3 must-know money tips for young professionals

It's not rocket science. Neither does it entail you living like a monk. Just follow these three tips and you are building a solid foundation.

Avoid credit card debt:

It's time you stopped your intense love affair with your credit card or else you will rapidly be sucked into a black hole called the debt trap. It starts off as a convenience, more of a stop-gap arrangement. You pay just the bare minimum amount and walk scot free. But as you well know, or will soon learn, there is no free lunch.

Remember this. When you use your card, you pay for an item with money that is not yours. So basically you enjoy life on borrowed money. This instant gratification can put you on a slippery slope. If you have started revolving credit, which means that you could not afford to pay your monthly bill, then the only way out of this ditch is to stop using your card till your debt is cleared.

Let's say you are revolving your debt at a rate of 2.75%/month. This works out to an obscene 33% pa which will rapidly eat into your disposable income and dramatically hinder your savings potential. And, it will not be just the debt that you are servicing. Every single purchase you make on that card will result in the interest rate being levied.

The way out:

Once you start revolving debt, make it a priority to clear it Stop using your card for additional spending once you are in debt If you are struggling, talk to the bank and see if they are open to negotiating the interest rate Get medically insured:

Numerous illnesses and accidents are pretty much age agnostic. So don't live under the deluded notion that you do not need medical insurance. Should you need it and not have it, you will watch your savings rapidly disintegrate.

Granted, you may have a medical insurance provided by your employer. But what if you quit your job or get handed the pink slip and between jobs you fall ill or meet with an accident? What if you decide to become a consultant and the employers no longer provide medical insurance?

Get a medical cover. The younger you are, the lesser your premium so you won't even feel the pinch. Not to mention the tax benefit. You can claim deduction from total income under Section 80D of the Income Tax Act, 1961, against premium paid towards the policy.

What's good:

Existing illnesses are excluded from the cover, so being young with no pre-existing ailments gives you a complete coverage When you are young you will not have to take a health check-up to qualify The more years go by without you making a claim, the greater your claim bonus Start investing:

The longer you wait, the more you lose.

You have time on your side today, this benefit won't last forever.

Let's say you invest Rs 1 lakh to withdraw when you are 70. By delaying your investment by just a few years, you pay a heavy cost. Here's how it will pan out.

Age you invest Rs 1 lakh	Its worth when you are 70
30	Rs 1.18 crore
35	Rs 65.30 lakh
40	Rs 35.94 lakh

 

 

 

 

If you don't have any savings, start now.

All you need to do is cut down on your savings by just Rs 1,000/month and invest that amount in an equity mutual fund. Within the next 10 years, you would be patting yourself on the back.

Let's say you invest Rs 1,000/month in a systematic investment plan (SIP) for 10 years in an equity fund that returns 12% pa. By just increasing the SIP amount every year by a very affordable Rs 500, the end result is amazing. A teeny-weeny push from your side, will go a long way. Start now!

If  you invest	You would have invested	Your corpus would be worth
Rs 1,000/month for 10 years	Rs 1.20 lakh	Rs 2.30 lakh
Increase your SIP by Rs 500 every year; so in the first year the SIP will be Rs 1,000, the next year it will be Rs 1,500, the third it will be Rs 2,000 and so on……	Rs 3.90 lakh	Rs 6.36 lakh

 

 

 

 

 

 

 

All investment calculations are on the assumption of an annual return of 12%.

The author is an Editor at Fundsupermart

Daily ETF Roundup: ITA Tumbles On Boeing, IYG Rallies

U.S. equities ended little changed today as investors digested a slew of corporate news and earnings, as well as Bernanke's commentary from earlier this week. JPMorgan Chase (JPM) reported earnings and revenue that were well above Wall Street expectations. Wells Fargo & Co. (WFC) also posted better-than-expected results, with profit rising 20% in the second quarter. Shares of Boeing (BA), however, tumbled after a fire broke out at London Heathrow Airport on one of the company's Dreamliner planes .



Global Market Overview: ITA Tumbles On Boeing, IYG Rallies Following today's upbeat earnings reports, all three major U.S. equity indexes managed to close in positive territory. The Dow Jones Industrial Average ETF slipped 0.14%, though its underlying index closed up 0.02% after being dragged down by Boeing. The S&P 500 ETF inched 0.04% higher, while the tech-heavy Nasdaq ETF gained 0.61%.

In Europe, markets erased earlier gains to end lower; the Stoxx Europe 600 slipped 0.1%, snapping a four-day win streak. Meanwhile, Japan's Nikkei Stock Average rose 0.2%, while China's Shanghai Composite fell 1.6% after China's Minister of Finance Lou Jiwei hinted that GDP could fall short of the government's 7.5% target.

Bond ETF Roundup

U.S. Treasuries traded higher today after Philadelphia Fed President Charles Plosser announced his support for the central bank scaling back its bond-buying program in September. Yields on 10-year notes rose 2 basis points, while 30-year bonds and 5-year note yields rose 1.5 and 3 basis points, respectfully .

Commodity Roundup

Crude oil futures traded higher today, settling above $105 a barrel, posting its third-consecutive week of gains. In other energy trading, natural gas and gasoline futures were also higher. Meanwhile, gold futures traded slightly lower, settling at $1,277.60 an ounce, on a stronger dollar.

ETF Chart Of The Day #1: The U.S. Aerospace & Defense ETF was one of the worst perfo! rmers today, shedding 0.66% during the session. Following news of a fire on one of Boeing's Dreamliner aircrafts, this ETF took a steep tumble during the afternoon hours. ITA eventually settled at $85.85 a share .

Click To EnlargeETF Chart Of The Day #2: The U.S. Financial Services ETF was one of the best performers today, gaining 0.86% during the session. After JPMorgan Chase (JPM) and Wells Fargo & Co. (WFC) posted better-than-expected earnings results, this ETF gapped higher at the open. IYG traded higher throughout the day, eventually settling at $74.89 a share .

Click To EnlargeETF Fun Fact Of The DayThe best-performing regional strategy year-to-date has been the Global Titans ETFdb Portfolio, which has gained 6.91%.

Disclosure: No positions at time of writing.

JPX Says It’s in Talks With Tocom on Trading System

Japan Exchange Group Inc. (8697), the operator of the world's second-biggest stock market, said it's in talks to provide its trading system to Tokyo Commodity Exchange Inc.

Tocom, as the bourse for gold, rubber and soybean contracts is known, is examining options beyond next May when its five-year contract to use the trading platform of Nasdaq OMX Group Inc. comes up for renewal, said spokeswoman Sayaka Sato. It may keep and upgrade the Nasdaq system or shift to a platform provided by a different domestic or overseas exchange, she said.

"JPX is in discussions with Tocom," said Naoya Takahashi, a spokesman for the exchange. "Nothing has been decided at this time." Sharing systems would bring revenue for JPX and reduce Tocom's systems development costs, he said.

About 25.5 million contracts changed hands through Tocom in 2012, down from a recent peak of 87.3 million in 2003, according to the bourse's website. The exchange reported net income of 20 million yen ($201,126) for the year ended March 31, compared with a 205 million yen loss the previous year, as investors increased holdings of risk assets and gold prices reached new highs in February, amid receding risks from Europe's debt crisis and economic-growth concerns in developing countries, the bourse said.

Tocom, CME

Tocom President Tadashi Ezaki said on July 12 the bourse is also in talks with CME Group Inc. about the possibility of sharing trading systems and met with CME Chief Executive Officer Phupinder Gill. CME has tentatively offered the use of its trading systems for around 8.5 billion yen over five years, the Nikkei newspaper reported today without attribution. JPX is asking for as much as 7 billion yen for the same period, Nikkei said.

JPX subsidiary Osaka Securities Exchange Co. uses the J-Gate trading system, also developed by Nasdaq OMX, for derivatives. The Osaka bourse and Tocom agreed in December 2010 that the commodity exchange can use the OSE's J-Gate backup facilities in case of emergencies.

