses wholesale funding or brokered deposits to supplement traditional customer deposits for liquidity. It participates in the Certificate of Deposit Account Registry Service (CDARS). Through CDARS its depositors are able to obtain FDIC insurance of up to $50 million. As of December 31, 2011, brokered deposits totaled $223,554,000, which includes $192,326,000 in reciprocal CDARS deposits. It also maintains lines of credit with the Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB). At December 31, 2011 there was $284.9 million available under these lines of credit. Borrowed funds consist of advances from the FHLB, senior unsecured term note, FHLB long-term borrowings, subordinated d! ebenture!! s (trust ! preferred), securities sold under agreement to repurchase, United States Treasury demand notes, federal funds purchased, and commercial paper. As of December 31, 2011 borrowed funds totaled $123.6 million. At December 31, 2011 borrowed funds totaled $70.9 million.

Best Financial Stocks To Own For 2014: B M Paschi Siena(BMPS.MI)

Banca Monte dei Paschi di Siena SpA provides various banking services in Italy and internationally. The company operates in various banking and finance segments comprising traditional banking; special forms of credit; asset management; life, and property and casualty insurance; investment banking; private banking, such as mutual funds, wealth management, and pension funds; and corporate banking, which consist of project finance, merchant banking, and financial advisory. Its products include various deposits; and loans, including retail, corporate customers, leasing, factoring, and consumer credit loans. As of December 31, 2010, it operated approximately 2,918 branches in Italy. The company was founded in 1472 and is based in Siena, Italy.

Best Financial Stocks To Own For 2014: Fox Chase Bancorp Inc. (FXCB)

Fox Chase Bancorp, Inc. operates as the holding company for Fox Chase Bank that provides financial services to consumers and businesses in Philadelphia and New Jersey. Its deposit products include non-interest-bearing demand accounts, such as checking accounts; interest-bearing accounts, including negotiable order of withdrawal and money market accounts; savings and club accounts; brokered deposits; and certificates of deposit. The company�s loan products portfolio comprises multi-family and commercial real estate loans; one-to four-family residential real estate loans that enable borrowers to purchase or refinance existing homes; commercial and industrial loans offered to professionals, sole proprietorships, and small and mid-size businesses; construction loans comprising adjustable-rate and fixed-rate loans offered to individuals, builders, and developers to finance the construction of residential dwellings, as well as loans offered for commercial development projects, including apartment buildings, restaurants, shopping centers, schools, and other owner-occupied properties used for businesses; and consumer loans, which include home equity loans and lines of credit, loans to individuals to purchase insurance policies, loans secured by certificate of deposits, and unsecured overdraft lines of credit. It also offers cash management services. In addition, the company manages and holds investment securities; and secures, manages, and holds foreclosed real estate. It operates through 11 branches in Philadelphia, Richboro, Willow Grove, Warminster, Lahaska, Hatboro, Media, and West Chester, Pennsylvania; and Ocean City, Marmora, and Egg Harbor Township, New Jersey. The company is headquartered in Hatboro, Pennsylvania.

Advisors' Opinion:

• [By Tim Melvin]

  To start, Seidman disclosed a position in Fox Chase Bancorp (FXCB), located in Hatboro, Pa. The bank is trading right around book value and has been a holding of mine for some time now. Me. Seidman owns a little over 5% of the bank.

Best Financial Stocks To Own For 2014: Cape Bancorp Inc.(CBNJ)

Cape Bancorp, Inc. operates as the holding company for the Cape Bank that provides a line of business and personal banking products to retail customers and small and mid-sized businesses primarily in Cape May and Atlantic Counties, New Jersey. Its deposit products include non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts, including NOW and money market accounts; savings accounts; and certificates of deposit. The company?s loan products portfolio comprises commercial mortgage loans, one-to-four family residential mortgage loans, commercial business loans, construction loans, home equity loans and lines of credit, and other consumer loans. It operates through its 16 full service branch offices located in Atlantic and Cape May counties in southern New Jersey; and a loan production office in Burlington County. The company was founded in 1923 and is based in Cape May Court House, New Jersey.

Advisors' Opinion:

• [By Tim Melvin]

  Right now I know that silver miners like Pan American Silver (PAAS) and Coeur Mining (CDE) are very cheap on an asset basis. I know that oil and gas producers like Swift Energy (SFY) and WPX Energy (WPX) are priced as if no one will ever use the stuff again. I know that small banks like Cape Bancorp (CBNJ) and Essa Bancorp (ESSA) are crazy-cheap — and if the world does not end, those stocks will be a lot higher in a few years.

Bear Of The Day: Golden Minerals

By Neena Mishra

Precious metals miners have had a rough ride this year due to the slide in metals' prices. Though they have somewhat stabilized in the past couple of weeks, the outlook still remains cloudy.

About the Company

Headquartered in Golden, Colorado, Golden Minerals Company (AUMN) owns mining operations and precious metals exploration properties in Mexico and South America.

Disappointing Second Quarter Results

The Company recorded a net loss of $217.8 million for the second quarter 2013, as compared to a net loss of $7.6 million in the second quarter 2012. EPS for the quarter was a negative $0.32, substantially worse than the Zacks consensus estimate of a negative $0.14.

The company has delivered negative surprises in three out of the last four quarters, with an average negative surprise of 29.3%.

The company had a $6.7 million negative operating margin for the first half of 2013.

Production Suspended

Due to depressed precious metals prices and legacy inefficiencies in mining operations, AUMN decided to suspend operations at its key Velardena mine in June.

The company expects $3.0 million one-time suspension related expenses and $2.5 million care and maintenance expenses in the second half of 2013.

Downwards Revisions

Due to disappointing outlook for precious metals miners, quarterly and annual estimates have been revised sharply downwards in recent months.

Zacks consensus estimate for the current quarter now stands at a negative $0.14 per share versus a negative $0.13 per share, 60 days ago, while the next quarter's estimate has worsened to a loss of $0.05 per share now, from a loss of $0.01 per share. The company is expected to lose money next year as well.

The Bottom Line

While the management continues to look for ways to reduce expenses and enhance production, there is still a lot of uncertainty related to resumption of operations at Velardena. In view of the cloudy outlook, investors may like to st! ay away from this stock for the time being.

AUMN is currently Zacks Rank # 5 (Strong Sell) stock and it also has a longer-term recommendation of "Underperform".

Better Play

Investors hoping for a turnaround in precious metals prices and looking for exposure to precious metals miners could consider Platinum Group Metals (PLG), currently ranked #2 (Buy) by Zacks.

GOLDEN MINERALS (AUMN): Free Stock Analysis Report (email registration required)

Source: Bear Of The Day: Golden Minerals

Is Vertex A Decent Long-Term Buy For Growth Investors?

