Tech Banquet Gone Before Investors Get a Bite

NEW YORK (TheStreet) -- Technology is always eating its young. This week's leaked information on an Apple (AAPL)-Beats Electronics deal points to what would be only the latest in a string of exciting new companies gobbled up before then went public.  

Small investors don't get a taste of many such deals, either on the front end or the back end. They won't learn about it until the bubble pops and supposedly safe investments crash.

Systems like Crowdfunder, which offer small investors the chance to get in on the ground floor of start-ups, claim they can plug the gap. But Stanford research indicates nearly 90% of venture capital investments fail. 

Want to fight those odds? If you don't, you may not get a sniff of today's hot deals. Back in the 1990s, venture capitalists quickly took investments public in order to cash in on their successes and recycle the money. But that carried significant downside. After the dot-com bubble popped, small investors had to eat some failures, like Pets.com, Webvan, and CMGI. Some, like Priceline (PCLN) and Amazon  (AMZN), returned to glory, but that came years later, and these were the exceptions rather than the rule. I personally remember getting stuck with one such "investment," when a site I was writing for, which had been acquired by Andover.Net, was in turn acquired by a company called VA Linux in early 2000. I was offered stock options, which I should have flipped, but instead I held the shares and rode them to disaster. Lesson learned. But will I ever get a chance to apply it? These days venture capital has merged into private equity, which does its own forms of financial engineering. Private equity companies don't need to recycle their cash like VCs do. They are large enough to take over, not just large private companies, but public ones as well. As a result many start-ups now routinely get multiple rounds of capital, each at a higher valuation. As these companies mature, private equity will take a bigger position, so the VCs can recycle their cash, but the company may still not come public. Whether or not it they become profitable, today's tech start-ups can also be recycled into larger tech companies as never before. During 2013, for instance, Apple made 13 acquisitions, including four in the mapping area, two in semiconductors, and a company called WiFiSlam involved in something called "indoor location." 

Stock quotes in this article: PCLN, AMZN, AAPL, GOOG, FB, YHOO 

Google (GOOG) made 18 acquisitions during the same year, including seven in the area of robotics alone. Facebook (FB) bought nine companies. Amazon mainly stayed out of it, buying only three firms. 

Yahoo! (YHOO) topped them all, taking over 26 companies in 2013. Tumblr was the biggest deal at $1.1 billion, but CEO Marissa Mayer also splashed out $50 million for Qwiki video production, $40 million for Xobni, a customer relationship management company, and $30 million for Summly, a news aggregator, and its 17-year old founder, Nick D'Alosio. 

Some of these were doubtless "acqui-hires," bought in order to gain the teams running them rather than the products they were producing. Acqui-hire companies are often closed once they're acquired.

Some of the biggest techs, notably Google, now have their own venture capital units which let them create their own start-ups, like Uber, practically from scratch, and bring them to multi-billion dollar valuations without selling out. In 2014, the hits just keep on coming. Big tech is taking out small, successful tech and you're not getting a taste of any of it. Oculus Rift was bought by Facebook. Google, which had backed Nest, bought it. At this writing, Apple is still considering a $3.2 billion deal to buy Beats, which makes headphones and runs a streaming music service, Beats Music. Beats' last funding round, $60 million in March, was headed by Ukranian-born industrialist Len Blavatnik. The latest rumor is the deal will be announced at next month's WorldWide Developer Conference. Time thinks Amazon could swoop in but given the few acquisitions the company has made so far, that seems unlikely. Thus, if there is a tech bubble, small investors are not profiting from it. Many of the IPOs filed in the last month had nothing to do with technology. They include several energy-related companies, a bank and a company that buys and operates farms in the Pacific Northwest.  So when this latest tech bubble pops, how will you know? Maybe when your Google shares collapse, weighed down by buying out the private equity boys who sold them their garbage. Or maybe it will just be the sound of a slow leak, as your safe investments are burdened by acquisition dilution.  >>Read More:

WWE Gets Smacked Down

5 Things Apple Doesn't Want You to Know

Pinterest, Uber Eye Fresh Funding on Sky-High Valuations At the time of publication the author owned shares of GOOG, AAPL and AMZN. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Stock quotes in this article: PCLN, AMZN, AAPL, GOOG, FB, YHOO 

Michaels confirms breach of as many as 2.6M cards

NEW YORK (AP) — Michaels Stores said Thursday that about 2.6 million cards, or about 7% of all debit and credit cards used at its namesake stores, may have been affected in a security breach.