Coca-Cola's Stock About to Get Personal

Over the years, Coca-Cola (NYSE: KO  ) has created advertising as iconic as its "red wave" logo, but its newest campaign could be among its most ambitious to invigorate sales and its stock.

Across Europe, Coke is replacing its own brand name with personalized names that are among the 150 most popular in the local markets it's targeting. Begun first in Australia two years ago, the beverage maker is expanding the campaign to 32 countries across the continent. If your name doesn't appear, you can visit a kiosk to have one personalized for you.

Companies have been experimenting for some time with using their label for further imprinting their brand on our brains. H.J. Heinz (NYSE: HNZ  ) offers up personalized ketchup bottles, but they're more of a limited-run novelty. It also more broadly offers other labels with witty or pithy sayings on them, more reminiscent of Dr. Pepper Snapple Group's fun facts found under their bottle caps than something that would allow a person to identify with a product.

The label, as a mini-billboard for a business' brand, have been tinkered with to create a new, different, or refreshed image. Over the years, General Mills (NYSE: GIS  ) has updated both Betty Crocker and its Pillsbury Doughboy, while PepsiCo's (NYSE: PEP  ) Quaker Oats slimmed down its Quaker mascot "Larry" while also modernizing Aunt Jemima. The Campbell Soup kids were also slimmed down a few years ago to highlight a healthier image.

More recently, other brands have sought to change their label in hopes of boosting stagnating sales. Boston Beer updated its Samuel Adams brand, hoping to reverse slowing sales of the craft brew, while Walgreen (NYSE: WAG  ) brought all of its private-label brands under a new, updated Nice! label.

Personalization such as what Coke is doing, however, is a different means of making a connection with the consumer. While you might end up having to drink someone else's "brand" if your name isn't so popular, it points to the marketing muscle Big Red carries that it can launch such a strategy. 

Yet the name game does carry risk. Apparently there are no Arabic names in its Israeli campaign, despite an Arab population in the country of 1.5 million. And it's prohibited the use of the name "Mohammed" in Sweden, despite its ubiquity, because it wisely didn't want to use the religious prophet's name used in conjunction with a commercial enterprise.

The initial Australian launch caused sales to rise Down Under by 4%, so rolling out the "share a Coke" campaign across Europe indicates that it wants to reverse the 6% slide in revenues it experienced in the fourth quarter of 2012 that was followed by 2% decline in the first quarter of this year.

Coca-Cola just might be able to teach the world to sing its praises once more.

Coca-Cola's wide moat has helped provide its shareholders with superior gains in the past, but the company faces some new threats to its continued market dominance. The Motley Fool recently compiled a premium research report containing everything you need to know about Coca-Cola. If you own or are thinking about buying shares in the company, you'll want to click here now and get started!

Why Movado Has Lagged Its Luxury Peers

On Wednesday, Movado (NYSE: MOV  ) will release its latest quarterly results. The stock has hit some bumps in the road lately, raising questions about whether it can successfully compete with its luxury-retail peers.

Overall, the luxury space has done relatively well lately, with the upper end of the income scale holding up better than broader-based retailers relying on a mainstream customer base for the bulk of their revenue. Movado has made some interesting strategic moves, but investors haven't been certain about its long-term success lately. Let's take an early look at what's been happening with Movado over the past quarter and what we're likely to see in its quarterly report.

Stats on Movado

Analyst EPS Estimate	$0.22
Change From Year-Ago EPS	(15.4%)
Revenue Estimate	$115.91 million
Change From Year-Ago Revenue	11.8%
Earnings Beats in Past 4 Quarters	4

Source: Yahoo! Finance.

Is Movado a timely stock right now?
Analysts have reduced their views on Movado's earnings substantially in the past few months, reducing their estimates for the April quarter by $0.06 per share. However, they've been less nervous about its longer-term prospects, cutting their full-year estimates by only half that amount. Nevertheless, the stock hasn't done too well, falling 5% since late February.

Movado has put in place a number of lucrative partnerships, going beyond selling its own line of luxury watches by creating watch lines for other luxury retailers. By latching onto the success of fellow luxury retailers Coach (NYSE: COH  ) and the Juicy Couture division of Fifth & Pacific (NYSE: FNP  ) , Movado ensures that it's able to get customers from multiple sources targeting different demographics.

But competition in the watch industry has gotten incredibly fierce. Archrival Fossil (NASDAQ: FOSL  ) has pushed ahead with partnership and expansion plans of its own, with its acquisition of Skagen last year helping to push sales higher. Earlier this month, Fossil posted its own strong earnings report, with a 24% jump in net income coming from a better-than-15% gain in revenue. Although direct sales through its own stores brought in the best margins, Fossil's partnership with Michael Kors (NYSE: KORS  ) and other third-party sales also led to substantial growth.

The big issue for Movado this quarter is whether its near-term results turn out as badly as it projected back in March, when it gave negative guidance along with its January quarter results. Yet despite taking a charge related to aligning its partnership with Coach to reflect Coach's strategic shift, Movado expects long-term sales growth in the 10% range throughout the next several years.

In Movado's report, look for signs of whether the retailer is falling behind Fossil in the watch space. In the fashion world, falling out of favor is always a troubling sign, but with so much promise, Movado needs to post the same strong results that Fossil did in order to reassure investors of its long-term success.

Michael Kors is one of today's hottest high-end fashion brands, and that's translated into one of the best-performing stocks in retail -- since its debut on the market in late 2011, the share price has more than doubled. But with all that growth, has the stock finally become too expensive, or is there still room left to run? The Motley Fool's premium report on Michael Kors gives investors all the information they need to make the right decision. We cover the key must-watch areas, opportunities, and threats to the company that investors need to know. To claim your copy, simply click here now for instant access.

Click here to add Movado to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Tackling Cancer: Leukemia's Biggest Current and Upcoming Players

As I noted 11 weeks ago, cancer statistics are both staggering and disappointing. Although cancer deaths per 100,000 people have been on the downswing since 1991 thanks to access to more effective medications and better awareness about the negative health effects of smoking, there is still a lot of research and progress yet to achieve. My focus in this 12-week series is to bring to light both the need for continued research in these fields, as well as highlight ways you can profit from the biggest current and upcoming players in each area.

Over the past 10 weeks, we've looked at the 10 cancer types most expected to be diagnosed this year:

Prostate cancer Breast cancer Lung cancer Colorectal cancer Melanoma Bladder cancer Non-Hodgkin's lymphoma Thyroid cancer Kidney cancer Endometrial cancer

Today, we'll turn our attention to the projected 11th-most diagnosed cancer: leukemia.

The skinny on leukemia
This year, nearly 49,000 new cases of leukemia are expected to be diagnosed. While that's well below some of the previous cancer's we've examined, the virulence of leukemia -- which is a cancer of the bone marrow or blood -- is higher than many we've reviewed in recent weeks. Leukemia is forecast to claim close to 24,000 lives this year, which makes it the sixth-deadliest cancer for both men and women.

There are four primary types of leukemia: acute lymphocytic leukemia (ALL), which is a cancer that starts from white blood cells called lymphocytes and is most common among children; acute myeloid leukemia (AML), which is a cancer usually found in adults where the bone marrow makes abnormal myeloblasts; chronic myeloid leukemia (CML), which is where the bone marrow makes too many white blood cells; and chronic lymphocytic leukemia (CLL), which is the most common adulthood leukemia and causes a slow increase in white blood cells called B lymphocytes, which helps spread cancer.

Although early stage detection really doesn't exist unless you're already presenting symptoms (fatigue, paleness, weight loss, bruising easily, etc.) or happen to be in the right place at the right time and are diagnosed during a blood test, the curability and severity of symptoms depends on which of these four diseases you have. Five-year survival rates for all leukemias have increased dramatically, from 34% in 1975-1977 to 58% as of 2002-2008, according to the American Cancer Society (links opens PDF file), but some offer better hope than others. As the ACS notes, those with CLL have an 82% chance of five-year survival, whereas AML patients have just a 25% chance.

