The recent Facebook Inc. (FB) IPO didn't go quite as planned. The stock opened around $42 a share and quickly spiked to $45 before settling slightly above $38 for the first day of trading; the IPO was originally priced at $38 a share. Then on day 2 of trading, Facebook Inc. fell nearly 11% to $34.03. The IPO wasn't nearly as impressive as people thought it would be, and for the third largest IPO in market history, this was a dud. Is giving up on the company after 2 days on the market really a logical solution?

Many that bought shares at the $38 IPO level or higher are probably feeling a bit uneasy right now as the press hounds this company and claims that it has no chance for success; I say don't reach for the panic button just yet. Exiting now and taking a 10% hit in the

Before I go any further, I know someone is going to say that this idea is ridiculous.

Some other readers will be shocked that I didn't refer to the classic "Seinfeld" episode. We all know that no one is going to succumb to someone else's occasional double dip, unless the mayonnaise has already gone south. In that case, it's the Center for Disease Control's problem, not yours.

"You can't possibly get both the dividend and an option premium and expect that you got a great deal on your trade, because the market is efficient and discounts the option premium to reflect the upcoming ex-dividend date."

Although by the time you read this, today's Double Dip Dividend recommendation to subscribers, Abercrombie & Fitch (ANF) may have already reached its ex-dividend date. No matter. It's just illustrative and through the modern miracle of quarterly dividends will come down the road again.

At

This may seem like an odd pairing, given that Facebook (FB) and Amazon (AMZN) don't really compete against each other. Facebook revenue largely comes from display ads, while Amazon's revenue coming from selling everything under the sun on a host of different websites. However at their core, they are both very large cap, high tech companies, attempting to innovate large parts of our life over the internet.

Both companies are expected to see around 30% revenue growth this year and next, and both companies are expected to see earnings growth at around a 30% annual rate over the next five years. Both of these companies also face large risks. Amazon could be negatively affected by states attempting to tax sales on Amazon's websites. Also Apple (AAPL) could hurt Kindle sales if and when they launch a smaller lower cost tablet. Facebook's large risks, among others, include difficulty in monetizing mobile

"It's like Déjà vu all over again", to quote the great Yogi Berra. Over the past couple of years, we have looked into the European Abyss, only to be pulled out of it as leaders from the continent continue to kick that can down the road just as far as they can.

In May & early June 2011, the SPDR S&P 500 ETF (NYSE: SPY) shed roughly 7% on worries that Greece may default on its debt, potentially leading to a contagion effect in the Eurozone, leading to surging interest rates on Euro-based debt. Of course, the ECB came to the rescue, restructuring Greece's debt and providing the country with the bail-out funds needed to finance its debt. With that, the markets temporarily put Greece and Europe on the back-burner and moved on - until November, at least.

In November, yields in Italian and Spanish bonds began spiking higher and

The energy sector has not been spared from the recent sell off in the markets. Energy stocks have been taken to the woodshed, so to speak, in recent weeks. Oil prices fell Tuesday as a potential deal between the U.N. nuclear watchdog and Iran on Tehran's nuclear program eased fears of oil supply disruptions, while the eurozone debt crisis continued to threaten economic growth. According to a Reuters report out late Tuesday:

International Atomic Energy Agency (IAEA) Director General Yukiya Amano said he expected to sign a deal with Iran soon to boost cooperation with the investigation into Tehran's nuclear activity, although differences remained.

Germany dismissed a French-led call for eurozone governments to issue common bonds, cooling hopes a day before a European Union summit that the meeting would produce fresh measures to tackle the region's debt problems.

Oil prices also felt pressure from an Organization for Economic Co-operation and

Through in-house innovation and an array of acquisitions, Google (GOOG) has become a completely different company since going public in 2004. Although Google has diversified its offerings to compete in the mobile operating space (Android), internet advertising (Adsense), Apps (Google Maps) and email (Gmail), YouTube is perhaps its most interesting asset.

YouTube's user-uploaded video database has seen enormous success in recent years and is showing no signs of slowing. In February comScore reported a 60% yoy increase in monthly minutes viewed, despite unique users rising a modest 5%. This can most likely be attributed to the increasing relevance of YouTube's content.

YouTube started as a forum for users to post funny videos of themselves or their friends, not as a forum for professionals. Now YouTube has become a media outlet to release music videos, exclusive TV shows, independent short films or even advertisements.

