January 2010

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LETTER FROM THE EDITOR

The broader market indices had a bumpy ride and closed positive in the month of December 2009 as a result of positive signs of economic recovery and increasing consumer confidence. The rally was mostly led by NASDAQ gaining over 4 percent during the month. After hitting the 13 month high in November 2009, the Dow Jones Industrial Average remained range bound closing above the 10,000 point mark. The jobless claims during the month did not face much of a change, but the federal government remains committed to improve the jobs market scenario leading into the New Year. The market had a number of mergers and acquisitions leading with Comcast’s purchase of a controlling stake in NBC Universal from General Electric for $30 billion. This was one of the largest joint venture formed in the media space.

GDP: The United States government’s Bureau of Economic Analysis revised down its third quarter GDP estimates from 3.5% (initial estimate) to 2.2%, on Tuesday, December 22, 2009. The third and final estimate is lower than the second preliminary estimate of 2.8% that the BEA came up in November 2009. Although the figure was revised downward, it is significantly higher when compared with the second quarter GDP estimate of a negative 0.7 %. Broadly speaking the increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures, exports, private inventory investment, federal government spending, and residential fixed investment. To get more specific details on the report visit: Bureau of Economic Analysis.

Oil: Oil prices climbed to their highest in more than five weeks to around $79 a barrel as a result of cold weather conditions and a weak dollar. Crude oil for February delivery rose 72 cents, or nearly 1%, to settle at $78.77 a barrel. Cooler-than-normal temperatures have supported rising oil prices, said James Cordier, the president of Liberty Trading Group. He added that the temperatures in the Northeast have been about 5 degrees lower than the average and are expected to remain lower in the near term. During the third week of December, the Energy Information Administration reported a supply dip of 4.9 million barrels in crude stocks as opposed to analyst expectations of a dip of 2 million barrels.

The Federal Reserve: The Senate Banking Committee voted to approve the nominations of Bernard S. Bernanke for a second four-year term as the chairman of the Federal Reserve on Thursday, December 17th, 2009. Although Mr. Bernanke is criticized for not doing more to prevent the financial crisis, he received a 16-to-7 vote. Despite the intensity surrounding Mr. Bernanke’s appointment, Time Magazine named him as its Person of the Year and citing his role in leading the economic recovery. In 2005, Mr. Bernanke was originally named by President Bush to succeed Alan Greenspan as the Fed chairman.

$700 Billion Bailout: Treasury Secretary Timothy F. Geithner is affirming the administration’s intent to soon end the $700-billion financial bailout program, as reported by Los Angeles Times. Mr. Geithner also says that legislation to bring transparency to $600-trillion global derivative market, in order to restore consumer confidence in the United States Financial System.

The Bank of America and Wells Fargo received approval from the Fed to repay the aid totaling $45 billion. The Treasury was quick to prove the point on how TARP funds were helpful for an economic recovery and beneficial to tax payers.

Mergers and Acquisitions

Exxon Mobil to Buy XTO Energy for $31 Billion
Exxon Mobil has agreed to buy XTO Energy, nation’s larges producer of natural gas, for $31 billion. The deal would give Exxon the equivalent of about 45 trillion cubic feet of natural gas through out United States. The deal is expected to complete by the second quarter of 2010.

Comcast to buy a controlling stake in NBC Universal from General Electric for $30 Billion
After an eight month long negotiations, Comcast purchased a controlling stake in NBC Universal for $30 billion from General Electric. The deal “a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding”, said Mr. Brian Roberts, the chief executive of Comcast. The deal will create a joint venture, with Comcast owning 51 percent and G.E. owning 49 percent.

Novartis to buy Corthera for $120 Million
Novartis, a Swiss pharmaceutical maker, agreed to acquire Corthera for $120 million. Acquiring this San Francisco, CA based biopharmaceutical company would give Novartis the right to develop a new drug against heart failures. The acquisition is subject to regulatory approval and should be completed by the first quarter of 2010, as stated by Novartis.

