Till's a-Ringing

In This Issue: Till's a-Ringing European Revival? Maybe The Global Bull Market: Ready, Set ... The Biggest Energy Surprise of 2015 Just knowing this ONE event is coming could save you from taking a huge loss this year. Time to check out my most fearless energy predictions for 2015. Go here. Till's a-Ringing 2/06/2015 By Benjamin Shepherd RadioShack had been an iconic brand for a century. As its name implies, if you were into repairing electronics, tinkering with computer builds in your garage or, in more recent years, wiring up stereo systems or building your own robotics, it was a go-to store. As a guy in his mid-30s, I can remember lots of trips to my local store as my friends and I souped-up old Tandy 2000s -- introduced by RadioShack -- and tried to fix our Atari's and original Nintendo systems. I'll probably never forget the sound of my first dial-up modem, purchased at RadioShack, or my parent's fury over the next phone bill. Unfortunately for RadioShack, though, those days are long gone. The nearly century-old chain filed for bankruptcy earlier this week after nearly a decade of trying to stay relevant in changing times and a couple of failed makeovers. These days, the stores seem to be more about selling cell phones and less about keeping old electronics running. The problem there is that with the rise of company-specific stores, like the ubiquitous AT&T (NYSE: T), Verizon (NYSE: V) or Sprint (NYSE: S) locations, competition has become pretty intense on what have become very low margin products. As a result, RadioShack hadn't turned a profit since 2011 and finally gave up the ghost, striking a bargain to sell up to 2,400 of its stores to Sprint and a hedge fund which also happens to be its largest shareholder. Then it declared bankruptcy. But while another iconic American retailer may be biting the dust, thanks to its failure to adapt to changing consumer tastes and needs, the overall state of the retail market isn't all bad. Over at Home Depot, 10-year average revenue and earnings growth has stayed consistently positive since 2006. Granted, that's not exactly an apples-to-apples comparison, but especially during the recession years the home improvement retailer struggled with some of the same issues that ultimately brought down RadioShack: It had expanded too quickly, supply chains became bloated and unwieldy and it entered markets it just didn't understand. By the mid-2000s, though, Home Depot (NYSE: HD) had come grips with its mistakes and began shedding marginal businesses, even shutting down its Chinese operations by 2012. Our analysts at Personal Finance added the stock to the publications Growth Portfolio not long after that, and since then the retailer's share price has more than doubled. As Home Depot's operating margins have improved, it has returned nearly $30 billion to its shareholders through buyback and steadily increasing dividends. Analysts even forecast that its earnings per share could grow an annual average of 14% over the next five years. In fact, while December's current retail sales growth was weaker than expected, it was still up by 3.2% on a year-over-year basis. In particular, fashion retailers and discount home goods stores saw stronger than expected same-store sales growth in the month, with Retail Metrics Inc reporting growth of 2.9%, beating analyst estimates. Car dealers are also reportedly expecting sales growth of better than 10% this year, spurred on by better job creation and lower fuel prices. RadioShack's failure was one of adaptation. While there are plenty of home improvement do-it-yourselfers out there, the cost of pretty every sort of electronic device has fallen to the point that most consumers simply toss broken items and buy new ones. And to say it was a late-comer to the cell phone game is probably pretty charitable, since the market dynamics in that niche were already shifting to a lower-margin, higher-volume model. RadioShack was simply too far past its prime. That said, better positioned American retailers, like Home Depot or Nordstrom (NYSE: JWN), are likely to thrive along with the American economy. Home Depot's 2015 EPS are forecast to grow by nearly 20% this year and 15% next as the US housing market continues picking up steam. Nordstrom's forecast isn't quite as rosy, with 2% growth expected this year and rising to 10% in 2016, but it is widely seen as a leader in not-quite-extravagant luxury merchandise. As consumers continue to gain steam, so will it. While RadioShack may be going the way of the dodo, American retailers as a whole are still attractive growth investments. "Buy when there's blood running in the streets" That's what Baron Nathan Rothschild said. And he was right. That strategy helped him create one of the largest – and most revered – financial dynasties in history. And here's the thing: A similar situation is happening right now in the energy industry. Rock-bottom energy prices have shortsighted investors running for the exits. But they're making a critical mistake. They should be buying, not selling. I found five shocking ways to profit from an $8.8 trillion Arctic energy fire sale… and I'll give you their names here. European Revival? Maybe 2/06/2015 