This shift is the reason for the

Farmer Brothers (FARM) might just be too cheap to pass up. After all, its stock price has been creamed beyond sanity, due to integration issues associated with its recent $45 million purchase of Sara Lee's Direct Store delivery business along with a nasty spike in green coffee prices.Couple that with recent management changes, an elimination of its cash dividend and a weak US economy, and you have a share price closely resembling 30 year lows.

A recent run up in the share price, could have been attributed more to technical factors than fundamental. The fact that the shares were extremely oversold, possess a very low share float (50% are owned by insiders) and carry a high short interest (737,000 shares short in mid December) could have been the catalyst for the shares big move higher. In merely a five month period (Sept. 2011 to Feb. of 2012) the stock exploded

George Jarkesy, host of "The George Jarkesy Show," interviewed the co-founder and vice president of AxoGen (AXGN.OB), John Engles, on his radio show. This is a transcript of their conversation.

George Jarkesy: Our first guest today is John Engles. He's the co-founder and now the vice president of AxoGen. He's got the company up and going. AxoGen is a regenerative medicine company with a portfolio of proprietary products and technologies for the reconstruction and regeneration of nerves.

To put that in layman's terms: When you have a traumatic injury that damages your nerves -- cuts your nerves, severs your nerves -- these guys have products that can fix that. And so, John, welcome to the show.

John Engles: Hey, good to be here, George. Thanks for having me.

Jarkesy: So you co-founded the company. You go 10 years. You hit the worst economic crisis of all times from our lifetime,

Reasons to be bullish on CenturyLink Inc (CTL)

• A strong levered free cash flow of $2.82 billion
• A good yield of 7.5%
• Sales surged from $4.9 billion in 2009 to $15.3 billion in 2011
• A five-year dividend growth rate of 72%
• A very strong quarterly revenue growth rate of 171%
• EBITDA increased from $2.15 billion in 2009 to $6.04 billion in 2011
• Cash flow per share increased from $5.70 in 2009 to $8.43 in 2011
• A strong five-year sales growth rate of 46%
• Operating margins of 15%
• Year over year projected growth rate of 12% for 2012
• Decent total three year return of 57%
• A five-year dividend average yield of 6.5%
• A great free cash flow yield of 9.37%
• $100K invested for 10 years would have grown to $172K; if the dividends were reinvested the rate of return would be much higher

Company: CenturyLink Inc

Levered Free Cash Flow =

"Exile on Wall Street: One Analyst's Fight to Save the Big Banks from Themselves," John Wiley & Son's, Inc. 2012

I had the pleasure of meeting Mike Mayo at the CFA Institute's 65th Annual Conference held in Chicago, IL, May 6 through 9, 2012. This year's conference celebrated the 50th anniversary of the CFA charter, the brainchild of storied value manager and mentor of Warren Buffett, Benjamin Graham. It is fitting, then, that the convocation should host Mike amongst its many distinguished speakers. Himself a charter

Many have asked me if the recession in Europe could derail the United States' recovery. That's an important and interesting question, as well as a complex one. While there are some dangers, there are a few positive factors that haven't been considered.

Let's first discuss the possibility of a full blown financial crisis. Yes, a financial panic could definitely cause real problems for our economy. You can see by JPMorgan Chase's (JPM) revelation of a $2 billion (now $3 billion) loss on derivatives and bankrupt MF Global's risky sovereign debt gamble that financial institutions can get themselves into a lot of trouble with European debt. All the banks have counter party risk to each other, via not only lending, but more esoteric financial instruments like Credit Default Swaps. Adding to the problem, some of our large banks are still not in the best of shape, especially Bank of America (BAC).

Selling naked puts is a great way to purchase shares in companies you like at a predetermined price. In essence, you are getting paid to wait.

Benefits associated with selling puts

1. In essence, you get paid for entering a "limit order" for a stock or stocks you would not mind owning.
2. It allows one to generate income in a neutral or rising market.
3. When you sell a naked put you are in a way acting like an insurance agent. The seller of the option agrees to buy the stock in the future if it drops to a certain level before the option expires. For this, you (the seller) are paid a premium upfront. If this strategy is repeated over and over again these premiums can really help boost you returns over time.
4. Acquiring stocks via short puts is a widely used strategy by many retail traders and is considered to

Today I am reviewing Beating the Business Cycle: How to Predict and Profit from Turning Points in the Economy .

By Lakshman Achuthan and Anirvan Banerji

Read my other book reviews here.

