Why Rising Bullishness Could Derail Stocks

"Why Rising Bullishness Could Derail Stocks", found at BusinessWeek.com, discusses how surveys and experts feel as if the mood of investors could be changing from pessimism to optimism. Measures of investor sentiment tend to become more bullish well after a stock market rally has already begun, as large numbers of people are persuaded to become buyers as the market moves higher and higher. Experts have been watching for overconfidence in individual investors, as this would be a sign that the rally is ending. However, recent surveys have shown mixed results in regards to whether or not the market is becoming bullish or bearish. Investors Intelligence's weekly survey of 130 investment newsletters showed the percentage of advisers bullish on the stock market rising 2.2 points, while the latest American Association of Individual Investors' Sentiment survey showed bullishness falling from 48.5% to 38.1% over the past week. Chief investment strategist at Robert Baird, Bruce Bittles, believes there is a split between professionals (who recognize the strength of the economic recovery) and the general public, which is still wary even after a 79% rise in the S&P 500 since March 2009. While surveys measure what the investors are saying, fund-flow data measures investors behavior and what they are doing with their money. According to this data, investors have pulled much of their money out of U.S. equity mutual funds and put money in the less risky bond mutual funds. John Merril, CIO at Tanglewood Wealth Management says, "The pessimism is pretty thick, the sentiment out there is pretty ugly". He feels this is due to people's unhappiness with politicians in Washington and an anger directed toward financial institutions that "stack the deck" against investors. Many other investing experts also cite the political climate for investor's continued pessimism, mentioning how people don't like policies being developed by Democrats in Congress and the White House. Another clue that could tell of added optimism among investors, is the exchange-traded funds indicator. According to experts, above average flow into ETF's have tended to occur before market declines, while above average flows out of ETF's tend to occur before market rebounds. Since the beginning of February, a net of $12.8 billion flowed back into ETF's. Sentiment is changing among investors and there quite possibly could be a turning point.

Nokia and Ericsson: A Tale of Two Telcos

"Nokia and Ericsson: A Tale of Telcos", found at BusinessWeek.com, discusses how Nokia and Ericsson are heading in two different directions after financial results fell short of what analysts expected. Both company's reports were nothing great, however Nokia is in a much worse position than Ericsson. The reasons behind Nokia's decreased earnings and plunging shares, many feel, are the falling average selling prices for phones, flat market share, and a slightly lowered forecast for operating margins this year. Although the biggest cause behind the negative results is the Apple iPhone. While Apple received about $622 dollars in product and service revenues, Nokia's devices sold for an average of $207. In other words, Apple made 22% more revenue on 60% fewer units. Not only has Apple stolen the market buzz, but they have sent Nokia reeling. Ericsson's financial results may have been even worse than Nokia's, yet their shares soared mainly due to North American sales almost doubling. Helping boost Ericsson's North American sales was the well-timed deal they struck with AT&T. Ericsson is also tied to the iPhone, only they feel it has benefitted their compnay rather than hurt it. According to Ericsson CEO, Hans Vestvurg, "Investors see huge opportunities for Ericsson to sell equipment that serves that growing demand, which in some cities has already lead to network saturation". While Ericcson soars to new heights, Nokia's shares will remain under pressure until they come up with an answer to the iPhone.

More Delicious Delicacies, Thanks to Tech

Our company must market our flow restriction device to artisan food makers as demand for artisan food continues to grow due to increased technology. The article, found at BusinessWeek.com, discusses how one area of artisan food that is being positively affected by technology is olive oil. The article also discusses how the olive oil industry is beginning to take off.

Technology is improving century-old processing techniques in a variety of artisan foods. One of the processes being affected most positively is the process of making olive oil. For years, mid size and family owned olive farms in Italy would use traditional presses to turn it's olive harvest, on average 20 to 30 tons per year, into 5,000 liters of oil. This process took a great deal of time. Also, after the olives were harvested, they sat in storage bins for up to eight days, which hurt the oil's quality and limited it's shelf life. Today, the same family farms have installed continuous presses, which crush the olives into paste, then separates the paste from residual water using a centrifuge, eventually extracting the oil. Olives now only need to be stored two days at most, while the quality and quantity of the oil produced is greater. Those same farms that were once producing 20 to 30 tons of olive oil every year are now producing five times that amount.

The higher quality has helped boost an already booming market for olive oil. Worldwide consumption has increased from 1.9 billion tons a decade ago, to 2.6 billion in 2002. Consumption in the United States alone has nearly doubled, from 104 million tons to 196 million tons in 2004. This would be a great industry for our company to crack as it continues to grow by leaps and bounds. Our company needs to market our technology towards these producers in an effort to have these farms buy our flow restriction device.

Venture Capital Investing Climbs to $4.73 Billion

The article "Venture Capital Investing Climbs to $4.73 Billion" discusses how interest in start ups has increased, along with venture capital investment. This is due mainly to improved access to capital among a rebound in mergers and initial offerings. Through the first quarter of 2010, 681 deals had occurred, an increase of $3.36 billion from the same period a year earlier. The biggest deals in the quarter involved companies focused on clean energy, while the biggest declines came in the software and biotechnology industries. According to Bill Wiberg, a partner in a venture firm, "The pace of investing is picking up". This is definitely a good sign for our company, as we will need money to continue to fund our on-going flow-restriction project.