The nation's largest arts and crafts chain said its subsidiary Aaron Brothers was also attacked, with about 400,000 cards potentially affected.

Irving, Texas-based Michaels said that it has contained the incident, which began last year. It has received "limited" reports of fraud from banks and the payment card brands that are potentially connected to the breach.

The compromised data includes customer information such as payment card numbers and expiration dates. But there's no evidence that other personal information such as names, addresses or PIN numbers were at risk, Michaels said.

MORE: Agency says Target hackers may take years to find

Michaels' report comes as many shoppers worry about the safety of their personal data following a massive pre-Christmas security breach at Target that affected 40 million debit and credit cards.

The details come nearly three months after Michaels disclosed that it may have been a victim of a data breach and that it was working with law enforcement authorities, banks and payment processors.

The company said Thursday that both chains were attacked by criminals using highly sophisticated malware that had not been encountered previously by the two security firms that were conducting the investigation.

"Our customers are always number one priority and we are truly sorry for any inconvenience or concern Michaels may have caused," said Chuck Rubin, CEO of Michaels, in a statement.

The breach at Michaels stores occurred between May 8, 2013 and Jan. 27. The company confirmed that between June 26, 2013 and Feb. 27, 54 Aaron Brothers stores were affected by this malware.

Michaels said that it was offering free identity protection, credit monitoring and fraud assistance services to affected Michaels and Aaron Brothers customers in! the U.S. for 12 months.

Follow Anne D'Innocenzio on Twitter @adinnocenzio

.

Tension grows between ranchers, mustang backers

RENO, Nev. (AP) — Tensions bubbled over on the range in a turf battle that has been simmering for decades over one of the icons of the American West and scant forage on arid, high desert lands from Nevada to Wyoming.

With the presence of wild horses continuing to pit animal advocates against ranchers, the Bureau of Land Management, which is caught in the middle, on Saturday began seizing hundreds of cattle from a longtime rancher that it says are trespassing on public land in southern Nevada.

The action came a day after the agency agreed to remove horses from the range in southwest Utah after Iron County commissioners threatened to take matters in their own hands.

Wild-horse protection advocates say the government is rounding up too many mustangs while allowing livestock to feed at taxpayer expense on the same rangeland scientists say is being overgrazed.

Ranchers say the government refuses to gather enough horses in the herds that double in size every five years while moving to confiscate cattle on lands where their ancestors have operated for more than a century.

The BLM says it's doing all it can, given budget constraints, overflowing holding pens and a distaste for the politically unpopular options of either ending the costly roundups or slaughtering excess horses.

The agency started taking cattle Saturday from Cliven Bundy, who it says has been trespassing on U.S. land without required grazing permits for over 25 years. Bundy doesn't recognize federal authority on land he insists belongs to Nevada.

"These people are thieves," Bundy told The Associated Press on Saturday. "I haven't even started fighting yet. You think I'm going to lay down and just give up. I'm going to fight for the Constitution and state sovereignty."

Asked what actions he planned to take, Bundy replied, "Why don't you wait and see. As I told the BLM and county sheriff, 'I'll do whatever it takes.'"

BLM spokeswoman Kirsten Cannon, in a media conference call Saturday afternoon,! said her agency was implementing two federal court orders to remove Bundy's cattle after making repeated efforts to resolve the matter outside court.

Plans call for the removal of some 900 trespassing cattle from 1,200 square miles of land in southern Nevada managed by her agency and the National Park Service over the next three to four weeks, she said.

A federal judge in Las Vegas first ordered Bundy to remove his trespassing cattle in 1998. Similar orders were issued last July and again in October.

"(Bundy's trespassing) is unfair to the thousands of other ranchers who graze livestock in compliance with federal laws and regulations in the West," Cannon said, adding the agencies are working with local and state officials to ensure the removal occurs in a safe manner.

She declined to comment on the number of personnel involved, and was unable to provide a cost estimate for the operation.

Bundy, who said he owns about 500 cows, estimates at least 100 federal agents and other personnel, many of them armed, gathered around the ranch his family has operated since the 1870s southwest of Mesquite a few miles from the Utah line.

"I've tried to stop them for 20 years. I've tried to be legal in the courts. I've tried to do it politically and through the media. Now, it's about down to having to do it as 'We the people,'" he said.

