YOUR FRIENDS' ACTIVITY

    • Dow Jones Industrial Average component Caterpillar (CAT) reported results for the first-quarter that were every bit as dismal as most people expected. CAT earned $1.31 a share, or 9-cents less than estimates on the Street.

      In a statement the company expressed optimism on domestic housing, but said a 50% reduction in mining related businesses and little to no inventory build going into summer planting season will hurt results. For 2013, Caterpillar lowered its forecasts for both earnings and revenue to the low-end of the previous range.

      Yahoo! Finance senior columnist Michael Santoli joined Breakout to discuss whether or not weakness in Caterpillar's outlook bodes ill for the economy and markets as a whole. In the attached video Santoli says it's becoming obvious that no great global growth story is in the works, taking away a tailwind upon which companies such as CAT relied.

      "Maybe this is the world we're in for the next few months," Santoli says. Pointing out that the iShares MSCI Global Emerging Market Index ETF (EEM) is down more than 6% in 2013, he suggests that this year, unlike last, investors are braced for weakness. "We've readjusted to this idea that we don't have any global boom going on."

      Read More »from Big Earnings Week Starts With Caterpillar Miss
    • Teaching your kids to invest responsibly can feel like a thankless chore. Kids and their parents move and think at different speeds. What's seemingly an eternity for a teen is a blink of the eye for mom and dad. An adult facing four years of college tuition payments followed by years of living off retirement understands the importance of putting aside money early. Most kids just can't grasp that concept.

      From the kids' point of view, having mom and dad lecture them on financial basics can also feel like a chore. Given how little fun it can be for both sides, the process of learning investing basics turns the prospect of spending time together as a family into yet another item on a daily to-do list.

      It doesn't have to be so bad. Teaching kids to invest isn't a one-way street. Learning from your children while teaching them financial basics can actually be fun and lucrative for the whole family. Set aside the textbooks and head to the mall together to shop for investing ideas.

      Rachel Fox is an actress and editor of the popular Fox On Stocks website. She's also 16 and hip, giving her an uncanny sense for what's hot and what's not among her peers. She's created a "MyGenLoves" index and describes it as, "Companies that are very hot in my generation; things my friends love."

      In the attached video Fox ran through four of the companies on her list. As it turns out, some of the names will sound very familiar to the parental set.

      Facebook (FB)

      Analysts spend a lot of time trying to figure out how the world's biggest social network is going to "monetize" users, but the company's long-term success or failure is going to come down to its ability to keep its core customers from going elsewhere. Fox says FB is a winner in that regard but maybe not for the reasons you think.

      Related: Facebook Is Still #1 for Teens, But Watch Out for Twitter! Says Analyst

      "Facebook was really smart in acquiring Instagram," Fox says, describing the photo sharing company FB purchased for nearly $1 billion in 2012. "Instagram is actually the big social media thing that my generation is into right now."

      Starbucks (SBUX)

      Starbucks' appeal to teens is an afterthought, at most, for many investors. Conventional wisdom says teens are too young to drink coffee, preferring any of the dozens of energy drinks flooding store shelves. Fox strongly disagrees.

      Read More »from How Your Kids Can Make You Money
    • Next Stop for Investors, The Land of the Rising Sun

      For decades pundits have been claiming Japan’s “zombie” economy was here to stay; nothing could be done to revive it or the moribund stock market.

      Fast forward to 2013. A new government installed in Tokyo and unprecedented central bank stimulus created a nice run-up in Japanese stocks. In fact, the G-20 group of major economies over the weekend praised Japan's monetary policies as supporting domestic demand (and not as a devaluing of the currency), giving the Nikkei another 2% boost on Monday.

      Wall Street hasn’t ignored these developments. Goldman Sachs recently upped their 12-month target for the benchmark Nikkei 225 (^N225), seeing a 20% gain push the index to 16,000. As U.S. stocks seesaw a bit in the early spring, investors are betting Japan could be the place to find some gains.

      With the money supply pumping, a weakened Yen (JPY=) has helped jumpstart Japanese stocks. The magical 100yen/USD “parity” mark is approaching fast, and Jonathan Krinsky, chief technical market analyst of Miller Tabak, sees it happening soon.

      “I think [the yen] ultimately does get through [100 yen/dollar],” he says, “and when you look at a long term chart of the dollar/yen, it’s actually breaking a 25 to 30 year downtrend, so there are a lot reasons to think it could get much weaker versus the dollar.”

      Read More »from Next Stop for Investors, The Land of the Rising Sun
    • Five years ago actively managed ETFs hit the scene, marking a clear and present danger to the mutual fund industry as we know it. As founder and CEO of AdvisorShares, Noah Hamman was a pioneer in the field. In the attached clip Hamman says his niche of the ETF business is just getting started.

      First the basics. An actively managed ETF operates behind the scenes "just like an actively managed mutual fund," according to Hamman. There are fund managers making portfolio decisions within a specific asset class, be it High Yield, Emerging Markets or any other type of exposure an investor is seeking. The main differences for investors are cost savings compared to mutual funds and the ability of investors to trade the assets just as they would a single stock or traditional indexed ETF.

      "Simple things that you're used to in the stock market like a limit order, you can't do with a mutual fund," says Hamman. To the degree that onerous mutual fund fees forced investors to buy and hold for the long-term, such flexibility could make it all too easy to start trading ETFs that are in turn being traded by a fund manager.

      Of course, we don't live in a buy and hold world anymore. Whatever risk is created by over-trading actively managed funds, it pales in comparison to the risks of some of the ETFs that use derivatives to replicate positions like a triple-levered short of the volatility index. Actively managed or even indexed ETFs will rise and fall based on their underlying assets, not based on whether or not an ETF company has set up a hedge correctly.

      Read More »from Actively Managed ETFs Are Making Mutual Funds Obsolete

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