Innovation is the critical success factor for the biotechnology industry. As long as the companies in this industry are able to get new drugs approved by the U.S. Food and Drug Administration (FDA) before their earlier patents expire, all is good to go. Vertex Pharmaceuticals (VRTX) is an active player in this industry. Let's take a look at how this company has been tackling the challenging economic conditions in the US and what the future holds for its shareholders.

Company profile

Vertex is in the business of discovering, developing, manufacturing and commercializing small molecule drugs for patients with serious diseases which include genotype 1 hepatitis C virus or HCV infection, cystic fibrosis "CF" etc. Vertex has recently submitted a supplemental New Drug Application "SNDA" to the FDA for the approval of KALYDECO (ivacaftor) monotherapy for the treatment of cystic fibrosis.

Historic financial performance

Revenue growth

(click to enlarge)

Source: Vertex SEC Filings

Vertex was in the research stage of its drug development during the period 2008-2010 and thus reported low revenues which were primarily coming from up front license fees related to collaboration agreements with Janssen and Mitsubishi Tanabe. Royalty payments also formed part of the minor revenue base as the company had entered into a purchase agreement with Fosamprenavir Royalty to receive royalty payments arising from sales of Lexiva/Telzir and Agenerase.

From 2011 onwards, the company reported net product revenues of $950.9 million from the sales of INCIVEK in the United States. This resulted in a razor sharp increase in the company's top line growth. Royalty revenues increased by $19.8 million in 2011 as compared to 2010 due to the addition of $20.3 million sales of INCIVO by Janssen for which there were no comparable revenues in 2010. The significant increase in! the collaborative revenues from Janssen in 2011 as compared to 2010 was related to $250 million in milestone payments for which there were no comparable revenues in 2010.

Sales continued to grow at a rate of 8.2% in 2012. This growth was led by a 40% increase in the net product revenues. KALYDECO was marketed for the first time and further growth was achieved in the sales of INCIVEK, which were the main drivers of this boost in the company's top line. Sales of INCIVEK increased by $210.9 million due to the realization of INCIVEK net product revenues over a full fiscal year in 2012 as compared to a partial fiscal year in 2011. Royalty revenues also continued to increase as Janssen was approved to market INCIVO in the European Union by the end of 2011. Since the approval of KALYDECO in the first quarter of 2012, most eligible patients in the United States initiated and began receiving treatment with KALYDECO, which drove Vertex's revenue higher.

Margins

Vertex saw a drastic turnaround in its operating margins in 2011 when the company properly began to market its drugs. The company reported a staggering 8.1% operating margin in 2011 compared to (486.7)% in 2010. This was a huge step forward as the company reported profits for the first time since inception. This improvement was achieved as the growth in the company's top line trickled down to positively affect its operating profits.

In 2012, the operating margin declined once again owing to a drastic increase in the cost of revenue as a percentage of sales from 4.54% in 2011 to 15.52% in 2012. This higher than expected increase in costs, due to an aggregate of $133.2 million charges for excess and obsolete INCIVEK inventories, contributed to the dent in the company's profitability.

Research pipeline

(click to enlarge)

Source: Vertex Research and Development Pipeline

According to Cystic Fibrosis Foundation T! herapeuti! cs (CFFT), cystic fibrosis disease has affected the lungs and digestive system of approximately 30,000 children and adults in the United States and 70,000 people worldwide. Every year 1000 new cases are diagnosed. Vertex is focusing its research on capturing this market demand and has recently submitted an application for KALYDECO (ivacaftor) monotherapy for patients with ages 6 and older who have at least one non-G551D gating mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene.

Presently, KALYDECO is approved for people with CF ages 6 and older who have at least one copy of the G551D mutation. After France and Germany, funding for KALYDECO has been recommended in England and Ireland, and it is expected that reimbursement in these countries will begin in 2013, which will further drive the company's revenue higher.

Hepatitis C is the second research area in Vertex's pipeline. Currently, there is no vaccine for this liver disease. There are approximately 150 million people who are chronically infected with hepatitis C virus with the addition of 3-4 million every year. A successful drug launch in this area in the upcoming years could mean big profits for Vertex.

Risks

Interest rate risk exposure

The company had 52.4% of its current assets invested in marketable securities as at June 30, 2013. These investments are denominated in U.S. dollars. Due to uncertain economic environment and the danger of US defaulting on its Treasuries once again on 15 Jan, these interest-bearing securities are materially exposed to interest rate risk and could decline in value if the US default occurs.

Foreign exchange market risk

With the US economy brimming with debt, the value of the dollar may depreciate. For the time being, the short-term debt ceiling has been raised but the country may face a similar default situation on 15th January as the government is expected to run out of funds once again after the next few months. This could adversely affect the ne! t revenue! s received from international product sales.

Conclusion

The company is currently in its high growth phase and has a positive future outlook. Despite the fact that the future FDA approvals carry a lot of significance in deciding the future of Vertex, its drugs that are already on the market are doing pretty well. Hence, I believe it is a decent long-term investment for growth investors.

Source: Is Vertex A Decent Long-Term Buy For Growth Investors?

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

Broadcom Guidance Sinks Shares

Broadcom Corp. (NASDAQ: BRCM) reported third quarter 2013 results after markets closed on Tuesday. For the quarter, the semiconductor maker posted adjusted diluted earnings per share (EPS) of $0.76 on revenues of $2.15 billion. In the same period a year ago, the company reported EPS of $0.79 on revenues of $2.09 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.69 EPS and $2.13 billion in revenues.

On a GAAP basis, Broadcom reported quarterly diluted EPS of $0.55, compared with EPS of $0.38 in the same period last year. GAAP net income included a one-time gain of $75 million, a charitable contribution of $25 million and $12 million in restructuring charges.

The company's CEO said:

Looking forward, we are taking the necessary steps to tightly manage the business while focusing on strategic initiatives, including LTE, data center innovation and driving the next generation of home video with HEVC [high-efficiency video coding].

For the fourth quarter of the 2013 fiscal year, Broadcom expects revenue of $1.975 billion, plus or minus 3% and gross margins down in a range of 0.5% to 1% compared with the third quarter. The consensus estimate calls for fourth quarter EPS of $0.59 on revenues of $2.13 billion. For the full year, the consensus estimate calls for EPS of $2.62 on revenues of $8.36 billion.

Broadcom's fourth-quarter forecast will cancel the top and bottom line beats the company posted for the third quarter. Lower pricing for high-end mobile devices from all manufacturers has taken a particular toll on Broadcom. Shares are down nearly 20% over the past 12 months, while peers like Qualcomm Corp. (NASDAQ: QCOM), Texas Instruments Inc. (NASDAQ: TXN), and Nvidia Corp. (NASDAQ: NVDA) are up around 17%, 45%, and 30%, respectively.