It's a battle that has raged since the 1980s when the Sagebrush Rebellion challenged federal ownership of Nevada rangeland ranchers said was rightfully theirs.

During the past 10 years, horse advocates have been more the aggressors, asking courts to block roundups they say violate the Wild Free-Roaming Horses and Burro Act of 1971. But in recent months, ranchers have again gone back on the attack.

The Nevada Farm Bureau Federation and Nevada Association of Counties sued the government in U.S. District Court in Reno in December seeking to force the BLM to step up roundups and, if necessary, sell excess mustangs for slaughter — somet! hing they! say is allowed under the law but that the federal agency has resisted.

Earlier this week, a federal magistrate judge in Reno granted horse advocates' request to become a party in that case based on their argument no one else involved — including the BLM — has the horses' best interest in mind.

In Utah, Iron County commissioners had threatened to gather up hundreds of mustangs themselves, saying the horses threaten livestock and wildlife on rangelands already damaged by drought.

"We will take whatever action we have to take to reduce those numbers immediately," Commissioner David Miller told the Salt Lake Tribune.

But BLM State Director Juan Palma, in an email sent Friday to Miller, said he is committed to working with the county in developing a plan to reduce the number of horses, The Spectrum of St. George, Utah, reported.

"Both the BLM and Iron County have a shared interest in the well-being of the range and all who rely in its health. ... Additionally, (we have) our shared interest in the well-being of sustainable populations of our wild horses," Palma wrote.

Whitney Tilson's Kase Fund 2013 Annual Letter

Kase Fund Annual Letter-2013

Also check out: Whitney Tilson Undervalued Stocks Whitney Tilson Top Growth Companies Whitney Tilson High Yield stocks, and Stocks that Whitney Tilson keeps buying
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Gold’s Next Big Move: Boom or Bust?

Gold has had very long periods of boom and bust. Was last year’s 28% tumble the end of boom and beginning of bust? 

On the bearish front, Morgan Stanley (MS) reduced its 2014 gold forecast by 12% to $1,160 an ounce, and Goldman Sachs expects gold to fall to $1,050 over the next year. 

In contrast, gold perma-bulls see higher bullion prices this year, just as they wrongly predicted last year. Who’s right? 

Market prices always tell us who’s right and who’s wrong. And so far, gold is ahead around 4%, and gold mining stocks are up almost 15% year-to-date.  

However, ETFs tied to large-cap gold mining stocks (GDX) lost 79% from 2011 to 2013, while small-cap miners (GDXJ) crashed 111%.

The Direxion Shares Daily Gold Miners Bear 3x Shares (DUST), which aims for triple daily opposite performance to mining stocks, skyrocketed 179% last year and was a star performer.

After such a significant decline for both GDX and GDXJ, a significant bounce was almost inevitable.

Strategic Bets

Understanding market psychology and being able to profit from it is important, especially in a disorderly and mood-driven market like precious metals.

Before the surge in gold miner ETFs began in late December, overly bearish sentiment signaled a clear profit opportunity in this beaten down sector. Were you ready?

“This year [2013] will be the third consecutive year of losses for gold mining stocks. But once year-end tax loss selling is over, we’re anticipating a bounce in beaten down gold miners in January.

“It remains to be seen whether this bounce will become a bigger trend change for GDX from down to up, but it’s nevertheless a short-term profit opportunity. We’re buying the Market Vectors Gold Miners ETF (GDX) at $21 and our tandem options trade is to buy the GDX JAN 2013 20 call options (GDX140124C00020000) at around $140,” said ETFguide’s Weekly ETF Picks from Dec. 26.

Since our 12/26 gold miners buy alert, we booked a blended two-week gain of 27% on our tandem GDX options trade, and we’re still long GDX shares.

As readers familiar with ETFguide’s research know, last year we were consistently bearish on gold and other precious metals along with mining stocks. In fact, our largest ETF gainer last year was our 2/14/13 time-stamped alert to buy GDX JUN 2013, 40 put options at $190 per contract.

As we expected, GDX crashed. In our 5/15/13 alert, we exited the trade with a 525% gain, selling our remaining position at $1,200 per contract.

This time around, the smart gold trade has been to do the exact opposite of the crowd. When they’re selling, you should be buying.  

Although gold bullishness has certainly picked up, it isn’t at extreme levels. And that’s good. It means the 2014 rally in gold and gold equities may have some legs, even if it has no brains.