By Bob Frick Almost exactly 200 years ago, the Duke of Wellington almost lost the day to Napoleon at Waterloo. But on June 18, 1815, the Prussians showed up in the nick of time, and cut short Napoleon's comeback. Talk about a close call -- even Wellington said the battle was "the nearest-run thing you ever saw." Just as Europe couldn't seem to shake Napoleon at the start of the 19th Century, Europe's economy can't shake recession since the Global Financial Crisis struck eight years ago. The European Union's GDP plunged to -4% in 2009, struggled up to +2 in 2010 and 2011, and since then been flat-lined. So weak is the EU, and so low are inflation and interest rates there, that many analysts fear the EU is on the brink of a deflationary spiral. This is a condition where prices drop, people and firms wait to buy because prices are falling, which causes prices to drop further and firms to cut back on spending and employment ... the end result can be a depression. But history may show that 2015 is the year the EU declares victory over its economic quagmire. Given the possibility it could have been sucked into a deflationary vortex, an EU recovery may be seen as the nearest-run thing you ever saw, economically speaking. I finally have faith that a real EU recovery could be coming from both the big picture and many small pictures. At the individual-firm level, Banco Santander, the Spain-based multi-national bank, this week reported a 70% jump in 2014's fourth quarter profits versus the same period in 2013. (It's a member of our Global Income Edge Aggressive Portfolio.) One bank reporting big profits wouldn't be a big deal, except this banco is the biggest in the Eurozone by market value. Further, its European operations are leading the charge, with profits in Spain nearly tripling, and the United Kingdom replacing Brazil as its most profitable market. Spain has been one of the more troubled EU economies. And the big picture also became much brighter this week. EU officials revised their economic forecast for the region, and for the first time in eight years they predicted growth in all the EU's 28 countries. Growth isn't going to be blockbuster, but at a forecasted 1.7% for this year, up from 1.5% predicted in November, the trend is at least in the right direction. Playing the role of Gebhard von Blcher (the Prussian field marshal at Waterloo) is a trifecta of factors that may rescue the EU. First, the weak euro will boost exports, as EU goods become cheaper relative to goods from countries with strong currencies (such as the U.S.) Second, depressed oil prices will help Europe relative to other zones that produce much more oil (such as the U.S.) And third, the European Central Bank is mimicking other countries' (such as the U.S.) monetary policies designed to jumpstart lending and commerce. So what does it mean to your investments? Hopefully you already have some European exposure, as it should be part of a balanced portfolio. After all, the EU accounts for about 19% of the world's economic output, roughly equivalent to the U.S., and it has a good long-term record of performance. As measured by the iShares Europe ETF (IEV), the Eurozone has returned 9.4% on an average, annualized basis for the last three years, and 8% for the last five. It's also our chief trading partner, which means our strong dollar and our stronger recovery will help pull the EU out of the doldrums. I don't believe in market timing, but I would say now is a good time to add European stocks if you don't already have some. I invest in Europe through mutual funds. One you might consider is a member of our Personal Finance funds portfolio: Causeway International Value (CIVVX). It currently has about 72% invested in Greater Europe, and has returned 10.6% for the last three years and 9.4% for the last five, on an average annualized basis. Europe is not out of the woods. But just as Napoleon knew he was pretty much cooked whether he won at Waterloo or not, a real European recovery is inevitable, sooner or later. This article originally appeared in the Mind Over Markets column. Never miss an issue. Sign up to receive Mind Over Markets by email. Reformed Wall Streeter Reveals Staggering Secret I've spent the past 26 years perfecting a stock-picking system that helps take the fear out of investing. From knowing what to buy to knowing when to sell, this system covers it all. And it all comes down to following three stunningly simple rules. The first time I tested it out, I made a staggering $127,344 in profits on a single trade. I wasn't allowed to use it when I worked for Wall Street because it actually would have made my job – and my bosses' jobs – obsolete. But I don't work for the 1% anymore, so I'm rolling this system out to the general public and showing anyone who wants an easier, less scary investing experience exactly how to do it. Get the profitable details here. The Global Bull Market: Ready, Set ... 