Sources: Surveillance, Epidemiology, and End Results Program and the National Center for Health Statistics. 

The risk factors associated with leukemia are just as varying as the statistics with regard to five-year survival. Cigarette smoking, for instance, is a big risk factor for AML, while the probability of CLL has a lot to do with the genetics in your family. One common theme that appears to be a risk factor across all types of leukemia is radiation exposure -- especially through the course of receiving chemotherapy or treating an existing cancer.

Where investment dollars are headed
Although there are numerous medications targeting leukemia, we'll stick to these four most common types listed above. Here's a look at some of the most common therapeutic agents used to treat leukemia.

Sprycel: Developed by Bristol-Myers Squibb, Sprycel was approved in 2006 as a second-line treatment for patients who had Philadelphia chromosome-positive (Ph+) ALL or Ph+ CML, and had resistance to prior therapy. In trials, 42% of patients with Ph+ ALL showed a complete or partial response while taking the drug and it delivered a median response time of 4.8 months.  Gleevec: Marketed by Novartis, Gleevec is also a secondary treatment used to treat Ph+ ALL and CML in patients who haven't responded to previous treatments. More recently, Gleevec was granted FDA approval to treat children with Ph+ ALL, which is an important win for Novartis because, as I mentioned, ALL is the most common form of leukemia in children. Gleevec is part of a class of drugs known as tyrosine kinase inhibitors that blocks a protein crucial for cancer cell development.  Iclusig: Approved by the FDA this past December on an accelerated approval basis and developed by Ariad Pharmaceuticals (NASDAQ: ARIA  ) , Iclusig is also approved to treat Ph+ ALL and Ph+ CML. In trials, 54% of patients experienced a major cytogenetic response that had chronic phase CML, while 41% of patients with Ph+ ALL were noted as having a major hematologic response with a median duration time of 3.2 months. Iclusig does come with a black box warning label, though, that arterial thrombosis and liver toxicity have occurred to patients while on the drug. Bosulif: Also approved recently (back in September) and developed by Pfizer (NYSE: PFE  ) , Bosulif is a tablet that targets Ph+ CML in patients with resistance or intolerance to prior treatments. In trials, of those with chronic phase CML, nearly 34% received a major cytogenetic response. Even more impressive, 53.4% of all patients had a major cytogenetic response if they'd previously taken a tyrosine kinase inhibitor, with more than half of these patients demonstrating a response time in excess of 18 months. Erwinaze: Now owned by Jazz Pharmaceuticals via its purchase EUSA Pharma, Erwinaze is more a symptom-treating therapy than a curative agent. Erwinaze is approved for patients with ALL that have developed hypersensitivity to E-coli-derived asparaginase and was given the thumbs up by the FDA based on a single clinical trial involving 58 patients.

I could nearly go on all day with the therapies used to treat leukemia, but these are some of the most common branded names. There are also numerous generic treatments used to treat a broad range of leukemias. However, as we've witnessed previously, not every drug trial turns out to be a success. Seattle Genetics (NASDAQ: SGEN  ) , which admittedly has one of the newest and hottest technological capabilities with its antibody-drug conjugates, discontinued its lintuzumab trial in 2010 after it failed to provide a statistical benefit to patients in a mid-stage trial. Even Seattle Genetics' ADC technology, which piggybacks a toxin on an antibody and delivers it directly to cancer cells, isn't a guaranteed winner in this tough-to-treat group of blood-borne diseases.

What's coming down the pipeline
Now that you have a better idea of what's going in in the world of leukemia treatments, let's have a look at some of the clinical-stage therapies that could be changing lives in hopefully the not-so-distant future.

Ibrutinib: There's probably no doubt that Pharmacyclics' (NASDAQ: PCYC  ) Ibrutinib would take the cake as one of the most exciting pipeline candidates. Currently, it's being tested on mantle cell lymphoma (as we saw last month), and the difficult-to-treat CLL. Partnering with Johnson & Johnson's subsidiary Janssen Pharmaceuticals, Ibrutinib delivered a complete or partial response to 71% of treatment-naive CLL patients, with an incredible 96% of those treatment-naive patients showing no disease progression after two years! The 71% response rate blew every other clinical trial on CLL to date out of the water and was good enough to earn Ibrutinib the very rare "breakthrough therapy" designation from the FDA.  Idelalisib (GS-1101): Currently in early stage development by Gilead Sceinces (NASDAQ: GILD  ) , Idelalisib blocks the PI3 kinase delta to inhibit tumor growth and hopefully treat its target patient population: those with CLL. In the wake of the annual American Society of Clinical Oncology meeting in less than two weeks, Gilead reported early data from Idelalisib, and the results were phenomenal. More than half of the 54 patients enrolled exhibited meaningful tumor shrinkage, with median progression-free survival of 17 months. It's certainly an experimental drug worth keeping your eyes on. 

Your best investment
As with the treatments, I could spend an entire day talking about what's coming down the pipeline and still might leave a few dozen potential therapies out. What can definitely be said is that researchers and big pharmaceutical companies are certainly throwing their weight around with regard to research into leukemia.

If you were to look at this from an investing perspective, I think you have some clear-cut winners in this space -- although I'd say picking a favorite might be impossible.

Obviously, both experimental drugs have a lot going for them at the moment. Pharmacyclics has a collaborative partnership with J&J's Janssen that could net it up to $975 million in royalty payments. Ibrutinib has performed splendidly in trials, but it'll certainly need to keep those expectations sky high if it wants to support its already frothy valuation.

Gilead offers promise from its existing pipeline of HIV and hepatitis drugs, but is still a long way away from seeing any bottom-line impact from Idelalisib. Make no mistake about what I'm saying here: I like Gilead a lot -- but any real results from Idelalisib are still years down the road.

I think the most solid play in leukemia is Pfizer. Bosulif, which was approved last year, went head-to-head against Novartis' Gleevec in CML, and returned blood counts in 55% of patients to normal after 48 weeks. Gleevec, during the same period, was effective in normalizing blood counts in 33% of patients. Bosulif offered some of the top progression-free response times and a high cytogenetic response rate, making it the most attractive second-line treatment available -- in my opinion, at least.

Stay tuned next week, when we tackle the current and upcoming therapies for the treatment of pancreatic cancer in this "Tackling Cancer" series.

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

The Incredible Shrinking Deficit

According to an LA Times article in 2011: "Some 75% of respondents said they were following the [California] budget debate, yet only 16% were aware that state spending has shrunk by billions of dollars over the last three years."

There may be something similar happening now at the federal level. Poll after poll will confirm that Americans are worried about the budget deficit. But how many of them know it's shrinking fast?

The Treasury Department issues reports on monthly spending and tax receipts -- a version of the government's income statement. Tally up the last four years, and you get this:

Source: Treasury Department.

Many have pleaded with the government to cut spending. Far fewer, I think, know that the government spent less over the last 12 months than it did during the same period two years ago. Adjusted for inflation, the government spent the exact same amount over the past 12 months as it did during the same period five years ago, before the current administration came into office.

If you just look at the first three months of the year, which is guided by the most recent deficit-reduction policies, the numbers are even better for deficit hawks. Compared with the first three months last year, federal spending is down 9%, tax receipts are up 14%, and the deficit is down 32%.

Goldman Sachs analyst Alex Phillips recently wrote:

The federal deficit continues to shrink. Through the first six months of the fiscal year, revenues have come in higher than expected, while spending has come in lower than expected. As a result we are lowering our deficit forecast for the current and next two fiscal years.

Earlier this year we lowered our FY2013 deficit forecast from $900bn (5.6% of GDP) to $850bn (5.3%). In light of recent trends, we are lowering it again to $775bn (4.8%) ...

We expect the improvement to continue for the next few years. Although we had already expected additional cyclical improvement and residual fiscal policy tightening to reduce the deficit further in 2014 and 2015, we have reduced our estimates a bit further, to $600bn (3.5% of GDP) and $475bn (2.7%).