*** 

Ron DeLegge is Editor of the ETF Profit Strategy Newsletter which uses technical and fundamental analysis along with market history and common sense to keep advisors on the right side of the market.  In 2013, 70% of ETFguide’s weekly ETF picks were winners.

 

 

 

George Goodman, TV's "Adam Smith," dies at 83

NEW YORK (AP) — George Goodman, a journalist, business author and award-winning television host who under the pseudonym "Adam Smith" made economics accessible to millions of people, died Friday at age 83.

Goodman's son, Mark Goodman, said his father died at the University of Miami Hospital after a long battle with the bone marrow disorder myelofibrosis.

Starting in the 1950s, the elder Goodman had a long, diverse and accomplished career, whether as a founder of New York Magazine, as a best-selling business author or as the personable host of "Adam Smith's Money World."

Known as "Jerry" to his friends, he prided himself on making arcane debates among economists and business leaders understandable, often using an anecdotal or irreverent approach to explain a complicated issue. He has been credited with coining the mocking catchphrase, "Assume a can opener," as a parody of academic jargon.

"I have always believed that if you dramatize a story, you can make it comprehensible while at the same time maintaining a relatively high level of sophistication," he once said.

"Adam Smith's Money World" was a multiple Emmy winner that aired on PBS stations from 1984-1996, with guests including Warren Buffett and then-Federal Reserve Board chairman Paul Volcker. He was also an executive editor at Esquire, a member of The New York Times editorial board and a commentator for NBC television. In recent years, he sponsored a lecture series through the Harvard Club of New York Foundation.

Before his success in the business world, Goodman had written novels and worked in Hollywood as a screenwriter. He helped adapt his own book, "The Wheeler Dealers," into a 1963 movie of the same name starring Lee Remick and James Garner.

Smith was editing the monthly journal The Institutional Investor when his first nonfiction book, "The Money Game," was published in 1968. Among the year's top sellers, and read for decades after, "The Money Game" offered a colorful take on the financial markets tha! t added a human element to the laws of finance and seemed as influenced by Damon Runyon as by any economic theorist. One popular character was an oversized investment guru known as "Scarsdale Fats."

"As far as I know it was a couple of the Boston institutions that hung the nickname on him, which shows that Boston institutions are not as stuffy as they used to be" Smith wrote. "One of his enthusiasts described him as 'glob shaped.' Minnesota Fats is an ectomorph and Sydney Greenstreet would blow away in the Scarsdale Fats ratio! All Scarsdale will say is that he is comfortably over 200 pounds."

"The Money Game" was also Goodman's first book as "Adam Smith." He wanted to keep Wall Street from learning his identity — the game was up soon after publication — and accepted a suggestion from founding New York magazine editor Clay Felker that he name himself after the 18th century economist.

His other books included "Supermoney," a 1972 publication that introduced many readers to a then-little known Buffett; "Powers of Mind" and "Paper Money," which came out in 1981.

"Where some authors exploit the paranoia over paper money, warning of horrible crashes and galloping inflation to come, Adam Smith strives for sanity," Leonard Silk wrote of "Paper Money" in a review for The New York Times. "And where some writers urge people to look out for Number One and to be prepared to head for the hills with their gold coins, silver futures, cans of beans and weapons to keep out the neighbors, Adam Smith counsels the revival of a sense of community."

George Jerome Waldo Goodman grew up outside St. Louis and was graduated from Harvard University in 1952. He was a Rhodes Scholar at Oxford and a member of the U.S. Army Special Forces, the forerunner of the Green Berets. He was still in the Army when his first novel, the comic tale "The Bubble Makers," came out in 1955.

He is survived by two children and three grandchildren. His wife, actress Sally Brophy, died in 2007.

EUM – Bet Against Emerging Markets in 2014

Popular Posts: The Taper Is Coming: Top 3 Ways to Play Fed Tapering Recent Posts: EUM – Bet Against Emerging Markets in 2014 The Taper Is Coming: Top 3 Ways to Play Fed Tapering Good News Spooks Wall Street View All Posts

Editor's note: This column is part of our Best Stocks for 2014 contest. Anthony Mirhaydari’s pick for the contest is the ProShares Short MSCI Emerging Markets ETF (EUM).

For a long time, things were going very right for emerging markets. Emerging markets were riding a wave of industrialization and urbanization fueled by mercantilist currency policies, an army of cheap laborers and eager multinationals looking to boost profits by slashing expenses.