Hot Heal Care Companies To Invest In Right Now

Broadcom shares are trading down about 6.6% at $25.35 in after-hours trading Tuesday, in a 52-week range of $23.25 to $37.85. Thomson Reuters had a consensus analyst price target of around $32.60 before today's report.

VMware Earnings Charging To Virtualization, EMC Next

VMware Inc. (NYSE: VMW) is seeing a strong reaction to its corporate earnings report. Its third quarter sales were broadly in-line with analyst expectations, but earnings managed to beat the consensus analyst estimates. The VMware report always tends to have a reflection on EMC Corp. (NYSE: EMC) as EMC is the super-majority shareholder here.

VMware’s earnings came in at 20% growth in operations at $0.84 per share and revenue was up 14% to $1.29 billion in the quarter. The consensus analyst estimates were $0.82 in earnings per share and were $1.29 billion in sales for the quarter. What stands out is that sales growth would have been 19% if you exclude GoPivotal and divestitures from this year. WMware’s operating margin was 33.9% in the last quarter.

The bias of the call was very positive, as comments of being very pleased with results were followed with continuing to gain momentum globally. VMware is also seeing strong customer demand and talked up its prospects for the software defined data center.

We did not see guidance so we will hold off on judgment until later. VMware shares closed up 1.5% at $82.65 on Monday and the after-hours trading session had shares up almost 4% more at $85.92. The stock’s 52-week trading range is $64.86 to $99.55.

EMC shares closed up 0.6% at $25.24 and its shares were up close to another 3.5% or so around $26 on last look. Its earnings estimates are $0.45 EPS on sales of $5.8 billion.

Another Oil Train Derails, Burns in Canada

A Canadian National Railway Co. (NYSE: CNI) derailed and 4 cars carrying crude oil and 9 cars carrying liquefied petroleum gas (LPG) caught fire about 50 miles west of Edmonton, Alberta, early Saturday morning. No injuries have been reported. The 100 people living in the town of Gainford were all evacuated as a precaution.

In early July a 72-car train derailed and exploded in the town of Lac-Megantic, Quebec, killing 47 people and levelling the town's central business district. The derailed train in Alberta was hauling crude and LPG to terminals Vancouver, British Columbia.

Moving crude oil and other petroleum products by rail has boomed in the last few years due to a lack of pipelines in the Bakken shale play in North Dakota and Montana. Crude production in the Bakken rose to more than 900,000 barrels a day this past August, less than a third of which is transported by pipeline.

According to a report from the AP, U.S. railroads have moved 178,000 carloads of crude oil in the first six months of 2013, double the number during the same period last year and 33 times more than during the same period in 2009. The Railway Association of Canada estimates that as many as 140,000 carloads of crude oil will be shipped on Canada's tracks this year, up from 500 carloads in 2009.

10 companies people would die to work for

LinkedIn, a social networking site for people in professional occupations, is attracting more and more users as the world's job market evolves along with technology. Many professionals are now finding themselves on the site as they secure their own jobs, post openings for others, and use the platform for networking. Subsequently, LinkedIn is able to use its site data to illuminate certain realities, such as the most sought-after companies, jobs, and industries on its network.

The popular website employed its information to reveal more statistics on Wednesday, when it unveiled the 100 most in-demand employers of 2013 according to its data. LinkedIn explained in its report that it determined the rankings by analyzing the actions of its users and evaluating the 25 billion interactions that occur daily on its website between companies and members.

It is interesting to note how LinkedIn's 2013 rankings compare to those from 2012, as certain companies and industries have clearly come to the forefront while others have suffered flattened interest. Technology and packaged consumer goods companies, for example, now dominate the top 10, and more international companies also have recently made the top 100 list.

Have a look for yourself. Here are the world's top 10 most in-demand employers, according to LinkedIn.

10. McKinsey & Co.

First on the top 10 list is McKinsey & Co., a U.S. global management consulting firm with headquarters in New York. To join the ranks of the firm's 19,000 employees, applicants must be skilled in management consulting, financial modeling, and market entry.

The company has offices throughout the U.S. and worldwide. McKinsey & Co. made news recently when it launched the Asia Consumer Insights Centre, which is meant to help companies better understand Asian consumers.

9. Royal Dutch Shell

Up next is Shell, the multinational oil company headquartered in The Hague, Netherlands. Shell employs 73,000 workers and represents one of the 1! 6 oil and energy companies that made LinkedIn's top 100 list this year, compared to the 10 companies that ranked last year.

Shell only recently entered the top 10 list in 2013, but it reflects another international company that is drawing more interest from job seekers.

8. PepsiCo

Up next is PepsiCo, coming in at No. 8.

Pepsi is the only food and beverage company that makes LinkedIn's top 10 list of in-demand employers, and despite reports that it is suffering flattened demand in North America, Pepsi beat out fierce rival Coca-Cola, which scored a No. 18 rank. While Coca-Cola employs 44,000 workers, Pepsi has 69,000, and both companies require the same skills from their employees: FMCG, consumer products, and shopper marketing.

Pepsi has its headquarters in Purchase, N.Y., but has many locations throughout the world.

7. Amazon.com

E-commerce giant Amazon also made the list of most sought-after employers, as many job seekers express an interest in working under Jeff Bezos, a CEO who has recently won the attention of many consumers.

Amazon, headquartered in Seattle, employs 47,000 workers, but to join the power team, applicants must prove their expertise in distributed systems, scalability, and algorithms — and they have to not fear Bezos.

6. Facebook

Interest in Facebook on LinkedIn helped the social network come in at No. 6 in the rankings for the most in-demand employer, and after learning about the construction plans Facebook has for its campus in Menlo Park, Calif., we can see why.

Unfortunately for Mark Zuckerberg wannabes, Facebook only employs 13,000 workers, the smallest workforce of the top 1o companies — but if applicants can prove their expertise in Python, algorithms, and distributed systems, they may have a chance.

5. Microsoft

LinkedIn's rankings also show that many job seekers wish to follow in Bill Gates's footsteps and join the Microsoft team that is now led by CEO Steve Ballmer. Redmond, Washington-bas! ed Micros! oft employs 151,000 workers, the largest number on the list, but the competition for these spots is brutal, and Microsoft is known to take its hiring process extremely seriously.

Still, many applicants have proven their commitment to Microsoft on LinkedIn, demonstrating that they aren't afraid of Ballmer's tendency to yell and throw things.