The most important figure here is the deficit as a share of GDP, because as long as a government's deficit is lower than annual economic growth, it can run in the red forever while actually lowering its debt burden (people overlook this because it doesn't apply to households). Since 1930, the government has run an average deficit equal to 3.2% of GDP each year.

Goldman now estimates the deficit as a share of GDP will total 4.8% this fiscal year, and 3.5% next year. Over the last year, GDP grew by 4%. If growth stays pat and Goldman's estimates are right, the nation's debt-to-GDP ratio will stop rising as soon as next fiscal year (which begins this October).

Long term, the largest budget issue is the cost of health care its impact on Medicare. It will be a mammoth problem if not addressed. But the short- and medium-term budget outlook is likely far tamer than most imagine. Just like California in 2011, there is a gulf between perception and progress. 

The Check's In the Mail for Some Foreclosed Homeowners

The nation's largest banks will begin sending payments this week to millions of Americans who may have been wrongfully foreclosed on during the housing crisis. A total of $3.6 billion in cash will be distributed to 4.2 million borrowers who lost their homes or were at risk of foreclosure, the Federal Reserve and the U.S. Comptroller of the Currency said Tuesday. Payments will range from $300 to $125,000. About 90 percent of borrowers whose mortgages were serviced by 11 of the banks will receive payments by the end of April, the agencies said. The last group of payments is expected in mid-July. A large share of those receiving payments, about 3 million borrowers, will each get only $300 or $400, according to data issued by the two agencies. Around 80 percent of them will receive $1,000 or less. At the other end of the scale, $125,000 payments will go to 1,082 military personnel, who were foreclosed upon in violation of a law prohibiting foreclosures on active-duty service members, and to 53 borrowers who weren't in default on their mortgages but still lost their homes. Generally homeowners who were wrongly denied a loan modification are entitled to relatively small payments. By contrast borrowers whose homes were deemed to be unfairly seized are eligible for the biggest payments. The amounts apply to borrowers whose mortgages were serviced by the 11 banks. Details for the other two, Goldman Sachs and Morgan Stanley, will be announced in the near future, the agencies said. The 13 banks, which include Bank of America, JPMorgan Chase, Wells Fargo and Citigroup, reached a settlement with the federal agencies in January. They agreed to pay a total $9.3 billion in cash and in reductions of mortgage balances. The banks settled the regulators' complaints that they wrongfully foreclosed on borrowers with abuses such as "robo-signing," or automatically signing off on foreclosures without properly reviewing documents. The settlement covers borrowers whose homes were in any stage of the foreclosure process in 2009 or 2010. It ended an independent review of loan files that the two agencies ordered in 2011. Banks and consumer advocates had complained that the loan-by-loan reviews were time-consuming and costly and didn't reach many affected borrowers. Some questioned the independence of the consultants who performed the reviews, who often ruled against borrowers. Consumer advocates have criticized the deal, saying the regulators settled for too low a price by letting banks avoid full responsibility for wrongful foreclosures. The other banks in the settlement are HSBC, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank, Aurora, Morgan Stanley and Goldman Sachs.

4 Big Stocks on Traders' Radars

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.

>>Buy These 5 Rocket Stocks to Beat the Market

From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.

Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.

While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.

>>5 Blue-Chip Stocks to Trade for Gains

These "most active" names are the most heavily-traded names on the market -- and often, uber-active names have some sort of a technical or fundamental catalyst driving investors' attention on shares. And when there's a big catalyst, there's often a trading opportunity.

Without further ado, here's a look at today's stocks.

Lululemon Athletica

Nearest Resistance: $45

Nearest Support: $35

Catalyst: Founder Rumors

Shares of athletic apparel stock Lululemon Athletica (LULU) are up more than 3% this afternoon, buoyed by rumors that founder Chip Wilson has been meeting with bankers at Goldman Sachs (GS) over possible strategic alternatives after a prolonged drop in LULU's share price. Wilson, who serves on the board and is a major shareholder (with 27% of LULU's shares), has been a controversial figure in the past -- but after a 32% tumble in the last 12 months, investors are getting excited about the prospect of a major change.

For now, the price action isn't that compelling. LULU continues to trade below the trend line resistance level that's acted like a price ceiling for the last year. Until that changes, it's best to stay away from the long-side of this stock.

Ericsson

Nearest Resistance: $12.50

Nearest Support: $12

Catalyst: Technical Setup

Handset maker Ericsson (ERIC) is seeing big volume for technical reasons this afternoon, up 1.26% after a big block trade hit shares this morning, bidding shares higher to start the session. The timing is convenient for shareholders right now -- ERIC is testing a key resistance level at $12.50, the top of this stock's ascending triangle pattern. A breakout above that $12.50 price ceiling is the buy signal for shares.

If ERIC can make the breakout happen, then look for $1 of upside potential as shares move up to the "R2" level on the chart above. When it happens, keep a protective stop just below $12.

American Apparel

Nearest Resistance: $0.80

Nearest Support: $0.60

Catalyst: Founder Drama

Small-cap clothing stock American Apparel (APP) is seeing another consecutive day of big volume, the aftermath of a battle between founder Dov Charney and the firm's board. American Apparel has publicly struggled under the weight of a heavy debt load in recent months, and the recent ouster of the firm's controversial chief executive is still causing a stir, particularly if a battle distracts new leadership from running the ship. Shares are down more than 2% this afternoon, following the latest updates, which included news that the firm's largest private shareholder wasn't planning on supporting Charney in a proxy fight.

But bulls may still have the last laugh. Shares of APP have been forming a bullish ascending triangle setup for the last month, bumping up against resistance at $0.80. A breakout above that $0.80 cent price level is the buy signal for shares of American Apparel in June.

Rite Aid

Nearest Resistance: $8.50

Nearest Support: $7

Catalyst: Technical Setup

Last up is drugstore chain Rite Aid (RAD), a name that's been in "buy-the-dips mode" since the beginning of 2014. Now, with shares testing support for a fifth time this year, investors are getting a change to buy another dip on big volume.

Waiting for a bounce is important for two key reasons: It's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, you're ensuring RAD can actually still catch a bid along that line before you put your money on shares.

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.



-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>5 Hated Earnings Stocks You Should Love

>>3 Stocks Spiking on Unusual Volume

>>5 Stocks Setting Up to Break Out

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in the names mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

Will Disney (DIS) Stock Be Affected By Theme Park Price Hike?

NEW YORK (TheStreet) -- The Walt Disney Company (DIS) announced a price increase for theme park admission to its parks in California.

The cost of admission to Disneyland is now $96, up from $92.

Admission to Disney's California Adventure also increased by $13 to $150.

Must Read: Warren Buffett's 25 Favorite Stocks  

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more

Shares of Disney are down -0.16% to $80.92 in after-hours trading on Monday.

TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year. DISNEY (WALT) CO has improved earnings per share by 30.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT) CO increased its bottom line by earning $3.38 versus $3.12 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $3.38). The net income growth from the same quarter one year ago has significantly exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 26.7% when compared to the same quarter one year prior, rising from $1,513.00 million to $1,917.00 million. Despite its growing revenue, the company underperformed as compared with the industry average of 14.9%. Since the same quarter one year prior, revenues rose by 10.4%. Growth in the company's revenue appears to have helped boost the earnings per share. The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, DISNEY (WALT) CO's return on equity exceeds that of both the industry average and the S&P 500. You can view the full analysis from the report here: DIS Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more

Stock quotes in this article: DIS 

The week in Tech: 5 must-know things

LOS ANGELES — Weekend project: Let's start changing all of our passwords.

The top five tech headlines this week are highlighted by a huge undertaking for all of us: password changing, thanks to the discovery of Heartbleed, a security bug that could make Internet surfing less safe as websites patch up holes.

Security researchers who uncovered the threat are worried because the lapse went undetected for more than two years.

Many popular sites, including Google, Yahoo, Facebook, YouTube and Tumblr, said that they fixed vulnerabilities this week or were not affected and that new passwords are recommended for those sites. Apple and Amazon said their consumer sites were not vulnerable.