But the jewels of the last bull market (as well as the 2009-11 rebound) are losing some sparkle.

Since the global economy hit an air pocket in 2011 — on a combination of the U.S. credit downgrade market scare and a surge of inflationary pressure that forced central banks to tighten (The Federal Reserve ended QE2 while the People’s Bank of China tightened policy) — the fairytale for emerging markets has been slowly ending.

The iShares MSCI Emerging Markets ETF (EEM) has gone nowhere, down 13% from its peak as it slides sideways.

Why You Should Buy the ProShares Short MSCI Emerging Markets ETF (EUM)

In anticipation of a bumpy 2014 for emerging markets, I recommend investors look to profit from the risks via the ProShares Short MSCI Emerging Markets ETF (EUM), and have picked it for the Best Stocks of 2014 contest.

There are many problems with the emerging markets story. Just look at China. The job market is tightening as the demographic dividend ends, a consequence of the one-child policy, which China recently updated. A massive credit bubble and infrastructure overbuilding threaten to not only roil the banking system and rattle the housing market, but also are complicating efforts by Beijing to structurally reorient the economy away from export-dependence toward domestic consumption.

And after colonizing China’s coastal regions before moving into the inner provinces, profit-maximizing multinationals are moving on to greener pastures, such as Thailand and Vietnam.

But above all, it’s the currency situation — and the infidelity of all the hot money inflows that fueled the infrastructure boom — that has me worried about emerging markets.

We got a taste of what’s to come in May and June: Emerging markets were slammed as the Federal Reserve started talking up a potential tapering of its QE3 stimulus. That bolstered the U.S. dollar and caused a rout in emerging markets currencies such as India’s rupee, which lost nearly 20% against the greenback between May and August. Indian stocks lost 15%.

I think the new Fed taper will act as the spark that catalyzes this dynamic once more. Another dramatic plunge in the Japanese yen — should the Bank of Japan desperately launch another currency devaluation/stimulus salvo in February or March, as analysts now anticipate — could also contribute.

Stocks in emerging markets have been lagging U.S. averages all year, and the iShares MSCI Emerging Markets ETF is once again threatening to fall through its 200-day moving average as shown in the chart above. A violation would put the 2012/2013 lows back in play for EEM — a 10% decline from here. If those levels are violated, there is no significant support above the 2009 bear market lows.

Worryingly, the current situation looks and feels similar to the run up to the 1997 Asian financial crisis. Then, as now, the reversal of hot-money foreign direct investment inflows is a real threat. A rapid increase in debt has fueled asset bubbles, notably in Chinese real estate. A breakdown in the yen is underway once more. And the Fed is poised to tighten monetary policy.

All of that potential tumult makes the EUM fund look attractive for 2014, and should put it among the leaders of the Best Stocks of 2014 contest.

Anthony Mirhaydari is the editor of Edge. As of this writing, he had recommended EUM to his clients.

Sending out an SOS: RadioShack Plunges 20% as Losses Grow

When I was a kid, I bought my first–and only–Ham radio telegraph key at RadioShack (RSH), which was a haven for those of us geeky enough to like playing with electronics. I also adored its packaged electronic kits, with those little metal springs to hold the wires. But that’s not today’s RadioShack, not really.

Getty Images

The problem is, that RadioShack doesn’t know what it is anymore, as clearly demonstrated by second-quarter loss of $1.11, well below forecasts for a 37 cents loss. The Wall Street Journal has the details:

Earlier this year [CEO Joe] Magnacca, a former Walgreen Co. executive who was hired in February, outlined a strategy to refurbish stores by overhauling layouts and removing items from the shelves, part of a broader effort to improve perception among younger customers while keeping traditional “do-it-yourself” patrons satisfied. The company plans to open or remodel more than 100 of its roughly 4,300 stores with some form of that new design by the end of the year.

In the meantime, RadioShack’s quarterly loss widened to $112.4 million from $47.1 million a year earlier as overall sales fell 10% to $805.4 million.

Sales at stores open at least a year dropped 8.4% as the company cleared stockpiles of less-profitable products by marking down devices or, in most cases, unloading them on wholesalers. The effort squeezed the company’s gross margin down to 30.1% from 36% a year earlier.

RadioShack also announced that it had hired two executives with J.C. Penney (JCP) pasts to help improve merchandising and global sourcing. Yes, JC Penney. That will make investors feel good.