4. Procter & Gamble

Procter & Gamble also wins a spot on LinkedIn's top 10 list, thanks to the many job seekers who visit its page daily and interact with company recruiters. The Cincinnati, Ohio-based consumer goods company employs 65,000 people, and although its products might not be as glamorous as the companies that flank it on the list, Procter & Gamble still has locations scattered throughout the world and serves consumers in many countries.

Hot Growth Companies For 2014

3. Unilever

Up next is another multinational consumer goods company, but this one has headquarters in London, representing another international corporation that makes LinkedIn's top 10.

Unilever has a workforce of 56,000 employees, and it only considers applicants skilled in FMCG, consumer products, and trade marketing. It is also the world's third largest packaged consumer goods company, behind Procter & Gamble and Nestle.

2. Apple

Unsurprisingly, the iPhone giant also makes LinkedIn's list, and it sits pretty at lucky No. 2, representing the world's second most in-demand employer.

It's not difficult to understand why so many job seekers are interested in working for the Cupertino, Calif.-based company. It just recently sold a record 9 million smartphones in the three opening days of its iPhone 5S and 5C launch, but only 77,000 employees are fortunate enough to hand out Apple business cards, and they have to prove their skills in iLife, iWork, and OS X.

1. Google

And Google comes in at first place as the company that the mo! st Linked! In users strive to work for.

The world's largest search engine only recently celebrated its 15th anniversary, but it has 71,000 proud employees who help expand Google's footprint in the digital world as it enters new industries and expands its reach. Any applicants interested in applying at Mountain View, California-based Google have to be able to prove an expertise in distributed systems, Python, and Google Adwords, and the qualifications definitely don't stop there.

MORE: Google X leader on wearable computing: It's coming

Wall St. Cheat Sheet is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Fraud trial to begin for 5 ex-Madoff employees

NEW YORK (AP) — The longtime secretary of imprisoned financier Bernard Madoff and four other back-office subordinates of the Ponzi king are going to trial Tuesday as the government for the first time shows a jury what it has collected in its five-year probe of one of history's biggest frauds.

The trial in federal court in Manhattan is expected to last up to five months and feature the unveiling of the government's prize witness — Frank DiPascali, Madoff's former finance chief.

The government is counting on him to explain to jurors the roles each defendant played in a fraud that prosecutors say stretched back into the early 1970s and consumed nearly $20 billion invested by thousands of victims, including retirees, charities, school trusts and even Holocaust survivors. Much of the money has since been recovered by a court-appointed trustee.

Amid a collapsing economy, Madoff was forced to reveal his fraud in December 2008, acknowledging that accounts he had told investors were worth nearly $68 billion only days earlier actually held only a few hundred million dollars. He pleaded guilty to fraud charges a few months later and was sentenced to a 150-year prison term in Butner, N.C.

Top 5 Canadian Stocks To Watch For 2014

Madoff, 75, claimed during his guilty plea that he acted alone, but the government says that was not true and will use the trial to try to prove it.

Prosecutors say fictitious trades and phantom accounts were created with help from Madoff's secretary, Annette Bongiorno, a supervisor in his private investment business; Daniel Bonventre, his director of operations for investments; JoAnn Crupi, an account manager; and computer programmers Jerome O'Hara and George Perez. All have pleaded not guilty. Six others have pleaded guilty in the case, including DiPascali.

Pretrial maneuvers included an effort by prosecutors to exclude from evidence any mention of the se! xual and romantic activities that seemed to permeate Madoff's offices when he was perceived as a high flying Wall Street guru, so smart that he could ensure double-digit returns to his investors even when the economy was flat or in decline.

"Suffice it to say that the government's investigation has revealed that, over the course of the multi-decade fraud alleged in the indictment, a number of Madoff Securities employees and customers — including expected witnesses, defendants, and others — were engaged in romantic or sexual relationships," prosecutors said in court papers.

The government said Madoff himself was engaged in a love triangle with one of the defendants.

U.S. District Judge Laura Taylor Swain, a calm, thoughtful presence on the bench, has not yet said for sure whether the salacious allegations can be aired in the courtroom.

Yet, she has excluded much of the evidence of the lavish lifestyles enjoyed by the defendants as Madoff splashed them with tens of millions of dollars even as the Ponzi scheme grew closer to its abrupt culmination.

Jurors won't hear about Bongiorno's Mercedes or her vacation home or her shopping forays to pricey department stores.

As her lawyers wrote in persuading the judge to exclude personal expenses: "The government seeks to tap into the public's generalized anger at 'Wall Street Greed,' which has the potential to result in an unjust verdict 'fabricated' from the jury's emotional response to proof that is not tethered to any element of the charges against Ms. Bongiorno."

Crupi's lawyers made a similar argument, saying "whether she purchased a beach house or not, went on vacation or not, bought a deluxe refrigerator or not, proves nothing about what happened ... or what Ms. Crupi knew."

Still, the judge is allowing into evidence information about the beach house and a Caribbean vacation for another defendant because Madoff's firm directly helped fund them.

And the first trial may not be the last.

Just days ! ago, pros! ecutors charged a 77-year-old accounting executive, saying he directed others since at least the early 1990s to falsify records and help conceal Madoff's fraud. He, too, has pleaded not guilty.

Best Gold Stocks To Own Right Now

link

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

What: Shares of clothing retailer G-III Apparel Group (NASDAQ: GIII  ) soared 19% today after its quarterly results and outlook topped Wall Street expectations.

So what: G-III suffered last year on spiking material costs and slumping sales, but today's first-quarter results -- EPS of $0.05 on a revenue jump of 19% -- coupled with upbeat guidance for 2013 reinforces optimism on Wall Street that the worst is behind it. In fact, the company's retail segment saw double-digit same-store sales growth while gross margin expanded 400 basis points, suggesting that its competitive position is strengthening, as well. �

Now what: Management now sees full-year EPS of $3.20 to $3.30 on sales of $1.57 billion, up nicely from its prior view of $3.10 to $3.20 and $1.55 billion. "Current booking activity and sell-through rates, as well as positive feedback from our retail customers on our upcoming merchandise programs, give us increased confidence in our full year outlook," said Chairman and CEO Morris Goldfarb. With the stock now up more than 100% over the past year and trading at a P/E of around 20, much of that optimism might already be baked into the valuation.