Lakshman Achuthan and Anirvan Banerji are co-founders of the Economic Cycle Research Institute, or ECRI, which I have discussed on this site several times. The firm has a rich history of accurately predicting recessions and recoveries and I have enjoyed reading Achuthan's views on the current state of the economy, so I was excited to learn that this book existed, even if it is a bit out of date (published in 2004)

The book is ostensibly about predicting the turning points in the business cycle so as to help guide business and investment decisions. In the introduction, the authors write "It really is possible to predict recessions. And we will show you how, so that you will no longer

Clownishness, much like beauty, stands in the eye of the beholder. So let's gather together to behold a clownish trade. Granted: playing Monday Morning quarterback to lame stock trades is a bit selective, even venal. But in the end, you learn from analyzing mistakes. Plus, what's more fun than making fun of missteps and pratfalls? With all that said, welcome to the next installment of The Clownish Trade of the Day…

Talk about a three-ring circus: let's consider Facebook (FB). Yesterday, it traded like an offering. It was down God-knows what, the latest installment to a three-day slide in the wake of Friday's disaster of an IPO. But more to the point: the offering was all anybody was talking about.

The mechanics of the Facebook offering, to be certain, defined dysfunctional. It was so mishandled, you'd think James Dolan and the Knicks (CVC) were running the show. Morgan Stanley (MS)

<< Return to Part 1

Free-to-Play Hooked on "Gacha"

Prior to the development of the "gacha" mechanic, the free-to-play business model was regarded as economically flawed and relegated to bottom-tier games. How could you possibly turn a profit when you give your core product away for free indefinitely? The early free-to-play games were distinctly small budget, low graphic, niche fare supported only by sales of cosmetic or "fluff" virtual items. Many doubted the business plan's viability. However, interest in the model took off after Turbine Inc.'s fantasy game "Dungeons and Dragons Online," part of the Time Warner (TWX) conglomerate, successfully reinvented itself.

Originally launched with the hope of competing against Activision Blizzard's (ATVI) "World of Warcraft," the game fell short of expectations and spiraled toward oblivion. In a last-ditch effort to save itself, "Dungeons and Dragons Online" switched from a subscription model to a free-to-play system, where customers could enjoy

Online game customers are putting a new spin on the old rule of thumb that one unhappy client will tell 10 people about his or her negative experience. Now it appears that purchasers of virtual items are taking their complaints a step further, to their governments -- and with startling results. On May 9, the Wall Street Journal reported Japanese mobile video game firm Gree Inc. would discontinue certain online games that involved the purchase of virtual items that utilize a chance factor akin to lottery gaming.

On Gree properties, as with many other online games utilizing micro transactions, customers buy mystery packages that, when opened, reveal virtual objects worth little to a lot depending on their rarity. Shares in Gree slid 23% after the specific virtual game mechanic known as "kompu gacha" ("complete gotcha") was ruled in violation of Japanese law. Other developers using the mechanic, and likely to

This week, I will run you through the most important buyback announcements for the week of May 14 - 18, which turned out to be a reasonably active week in terms of buyback activity.

While consumers and governments across the world are strapped for cash, corporations have plenty. Rather than signal long-term trust and pay more generous long-term oriented dividends, many of them have adopted share repurchases to buy back their own stock. Investors welcome these announcements as they boost earnings per share and provide a lot of support for the share price during the repurchase periods.

Denny's (DENN) the operator of over 1,600 restaurants announced a 6 million share repurchase program, which is equivalent to almost $25 million. The 6 million shares to be repurchased come on top of the 1.6 million shares remaining under the 2011 buyback program which indicates the company has authorization to buy back up

Germany sold $6Bn worth of 2-year notes at 0% this morning.

That's right, if you give Germany $6Bn for two years, they promise to give it back - AND THERE WAS STRONG DEMAND. How low can we go? Well, the yield in Swiss two-year paper is actually -0.10%. That's right, you pay them 0.1% to hold your money for two years. Don't like it? Shut up - you're lucky they don't take it all.

Of course the markets are crashing this week - the G8 has bonds to sell! If the markets are flying you're not likely to be so anxious to give your government free money to hold for a couple of years, are you? So this is a great week to take the markets down and the U.S. sold $35Bn worth of two-year notes at Depression-level lows (1.78%) yesterday and today we sell $35Bn worth of five-year notes

Earlier this morning, American Eagle Outfitters (AEO) reported its first-quarter earnings for fiscal 2013. Shares are now trading up on revised guidance for the company's second quarter and full fiscal year.