2/05/2015 DIVIDEND SPOTLIGHT 6.01% Yield (12-month trailing) -- U.K. -- Healthcare This company is known internationally for their pharmaceuticals and vaccines. In addition to a product lineup that would excite any investor, we were drawn to this stock because of their competent debt management. They recently reduced long-term debt from $180 million to $48 million through two milestone financing deals. Because of their stability, they predict earnings growth in the quarters to come. We also like the fact that they're straight shooters in a complex field. Case and point, they ranked first among 20 global pharmaceutical companies on the Bill and Melinda Gates Foundation's Global Access to Medicines Index. Dividends like this are what make income investing so worthwhile, and are the focus of our premium publication Global Income Edge. We provide actionable advice that you can use to build wealth and protect your financial assets -- find out more here. FEATURE STORY By Richard Stavros After years of sputtering, global stocks may finally be about to boom. Central banks are stimulating economies, investors are cozying up to emerging markets, and low oil prices are greasing the skids for a much-needed rise in consumer spending. Global Income Edge's foreign holdings, particularly, should see a big benefit when the boom begins. The plan for a European recovery seemed to be back on track with markets rallying on a potential debt deal with Greece and on the European Central Bank's planned $1.2 trillion stimulus, which has been a big driver this year of a rebound in European stocks. And while negotiations over Greek debt will have stops and starts -- and cause some market volatility -- that won't derail the European recovery. Rather, fear-fraught headlines will create buying opportunities. We're cautiously optimistic on the Greek front because the new government moderated its tone this week and is wants to restructure its debts rather than default and exit from the Eurozone. Meanwhile, there was more good news this week. Investors are returning to emerging markets in droves and put $18 billion to work in stocks and bonds in January, according to the Institute of International Finance. According to the Wall Street Journal, asset managers are telling their clients that emerging markets are undervalued. Further the article noted, "Emerging markets are still expected to grow at a faster clip than developed ones, aided by cheaper commodity prices. Valuations there, after years of poor performance, have become attractive." Emerging Markets on the Rebound Source: Y Charts The report also noted that money managers are particularly focused on reform-minded India and Indonesia, and Mexico and Taiwan are expected to benefit from the U.S. recovery. As we have noted in this column often, many investors are focusing on companies that sell to the U.S. as they can cash in on the strong dollar. For subscribers of Global Income Edge, we identify which names will be able to best take advantage of new accommodative policy and growth initiatives the world over. GET PREMIUM... And Fuel Your Retirement with our Global Yields Just a friendly reminder that our launch ofGlobal Income Edgeis almost over, and your chance to get special pricing will soon end. Real recommendations with actionable advice that can transform your portfolio. Don't miss out on this limited-time opportunity. You have 90 days to see if it's right for you (100% of your money back, hassle-free, if it isn't) and we think that you'll be incredibly pleased with what you'll find inside. Funding your retirement isn't easy -- our 10.05%, 10.10%, and 10.32% yields can get your there.Find out more here. WEEKLY INCOME TRIVIA QUESTION Q: Last week was the 101st birthday of what small California town of 34,000 people -- zip code, "90210?" The answer will be provided in next week's issue. Last week's question was: Koala bears eat only one kind of food -- what is it? The answer: Eucalyptus leaves. These adorable bears are "univores," relying solely on the tough leaves of the Eucalyptus tree for sustenance. They spend most of their lives in the tree, and rarely even drink water. Their natural habitat is in Australia -- just like our new dividend pick. It's an Australian bank with a 5.7% dividend yield. Given that the World Economic Forum recently named Australia as the 5th safest country for banks in the world, we're excited about income picks like this. Especially for retirement... it's all part of our "Golden Years Paychecks" retirement income plan. Find out how high-yield dividends can power a retirement without worry, and collect steady income from a class of dividends that we call "Golden Years Paychecks." Get 5 of My Favorite MLP Picks Right Now for Free Perfectly positioned to reap the rewards of the U.S. energy boom, these 5 rock-solid partnerships yield an average of 7.6%. Buy them now and they will repay you with rising income for years to come. Click here for more. You are receiving this email at benjamart.ss.stock@blogger.com as part of your subscription to Investing Daily's Stocks To Watch, published by Investing Daily. To ensure delivery directly to your inbox, please add postoffice@investingdaily.com to your address book today. Email Preferences | About Us | Premium Services | Contact Us | Privacy Policy Copyright 2015 Investing Daily. All rights reserved. Investing Daily, a division of Capitol Information Group, Inc. 7600A Leesburg Pike West Building, Suite 300 Falls Church, VA 22043-2004 U.S.A.