Best Gold Stocks To Own Right Now: CME Group Inc.(CME)

CME Group Inc. operates the CME, CBOT, NYMEX, and COMEX regulatory exchanges worldwide. The company provides a range of products available across various asset classes, including futures and options on interest rates, equity indexes, energy, agricultural commodities, metals, foreign exchange, weather, and real estate. It offers various products that provide a means of hedging, speculation, and asset allocation relating to the risks associated with interest rate sensitive instruments, equity ownership, changes in the value of foreign currency, credit risk, and changes in the prices of commodities. CME Group owns and operates clearing house, CME Clearing, which provides clearing and settlement services for exchange-traded contracts and counter derivatives transactions; and also engages in real estate operations. Its primary trade execution facilities consist of its CME Globex electronic trading platform and open outcry trading floors, as well as privately negotiated transact ions that are cleared and settled through its clearing house. In addition, the company offers market data services comprising live quotes, delayed quotes, market reports, and historical data services, as well as involves in index services business. CME Group?s customer base includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, and governments. It has strategic partnerships with BM&FBOVESPA S.A., Bursa Malaysia Derivatives, Singapore Exchange Limited, Green Exchange, Dubai Mercantile Exchange, Johannesburg Stock Exchange, and Bolsa Mexicana de Valores, S.A.B. de C.V., as well as joint venture agreement with Dow Jones & Company. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group was founded in 1898 and is headquartered in Chicago, Illinois.

Advisors' Opinion:

• [By Shauna O'Brien]

  CME Group Inc (CME) reported on Wednesday that September volume average increased 10% from September 2012, while its third quarter volume average grew 11% from last year.

  For September, volume averaged 13.1 million contracts per day, totaling 261 million for the month. Equity index volume in September averaged 2.9 million contracts per day, a 4% increase from last year. Equity index options volume was up 52% in September.

  Third quarter volume average was 12 million per day, up 11% from a year ago.

  CME Group shares were mostly flat during pre-market trading Wednesday. The stock is up 48% YTD.

Best Gold Stocks To Own Right Now: Goldcorp Incorporated(GG)

Goldcorp Inc. engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. It produces and sells gold, silver, copper, lead, and zinc. The company was founded in 1954 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Doug Ehrman]

  Gold reacts
  Gold, as represented by the SPDR Gold Trust (NYSEMKT: GLD  ) , fell quickly on the remarks, but bounced back to unchanged in short order. The gold miners -- including Barrick (NYSE: ABX  ) , Goldcorp (NYSE: GG  ) , and Newmont Mining (NYSE: NEM  ) had similar reactions (see chart). Looking ahead, the Fed is expecting U.S. GDP growth of 2.3% to 2.6% in 2013, accelerating to 3% to 3.5% in 2014. This growth is expected to come against a backdrop of falling unemployment, and an inflation rate in line with the targeted 2% rate set by the Fed.

Hot Blue Chip Stocks To Invest In 2014: Australian Dollar(AU)

AngloGold Ashanti Limited primarily engages in the exploration and production of gold. It also produces silver, uranium oxide, and sulfuric acid. The company conducts gold-mining operations in South Africa; continental Africa, including Ghana, Guinea, Mali, Namibia, and Tanzania; Australia; and the Americas, which include Argentina, Brazil, and the United States. It also has mining or exploration operations in the Democratic Republic of the Congo, Guinea, and Colombia. As of December 31, 2010, the company had proved and probable gold reserves of 71.2 million ounces. The company has a strategic alliance with Thani Dubai Mining Limited to explore, develop, and operate mines across the Middle East and parts of North Africa. AngloGold Ashanti Limited, formerly known as Vaal Reefs Exploration and Mining Company Limited, was founded in 1944 and is headquartered in Johannesburg, South Africa.

Advisors' Opinion:

• [By Dan Caplinger]

  One way Yamana has kept its competitive cost advantage is through extensive sales of base-metal byproducts like copper and zinc, as both it and fellow low-cost rival Goldcorp (NYSE: GG  ) benefit from utilizing those secondary metals to offset the cost of their gold production. Peers Gold Fields (NYSE: GFI  ) and AngloGold Ashanti (NYSE: AU  ) , on the other hand, face much higher costs in part because of their exposure to South Africa and its unstable labor market.

Best Gold Stocks To Own Right Now: First Majestic Silver Corp.(AG)

First Majestic Silver Corp. engages in the production, development, exploration, and acquisition of mineral properties with a focus on silver in Mexico. The company owns interests in La Encantada Silver Mine comprising 4,076 hectares of mining rights and 1,343 hectares of surface land located in Coahuila; La Parrilla Silver Mine consisting of mining concessions covering an area of 69,867 hectares; and San Martin Silver Mine comprising approximately 7,841 hectares of mineral rights and approximately 1,300 hectares of surface land rights located in Jalisco. It also holds interests in Del Toro Silver Mine consisting of 393 contiguous hectares of mining claims and an additional 129 hectares of surface rights located in Zacatecas; Real de Catorce Silver Project comprising 22 mining concessions covering 6,327 hectares located in San Luis Potosi state; and Jalisco Group of Properties consisting of mining claims totalling 5,240 hectares located in Jalisco. The company was founded in 1979 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Doug Ehrman]

  It is no secret that precious metals companies have been taking a pounding for some time now. The SPDR Gold Trust (NYSEMKT: GLD  ) and iShares Silver Trust (NYSEMKT: SLV  ) , the gold and silver ETFs, have been hard hit and operating companies like First Majestic (NYSE: AG  ) and Barrick Gold (NYSE: ABX  ) have been hit even harder. Through all of these struggles, and in some cases because of them, one precious metals company continues to look attractive for the long term: Silver Wheaton (NYSE: SLW  ) .

• [By Doug Ehrman]

  While many precious-metals companies have been in a slump of late, there is one that belongs perpetually in your portfolio: Silver Wheaton (NYSE: SLW  ) . The company is not like other miners -- including Pan American Silver (NASDAQ: PAAS  ) and First Majestic (NYSE: AG  ) -- in that it has a unique business plan that insulates it against many of the vagaries of the mining business. Moreover, because silver will always have a significant industrial demand component, even with the heightened volatility you see in the silver market, maintaining exposure to silver is appropriate.

• [By Doug Ehrman]

  In terms of individual companies, there are several good choices, but these can behave very differently. Pan American Silver (NASDAQ: PAAS  ) , for example, missed revenue expectations and beat earnings expectations in its last earnings release. But despite the beat, EPS shrank considerably from a year earlier on a GAAP basis. The stock has been fairly flat ever since. Conversely, First Majestic (NYSE: AG  ) reported strong revenue growth and a small bump in profits, sending the stock higher since the announcement. First Majestic reported increased cash costs and tightening margins, largely driven by lower silver prices. Each of these companies faces pressure from increasing production costs and environmental concerns.

• [By Doug Ehrman]

  Despite the weakness seen in precious metals a few weeks ago, silver has been relatively stable ever since mid-April, with the iShares Silver Trust (NYSEMKT: SLV  ) trading in a dollar-wide range ever since. With the presidents of the Chicago and Philadelphia Federal Reserve banks��releasing conflicting statements, turmoil may be just around the corner. Miners like Pan American (NASDAQ: PAAS  ) and First Majestic (NYSE: AG  ) are still facing operating challenges, while silver streaming darling Silver Wheaton (NYSE: SLW  ) struggles as well.