The bottom line: Experts say it's imperative to update your passwords ASAP and to use effective ones that aren't simply "123456" or "Password." Try combinations of letters, numbers and symbols.

Here's more from the week in Tech:

A MOVE FOR MESSENGER

Sorry, Facebook fans, but that messenger program we all use on the social network to instantly reach out to folks is leaving the mobile Facebook. If you want to connect with someone, you'll need to leave Facebook soon and open up the free-standing Messenger app. The reason for the change? Facebook says messaging is a better experience on the app, so it wants to put the emphasis there.

FAREWELL TO XP

Another big change came to users of Windows XP, the 12-year-old operating system that no longer will get security updates from Microsoft, which wants you to stop using XP and buy new software. But guess what — Tuesday came and went, and millions of XP machines kept on running. So far, so good, but folks: XP without security has been described as a hacker's paradise. Best to join the modern era with more current software.

HELLO TO A NEW GALAXY

Speaking of contemporary, Samsung this week brought out the latest state-of-the-art Galaxy smartphone. The S5 has a slightly larger screen and built-in heart-rate monitor, is wate! rproof and — oh! — takes a pretty cool picture, too. In his review, USA TODAY's Ed Baig called the Galaxy S5 "a solid device" that didn't break much major ground.

WHAT'S UP IN APPS

Finally, in app news, the numbers puzzle 2048 is No. 1 on the free iTunes app chart for the third week in a row, but bubbling under is the mind game What's the Difference?, another fun time-waster. Tops for Android is Cut the Rope 2, a character-based adventure game.

Readers: Have you changed your passwords yet? Any questions about password management? Let's chat about it on Twitter, where I'm @jeffersongraham.

Don’t Overlook the Retirement Savers’ Tax Credit

You mentioned the retirement savers' tax credit in your article about President Obama's MyRA plan. How does this credit work, and who is eligible?

SEE ALSO: The Most-Overlooked Tax Deductions

The credit is 10%, 20% or 50% of your contribution to a retirement account, depending on your income, up to a maximum of $1,000 per person or $2,000 per couple. You can qualify for the retirement savers' tax credit if your adjusted gross income in 2014 is $60,000 or less if married filing jointly, $45,000 or less if filing as head of household, or $30,000 or less if you're a single filer. To qualify, you must contribute to a traditional or Roth IRA (MyRA's count), 401(k), 457, 403(b) or other retirement-savings plan.

If you are married filing jointly, for example, the credit can be worth 50% of your contribution (a $2,000 credit for a $4,000 contribution) if your joint income in 2014 is $36,000 or less. The credit is worth 20% of your contribution if you earn $36,001 to $39,000 and 10% if you earn $39,001 to $60,000. Married couples can't qualify for the credit if they earn more than $60,000. See the IRS factsheet for a table showing the income cutoffs for each level of the credit for joint filers, heads of household and singles for both 2013 and 2014 returns (the income numbers are slightly lower for 2013).

To qualify for the credit, you must be at least 18 years old and not a full-time student, and no one else (such as your parents) can claim an exemption for you on their tax return. You can qualify for this credit even if you make pretax contributions to an employer's retirement plan or nondeductible contributions to a traditional or Roth IRA, or if you get other tax breaks for your retirement-savings contributions -- such as a tax deduction for a traditional IRA contribution.

Keep in mind that this is a credit, not a deduction, so it lowers your income tax dollar for dollar. It is a nonrefundable tax credit, however, which means it cannot reduce your tax liability below zero. See IRS Publication 4703 for more information about the credit.

Complete IRS Form 8880 to determine the rate and amount of the credit, and file it with your income tax return. If you realize that you would have qualified for the credit in previous years but didn't claim it, you can file an amended return (Form 1040X) as far back as 2010 and still get the money. A 2010 amended return is due by April 15, 2014; a 2011 amended return is due by April 15, 2015; and a 2012 amended return is due by April 15, 2016. See Instructions for Form 1040X for more information about filing an amended return.

You still have until April 15, 2014, to contribute to an IRA for 2013 and qualify for the credit for 2013. See Often Overlooked Opportunities to Save in a Roth IRA for more information about Roth contributions if you're a nonworking spouse, retiree or freelance worker.

Got a question? Ask Kim at askkim@kiplinger.com.

Report: Fracking raising water supply worries

The USA's domestic energy boom is increasing demands on water supplies already under pressure from drought and growing populations, a new report says.

The water-intensive process used to extract oil and gas from shale underground — known as hydraulic fracturing or fracking — has required almost 100 billion gallons of water to drill more than 39,000 oil and shale gas wells in the U.S. since 2011, says Ceres, a green investment group.

More than half of those wells — 55% — were in drought-stricken areas, and nearly half were in regions under high or extremely high water stress, such as Texas, the report says.

To be in extremely high water stress means more than 80% of the area's available surface and ground water is already allocated for city, agriculture or industrial use. High stress means 40% to 80% of the water is already allocated, Ceres says.

Shale development is also occurring rapidly in areas where groundwater is already being depleted by other uses, including agriculture and residential development.

Nationwide, more than 36% of the 39,000 wells drilled since 2011 were in areas already experiencing groundwater depletion, the study says.

Hydraulic fracturing pumps water and chemicals at high pressure to break the shale, allowing trapped oil or gas to flow to the surface.

While fracking consumes far less water than agriculture or residential uses, the impact can be huge on particular communities and is "exacerbating already existing water problems," says Monika Freyman, author of the Ceres study.

Hydraulic fracking is the "latest party to come to the table," Freyman says. The demands for the water are also "taking regions by surprise," she says. More work needs to be done to better manage water use, given competing demands, she says.

Texas has the highest concentration of hydraulic fracturing activity in the U.S. More than half of its wells put in since 2011 were in high or extremely high water stress regions, Ceres says.

In Colorado ! and California, 97% and 96% respectively of the wells were drilled in regions under high or extremely high water stress.

The oil and gas industry says it's doing more to reuse and recycle water. It also points out that overall water use by the fracking industry is small.

In Colorado, oil and gas development accounts for 0.1% of the state's total water demand, while in Texas, it's less than 1%, says Katie Brown, researcher with Energy in Depth, a research arm of the Independent Petroleum Association of America.

A recent report from the University of Texas also found that natural gas fracking saves water overall by making it easier for utilities to switch from coal to natural gas power. As a result, it's helping to "shield the state from water shortages," Brown says.

More recycling will occur because companies "recognize the economic risk they have," with access to needed water, says Marcus Gay, water research director at IHS Global Insight.

Only about 5% of water consumed by oil and gas producers in the Barnett Shale in North Texas is currently being recycled, says a recent report by research scientist Jean-Philippe Nicot, of the University of Texas. That's probably about average for fracking throughout Texas, Nicot says.

Producers in Pennsylvania, meanwhile, are doing more recycling because they lack good access to deep injection wells to store spent water. For those companies, "it's cheaper to recycle" than ship the water out of state to deep injection wells, Nicot says.

5 Big Trades to Take Before the New Year

BALTIMORE (Stockpickr) -- Three more days -- that's how much time stands in between this morning's open and the final trading session of 2013.

It would take a pretty active three days to derail what's been a spectacular year for stock investors. Since the calendar flipped over to January, the S&P 500 has rallied more than 29%, climbing to new all-time highs in spite of a real lack of participation in among retail investors. And if yesterday's trading is any indication, a Santa Claus rally looks likely to tack on some extra gains before the first trade of 2014.

That's why we're taking a closer technical look at five year-end trades to take this week.

If you're new to technical analysis, here's the executive summary.

Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time.

Every week, I take an in-depth look at big names that are telling important technical stories. Here's this week's look at five high-volume stocks to trade this week.

Bally Technologies

It may seem like a sort of unlikely choice, but mid-cap gambling device designer Bally Technologies (BYI) is topping off our list today. Bally is capping off a stellar run in 2013, after rallying more than 72% since the start of the year. But don't worry if you missed the move; the technicals point to even higher ground in the short-term.

