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BUFFETT WON’T DIG DEEPER INTO COAL, SHOULD BE LIKE BOONE AND GO FOR GAS

March 18, 2012

Thursday morning started with rampant rumors that Warren Buffett will invest in coal by orchestrating a Berkshire Hathaway buyout of an big coal miner. Friday the rumors picked up steam. It is no secret that coal is dirty and that generating electricity from coal causes pollution. It is also no secret that natural gas is a lot cleaner than coal. With such an abundance of natural gas in the United States, supply vastly exceeds demand and prices are cheap. In the United States power generation industry, the switching from coal to natural gas is in full swing and likely to accelerate over the coming years.

LET THE BATTLE BEGIN

March 17, 2012

The battle is about to begin between those who in one form or another end up following the leading indicators and those who in one fashion or another end up following the lagging indicators. Time has proven that the ZYX Global Multi Asset Allocation Model was spot on when it declared the end of the old cycle in August 2011 and identified characteristics of the new cycle in Oct, 2011. Now the new cycle has reached a stage where early adopters have exhausted their firepower and doubters are ready to take a stand. The battle is about to begin. The battles

SELL CHINA, BUY TAIWAN

March 17, 2012

While the S&P 500 is making highs, the Chinese market is beginning to dip. The big news is the firing of Bo Xilai, the populist leader. Bo was the head of Chongqing Municipality. Bo successfully led the city of about 30 million people to rapid development, narrowed the gap between rich and poor, and hit organized crime hard. The firing of Bo highlights challenges facing China’s political system and potential risks to investors in China. Astute investors may consider selling China and buying Taiwan. Sophisticated investors can consider short selling China and hedging it with Taiwan. To assist investors in

WEEKLY MARKET DIGEST: THE LOWEST INTEREST RATES IN A GENERATION MAY BE IN THE REAR VIEW MIRROR

March 16, 2012

(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.) INFLATION DROPS March 16, 2012 Core Consumer Price Index (CPI) drops to 0.1% from prior 0.2%. Consensus was 0.2%. Stocks and bonds are taking encouragement from lower inflation data. Obviously this is not good for gold and silver, but our algorithms show that even after release of lower inflation numbers, mom and pop momo crowd continues to aggressively buy gold and silver. As we have previously written, in our models core PPI gets a heavy weight,

NEW APPLE IPAD SEMICONDUCTOR INVESTMENT PLAYS

March 16, 2012

Apple (AAPL) has become one of the world’s largest buyers of semiconductors. Whenever a new Apple device is introduced, a race is on to tear down the device and find the origin of the components inside. This time the winner is iFixit. iFixit reports the following components inside the new iPad. –Texas Instruments (TXN) CD3240 driver device –Broadcom (BRCM) BCM4330 802.11a/b/g/n MAC/baseband/radio with integrated Bluetooth 4.0+HS and FM transceiver; 2 x 4Gb; BCM5974 microprocessor; BCM5973 I/O controller –Elpida LP DDR2 = 1 GB DRAM in separate packages in a 64-bit configuration –Fairchild Semiconductor International (FCS) FDMC 6683 –Apple 338S0987, Cirrus Logic (CRUS) Logic audio

WATCH OUT APPLE ITV, CISCO GOING FOR THE KILL

March 16, 2012

“Imagine a world where finding, enjoying, storing and moving content is easy. Because TV should be easy.” You would think these are the words from an Apple (AAPL) ad for its much speculated upcoming iTV. You could not be more wrong. With a little help from Cisco Systems (CSCO), soon every player in the TV market will genuinely be able to make such a claim. Who would have thought that Cisco would go for the kill even before Apple gives birth to iTV? Cisco has announced that it will pay about $5 billion to acquire a British software company NDS Group. NDS has a

GOLD AND SILVER: WHAT TO DO NOW

March 15, 2012

The recent swoon in gold and silver prices has dramatically increased the number of emails I receive from investors trying to figure what to do now. There is no shortage of advice on the Internet. An investor can easily find contradictory advice from gurus. Instead of listening to gurus, astute investors may want to take a simple common sense approach. A sharp reader may ask, “Why should I listen to you?” The answer is that you should not blindly follow anyone including me, but focus on learning how to find the right data and letting the data speak for itself

APPLE MAY PAY BILLIONS TO SAMSUNG FOR NEW IPAD

March 15, 2012

Apple may end up paying billions to Samsung (SSNGY) for the new iPad. Apple euphoria is in full swing. Some Apple fans have made their investment far more than an investment; it is a love affair and personal. From the emails I receive it is obvious that the love affair with Apple has turned some fan boys into Samsung haters. On one level it makes sense because not only Samsung has emerged as the main competitor to Apple, there are bitter legal battles raging between the two across the globe. Samsung is the most successful vendor of Google (GOOG) Android devices. Lost in