Best Gold Stocks To Own Right Now: Newmont Mining Corporation(Holding Company)

Newmont Mining Corporation, together with its subsidiaries, engages in the acquisition, exploration, and production of gold and copper properties. The company?s assets or operations are located in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand, and Mexico. As of December 31, 2009, it had proven and probable gold reserves of approximately 93.5 million equity ounces and an aggregate land position of approximately 27,500 square miles. The company was founded in 1916 and is headquartered in Greenwood Village, Colorado.

Best Gold Stocks To Own Right Now: Thompson Creek Metals Company Inc.(TC)

Thompson Creek Metals Company Inc., through its subsidiaries, engages in mining, milling, processing, and marketing molybdenum products in the United States and Canada. The company?s principal properties include the Thompson Creek Mine and mill in Idaho; a metallurgical roasting facility in Langeloth, Pennsylvania; and a joint venture interest in the Endako Mine, mill, and roasting facility in British Columbia. It also holds interests in development projects comprising the Davidson molybdenum property and the Berg copper-molybdenum-silver property located in northern British Columbia; the Howard?s Pass property, a lead and zinc project situated in the Yukon territory-northwest territories border; and the Maze Lake property, a gold project located in the Kivalliq district of Nunavut. The company produces molybdenum products, primarily molybdic oxide and ferromolybdenum, as well as soluble technical oxide, pure molybdenum tri-oxide, and high purity molybdenum disulfide. As o f December 31, 2010, its consolidated recoverable proven and probable ore reserves totaled 462.2 million pounds of contained molybdenum in the Thompson Creek Mine and the Endako Mine. The company was formerly known as Blue Pearl Mining Ltd. and changed its name to Thompson Creek Metals Company Inc. in May 2007. Thompson Creek Metals Company Inc. is based in Denver, Colorado.

Advisors' Opinion:

• [By Jim Jubak]

  The stock market liked what it heard Wednesday, August 7, from Thompson Creek Metals (TC) after the close in New York. Second quarter adjusted net earnings of 8 cents a share crushed the Wall Street consensus of a penny a share. Revenue climbed 3.8% to $117.8 million versus expectations for revenue of just $1.3.8 million. The company also said that its new Mt. Milligan mine is on schedule with a start-up for the concentrator expected this month, with first ore-feed by mid-August. The company said it expects commercial production to begin in the fourth quarter of 2013, with production ramping to full capacity over the next twelve months.

• [By Jon C. Ogg]

  Thompson Creek Metals Co. Inc. (NYSE: TC) was at 54% discount to its book value of $8.30 per share at the time, and the stock price of $3.90 is up from $3.03 Deutsche Bank’s team nailed upside of more than 28% here. Its price target was $4 at the time versus a consensus target of $4.50 at the time. The 52-week range here is $2.42 to $4.55, but we would point out that the consensus price target is $3.93.

• [By Selena Maranjian]

  Beaten-down companies that you think are likely to recover strongly are also good candidates. Molybdenum miner Thompson Creek Metals (NYSE: TC  ) , for example, sports average annual losses of 35% over the past five years, and carries substantial debt, but molybdenum's long-term outlook is promising, with price increases likely, and the company has a promising gold and copper mine on track to start producing by the end of the year. Freeport-McMoRan Copper & Gold (NYSE: FCX  ) is another major molybdenum player, with considerable operations in other metals, as well -- along with new investments in oil and gas production.

Best Gold Stocks To Own Right Now: Golden Star Resources Ltd(GSS)

Golden Star Resources Ltd., a gold mining and exploration company, through its subsidiaries, engages in the acquisition, exploration, development, and production of gold properties. It owns and operates the Bogoso/Prestea gold mining and processing operation that covers approximately 40 kilometers of strike along the southwest-trending Ashanti gold district in western Ghana; and the Wassa open-pit gold mine located to the east of Bogoso/Prestea in southwest Ghana. The company also has an 81% interest in the Prestea underground gold mine located in Ghana. In addition, it holds interests in various gold exploration projects in Ghana, Sierra Leone, Burkina Faso, Niger, and Cote d?Ivoire, as well as holds and manages exploration properties in Brazil in South America. The company was founded in 1984 and is based in Littleton, Colorado.

Advisors' Opinion:

• [By Rich Duprey]

  Clash of the titans
  When bears are raging on the gold bullion market, it's not surprising to see gold stocks getting mauled as well. Golden Star Resources (NYSEMKT: GSS  ) was the biggest loser in the sector, losing a quarter of its market cap on no company-specific news, though a report last Friday indicated that a large number of hedge funds had recently dumped their positions in the mid-tier miner. Yet it wasn't all that much better among the majors, either, as Barrick Gold (NYSE: ABX  ) fell almost 13% and Kinross Gold (NYSE: KGC  ) was down 14%.

Best Gold Stocks To Own Right Now: NEW GOLD INC.(NGD)

New Gold Inc. engages in the acquisition, exploration, extraction, processing, and reclamation of mineral properties. The company primarily explore for gold, silver, and copper deposits. Its operating properties include the Mesquite gold mine in the United States; the Cerro San Pedro gold-silver mine in Mexico; and the Peak gold-copper mine in Australia. The company also has development projects, including the New Afton gold, silver, and copper project in Canada; and a 30% interest in the El Morro copper-gold project in Chile. The company was formerly known as DRC Resources Corporation and changed its name to New Gold Inc. in June 2005. New Gold Inc. was founded in 1980 and is headquartered in Vancouver, Canada.

Advisors' Opinion:

• [By Ben Levisohn]

  One group of stocks not feeling the optimism today: Gold miners. With fewer concerns that a U.S. attack on Syria will be disruptive and more evidence that tapering will begin this month, the price of the precious metal has dropped 1.6% to $1,388.90 an ounce–and gold stocks are falling with it. New Gold (NGD), for one, has dropped 3% to $6.55, while Barrick Gold (ABX) has fallen 1.3% to $19.25.

Top Warren Buffett Companies To Watch For 2014

The annual Value Investor Conference is one of the premier events surrounding Berkshire Hathaway's (NYSE: BRK-B  ) annual meeting in Omaha. The Motley Fool's Joe Magyer, Michael Olsen, and Rex Moore were in attendance and talked to several value investors. In today's video, Joe chats with Wedgewood Partners' David Rolfe about the biggest lesson -- and misconception -- surrounding Warren Buffett.