That's because Bally is currently forming an ascending triangle pattern, a bullish price setup that's formed by a horizontal resistance level above shares and uptrending support to the downside. Basically, as BYI bounced between those two technical price levels, it's been getting squeezed closer and closer to a breakout above resistance. The breakout happened just before Christmas, and it's giving us a buy signal this week.

Momentum adds some extra confidence to the setup in BYI: 14-day RSI has been trending higher since early October, an indication that buyers have been piling in at an increasing rate as the pattern developed. If you decide to jump in here, I'd recommend putting a protective stop at the 50-day moving average.

Stericycle

We're seeing the exact same setup in shares of Stericycle (SRCL), but with one big difference: This stock hasn't broken out yet. Stericycle is another ascending triangle pattern, in this case with a resistance level at $120. A breakout above that $120 price ceiling is the signal that it's time to take this trade.

Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Triangles and other pattern names are a good quick way to explain what's going on in a stock, but they're not the reason it's tradable – instead, it all comes down to supply and demand for shares.

That $120 resistance level is a price where there has been an excess of supply of shares; in other words, it's a place where sellers have been more eager to step in and take gains than buyers have been to buy. That's what makes a breakout above it so significant -- the move means that buyers are finally strong enough to absorb all of the excess supply above that price level.

Don't be early on the SRCL trade.

Ansys

$8 billion engineering simulation software maker Ansys (ANSS) is looking tradable too after spending most of the last five months in a sideways slump. Even though ANSS' price action hasn't exactly shown outstanding momentum, the bias is definitely on the side of sellers right now. Here's why.

Ansys is currently forming a rectangle pattern, a consolidation setup that's formed by a pair of horizontal price levels that basically "box in" shares of the stock. In Ansys, the rectangle is formed by resistance above shares at $90 and support down at $84. The breakout signal works just like the ones in BYI and SRCL – a move through the $90 level is the buy signal for shares of Ansys.

Strictly speaking, a move through $84 support is just as strong of a sell signal as the move through $90 is to buy. But the moves leading up to the rectangle pattern have a lot to say about how these setups typically resolve. Since ANSS started consolidating after a move up, a bullish breakout is the likelier outcome here. Either way, don't try to predict what's going to happen in shares; just be ready to react to it.

Apple

I've been a big fan of Apple (AAPL) for while now -- I own shares too. I'm happy to report that, from a technical standpoint, Apple couldn't look much better than it does now. And you don't have to be some kind of expert technical analyst to see why.

Apple is currently forming an uptrending channel, a setup formed by a pair of parallel trendlines. When it comes to price channels, up is good and down is bad; it's as simple as that. Shares have bounced higher on each of the last four tests of trendline support, and so, with the most recent bounce just a couple sessions ago, now's a pretty good time to be a buyer once again.

Relative strength (not to be confused with RSI, the momentum gauge we looked at earlier) continues to look exemplary for Apple right now. With a market that's teetering on new highs as I write, relative strength remains the single most important technical indicator to add to your toolbox right now. It speaks volumes that Apple's RS line is still in bull mode.

The 50-day moving average has been a pretty good proxy for support for the last few months, so short-term traders may want to consider putting a protective stop just below it.

Honeywell

Last up is Honeywell (HON), another basic channel trade to watch right now.

Honeywell has been forming a picture-perfect uptrending channel since back in February, bouncing higher off of each of the last seven tests of support. More bounces indicate more buying pressure below the trendline, and that's a very good thing for anyone who owns HON right now.

While shares of Honeywell are a fair bit off of trendline support right now, it still makes sense to wait for the next return to the lower bound of the channel. Then, buy the bounce.

Buying off a support bounce makes sense for two big reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). Remember, all trend lines do eventually break, but by actually waiting for the bounce to happen first, we're ensuring HON can actually still catch a bid along that line.

To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.

 

RELATED LINKS:

 

>>4 Stocks Spiking on Big Volume

 

>>5 Stocks Insides Love Right Now

 

>>5 Dividend Stocks Ready to Pay You More in 2014

 

Follow Stockpickr on Twitter and become a fan on Facebook.

 

At the time of publication, author was long AAPL.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

 

Follow Jonas on Twitter @JonasElmerraji

 

It Might Be the Time for Beer

After a couple of capital increases and what looks like a weak strategy for its growth in different South American countries, Chile's beer king Compania Cervecerias Unidas (CCU) – most commonly knows as CCU - is selling at a steep discount to its peers. In other words, being down by 23% year to date, I think it might be the time to start thinking of buying CCU's shares.  

A Weak Growth Strategy

CCU recently issued more than 50 million shares and plans to use the proceeds for organic growth as well as M&A in South America. Possible targets could be related to soft drinks in Colombia, dairy in Chile, or a multi-category approach in Argentina and Uruguay (where the company recently acquired a mineral water company). That being said, I agree with most analysts. CCU should focus on its wonderful beer business in Chile (where the company is an effective monopoly) and on returning capital to its shareholders through dividends and buybacks.  

Results Are Still Wonderful

Despite having lost some ground in terms of market share in its main market against its rival, the Brazilian giant AmBev (ABEV), CCU's results are still ameliorating fast. Revenues were up by 13% year over year, EBITDA increased 6% year over year and their net income grew by 21% year over year. Better yet, consolidated organic volumes (the most important figure for beverage companies) increased by 7% year over year while pricing was also up by 5% year over year. That said, cost increases in Chile, Argentina and Uruguay (where the company is still losing money) were behind the 1.2% EBITDA margin contraction. Even when CCU's figures look very compelling, the company needs to work a lot on its cost structure and on focusing on its main market. After all, CCU's 18.4% EBITDA margin is well below AmBev's 50% margins.  

Valuation Contraction Looks Overdone

Despite the unnecessary capital increase, I believe it's time to take a deep look at the shares. Price is! what you pay and value is what you get, and at the current market price, I think you will get more than you pay for if you buy CCU's shares. The Chilean beverage leader sells for 7.7 times 2014 EV/EBITDA and 15 times earnings. Meanwhile, AmBev, which is down by 16% year to date, currently trades at 13 times 2014 EV/EBITDA and 20 times earnings. Even when the Brazilian beverages leader pays a much higher cash dividend yield than CCU (2.95% versus 1.95%), I believe the valuation gap is too wide. Moreover, with CCU you always have the M&A free call attached to the asset. The Chilean beer leader would be a wonderful target for the much bigger AmBev, which has been (unsuccessfully) trying to enter the Chilean market for more than a decade now. The Brazilian company could buy CCU and put into practice its wonderful famous cost-cutting strategies in order to boost margins.

Investors such as Carl Icahn and Richard Perry have held CCU for long periods of time. Maybe they should be buying once more. Always remember: “Price is what you pay and value is what you get.”

Also check out: Carl Icahn Undervalued Stocks Carl Icahn Top Growth Companies Carl Icahn High Yield stocks, and Stocks that Carl Icahn keeps buying

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Stocks to Watch: Joy Global, Costco, Avanir

Among the companies with shares expected to actively trade in Wednesday’s session are Joy Global Inc.(JOY), Costco Wholesale Corp.(COST) and Avanir Pharmaceuticals Inc.(AVNR)

Mining-equipment maker Joy Global’s fiscal fourth-quarter earnings plummeted 87% as the company struggled to cut costs and an oversupply of commodities-accentuated weaker demand in emerging markets. “With a limited number of projects that can book in time to help 2014, we continue to see both the need and opportunity to lower the cost base in our business,” Chief Executive Mike Sutherlin said. Shares dropped 4.8% to $53.55 premarket.

Costco Wholesale Corp.’s fiscal first-quarter profit rose 2.2%, though missed market expectations, as the wholesale club’s revenue grew less than anticipated. Shares slipped 1.7% to $118.05 premarket.