Net sales for the company's first quarter were $708.7 million (excluding 77kids). Last year, excluding 77kids, American Eagle reported net sales of $603.1 million in the first quarter. Adjusted earnings per share were $0.22 vs. $0.16 in last year's first quarter.

American Eagle's same-store sales were positive for the quarter:

• All Brands: +17%
• AE Brand: +17%
• Aerie: +20%
• AEO Direct (online): +22%

Online sales saw the biggest growth for the company. Last fiscal year, online sales were only up 3% for American Eagle.

At the end of the first quarter, American Eagle had a total of 1,090 stores. The company's plans call for ending with a range of 1,054-1,064 stores by the end of fiscal 2013. In addition to

iShares Silver Trust (SLV) investors have the opportunity to take advantage of the historically low implied volatility at which long-term options are currently being priced.

Historical and Implied Volatility:

click to enlarge

Source: ivolatility.com

Implied volatility is the markets' expectation of future volatility, which is used to determine options premiums. When purchasing options, implied volatility is generally the most important factor to consider to ensure investors are receiving a fair price on options purchased. With implied volatility at approximately 33%, which is near the lowest it has been in the last 12 months, investors can purchase SLV options at a significant discount compared to historic premiums.

Historic volatility is mean reverting, and with SLV 30-day historic volatility at 52 week lows of approximately 22%, it is likely we will see a significant spike. In the past 12 months 30-day historic volatility was as high as 73.3%. A significant spike in

Below I look at six devaluations. They are the devaluations that occurred in Argentina in 2002, Great Britain in 1992, Sweden in 1992, Brazil in 1999, Russia in 1998, and Indonesia in 1997. I do not go into the detail surrounding each devaluation. These are all well documented and extensively discussed in places like Wikipedia. My interest in looking at this is to see if there any commonalities in the timing and magnitude of the moves amongst the currency rate, the nominal local stock market, and the local stock market as denominated in U.S. dollars. In many cases, the U.S. dollar denominated stock market rose many hundreds of percent post the devaluation. This may offer a proxy for investing in Greece (or any other country) should it ultimately leave the euro and turn to an alternate currency.

1) Argentina

The graph below depicts the Merval Index in Argentina in both

In part one of this two-part series (Found Here) I laid the groundwork for why I believe that blue-chip dividend paying US equities represent not only a viable, but also a safer investment choice than many give them credit for. I also pointed out why I believe the risk profile on bonds is currently upside down, arguing that for one of the few times in history they may actually be more dangerous an investment than equities.

This is not normal, and therefore, I believe requires looking at investment choices differently than we traditionally have. I once read a comment from the renowned spiritual leader Dr. Wayne Dyer that summarizes my point quite nicely: "when you change the way you look at things the things you look at change." In today's investment environment I think we need to change the way we look at bonds and simultaneously change the way we

Big Lots (BIG) should be one of the disasters du jour, after an earnings miss and delivering a lower forecast.

Some analysts claim it competes with Wal-Mart (WMT) and Target (TGT), but I've been to the stores. It doesn't. It's not selling general merchandise at a discount, it's selling close-out merchandise.

It would be more accurate to compare Big Lots with the dollar store and deep-discount chains like Family Dollar (FDO) and Dollar General (DG). (For more on that sector, see our Sammy Pollack.)

So why is this good news?

It's good news because it's isolated to the low end of the market. Other big retailers are doing OK. And the higher you go up the stack, the more you see premium merchandise at something closer to a retailer, the better things are getting. Wal-Mart is up 6.5% for the year. Macy's (M) is up 12.5% for the year. Dillard's

My day today began in a nearly identical fashion to most other weekdays. I followed my regular routine by hopping out of bed, walking to the kitchen to put the hot water on for coffee and opening my laptop for direct access to my brokerage account. What can I say? A guy's got his priorities straight, am I right?

If you really want to know, the reason I log into my account every morning is to see if another glorious dividend payout has been deposited by one of my most favorite, most reliable dividend-paying companies. Some days the dividends roll in, most days they don't, but the process continues and I've been lucky to monitor the building of my wealth day by day.

Despite only being 29 years old, I feel buying up shares of companies with consistent histories of paying dividends and reinvesting those distributed shareholder earnings is one

Does the government that governs least also govern best? The famous quote will be put to the test if Congress and the White house don't resolve the "Taxmageddon" train wreck coming our way. What's at stake? Perhaps economic growth, according to a new report from the Congressional Budget Office: "Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013."