What now?
Thanks to the savvy of investing legend Warren Buffett, Berkshire Hathaway's book value per share has grown a mind-blowing 586,817% over the past 48 years. But with Buffett aging and Berkshire rapidly evolving, is this insurance conglomerate still a buy today? In The Motley Fool's premium report on the company, Berkshire expert Joe Magyer provides investors with key reasons to buy as well as important risks to watch out for. Click here now for instant access to Joe's take on Berkshire!

Top Warren Buffett Companies To Watch For 2014: Curlew Lake Resources Inc. (CWQ.V)

Curlew Lake Resources Inc. engages in the acquisition, exploration, and development of mineral properties, as well as in the production of oil and gas in Canada and the United States. The company explores for gold and silver. It holds a 100% interest in the Typhoon mineral claims that include 117 mineral claims in the Clear Creek District of the Yukon. The company also has interests in oil and gas properties primarily in Alberta. Curlew Lake Resources Inc. was incorporated in 1987 and is based in Langley, Canada.

Top Warren Buffett Companies To Watch For 2014: Nortec Ventures Corp. (NVT.V)

Nortec Minerals Corp., an exploration stage company, engages in the acquisition and exploration of mineral properties in Canada, Ecuador, and Finland. The company explores for gold, copper, silver, platinum, palladium, nickel, lithium, tin, tantalum, and cobalt ores. It owns interest in the Tammela project in south-west Finland; the Kaukua and Haukiaho projects in north-central Finland; the TL property in Northern Labrador, Canada.The company was formerly known as Nortec Ventures Corp. and changed its name to Nortec Minerals Corp. in January 2010. Nortec Minerals Corp. was incorporated in 1999 and is headquartered in Vancouver, Canada.

Top 10 High Tech Stocks To Invest In Right Now: MFA Financial Inc (MFA)

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

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

Advisors' Opinion:

• [By Jonas Elmerraji]

  We're seeing the exact opposite setup in shares of MFA Financial (MFA). Unlike NCT, shares of MFA have been in a well-defined downtrend since the middle of May. That high probability range puts this stock's likely target price lower for the end of August.

  Since the best time to buy an uptrend is at support, it makes sense that the best time to sell a stock in a downtrend is at trendline resistance. That's the exact level that MFA is testing this week. If you own MFA right now, it makes sense to be a seller on the first semblance of a bounce lower.

  Momentum provides some extra confirmation here too. RSI has been suck down in bearish territory since the uptrend began in May. Oscillators like RSI tend to become range-bound when stocks' price action trends. I'd look for a move above 50 on RSI as a precondition to a move higher in price.

• [By Jon C. Ogg]

  MFA Financial Inc. (NYSE: MFA) has an estimated $0.20 decline in book value. This is partially attributable to the company’s recent special dividend declaration. For the third quarter, Sterne Agee sees MFA with a core earnings per share of $0.19, yet the dividend of $0.50 is a combined $0.22 estimated and $0.28 special.

Top Warren Buffett Companies To Watch For 2014: (JAINIRRIG.BO)

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

Top Warren Buffett Companies To Watch For 2014: ASF Group Ltd(AFA.AX)

ASF Group Limited, an investment company, operates in the resources, property, travel, commodities, infrastructure, and financial services sectors in Australia and China. The company holds interests in various mineral exploration projects, including the South Ellendale thermal coal and diamonds project covering an area of approximately 2,000 square kilometers in the Canning Basin of Western Australia; and two mineral exploration ventures for base metals and gold in Tasmania. It also involves in the shipping of bulk commodities from Australia to markets in China; development of port and rail facilities; and provision of property services to Chinese investors in Australia, as well as provides funds management and advisory services. ASF Group Limited was founded in 1980 and is headquartered in Sydney, Australia.

Top Warren Buffett Companies To Watch For 2014: Constellation Brands Inc (STZ)

Constellation Brands, Inc. produces and markets alcoholic beverages primarily in the United States, Canada, and New Zealand. It offers wine, spirits, and imported beer. The company?s Constellation Wines North America segment produces, markets, and exports wine, as well as sells various wine brands across various categories, including table wine, sparkling wine, and dessert wine. It offers wine under various brands, which include Robert Mondavi Brands, Clos du Bois, Blackstone, Estancia, Arbor Mist, Toasted Head, Simi, Black Box, Ravenswood, Rex Goliath, Kim Crawford, Franciscan Estate, Wild Horse, Ruffino, Nobilo, Mount Veeder, Inniskillin, and Jackson-Triggs; and spirits under various brands, including SVEDKA Vodka, Black Velvet Canadian Whisky, and Paul Masson Grande Amber Brandy. This segment also produces and markets wine kits and beverage alcohol refreshment drinks in Canada. The company?s Crown Imports segment imports, markets, and sells beer under the Modelo Brands, which include Corona Extra, Corona Light, Coronita, Modelo Especial, Pacifico, Negra Modelo, and Victoria, as well as the St. Pauli Girl and Tsingtao brands in the United States. The company sells its products through wholesale distributors, as well as state and provincial alcoholic beverage control agencies in North America; and directly to retailers or through wholesalers and importers in New Zealand. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.

Advisors' Opinion:

• [By Jon C. Ogg]

  Constellation Brands Inc. (NYSE: STZ) was raised to Buy from Neutral with a $65 price target at Goldman Sachs.

  Corning Inc. (NYSE: GLW) was downgraded to Perform from outperform at Oppenheimer, taking out 0.3% of the value of shares down to $14.00 on the news.

• [By Sue Chang and Saumya Vaishampayan]

  $STZ: Constellation Brands Inc. (STZ) �shares recovered to trade up 0.3%. The alcoholic beverages company, which owns beer brands including Corona and Modelo, notched its all-time closing high of $62.99 on Friday, according to FactSet.

• [By Monica Gerson]

  Wall Street expects Constellation Brands (NYSE: STZ) to report its Q2 earnings at $0.88 per share on revenue of $1.53 billion. Constellation Brands shares rose 0.41% to $58.50 in after-hours trading.

Top Reasons Forex Traders Fail

10 Best Insurance Stocks To Watch For 2014

The forex market is the largest and most accessible financial market in the world, but although there are many forex investors, few are truly successful ones. Many traders fail for the same reasons that investors fail in other asset classes. In addition, the extreme amount of leverage - the use of borrowed capital to increase the potential return of investments - provided by the market, and the relatively small amounts of margin required when trading currencies, deny traders the opportunity to make numerous low-risk mistakes. Factors specific to trading currencies can cause some traders to expect greater investment returns than the market can consistently offer, or to take more risk than they would when trading in other markets.