Sanofi-Aventis to buy Chattem for $1.9 Billion
Sanofi-Aventis, a drug maker, has agreed to buy Chattem for $1.9 billion. Acquiring the 100 year old health care company will give Sanofi-Aventis an over-the-counter presence in the United States. Chattem makes and sells household and personal care products that include Selsun Blue dandruff shampoo, Cortizone-10, Gold Bond skin care cream, and Icy Hot pain relief medicine.

Bucyrus to buy Terex Mining Unit for $1.3 Billion
Bucyrus International, a South Milwaukee, Wisconsin-based manufacturer of mining equipment, agreed to buy the mining business segment from Terex, a world’s third largest maker of heavy earth-moving equipment. The deal is subject to regulatory approval and is expected to close by the first quarter of 2010. The business unit being sold has 38 facilities around the world with 2,150 employees.

Celgene to buy Gloucester Pharmaceuticals for $640 Million
Celgene, the biopharmaceutical company, agreed to buy Gloucester Pharmaceutical, a Cambridge, MA – based privately held company for $640 million. The deal is expected to close by the first quarter of 2010. “We are thrilled with this transaction because Celgene’s global leadership in the development and commercialization of innovative treatments for hematologic diseases makes them ideally suited to bring the clinical benefits of Istodax to patients with CTCL,” Alan Colowick, Gloucester’s chief executive, said in a statement.

WHAT IS NEW?

December was an eventful month for us here at Investor Concepts. We are on an aggressive growth path and intend to remain that way for the foreseeable future. What this means to you “our reader” is lots of new and relevant content and tools integrated into our website that is made with a purpose of equipping you to be a smart and sophisticated investor to make the right investment decisions.

So what have we accomplished during the month of December? Here is the short list.

•    We have been working with few practitioners in the investment industry to provide valuable investment insights to our Investor Concepts readers through articles.
•    We have worked on an agreement with our new authors - Mr. Michael Johnston and Mr. Paco Ahlgren, who are practitioners in the industry to write articles on potential investment opportunities and economic analysis for our readers.
•    We have integrated the largest financial glossary to our Investor Concepts website that currently has meanings and definitions to 8,799 financial and business terms written by Mr. Campbell Harvey, Ph.D., a well renowned professor of finance at Duke University, in addition to our in-house authors.
•    We have expanded a few content areas: Concepts, Books, and Investor Tools.
•    We still continue to expand our Concepts section by including concepts in Spanish.
•   We have licensed with PR Newswire, one of the largest news distribution agency, to provide timely financial and business news articles to our readers on Investor Concepts.
•    Added content categorization feature that allows tagging and topical navigation of published articles.
•    Expanded the Events calendar to include a variety of online and offline financial events.

FEATURED ARTICLES

During the month of December we had a number of very interesting articles published on our site, many of which deal with financial planning, investor education, commodity trading, potential investment opportunities, and economic analysis. We’ve also had some primary research published and are beginning to see some forecasts. Below is a list of articles that caught our attention and we recommend reading them. For a complete list of published content for the month of November visit our Monthly Content Archive.

"Definitive Guide To Preferred Stock ETF Investing" by Michael Johnston
In this article Mr. Michael Johnston, the founder and senior analyst at ETF Database, writes about the characteristics and benefits of Preferred Stock ETF investing. He also discusses the most common misconceptions on investing in preferred stock ETF’s. In addition, Mr. Johnston highlights some popular preferred stock options in the market.

"AFM | The 30th American Film Market - Santa Monica, CA - November 4-11, 2009" by Endre Palfi
In this article, Mr. Endre Palfi, production director and webmaster at Investor Concepts covered the 30th American Film Market event in Santa Monica, CA. He talks more about the film deals and participants in this annual event.