Mind the Estate Tax Gap

The article "Mind the Estate Tax Gap", discusses how much of a mess an estate tax break law has become and the consequences many will face due to it not being fixed by Congress. Although estate taxes will return to their normal 55% in 2011, 2010 will be a year where there will not be an estate tax. This may seem like a lucky break for wealthy heirs of the ultra-rich, however many will end up paying high capital-gains taxes on these inheritances. This is so because of the disappearance of the "step-up" in basis, which allowed assets to be revalued for tax purposes at the time of death. For heirs who inherited homes or family businesses that have grown in value, the "step-up" rule allowed them to start with a clean slate, owing no capital-gains when they sold the assets. Now, an executor can assign a "step-up" basis of up to $1.3 million to assets in the estate, and an additional $3 million for assets left to a surviving spouse. Things get even more complicated when there are multiple heirs receiving multiple assets, a task which requires the executor choosing how to allocate the $1.3 million in tax basis among the assets. This task has led to many executors facing lawsuits from unhappy heirs. According to Clay Stevens, Director of strategic planning at Aspirant, "Many people are going to be worse off than before". Regardless of whether or not Congress fixes the problem before the end of the year, it may be too little too late for some families as we are already well into the year 2010.

USEC shares climb on DOE grant for Ohio

Our company must market our flow restriction device to a company in southern Ohio after the United States Department of Energy recently awarded the plant a grant of $45 million for further development and demonstration of centrifuge technology. The article, found at BusinessWeek.com, discusses how USEC is the world's leading supplier of enriched uranium for commercial nuclear power plants. USEC also looks to increase production of enriched uranium after gaining this grant.

Recently the U.S. Department of Energy announced it will provide $45 million to fund an on-going centrifuge project at the USEC plant in Ohio. The project was developed to further research and develop centrifuge technology. Over the course of this testing program, the company has logged over 338,000 hours on centrifuges. This would be a great market for our company to tap as USEC is the world's leading supplier of enriched uranium fuel for use in commercial nuclear power plants. According to the USEC, using centrifugal force to extract uranium is much more efficient than the Cold-War era gaseous diffusion method. Enriched uranium from the plant 65 miles south of Columbus would be used in generating electricity by nuclear power plants.

Want To Bank Your Own Stem Cells?

The article, "Want To Bank Your Own Stem Cells?", found at BusinessWeek.com, discusses a market that may be viable for our flow restriction device. The article states the potential power for stem cells is limitless and people should be ready to bank their own stem cells in order to be ready when regenerative therapies hit the market. A recently founded company, NeoStem, may have a need for our device. The main question surrounding the flow restriction device is whether it will sell or not.

Denis Rodgerson is the CEO for NeoStem, a company that allows people to bank their own stem cells, in case they are needed someday. Studies have shown that stem cells can later be grown into heart cells, brain cells or even used for the treatment of Parkinson's disease. The process of banking one's own stem cells involves the separation of the cells from bone marrow using a centrifuge. Rodgerson believes the company has potential and believes the evidence found in research is good enough to make stem cell banking a profitable proposition. This is just one of many opportunities where our company feels as though it can make an impact with our flow restricitor device.

Why a VAT Tax Is Where It's At

The article "Why a VAT Tax Is Where It's At", found at BusinessWeek.com, discusses how a VAT would help stop the United States national debt from skyrocketing even further. As Baby Boomers are set to retire, the United States government is faced with the arduous task of supporting many programs, such as MediCare and Social Security. The author truly believes a VAT can help solve some of the current financial problems in the United States. A VAT, which stands for value added tax, is collected at each stage of the production process and distribution rather than just from retailers. Not only is this type of tax highly efficient, but the way it is collected also minimizes compliance problems. However, there is opposition to the idea of enforcing a VAT tax. Some believe this tax would make the government even bigger than it already is. According to Americans For Tax Reform member Grover Norquist, "VAT is French for big government." The author points out that nobody really defends the current income system anymore because it is far too complicated and contains too many loopholes and special interest favors. It is time for the VAT to be embraced and long term fiscal discipline in the United States to be back on track.

Postal Service Seeks Five-Day Delivery by Early 2011

The article "Postal Service Seeks Five Day Delivery By Early 2011", found at BusinessWeek.com, discusses how USPS plans on cutting a sizable portion of their budget by eliminating delivery on a certain day of the week. By eliminating deliveries on Saturdays, the article mentions that USPS would save about $3.3 billion the first year and as much as $5.1 billion by the year 2020. However, the plan will get rid of around 40,000 jobs. There are both advocates and naysayers of this plan, including the National Association of Letter Carriers and small business customers. The National Association of Letter Carriers calls the plan "risky and counterproductive", while residential and small business customers believe Saturday delivery is "unimportant". The Postal Commission has 90 days to review the proposal and make a non-binding agreement.