Forex Market Trading Hazards
Certain mistakes can keep traders from achieving their investment goals. Following are some of the common pitfalls that can plague forex traders:


Not Maintaining Trading Discipline
The largest mistake any trader can make is to let emotions control trading decisions. Becoming a successful forex trader means achieving a few big wins while suffering many smaller losses. Experiencing many consecutive losses is difficult to handle emotionally and can test a trader's patience and confidence. Trying to beat the market or giving in to fear and greed can lead to cutting winners short and letting losing trades run out of control. Conquering emotion is achieved by trading within a well-constructed trading plan that assists in maintaining trading discipline. Trading Without a Plan
Whether one trades forex or any other asset class, the first step in achieving success is to create and follow a trading plan. "Failing to plan is planning to fail" is an adage that holds true for any type of trading. The successful trader works within a documented plan that includes risk management rules and specifies the expected return on investment (ROI). Adhering to a strategic trading plan can help investors evade some of the most common trading pitfalls; if you don't have a plan, you're selling yourself short in what you can accomplish in the forex market. Failing to Adapt to the Market
Before the market even opens, you should create a plan for every trade. Conducting scenario analysis and planning the moves and countermoves for every potential market situation can significantly reduce the risk of large, unexpected losses. As the market changes, it presents new opportunities and risks. No panacea or foolproof "system" can persistently prevail over the long term. The most successful traders adapt to market changes and modify their strategies to conform to them. Successful traders plan for low probability events and are rarely surprised if they occur. Through an education and adaptation process, they stay ahead of the pack and continuously find new and creative ways to profit from the evolving market.
Learning Through Trial and Error
Without a doubt, the most expensive way to learn to trade the currency markets is through trial and error. Discovering the appropriate trading strategies by learning from your mistakes is not an efficient way to trade any market. Since forex is considerably different from the equity market, the probability of new traders sustaining account-crippling losses is high. The most efficient way to become a successful currency trader is to access the experience of successful traders. This can be done through a formal trading education or through a mentor relationship with someone who has a notable track record. One of the best ways to perfect your skills is to shadow a successful trader, especially when you add hours of practice on your own.
Having Unrealistic Expectations
No matter what anyone says, trading forex is not a get-rich-quick scheme. Becoming proficient enough to accumulate profits is not a sprint - it's a marathon. Success requires recurrent efforts to master the strategies involved. Swinging for the fences or trying to force the market to provide abnormal returns usually results in traders risking more capital than warranted by the potential profits. Foregoing trade discipline to gamble on unrealistic gains means abandoning risk and money management rules that are designed to prevent market remorse.
Poor Risk and Money Management
Traders should put as much focus on risk management as they do on developing strategy. Some naive individuals will trade without protection and abstain from using stop losses and similar tactics in fear of being stopped out too early. At any given time, successful traders know exactly how much of their investment capital is at risk and are satisfied that it is appropriate in relation to the projected benefits. As the trading account becomes larger, capital preservation becomes more important. Diversification among trading strategies and currency pairs, in concert with the appropriate position sizing, can insulate a trading account from unfixable losses. Superior traders will segment their accounts into separate risk/return tranches, where only a small portion of their account is used for high-risk trades and the balance is traded conservatively. This type of asset allocation strategy will also ensure that low-probability events and broken trades cannot devastate one's trading account. Managing Leverage
Although these mistakes can afflict all types of traders and investors, issues inherent in the forex market can significantly increase trading risks. The significant amount of financial leverage afforded forex traders presents additional risk that must be managed.

Leverage provides traders with an opportunity to enhance returns. But leverage and the commensurate financial risk is a double-edged sword that amplifies the downside as much as it adds to potential gains. The forex market allows traders to leverage their accounts as much as 400:1, which can lead to massive trading gains in some cases - and account for crippling losses in others. The market allows traders to use vast amounts of financial risk, but in many cases it is in a trader's best interest to limit the amount of leverage used.

Most professional traders use about 2:1 leverage by trading one standard lot ($100,000) for every $50,000 in their trading accounts. This coincides with one mini lot ($10,000) for every $5,000 and one micro lot ($1,000) for every $500 of account value. The amount of leverage available comes from the amount of margin that brokers require for each trade. Margin is simply a good faith deposit that you make to insulate the broker from potential losses on a trade. The bank pools the margin deposits into one very large margin deposit that it uses to make trades with the interbank market. Anyone that has ever had a trade go horribly wrong knows about the dreadful margin call, where brokers demand additional cash deposits; if they don't get them, they will sell the position at a loss to mitigate further losses or recoup their capital.

Many forex brokers require various amounts of margin, which translates into the following popular leverage ratios:

Margin	Maximum Leverage
5%	20:1
3%	33:1
2%	50:1
1%	100:1
0.5%	200:1
0.25%	400:1

The reason many forex traders fail is that they are undercapitalized in relation to the size of the trades they make. It is either greed or the prospect of controlling vast amounts of money with only a small amount of capital that coerces forex traders to take on such huge and fragile financial risk. For example, at a 100:1 leverage (a rather common leverage ratio), it only takes a -1% change in price to result in a 100% loss. And every loss, even the small ones taken by being stopped out of a trade early, only exacerbates the problem by reducing the overall account balance and further increasing the leverage ratio.

Not only does leverage magnify losses, but it also increases transaction costs as a percent of account value. For example, if a trader with a mini account of $500 uses 100:1 leverage by buying five mini lots ($10,000) of a currency pair with a five-pip spread, the trader also incurs $25 in transaction costs [(1/pip x 5 pip spread) x 5 lots]. Before the trade even begins, he or she has to catch up, since the $25 in transaction costs represents 5% of the account value. The higher the leverage, the higher the transaction costs as a percentage of account value, and these costs increase as the account value drops.

While the forex market is expected to be less volatile in the long term than the equity market, it is obvious that the inability to withstand periodic losses and the negative effect of those periodic losses through high leverage levels are a disaster waiting to happen. These issues are compounded by the fact that the forex market contains a significant level of macroeconomic and political risks that can create short-term pricing inefficiencies and play havoc with the value of certain currency pairs.

Conclusion
Many of the factors that cause forex traders to fail are similar to those that plague investors in other asset classes. The simplest way to avoid some of these pitfalls is to build a relationship with other successful forex traders who can teach you the trading disciplines required by the asset class, including the risk and money management rules required to trade the forex market. Only then will you be able to plan appropriately and trade with the return expectations that keep you from taking excessive risk for the potential benefits.

While understanding the macroeconomic, technical and fundamental analysis necessary for trading forex is as important as the requisite trading psychology, one of the largest factors that separates success from failure is a trader's ability to manage a trading account. The keys to account management include making sure to be sufficiently capitalized, using appropriate trade sizing and limiting financial risk by using smart leverage levels.