Still, JCPenney RadioShack was able to sign an $835 million financing deal at “very market-based competitive rates,” its CFO said.

BB&T Capital Markets’ Anthony Chukumba and Eric Cohen survey the damage:

RadioShack continued to stumble in Q3'13, and we saw scant evidence in the company's results a turnaround is on the horizon. While we are encouraged to see RadioShack secure the necessary financing to make it through the upcoming holiday selling season, we still have serious concerns about the company's long-term viability—particularly as Best Buy (BBY) continues to right its ship and Amazon (AMZN) becomes a larger player in consumer electronics retailing.

Radioshack’s shares have dropped 21% today, and Chukumba and Cohen continue to rate the stock a hold. Because at $$2.79, what else are you going to do?

Pay Attention To Your Fund’s Expense Ratio

All mutual funds and exchange-traded funds (ETFs) charge their shareholders an expense ratio to cover the fund's total annual operating expenses. Expressed as a percentage of a fund's average net assets, the expense ratio can include various operational costs such as administrative, compliance, distribution, management, marketing, shareholder services, record-keeping fees and other costs. The expense ratio, which is calculated annually and disclosed in the fund's prospectus and shareholder reports, directly reduces the fund's returns to its shareholders, and, therefore, the value of your investment.

According to a report published by the Investment Company Institute (ICI) entitled Trends in the Expenses and Fees of Mutual Funds, 2012, expense ratios incurred by investors in long-term mutual funds have, on average, declined over the past 20 years. Equity fund expense ratios, for example, fell from an average of 1.07% in 1993 to 0.77% in 2012. Hybrid funds went from 0.96% to 0.79%, bond funds dropped from 0.83% to 0.61%, and money market funds fell from 52% to 17% over the same 20-year period.

The trend in lower expense ratios can be attributed to a variety of factors, such as money market funds waiving expenses to ensure that net returns remain positive during periods of low interest rates, and target date mutual funds being able to lower expenses due to economies of scale (target date mutual fund assets have tripled since 2008). In addition, expense ratios often vary inversely with fund assets, meaning that as a fund's assets increase, its fixed costs likely represent a smaller percentage of its net assets; therefore, its expense ratio can correspondingly decrease. Despite trends indicating an overall decrease in fees across many fund categories, investors should still pay attention to expense ratios: even small differences in fees can have a significant impact on your investment over time.

Expense Ratios Differ

In general, the expense ratios for mutual funds tend to be higher than for ETFs. While ETF expense ratios top out around 2.5%, mutual fund costs can be as high as 20% (most, however, are much lower). The costs of operating funds vary greatly depending on the investment category, investment strategy and the size of the fund, and those with higher internal costs generally pass on these costs to shareholders through the expense ratio. If a fund's assets are small, for example, its expense ratio might be relatively high, because the fund has a restricted asset base from which to meet its expenses.

When looking at funds and costs, it is important to compare funds that own similar types of investments. For example, international funds are typically very expensive to operate because they invest in many countries and may have staff all over the world (which equates to higher research expenses and payroll). Large cap funds, on the other hand, tend to be less expensive to operate. While it is reasonable to compare expense ratios across multiple international funds, it would not make sense to compare the costs of an international fund against a large cap fund.

When researching investments, there are several ways you can determine the expense ratio of a fund:

The fund's prospectus - If you are already a shareholder, the prospectus will be mailed or sent electronically to you each year. The expense ratio is typically found under the "Shareholder Fees" heading. You can also view the prospectus on the fund company's website. Financial news websites - Websites such as Google Finance and Yahoo! Finance have expense ratio information for mutual funds and ETFs. Type in a fund's ticker symbol to view this information. Fund screeners - A number of ETF and mutual fund screeners are available online. You can search by category or group (i.e., equity, bond, money market, international) and compare expense ratios across similar investments. FINRA's Mutual Fund Expense Analyzer, for example allows you to compare up to three mutual funds (or ETFs) or the share classes of the same mutual fund. The tool estimates the value of the funds and impact of fees and expenses on your investment. News journals - Print newspapers, such as Investor's Business Daily (IBD) and the Wall Street Journal print information regarding funds, including expense ratios. Rates Affect investments

To see how expense ratios can affect your investments over time, let's compare the returns of several hypothetical investments that differ only in expense ratio. The following table depicts the returns on a $10,000 initial investment, assuming an average annualized gain of 10%, with different expense ratios (0.5%, 1%, 1.5%, 2% and 2.5%):