Unless the government acts between now and the end of the year, a combination of expiring tax cuts and broad reductions in spending will kick in automatically. It doesn't take a genius to recognize that this wave of fiscal change, if implemented overnight in one fell swoop, could be toxic for a fragile economic recovery. The CBO report says as much:

If current law is allowed to unfold unchanged, the

Led by near suicidal sentiment among the gold "community," the broad markets recently embarked on a southerly course as well, culminating with "dumb money" sentiment at very bearish levels in technology, energy, financials, industrials and on out to commodities.

'Smart/dumb' confidence courtesy sentimentrader.com

The last time sentiment was in such a compelling (contrarian) bullish structure was after the damage inflicted upon markets by last summer's acute phase of the euro crisis. Here I will interject that I subscribe to Sentimentrader.com to give us a real time edge on the market's sentiment structure and highly recommend the service.

It is important to realize that when commodities like crude oil and copper are weak the last thing on the public's collective mind is inflation. That is just the way that powerful entities - entities that have been roundly criticized for their chronic inflationary policies - want it in order to promote the

I, for one, won't do much hand-wringing over the JPMorgan Chase (JPM) debacle. After all, the real losers will be its customers and stockholders, and I am neither.

JPMorgan's full 2011 revenue was about $90 billion. The $3 billion loss, which is being lamented ad nauseam, amounts to less than 2 weeks revenue for this banking colossus. If you want to wring your hands, consider this; there is potential for the losses to continue to grow. Banks, as they always do, will find a way to recover these losses by way of higher fees, new fees or interest rate increases imposed on customers. Of course, shareholders are paying a price too. JPMorgan's stock has plummeted in value since the disclosure of the loss, and its trading volume soared to as much as 5 times the 3 month average. The stock now trades at around $34 per share, though still well

For those that follow this equity closely, this article may be a bit of a review. However, after attending the Sirius XM (SIRI) shareholder meeting yesterday, it became apparent that there are still many questions out there regarding Liberty Media (LMCA), the Federal Communications Commission (FCC), and control of Sirius XM.

I get the sense that much of the confusion surrounds the Liberty media request for de facto control status of Sirius XM earlier this year. Essentially, what Liberty media was trying to do was gain FCC approval for being in control of the Sirius XM licenses. If the FCC would have granted de facto control, then Liberty Media would essentially have gained the required permission of the agency to be in control of Sirius XM.

What many do not seem to understand is that the FCC actually has a great deal of control over any entity gaining over 50%

Goldcorp

Ticker: GG

Share Price 5/18/2012: $34.79

Shares Outstanding 3/31/2012: 810,000,000

Market Cap: $28.2B

Website: goldcorp.com

Company Overview:

Goldcorp operates as a worldwide precious metals mining company with 20 projects located primarily in Canada and Mexico. Goldcorp is the fastest-growing low-cost senior miner in the precious metals space.

2011 Key Points

• 2,514,700 Oz of Au produced
• 23,063,225 Oz of Ag produced
• Revenue: $5.4B
• Net Income: $1.9 ($2.34 per share)
• Cash: $1.5B ($1.85 per share)
• Debt: $737mm
• Liquidity: Cash + $2B undrawn revolver

Analyst Estimates:

click to enlarge

* Source: Yahoo Finance

Analysis of Reserves:

The majority of Goldcorp's reserves are proven and probable, which give investors confidence in the company's below ground reserves.

Goldcorp's reserves are well diversified, and over 50% of its reserves are in miner-friendly countries, including: Mexico and Canada. By diversifying, Goldcorp reduced its production exposed to issues encountered at any given mine and the political risk

Today Dell (DELL) shareholders are going to "party like it's 2009." The stock is going to take a pounding, and will start trade at about $13/share, a price not seen since the market's bottom in early 2009.

How bad is it? Well, if you took a flyer on Ford (F) back then, you're up 400%. For Dell, you're still ahead 30%, but your prospects are bleaker than that.

Full disclosure. I took that flyer on Ford. I also bought some Dell around the same time. I sold it later and broke even. I'm thankful for that.

That's because tech stocks, unlike most industrials, do disappear when they lose the market plot. Silicon Graphics Inc. used to be a high-flyer. So, once, was Wang Labs. And Digital Equipment. When the mighty fall, they can fall all the way.

Dell is falling right now because of a first-quarter earnings miss and a