Avanir Pharmaceuticals Inc. said Tuesday a Phase II clinical trial of an investigational treatment for central neuropathic pain in multiple sclerosis patients didn’t meet its primary efficacy endpoint. The biopharmaceutical company separately reported its fiscal fourth-quarter loss widened amid a one-time charge related to the company’s investigational migraine treatment. Shares fell 14% to $3.68 premarket.

Discovery Communications Inc.(DISCA) is mulling a bid for Scripps Network Interactive Inc.(SNI), the owner of cable channels like the Food Network and HGTV, according to a person familiar with the matter. Shares of Scripps jumped 10% to $83.01 premarket.

Laboratory Corp. of America Holdings’ issued a preliminary 2014 profit outlook that missed Wall Street’s expectation, as the medical-testing services provider sees muted demand and an uncertain healthcare environment. The company’s shares slid 9.2% to $90 premarket.

MasterCard Inc.'s(MA) board approved a series of shareholder-friendly actions including an 83% boost to its dividend and an authorization to repurchase as much as $3.5 billion of its shares. Shares climbed 4.2% to $795.90 premarket.

NorthStar Realty Finance Corp.(NRF) disclosed a plan to spin off its asset-management business into a separate publicly traded company, a move investors praised. NorthStar’s shares rose 17% to $11.60 premarket.

Avon Products Inc.(AVP) said it halted a roll-out of a new order management system, saying a pilot program in Canada resulted in “significant business disruptions in the market.” The company said the change will result in additional layoffs and write-downs.

CBOE Holdings Inc.(CBOE) said it will pay a special cash dividend that will cost nearly $44 million, while the U.S. options exchange operator also boosted its stock buyback authorization by an additional $100 million.

Vacation-home rental website operator HomeAway Inc.(AWAY) and midstream energy owner American Midstream Partners LP(AMID) separately disclosed plans to offer shares and units, respectively. HomeAway is aiming to raise proceeds for general corporate purposes, while American Midstream is looking to use some of the funds to pay for a previously disclosed acquisition.

Home Depot Inc.(HD) issued a slightly cautious earnings target for the new year, projecting 17% growth in per-share earnings, while analysts polled by Thomson Reuters expect growth of 18%. The home-goods retailer typically issues cautious guidance and then repeatedly raises expectations throughout the year.

H&R Block Inc.'s(HRB) fiscal second-quarter loss narrowed, as the tax-services provider recorded a higher income-tax benefit, though revenue slid and overall expenses climbed.

Marathon Oil Corp.(MRO) boosted its capital budget for next year and said it expects production to grow as it plans to ramp up rig activity at U.S. resource plays. Marathon said it will invest more than 60% of the budget in its North American resource play assets.

Smith & Wesson Holding Corp.'s(SWHC) fiscal second-quarter earnings fell 20% despite continued strong growth in handgun sales and higher margins. The gun maker’s revenue was near the high end of estimates and the company provided fiscal third-quarter guidance that topped expectations.

Tessera Technologies Inc.(TSRA) named its interim chief executive, Thomas Lacey, to the top post Tuesday, bringing to a close a months-long search for a permanent leader.

Will a Tentative Agreement Offer JPMorgan Chase a Boost?

With shares of JPMorgan Chase & Co. (NYSE:JPM) trading around $54, is JPM an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

JPMorgan Chase is a financial holding company that provides various financial services worldwide. The company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management, and private equity. Financial services companies like JPMorgan Chase are essential for well-functioning economies around the world.

JPMorgan Chase has reached a tentative agreement with the U.S. Department of Justice to settle the many investigations against the bank, The New York Times reports. The agreement involves JPMorgan paying a $13 billion fine and contains no promise that the DoJ won't pursue a criminal investigation. The JPMorgan settlement would be a record one for the government agency, as no single company has ever paid such a steep settlement, but the Times cautioned that talks could still fall apart.

T = Technicals on the Stock Chart Are Strong

JPMorgan Chase stock has done relatively well in the past couple of years. The stock is currently trading sideways as it digests the flurry of recent news it has received. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, JPMorgan Chase is trading slightly above its rising key averages, which signals neutral to bullish price action in the near term.

Source: Thinkorswim

Taking a look at the implied volatility and implied volatility skew levels of JPMorgan Chase options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
JPMorgan Chase Options	22.7%	6%	5%

What does this mean? This means that investors or traders are buying a very small amount of call and put options contracts as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
November Options	Flat	Average
December Options	Flat	Average

As of Monday, there is average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very small amount of call and put option contracts and are leaning neutral to bullish over the next two months.

E = Earnings Are Mixed Quarter Over Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on JPMorgan Chase’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for JPMorgan Chase look like and, more importantly, how did the markets like these numbers?

	2013 Q3	2013 Q2	2013 Q1	2012 Q4
Earnings Growth (Y-O-Y)	-112.14%	32.23%	33.61%	54.89%
Revenue Growth (Y-O-Y)	-7.67%	13.67%	-3.57%	10.16%
Earnings Reaction	-0.01%	-0.3%	-0.6%	1.01%

JPMorgan Chase has seen increasing earnings and mixed revenue figures over the last four quarters. From these numbers, the markets have not been pleased with JPMorgan Chase’s recent earnings announcements.

P = Average Relative Performance Versus Peers and Sector

How has JPMorgan Chase stock done relative to its peers – Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC) — and sector?

	JPMorgan Chase	Bank of America	Citigroup	Wells Fargo	Sector
Year-to-Date Return	23.31%	25.11%	29.08%	25.04%	25.53%

JPMorgan Chase has been an average relative performer, year to date.

Conclusion

JPMorgan Chase is a bellwether in the banking space that forms an essential part of the United States financial system. The company is reportedly reaching a tentative agreement with the Justice Department to settle its many investigations. The stock has done relatively well in recent months but is now trading sideways as it digests recent news. Over the last four quarters, earnings have been increasing while revenues have been mixed, which has not pleased investors in the company. Relative to its peers and sector, JPMorgan Chase has been an average year-to-date performer. WAIT AND SEE what JPMorgan Chase does this quarter.

Private Foundation Assets Rebound From Recession

Private foundation endowments returned an average of 12% (net of fees) for the January to December 2012 fiscal year, according to a new study by the Council on Foundations and Commonfund Institute.

The return was a significant improvement over the FY2011 loss of 0.7%.

The study comprised 140 foundations, representing $79 billion in assets.

Foundations with assets between $101 million and $500 million produced the highest return, 12.4%. Organizations with more than $500 million in assets realized an average return of 11.9%, while those with less than $101 million produced an average return of 11.4%.

The study showed that trailing three-year returns for participating foundations averaged 7.9% in 2012, compared with 10.3% in 2011. The decline was the result of 2009’s strong returns being dropped from the three-year calculation.

Trailing five-year returns averaged 1.8%, versus 1.4% in the prior year, reflecting the continuing inclusion of FY2008’s losses in the five-year number. For the trailing 10-year period, returns averaged 7.9%, compared with last year’s 5.2%, as the losses from FY2002 were now no longer included.

“After a mildly negative 2011, private foundations secured double-digit gains in 2012, restoring much needed growth to their endowments,” John Griswold, Commonfund Institute’s executive director, said in a statement.

“Even more heartening is the higher 10-year return, an average of almost 8%. Last year’s 10-year return, in the 5% range, was simply not high enough to sustain spending levels once inflation and investment management costs are taken into account.”

Domestic and international equities were the greatest contributors to FY2012’s 12% return, the latter leading all asset classes with a 17.5% gain and the former close behind at 16.3%. Fixed income returned 7.1%, alternative strategies 7% and short-term securities/cash/other 1%.

Within the broad category of alternative strategies, distressed debt returned 14.7%, followed by an 8% gain from marketable alternative strategies (hedge funds, absolute return, market neutral, long/short, 130/30, event driven and derivatives). Private equity (leveraged buyouts, mezzanine and mergers and acquisitions funds, and international private equity) returned 7.7%, followed by private equity real estate (noncampus), at 6.7%; venture capital, at 6.5%; energy and natural resources, at 4.6%; and commodities and managed futures, at 1.3%.

