Category: General

Byron King's Shocking 2013 Predictions

Posted on by admin

The Energy Report: Let's start with a recent takeover deal that's been getting a lot of criticism in recent weeks. Freeport-McMoRan Copper Gold Inc. (FCX:NYSE) made a $9 billion takeover offer for the oil and gas explorer McMoRan Exploration Co. (MMR:NYSE) and Houston-based Plains Exploration Production (PXP:NYSE). Are you happy with this deal?

Byron King: It came as a surprise. I've held McMoRan Exploration in Energy Scarcity for about two years. I like what McMoRan is working to do with deep gas in the Gulf of Mexico. Still, I recommended that readers take their money off the table with this deal. Sell the shares, take the cash and we'll find other opportunities.

McMoRan Exploration nearly doubled after the Freeport announcement, going from $8 to $15 per share. You can't walk away from that kind of potential gain. Take your money, pay your taxes at the lower 2012 rates and do something else with the money next year.

There's another angle to this takeover. Freeport and Plains together already own about 36% of McMoRan. There are a lot of ties here, between key individuals. I think this deal was driven by the impending tax changes next year. Freeport, the copper play, is borrowing a lot of money to fund this whole process. Fortunately, interest rates are very low, so it's borrowing cheap to do a big takeover, which will give a lot of people a really sweet payday, and they'll get to pay capital gains taxes at much lower rates this year than if they wait until January 2013.

TER: James "Jim Bob" Moffett, who founded McMoRan, is also paying himself. He was a significant shareholder in McMoRan Exploration. He's taking from his left pocket to put it in his right pocket. Continue reading "Byron King's Shocking 2013 Predictions" →

When to Pay Off Your Mortgage

Posted on by The INO.com Team

My good friend Rob recently paraphrased Warren Buffett as saying, “If he knew where he was going to live for the next decade, he’d buy a house with a long-term mortgage.” Buffett thought a mortgage was a good hedge against inflation, because the homeowner would pay off the mortgage with cheaper dollars down the road.

My own mortgage caused great conflict between the emotional and logical sides of my brain. When I was contemplating paying it off, I spoke with a financial counselor and explained that I was self-employed and my mortgage was my largest monthly payment. I suggested paying it off to eliminate stress. He pooh-poohed that idea, and insisted that I could easily earn more after taxes than the cost of a first mortgage.

I asked if his mortgage was paid off. He looked at me and said, “Oh hell yes!” I was flabbergasted. How could he advise me to do one thing when he’d done the exact opposite? He explained that his wife was from Germany – the old school where you pay your bills and keep out of debt. Were it not for her, he’d gladly have a mortgage. Continue reading "When to Pay Off Your Mortgage" →

Stocks sink as budget deadline nears

Posted on by The INO.com Team

Stocks dipped Wednesday, recording their first loss of the week. President Barack Obama and Republicans in Congress sniped at each other, and a deadline to avoid sweeping tax increases and government spending cuts drew closer.

General Motors stock surged after the government announced plans to sell its ownership stake in the company.

The Dow Jones industrial average closed down 98.99 points, or 0.7 percent, at 13,251.97. The Standard & Poor's 500 index dropped 10.98 points, or 0.8 percent, to 1,435.81. The Nasdaq composite index fell 10.17, or 0.3 percent, to 3,044.36.

Obama said that he and House Speaker John Boehner were "pretty close" to a deal to avoid the tax increases and spending cuts, a combination known as the "fiscal cliff." The two sides have exchanged proposals this week.

But the president also said that congressional Republicans keep finding "ways to say no as opposed to finding ways to say yes." He said the nation deserves compromise in the aftermath of the Connecticut school shooting.

Boehner, speaking to reporters for less than a minute and in a defiant tone, called on Obama to offer a deficit-cutting plan balanced between spending cuts and tax increases. Continue reading "Stocks sink as budget deadline nears" →

What's Wrong With Gold?!?!

Posted on by The INO.com Team

Nothing. It’s what’s wrong with peoples’ expectations and perceptions that is the problem.

Once again I’ll quote NFTRH 208 from October 14 (that edition and a sample interim update can be reviewed here: Samples), not to be an ‘I told you so’ wise guy (I didn’t definitively tell anybody anything), but rather to highlight how important sentiment is to this sector and also I suppose to too the horn a little with respect to good risk management.

“Sentiment is over bullish in the precious metals. Public opinion is over bullish, Hulbert’s HGNSI is over bullish and the CoT data show that the little and big speculators are over bullish. This should be cleared out before we renew our bullish enthusiasm on a risk vs. reward basis. Broad stock sentiment is in a better state than in the precious metals. It is mostly neutral.”

The over bullish sentiment in the precious metals has been ground down to a current state of numbness at best, and full out despair at worst. Actually, it is the reverse; a state of despair is best for a contrarian opportunist.

I have received hate mail over the years for the way I poke at the gold “community” even as I am and have been a gold bull. That is because psychologically, this “community” fancies itself as the battlers of evil, the doers of good; and do you know what? Evil wins some pretty big battles along the way. I want neither NFTRH’s subscriber nor myself fighting that battle.

Rather, a calm perspective is required ALL the time; when a market is surging with bullish enthusiasm and when it is in the grips of despair. It is important to look around the next corner and be prepared. It’s what they taught me in Boy Scouts and it has never failed me.

Putting lectures aside, let’s catch up on gold as measured in a few currencies after a look at the nominal weekly chart. Continue reading "What's Wrong With Gold?!?!" →

Fiscal Cliff Optimism May Generate Further Buying Interest

Posted on by The INO.com Team

With traders expressing continued optimism about the looming fiscal cliff, stocks may extend a recent upward move in early trading on Wednesday. The major index futures are currently pointing to a moderately higher open for the markets, with the Dow futures up by 32 points.

The markets may continue to benefit from signs of progress in budget negotiations between President Barack Obama and House Speaker John Boehner, R-Ohio.

Although the lawmakers have not yet reached an agreement with less than two weeks to go before the year-end deadline, recent moves toward a compromise have generated buying interest on Wall Street.

News that Standard & Poor's raised its credit rating on Greece may also help to push stocks higher, with S&P upgrading the rating on Greece to B-minus from selective default. Continue reading "Fiscal Cliff Optimism May Generate Further Buying Interest" →