"Lessons from a Legend: Jim Rogers" by MB Wealth
In this article, Mr. Matthew Bradbard, president and founder of MB Wealth discusses his learning from Mr. Jim Rogers. Mr. Jim Rogers is the author of the book “A Gift to My Children a Father’s Lesson for Life and Investing.”

"Consumer-Driven Deflation? Not Even Close" by Paco Ahlgren
In this article, Mr. Paco Ahlgren, a financial analyst and writer discusses on inflation and deflation. And some common misconceptions that investors have about this important inflation metric.

"Singapore ETF: Investing In The Lion City" by Michael Johnston
In this article Mr. Michael Johnston, the founder and senior analyst at ETF Database, writes about the potential investment opportunities and threats of investing in Singapore through ETF’s. He also talks about iShares MSCI Singapore Index Fund and its historical performance.

"Can My Lender Do That?" By Liz Davidson
In this article, Mr. Liz Davidson, the chief executive officer of Financial Finesse discusses the importance of the new credit card legislation to consumers.

"As Currencies Collapse, What Do You Do?" By Paco Ahlgren
In this article, Mr. Paco Ahlgren, a financial analyst and writer discusses on the fall of the dollar in the recent past. He also highlights other potential investment opportunities in this rough economic environment.

MARKET PERFORMANCE RECAP

December turned out to be profitable for most market indices, especially the technology sector led by the NASDAQ. The DJIA remained range bound, but it closed above the 10,000 point mark.

•    Dow Jones Industrial Average -0.42%
•    NASDAQ Composite +4.29 %
•    Standard & Poor’s 500 +0.56%
•    Russell 3000 +1.38%
•    Dow Jones Wilshire 5000 Composite +1.44%

INDUSTRIES

Most Bullish

1.    Electronics +9.29%
2.    Consumer Durables +4.89%
3.    Real Estate +4.80%
4.    Media +4.45%
5.    Computer Hardware +4.18%

Most Bearish

1.    Banking -4.35%
2.    Metals & Mining -2.77%
3.    Telecommunications -1.27%
4.    Retail -0.87%
5.    Conglomerate -0.50%

SECTORS

Most Bullish

1.     Semiconductor-Memory Chips +30.69%
2.     Office supplies +15.40%
3.     Textile Manufacturing +14.55%
4.     Aluminum +13.88%
5.     Long-Term Care Facilities +13.64%
6.     Hospitals +12.64%
7.     Sporting Goods Stores +12.50%
8.     Computer Based Systems +12.34%
9.     Semiconductor-Specialized +12.25%
10.    Major Airlines +11.68%
11.    Semiconductor-Equipment +10.28%
12.    Auto Dealerships +10.17%
13.    Publishing-periodicals +10.13%
14.    General Contractors +9.93%
15.    Home Health Care +9.86%
16.    Appliances +9.52%
17.    Printed Circuit Boards +9.50%
18.    Processing Systems & Products +9.23%
19.    Dairy Products +9.15%
20.    Savings & Loan +9.11%

Most Bearish

1.     Gold -14.58%
2.     Silver -12.70%
3.     Resorts & Casinos -11.12%
4.     Internet Service Providers -8.98%
5.     Long Distance Carriers -6.91%%
6.     Telecom Service – Foreign -6.03%
7.     Money Center Banks -5.96%
8.     Gaming Activities -4.84%
9.     Electronic Stores -4.78%
10.    Major Integrated Oil & Gas -4.42%
11.    Foreign Regional Banks -4.14%
12.    Closed End Fund – Foreign -4.04%
13.    Personal Products -3.85%
14.    Copper -3.83%
15.    Grocery Stores-3.40%
16.    Music & Video Stores -2.83%
17.    Jewelry Stores -2.68%
18.    Oil & Gas Refining & Marketing -2.67%
19.    Pollution & Treatment Controls -2.57%
20.    Oil & Gas Drilling & Exploration -2.41%

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