Among all participating foundations, 34% reported an increase in their effective spending rate (derived by dividing the amount spent on mission by the market value of the foundation at the beginning of the year), 22% reported a decrease and 14% reported no change. Thirty percent gave no answer or were uncertain.

Foundations continued the deleveraging trend of recent years. For fiscal 2012, the 13 foundations that reported carrying debt had an average debt level of $47 million, versus $54 million in fiscal 2011. Median debt, however, rose to nearly $15 million in fiscal 2012 from $14 million in fiscal 2011. The number of full-time professional private foundation staff members devoted to investments averaged 1.4 full-time equivalents, down from last year’s average of 1.5 FTEs. Twenty-three percent of study participants reported having a chief investment officer, a figure that rose to 72% among the largest participating foundations with at least $500 million in assets.

Eighty percent reported using a consultant, compared with 76% a year ago. Thirty-eight percent said they had substantially outsourced their investment function, up from last year’s 30% that did.

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Check out 10 Worst Charities in America on ThinkAdvisor.

Broker Dealers, Equity-Focused Managers To Lag On Taper Delay: Citi

Investors are still wading through the implications of the Federal Reserve's decision not to begin tapering its bond purchases. Citigroup's William Katz has a note out today wading through the consequences for brokers and asset managers.

He expects two main outcomes from the taper delay. Firstly, that broker dealers will likely lag in the short term, given rate leverage embedded in their models and recent outperformance—although he warns that a more prolonged delay would "materially impact" the time before these names will reach normalized earnings.  He also writes that managers focused on stocks will likely lag compared to fixed income managers, while wondering overall if the move calls into question the strength of the economic recovery and the credibility of the Fed.

Read on for company-specific musings from the report:

Moving up Franklin Resources (BEN) among Traditionals; Close out T. Rowe Price (TROW)/Legg Mason (LM) pair trade — We are still selective on Traditional managers but are re-ranking our short-term (ST) preferences as we believe FI-centric managers may outperform as NAV risks diminish while volumes become more sustainable. Invesco (IVZ) remains our top selection but we move up BEN ahead of TROW. BEN should outperform given: a) attractive relative valuation; and, b) easing investor concern over FI NAV risk and global bond volumes. We also close out long TROW/underweight LM pair trade as equities flow recovery could slow. Additionally, we see Wisdom Tree Investments (WETF) negatively impacted as DXJ is ~35% of AUM and depreciating USD may result in uneven ST volumes.

Expect B/Ds to lag in the ST but keeping perspective on LT thesis — The delay in tapering and the pullback in rate expectations weakens the ST case for rate sensitive names but does not take away from upside potential with respect to normalized earnings power. While the 10-year Treasury yield pulled back sharply on 9/18 to 2.70%, it is still up from ~2.50% at 6/30. Nonetheless, we see Buy-rated LPL Financial (LPLA) and Neutral-rated Raymond James Financial (RJF) as likely defensive in the ST given FI centricity within key businesses; lower correlation to long end of the curve; and underperformance relative to TD Ameritrade (AMTD) + Charles Schwab (SCHW). Among LPLA and RJF, we prefer LPLA given stronger ETR potential and less risk around consensus expectations. That said, there is no change to our positive LT thesis on B/Ds reflecting bottoming EPS expectations; improving retail re-engagement; and higher NIM.

For alternative names, Katz notes these remain well positioned, as low rates in the short term could reduce pressure on financing costs (although with the prospect of reduced economic growth). He favors Blackstone Group (BX), Apollo Group (APO), KKR, (KKR), and Och-Ziff Capital Management Group (OZM).

Five money management tips for the youth

If you are young and confused in money matters, don't worry; help is at hand. We present five money management tips for young investors.

India's 'young' population is the topic of several discussions and debates. As this sizeable chunk of the population starts earning, it gives rise to higher disposable incomes, needs and aspirations.

Expectedly, managing money is a natural corollary. However, the youth as a segment, has its own set of needs and niceties. In keeping with the same, we present five money management tips for young investors.

1.  Say no to lazy money 

One of the biggest financial blunders is to leave money idle in a savings bank account. Sure, some banks have capitalised on the liberalised regime to offer higher rates than the norm, but that doesn't justify leaving substantial monies in the bank account.

Instead, you should set aside enough money to meet your monthly expenses say for a 6-month period or thereabouts. In effect, this sum can be used to provide for any contingencies that may arise, and the balance monies should be invested.

If you can take on risk, then investing in equity mutual funds via a systematic investment plan is an option. If you would rather just park monies in an alternative avenue, then liquid funds or ultrashort bond funds can be considered.

Finally, if your risk appetite doesn't permit taking on risk, then  bank fixed deposits can be apt. Even a combination of the aforementioned options can be considered. While the investment avenues and allocation must be determined based on your risk profile, needs and investment horizon, the key is to make your money work for you.

2.  Buy a term plan

With age on your side, buying insurance is unlikely to be a priority for you. Nonetheless, the importance of buying insurance cannot be overstated. Start off with a term plan. A term plan offers insurance in its purest form.

Simply put, if an eventuality occurs, then the policy holder's dependents receive the sum assured; however, if the policy holder survives the tenure of the policy, then no pay out is made.

Since the investment component is missing, a term plan is the cheapest form of availing an insurance cover. Furthermore, given that you are young, the premium amount will be lower now rather than later; also, it certainly helps that the premium amount remains unchanged over the tenure of the policy.

Over time, as your needs and obligations change, you can consider adding more policies to your portfolio, but now is as good a time as any, to get started with a term plan.

3. Start a PPF account

Public Provident Fund or PPF as it is popularly referred to, makes for an attractive long-term investment avenue. Presently, investments in PPF earn an assured return of 8.8 percent per annum. Not only is the interest tax-free, investments of upto Rs 100,000 in each financial year are eligible for tax benefits under Section 80C of the Income Tax Act.

Additionally, the investments are backed by a sovereign guarantee ensuring the highest degree of safety for both the sum invested and interest.

Recurring investments (on an annual basis) add an element of discipline to the investment process; the latter coupled with a 15-year investment horizon make PPF an ideal avenue for long-term investing.

You can use PPF to provide for long-term goals like buying real estate or retirement. PPF's appeal is not restricted to just risk-averse investors. For instance, if you are a risk-taking investor, the PPF account can be apt as the stable, assured return component of your portfolio.

 4. Use your credit card judiciously

The basic advantages that a credit card offers are common knowledge. However, it is the ancillary benefits that you need to be circumspect about. For instance, it isn't uncommon for credit card companies to offer a cash limit, which entitles you to withdraw money using the card.

Card companies will also offer the option to pay a 'minimum amount due' rather than the entire due. Another common feature is to buy gadgets from a retailer who has tied-up with the credit card company; payments can be made using the EMI facility.

However, there is no free lunch in the world of credit cards. Availing the aforementioned facilities comes at a steep price an exorbitant interest rate. The credit card's terms and conditions will reveal that cash withdrawals attract an interest rate ranging around 2.5 percent-3.4 percent per month.

Furthermore, transaction fees are levied as well. Paying only the 'minimum amount due' or paying for shopping via the EMI facility can be pricey propositions too. Hence, it is prudent to be disciplined and spend only as much as you can afford to pay for at once. Don't use the credit card for any extraneous purpose.

5. Become financially literate

Surprised to read this as a money management tip? Don't be! In India, the investment industry is coming of age. There is a growing breed of investment advisors and financial planners who are equipped to help you manage your finances.

You would do well to engage the services of a competent and experienced advisor. That being said, it will certainly help your cause, if you are involved in the process as well be it evaluating options or choosing between them. This in turn necessitates that you be financially literate.

There are several books, websites and publications that offer information on investing and personal finance. Invest time and effort to educate yourself. The intention is not to become an expert; instead, you should have enough knowledge to be able to make informed decisions. Let's not forget that making informed decisions is the first step towards achieving financial nirvana.