As the table illustrates, even a small difference in expense ratio can cost you a lot of money in the long run. If you had invested $10,000 in the fund with a 2.5% expense ratio, the value of your fund would be $46,022 after 20 years. Had you instead invested your $10,000 in the fund with a lower, 0.5% expense ratio, your investment would be worth $61,159 after two decades, a 0.33% improvement over the more expensive fund. Keep in mind, this hypothetical example examines funds whose only differences are the expense ratios: all other variables, including initial investment and annualized gains, remain constant (for the example, we must assume identical taxation as well). While two funds are not likely to have the exact same performance over a 20-year period, the table illustrates the effects that small changes in expense ratio can have on your long-term returns.

The Bottom Line

While important, a fund's expense ratio is not the only important consideration when analyzing and comparing fund investments. Investors must consider a variety of factors, including each fund's:

Sales charges Taxes Age and size Risks and volatility Recent changes in operations (for example, has the fund's investment adviser changed?) Impact on your portfolio diversification It should be noted that a fund's expense ratio represents your cost of owning the fund – not purchasing or redeeming the fund (sales loads). Any initial or deferred sales charges, transaction fees or brokerage charges are not included in the expense ratio. All of these factors should be taken into consideration prior to making any investment decisions. With research, you can find funds that meet your goals and objectives while leaving more money in your portfolio.

FedEx Beats Estimates as Net Income Rises 7%

MEMPHIS (TheStreet) -- FedEx (FDX) beat Wall Street estimates as net income rose 7%, driven by growth in each of the company's transportation segment.

In pre-market trading about an hour before the opening bell, FedEx shares had gained $3.32 or 3% to $114.

The overnight package shipper reported earnings of $489 million, or $1.53 a share, for the fiscal first quarter ended Aug. 31. Analysts surveyed by Thomson Reuters had estimated $1.50. Revenue rose 2% to $11 billion, in line with estimates.

In the same quarter a year earlier, FedEx earned $459 million, or $1.45 a share. "Growth in overall demand for our broad global portfolio of solutions drove our improved first quarter results," said CEO Fred Smith, in a prepared statement. "FedEx Express remains focused on reducing costs while facing challenging global economic conditions. Meanwhile, FedEx Ground continues to generate strong profitability on growing customer demand for its services." Looking ahead, FedEx reaffirmed its forecast of full-year earnings per share growth of 7% to 13%, assuming the market outlook for fuel prices, U.S. GDP growth of 2.1% and world GDP growth of 2.6%. "We remain confident in our full year earnings outlook despite tepid global economic growth," said Chief Financial Officer Alan Graf. The company will increase shipping rates by an average of 3.9% for U.S. services, effective Jan. 6, 2014. During the quarter operating income rose 7% to $742 million while operating margin was 7.2%, up from 6.9% a year earlier. Trends were positive despite "significant headwinds from the net year-over-year impact from the timing lag that exists between when fuel prices change and (when) indexed fuel surcharges automatically adjust, as well as one fewer operating day," the company said. At FedEx Express, operating income rose 14% to $236 million, while revenue declined marginally $6.61 billion due to lower fuel surcharges and one fewer operating day. At FedEx Ground, operating income rose 5% to $468 million while revenue rose 11% to $2.73 billion due to increased rates and higher residential surcharge revenue, partially offset by lower fuel surcharges. At FedEx Freight, operating income rose 1% to $91 million, while revenue rose 2% to $1.42 billion. Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed

Anticipation Builds For QUAN’s Debut iPad Case (OTCMKTS:QUAN, OTCMKTS:CLNO)

Quantum International Corp. (QUAN)

Today, QUAN surged (+2.86%) up +0.005 at $.180 with 160,170 shares in play thus far (ref. google finance Delayed: 11:43AM EDT June 24, 2013).

As Apple is expected to release the iPad 5 this summer, Quantum International Corp. is readying to enter the exploding $2.3 billion iPad accessories market as work continues on the company's first prototype case.

With iPads becoming more and more prevalent in the professional environment as well as for education and entertainment, Quantum's engineering partners are hard at work developing an amazing and innovative case that will provide users with many exciting options. The case will be the debut offering in Quantum's lifestyle enhancement product line.

Take a look at Quantum International Corp. (QUAN) 5 day chart: