Broker Dealers, Equity-Focused Managers To Lag On Taper Delay: Citi

Investors are still wading through the implications of the Federal Reserve's decision not to begin tapering its bond purchases. Citigroup's William Katz has a note out today wading through the consequences for brokers and asset managers.

He expects two main outcomes from the taper delay. Firstly, that broker dealers will likely lag in the short term, given rate leverage embedded in their models and recent outperformance—although he warns that a more prolonged delay would "materially impact" the time before these names will reach normalized earnings.  He also writes that managers focused on stocks will likely lag compared to fixed income managers, while wondering overall if the move calls into question the strength of the economic recovery and the credibility of the Fed.

Read on for company-specific musings from the report:

Moving up Franklin Resources (BEN) among Traditionals; Close out T. Rowe Price (TROW)/Legg Mason (LM) pair trade — We are still selective on Traditional managers but are re-ranking our short-term (ST) preferences as we believe FI-centric managers may outperform as NAV risks diminish while volumes become more sustainable. Invesco (IVZ) remains our top selection but we move up BEN ahead of TROW. BEN should outperform given: a) attractive relative valuation; and, b) easing investor concern over FI NAV risk and global bond volumes. We also close out long TROW/underweight LM pair trade as equities flow recovery could slow. Additionally, we see Wisdom Tree Investments (WETF) negatively impacted as DXJ is ~35% of AUM and depreciating USD may result in uneven ST volumes.

Expect B/Ds to lag in the ST but keeping perspective on LT thesis — The delay in tapering and the pullback in rate expectations weakens the ST case for rate sensitive names but does not take away from upside potential with respect to normalized earnings power. While the 10-year Treasury yield pulled back sharply on 9/18 to 2.70%, it is still up from ~2.50% at 6/30. Nonetheless, we see Buy-rated LPL Financial (LPLA) and Neutral-rated Raymond James Financial (RJF) as likely defensive in the ST given FI centricity within key businesses; lower correlation to long end of the curve; and underperformance relative to TD Ameritrade (AMTD) + Charles Schwab (SCHW). Among LPLA and RJF, we prefer LPLA given stronger ETR potential and less risk around consensus expectations. That said, there is no change to our positive LT thesis on B/Ds reflecting bottoming EPS expectations; improving retail re-engagement; and higher NIM.

For alternative names, Katz notes these remain well positioned, as low rates in the short term could reduce pressure on financing costs (although with the prospect of reduced economic growth). He favors Blackstone Group (BX), Apollo Group (APO), KKR, (KKR), and Och-Ziff Capital Management Group (OZM).

UBS and BMO Capital Raise Price Target, Estimates on Cummins (CMI)

Early on Wednesday, analysts at both UBS and BMO Capital raised their price targets and earnings estimates on diesel engines manufacturer Cummins Inc. (CMI).

The analysts at UBS raised the numbers on CMI to reflect better growth from market positions and new products. As such, they now see shares of CMI reaching $146, which suggests a 10.6% upside to the stock’s Tuesday closing price of $131.96.

At BMO Capital, the analysts raised CMI’s earnings estimates through 2015 as distribution acquisitions should add to earnings. Furthermore, the analysts rate CMI as “Outperform” and see shares reaching $146 as well.

Cummins shares were down 20 cents, or 0.15%, during pre-market trading on Wednesday. The stock is up 21.79% year-to-date.

12 Best U.S. Cities for Successful Aging

As boomers age, their retirement ambitions are likely to include more than just trading in their winter snow shovels for a fair-weathered community in a low-tax state. That is why the Milken Institute created its Best Cities for Successful Aging Index, which they compiled in 2012 and won’t update till 2014.

Last year, ThinkAdvisor published two, more extensive versions of the Aging Index: 20 Best Big Cities for Successful Aging and 15 Best Small Cities for Successful Aging. In this version we’ve condensed those findings, extracting the top cities of those two stories and combining them here into two categories: big metro areas and small metro areas.

Far from a list of Florida cities with cheap, and early, eats, the Milken Institute rankings (which are actually dominated by cold-weather places) take into account a wide number of variables — 78 in fact — that point to a community’s health care resources, safety, affordability, comfort, ease of transportation, second-career opportunities, cultural offerings and community connectedness.

The study’s authors — Anusuya Chatterjee, Ross DeVol and Paul Irving — drilled deeply. In the area of heath care, for example, they looked at the number of doctors, hospital beds, dialysis centers and more; the number of hospitals with Alzheimer’s units and hospice centers; hospital expenses per inpatient day; the percentage of hospitals with medical school affiliations; and more than a dozen other factors.

They did the same for wellness indicators, financial indicators, employment and education indicators as well; they did all this for large metro areas and small metro areas, and they did this for two age cohorts — 65 to 79 and 80 and older. The result is a multivariate ranking on steroids.

“This index is a first research of its kind in the United States using public-use data that determine the overall quality of life for seniors,” Milken Institute scholar Anusuya Chatterjee said, commenting on the study for ThinkAdvisor. “Ninety percent of seniors want to age in [the same] place, and this index looks directly at how cities are meeting these needs.”

The big study examined two cohorts: one that included the 100 largest cities and regions and the other 259 smaller metropolitan areas. Please read ThinkAdvisor’s slice of that large study: 12 Best U.S. Cities for Successful Aging.

6.  Gainesville, Fla.

Overall Score: 92.26

Age 65-79 Rank and Score: 5; 91.86

Age 80+ Rank and Score: 6; 93.25

TAKEAWAY: Home of the University of Florida, Gainesville is a vibrant town with great weather and a strong fiscal base. The university-affiliated Shands HealthCare system is one of the best in the nation. However, a slow economy and a small senior population in the metro might prevent seniors from relocating here.

5.  Rochester, Minn.

Overall Score: 92.49

Age 65-79 Rank and Score: 12; 89.06

Age 80+ Rank and Score: 4; 94.34

TAKEAWAY: The Mayo Clinic, one of the best hospitals in the nation, is located here. Needless to say, this has attracted many health care providers. Safe and secure neighborhoods offer a superior quality of life. But the sluggish economy and low college enrollment are definite weaknesses.

4.  Columbia, Mo.

Overall Score: 94.43

Age 65-79 Rank and Score: 4; 93.26

Age 80+ Rank and Score: 5; 94.00

TAKEAWAY: Thanks in part to a strong tax base, Columbia offers excellent educational facilities and health care. University-sponsored research is an incubator for innovation and new businesses, which gives seniors access to cutting-edge technology in health care and supports entrepreneurial activities. However, the metro is short on recreation and culture.

3.  Bismarck, N.D.

Overall Score: 95.44

Age 65-79 Rank and Score: 3; 93.30

Age 80+ Rank and Score: 3; 96.26

TAKEAWAY: The capital city is reaping the benefits of North Dakota’s oil and gas boom. It ranks high in senior employment, and the large service sector increases the chances of finding a job. If weather is not a high priority, Bismarck offers excellent opportunities for working seniors.

2.  Iowa City, Iowa

Overall Score: 98.63

Age 65-79 Rank and Score: 2; 97.07

Age 80+ Rank and Score: 1; 100.00

TAKEAWAY: Home to the University of Iowa and its medical school, Iowa City has excellent health care, little crime and relatively few seniors below the poverty line. On the flip side, housing and rentals are pricier than the median for small metros. Although its population skews younger, the presence of a young working-age population implies a solid fiscal base.

1.  Sioux Falls, S.D.

Overall Score: 100.00

Age 65-79 Rank and Score: 1; 100.00

Age 80+ Rank and Score: 2; 97.58

TAKEAWAY: With a booming economy, low unemployment and a rapidly growing financial infrastructure, Sioux Falls is a good place for seniors who want to work or start a second career. Its hospitals specialize in geriatric services, hospice and rehabilitation, and the metro has recreation and an active lifestyle. But seniors might be turned off by the inclement weather and lack of contemporaries.

6.  Des Moines-West Des Moines, Iowa

Overall Score: 98.36

Age 65-79 Rank and Score: 8; 95.71

Age 80+ Rank and Score: 6; 98.01

TAKEAWAY: Des Moines has dynamic financial services and insurance industries, and its economic outlook is bright. However, the car is still king in this midsize Midwestern city, making it difficult for seniors who no longer drive. Des Moines ranks 45th out of 100 in the transportation/convenience indicator.

5.  New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.

Overall Score: 98.49

Age 65-79 Rank and Score: 3; 97.19

Age 80+ Rank and Score: 2; 99.96

TAKEAWAY: Greater New York hosts two of the top 20 hospitals in the U.S. Despite being the nation’s financial capital, it did poorly in the financial category because of high taxes and many seniors facing financial distress. If you can afford to live there, the area has all the big-city amenities — and all the negatives, too.

4.  Boston-Cambridge-Quincy, Mass.-N.H.

Overall Score: 98.93

Age 65-79 Rank and Score: 6; 96.70

Age 80+ Rank and Score: 1; 100.00

TAKEAWAY: It almost goes without saying: Few places are as innovative or offer as many opportunities for education and retraining as the greater Boston area, home to more than 100 colleges and universities. For culture vultures, the area is full of theaters, historic places, lively lectures and music venues.

3.  Omaha-Council Bluffs, Neb-Iowa

Overall Score: 99.46

Age 65-79 Rank and Score: 7; 96.22

Age 80+ Rank and Score: 3; 99.53

TAKEAWAY: The greater Omaha area hosts the headquarters of five Fortune 500 companies, which contribute significantly to the area’s financial well-being and are a testament to its low-cost environment. The metro is becoming a health care hub for the surrounding area and a popular place for holding conferences.

2.  Madison, Wis.

Overall Score: 99.95

Age 65-79 Rank and Score: 5; 96.84

Age 80+ Rank and Score: 4; 98.67

TAKEAWAY: Home to the respected University of Wisconsin, Madison is a hub of innovation and intellectual stimulation. A midsize city with its own quality health care system and cultural events, Madison and its residents also benefit from being just 150 miles from Chicago’s amenities, services and consumer markets.

1.  Provo-Orem, Utah

Overall Score: 100.00

Age 65-79 Rank and Score: 1; 100.00

Age 80+ Rank and Score: 7; 97.93

TAKEAWAY: Provo has a relatively young population, but more older Americans have been moving to the metro over the past decade. A learning environment and vibrant economy provide opportunities for a second career and retraining. The presence of Brigham Young University, one of the largest private universities in the U.S., and a pro-business environment make Provo the No. 1 city on our list. It also boasts a low incidence of chronic disease, thanks to healthy lifestyles and a focus on wellness. Provo is an excellent location for seniors who are relocating or hoping to age in place, with safety, security, high community engagement, quality health care, a healthy lifestyle, and opportunities for second careers and entrepreneurship.

(Read the full Milken Institute report on Best Cities for Successful Aging.)

-- Check out these Top 10 lists from ThinkAdvisor:

The Week's Winners and Losers: iPhones and Elops and Kindles, Oh My!

AlamyStephen Elop (left), the soon-to-be ex CEO of Nokia, with Steve Ballmer, CEO of Microsoft, which is acquiring his services. Companies can make brilliant moves, but there are also times when things don't work out quite as planned. From fallout from an excessively generous golden parachute to applause for a new cheap tablet, here's a rundown of the week's best and worst moves in business world. Amazon.com (AMZN) -- Winner The leading online retailer introduced the new generation of its Kindle Fire tablets this week. The Kindle Fire HDX offer several enhanced features, but the real winning move by Amazon is that it's lowering the price of the Kindle Fire HD to $139. Amazon can afford to sell its tablets near cost, thanks to its ecosystem of digital books, music, movies, and games that allows it to cash in later. Pricing the perfectly acceptable 7-inch tablet at $139 -- well below last holiday season's price of $199 -- should make it one of the hottest purchases this shopping season. Nokia (NOK) -- Loser There has been some public rumbling about the $25 million bonus that Nokia's now departing CEO Stephen Elop will be receiving on the way out. Even though the Finnish cell phone pioneer saw its value crater under Elop's watch, his contract guarantees the big payout under terms of the sale of its handset business. There's an uproar in Finland, even though Microsoft (MSFT) will actually be covering most of the bonus when it buys Nokia's devices and services unit, and Elop's services along with it. However, as a matter of corporate pride, Nokia has reportedly been pleading for Elop to accept a smaller bonus for his work in devaluing the company to the point where the best it could do was to slice off its juiciest segment and sell it to his former employer. (Yes, Elop was a Microsoft exec before becoming the first American to run Nokia.) Things got hairy on Wednesday when Finnish newspaper Helsingin Sanomat reported that Elop is insisting on the bonus because he's in the process of getting a divorce and he believes that his wife won't accept a reduction. Apple (AAPL) -- Winner Apple wowed the market by selling 9 million iPhone 5c and iPhone 5s devices during their first weekend on the market. That's not as amazing as it sounds. Apple sold 7 million iPhone 5 smartphones in the first weekend of availability last year in the countries that got the new iPhones a week ago today. Apple's figure also counts what we can assume were a few million cheaper iPhone 5c's, though those didn't exactly fly off the shelves. However, the real reason to call Apple a winner is because in the first five days iOS 7 was available, 200 million devices were upgraded to it. Just 100 million devices were upgraded to iOS 6 five days after it became available last year. Apple may not be perfect, but it must be doing something right if that many users are rushing to update their gadgetry to its next system. J.C. Penney (JCP) -- Loser The department store chain continues to struggle. Shares hit a new low on Thursday, and then Penney's made things worse by announcing that it would execute a secondary stock offering. Selling at least 84 million new shares will provide J.C. Penney with some well-needed liquidity, but there's nothing worthy of praise when a company is printing new shares when the stock's at a 52-week low. Target (TGT) -- Winner Target is the latest player to throw its hat into the ring of digital video. The cheap chic retailer is offering 30,000 movies and TV shows that can stream as rentals or be downloaded as purchases. Video services that offer individual titles haven't been as popular as Netflix's (NFLX) visual buffet, but you can't blame Target for trying. In a clever move, Target is offering 10 free movies just for signing up and registering a credit card on the account. The freebies must be from a pool of 25 older movies including "Rudy" and "Mars Attacks," but getting viewers to set up the account for usage and charging will make it easier to win them over as paying customers in the future.

Top Cheap Companies For 2014

With shares of Take-Two Interactive (NASDAQ:TTWO) trading around $17, is TTWO an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let�� analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Take-Two Interactive is a developer, marketer, and publisher of interactive entertainment for consumers worldwide. The company develops and publishes products through its two wholly owned labels Rockstar Games and 2K, which publishes its titles under the 2K Games, 2K Sports, and 2K Play brands. Its products are designed for console gaming systems, handheld gaming systems, and personal computers, including smartphones and tablets. It delivers its products through physical retail, digital download, online platforms, and cloud streaming services. Rockstar Games is the developer and publisher of the brand Grand Theft Auto as well as other franchises, including L.A. Noire, Max Payne, Midnight Club, and Red Dead.

Take-Two Interactive has said that global sales of its new video game Grand Theft Auto V were over $800 million within the first 24 hours of the game�� availability. Take-Two likely spent $250 million to develop and market the latest Grand Theft Auto installment. According to a report from Bloomberg, the game is expected to make $1 billion in sales in just one month, which is four times what Take-Two Interactive spent producing the game. This is a good sign for the gaming industry, which struggled in the face of cheap online gamesmade for mobile devices.

Top Cheap Companies For 2014: Emerson Electric Company(EMR)

Emerson Electric Co. operates as a diversified manufacturing and technology company. The company engages in appliance solutions, climate technologies, industrial automation, motor technology, network power, process management, professional tools, and storage solutions businesses. Its appliance solutions business provides appliance controls, appliance motors, heating products, and white-rodgers; climate technology business provides heating, ventilation, air conditioning, and refrigeration (HVACR) solutions for residential, industrial, and commercial applications; and industrial automation business offers bearings and power transmission products, electrical power generation products, electric motors, variable speed drives and servos, electrical products, material joining solutions, fluid automation products, and wind turbine systems. The company?s motor technology business provides appliance motors, HVACR motors, DC motors, fractional horsepower motors, integral horsepower a nd larger motors, and drives; network power business provides power, precision cooling, connectivity, and embedded solutions; and process management business provides various wireless related products from self-organizing field networks to wireless asset and people tracking. Its professional tools business offers pipe working and threading equipment, pressing technology, utility locating and visual diagnostics systems, drain maintenance tools, power tools, air tools, general purpose hand tools, wet/dry vacs, job site storage equipment, truck tool boxes and equipment, and van storage equipment; and storage solutions business provides shelving and storage products for residential, commercial, and foodservice needs, as well as offers specialized carts, mobile computer workstations, and cabinet fixtures. The company was founded in 1890 and is headquartered in St. Louis, Missouri.

Advisors' Opinion:

• [By Rising Dividend Investing]

  Pent Up Demand Pushing Cyclical Stocks

  We are coming out of a lengthy period of decreased spending in the wake of 2008-09, which has built pent up demand for automobiles, housing and capital expenditures. The average age of vehicles on the road has reached a record high of 11.4 years. Demand for new houses fell off dramatically since the Great Recession. The average U.S. home was built in 1974 and continues to age.
  As people have chosen to fix rather than replace their vehicles and homes, we’ve seen the replacement-type industries do very well. Auto Retail’s second quarter sales and earnings per share were up 14.7% and 18.6%, respectively. Home improvement retail grew sales nearly 10% with earnings up 20% from second quarter 2012.
  Adding to the pent up demand for housing is the number of young people living with their parents rather than buying or renting on their own. According to real-estate marketplace Trulia, the number of “missing households” (Americans who would currently be owning or renting a home if pre-recession economic trends had continued) was up to 2.4 million in March. More than half of these missing households are 18 to 34-year-olds.
  This pent up demand extends beyond just the immediate products being bought by consumers. Businesses have held off replacing durable goods since the recession. All of this excess demand will have to be released at some point. Eventually, these homes and vehicles will exceed their useful life and need to be replaced. To meet the need for the excess demand, companies will not be able to hold off re-investing in new plant equipment.
  We’ve seen the beginning of this demand in 2013 and believe there is more to come. The market is buying into this as well, as more growth and manufacturing oriented sectors – such as Consumer Discretionary and Industrials – have performed well over the near-term.
  Share prices for stocks in the Industrial sectors are mo
• [By David Sterman]

  We can glean a few clear trends from these share buybackers:

  The majority of these plans are simply new plans to replace old plans that have now been completed, meaning these companies buy back their shares on a regular basis. Many of these stocks are valued right near the market multiple of 15 to 16 times projected earnings. Many of these stocks offer up a decent dividend as well, boosting their total cash return to shareholders. Most of these buyback programs represent a meaningful amount of the current share count. (Both VMWare's (NYSE: VMW) and Emerson Electric's (NYSE: EMR) buyback programs are not really meaningful as they are only likely large enough to offset stock option grants). Most of these stocks are near their 52-week highs, extending the theme of the current era that companies no longer wait for their stock to fall out of bed before buying back stock. Nor do any of these stocks trade below tangible book value, which also had historically served as a key litmus test of buyback efficacy. 

  Still, the longer-term buyback programs for some of these firms have surely been impressive. Take toy maker Hasbro (NYSE: HAS) as an example. The company's new $500 million share buyback (which would reduce the share count by 11% at current prices) is reasonably impressive -- until you look at what Hasbro has already been doing for nearly a decade.

Top Cheap Companies For 2014: First Busey Corporation(BUSE)

First Busey Corporation operates as the bank holding company for Busey Bank that provides various retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. It accepts noninterest-bearing demand, interest-bearing transaction, savings, money market, and time deposits. The company?s loan portfolio includes commercial, agricultural, and real estate loans; individual, consumer, installment, first mortgage, and second mortgage loans; and commercial real estate, residential real estate, and consumer loans. It also provides money transfer, safe deposit, fiduciary, automated banking, and automated fund transfer services. In addition, the company provides asset management, brokerage, and fiduciary services, including financial planning, investment management, retirement planning, brokerage, and trust and estate advisory services to individuals; investment management, business succession planning, an d employee retirement plan services to businesses; and investment management, investment strategy consulting, and fiduciary services to foundations. Further, it offers pay processing solutions, such as walk-in payments processing for payments delivered by customers to retail pay agents; online bill payment solutions for payments made by customers on a billing company?s Website; customer service payments for payments accepted over the telephone; direct debit services; electronic concentration of payments delivered by the automated clearing house network; money management software and credit card networks; and lockbox remittance processing of payments delivered by mail. The company has 33 locations in Illinois, 7 locations in southwest Florida, and 1 location in Indianapolis, Indiana. First Busey Corporation was founded in 1868 and is headquartered in Champaign, Illinois.

Top 5 Warren Buffett Stocks To Own Right Now: Cardero Resource Corporation(CDY)

Cardero Resource Corp., together with its subsidiaries, engages in the acquisition, exploration, and development of mineral properties in Mexico, Peru, Argentina, the United States, and Canada. The company holds a 75% interest in the Carbon Creek deposit, a metallurgical coal development project located in the Peace River Coal Field of northeast British Columbia, Canada. It also has an option to acquire 100% interest in the Pampa El Toro project, an iron sands deposit, located in southern Peru; option to acquire up to an 85% interest in the Longnose property in St. Louis county, northeastern Minnesota; and 100% leasehold interest in the Titac property, located in St. Louis county, northeastern Minnesota. The company was formerly known as Sun Devil Gold Corp. and changed its name to Cardero Resource Corp. in May 1999. Cardero Resource Corp. was founded in 1985 and is headquartered in Vancouver, Canada.

Top Cheap Companies For 2014: Hewlett-Packard Company(HPQ)

Hewlett-Packard Company and its subsidiaries provide products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Its Personal Systems Group segment offers commercial personal computers (PCs), consumer PCs, workstations, calculators and other related accessories, and software and services for the commercial and consumer markets. The company?s Services segment provides consulting, outsourcing, and technology services to infrastructure, applications, and business process domains. Its Imaging and Printing Group segment provides consumer and commercial printer hardware, supplies, media, and scanning devices, such as inkjet and Web solutions, laser jet and enterprise solutions, managed enterprise solutions, graphics solutions, and printer supplies. The company?s Enterprise Servers, Storage, and Networking segment offers industry standard s ervers, business critical systems, storage platforms, and networking products, including switches, routers, wireless LAN, and TippingPoint network security products. Its HP Software segment provides enterprise IT management software, information management solutions, and security intelligence/risk management solutions. The company?s HP Financial Services segment offers leasing, financing, utility programs, and asset recovery services; and financial asset management services for enterprise customers, as well as specialized financial services to SMBs, and educational and governmental entities. Hewlett-Packard Company also provides business intelligence solutions that enable businesses to standardize on consistent data management schemes, connect and share data across the enterprise, and apply analytics, as well as licenses its specific technology to third parties. The company was founded in 1939 and is headquartered in Palo Alto, California.

Advisors' Opinion:

• [By Paul Ausick]

  Big earnings movers: Abercrombie & Fitch Co. (NYSE: ANF) is down 17.7% at $38.53after an abysmal earnings report. Hewlett-Packard Co. (NYSE: HPQ) sunk 12.4% today to $22.24 after its own dismal results came out. GameStop Corp. (NYSE: GME) is up 9.1% at $51.93 following weak earnings but a positive forecast for the second half of the year based on the introduction of new game controllers from Sony Corp. (NYSE: SNE) and Microsoft Corp. (NASDAQ: MSFT).

• [By Douglas A. McIntyre]

  Logically, the first place Gates & Co. would look is at other big tech companies. Unfortunately, almost all the other chief executives are tied to Microsoft’s failures, or are founders of their own companies. So, leave out the CEOs of Intel Corp. (NASDAQ: INTC), Hewlett-Packard Co. (NYSE: HPQ)�and Dell Inc. (NASDAQ: DELL), as if the heads of HP and Dell were not already dealing with their own problems. Other successful tech companies might include Oracle Corp.’s (NASDAQ: ORCL)�CEO and founder Larry Ellison, who is nearly as wealthy as Gates, or Marc Benioff, the founder and CEO of Salesforce.com Inc. (NYSE: CRM). Neither would ever abandon their successes for the uncertainty of Microsoft.

• [By Alyssa Oursler]

  MCD went from the best performer of the Dow Jones Industrial Average�in 2011 to one of the worst in 2012, posting an ugly 12% decline only dwarfed by drops at Hewlett-Pacakard (HPQ) and Intel (INTC). So far this year, McDonald’s stock is in the black … but still is notably lagging the broader market.

• [By Jon C. Ogg]

  The real companies hanging in the balance here are Dell Inc. (NASDAQ: DELL) and Hewlett-Packard Co. (NYSE: HPQ). Both companies are in a turnaround, even though Dell is in the midst of a management and private equity-led buyout. If you looked at the most recent earnings results from both Dell and HP, the commonality was declining core operations with lower PC sales. Even increasing IT offerings is not enough to fix the weakness that has been seen in PCs, and prior declining PC sales reports even went so far as to blame Windows 8 for the poor unit sales.

Top Cheap Companies For 2014: Horace Mann Educators Corporation(HMN)

Horace Mann Educators Corporation, through its subsidiaries, operates as a multiline insurance company in the United States. The company underwrites and markets personal lines of property and casualty insurance, retirement annuity, and life insurance products. Its products include private passenger automobile and homeowner?s insurance coverage; tax-qualified individual and group annuities in fixed account and combination contracts; and individual and joint whole and term life insurance products. The company offers its products primarily to K-12 teachers, school administrators, education support personnel, and other employees of public schools and their families. It markets its products through its sales force, as well as through independent agents. Horace Mann Educators Corporation was founded in 1945 and is based in Springfield, Illinois.

Top Cheap Companies For 2014: Compass Minerals Intl Inc(CMP)

Compass Minerals International, Inc., through its subsidiaries, produces and markets inorganic mineral products primarily in North America and the United Kingdom. The company operates in two segments, Salt and Specialty Fertilizer. The Salt segment produces salt and magnesium chloride for use in road deicing and dust control, food processing, water softeners, pool salt, and agricultural and industrial applications. This segment also purchases potassium chloride and sells as a finished product. The Specialty Fertilizer segment produces and markets sulphate of potash crop nutrients and industrial grade sulfate of potash for use in the production of specialty fertilizers for vegetables, fruits, potatoes, nuts, tobacco, and turf grass. The company also produces and markets consumer deicing and water conditioning products, ingredients used in consumer and commercial food preparation, and other mineral-based products for consumer, agricultural, and industrial applications. In ad dition, Compass Minerals provides records management services to businesses located in the U.K. The company operates rock salt mines in Goderich, Ontario, Canada; and Winsford, Chesire, the United Kingdom. It primarily serves producers of intermediate chemical products used in the production of vinyls and other chemicals, and pulp and paper, as well as water treatment and other industrial uses. The company markets its products through direct sales personnel, contract personnel, and a network of brokers or manufacturers? representatives. Compass Minerals International, Inc., formerly known as Salt Holdings Corporation, was founded in 1993 and is headquartered in Overland Park, Kansas.

Top Cheap Companies For 2014: Global Payments Inc.(GPN)

Global Payments Inc. provides electronic transaction processing services for merchants, independent sales organizations (ISO), financial institutions, government agencies, and multi-national corporations located in the United States, Canada, Europe, and the Asia-Pacific region. It offers a comprehensive line of processing solutions for credit and debit cards; business-to-business purchasing cards; gift cards; and electronic check conversion and check guarantee, verification, and recovery, including electronic check services, as well as terminal management. The company also offers proprietary software products to establish revolving check cashing limits for the casinos? customers in the gaming industry. In addition, it sells, installs, and services automated teller machine and point of sale terminals; and provides card issuing services, including card management and card personalization. The company markets its products directly, as well as through ISOs, retail outlets, tra de associations, alliance bank relationships, and financial institutions. Global Payments Inc. has a joint venture with La Caixa Group to provide merchant acquiring services to merchants in Spain. Global Payments Inc. was founded in 2001 and is headquartered in Atlanta, Georgia.

Top Cheap Companies For 2014: Capstone Turbine Corporation(CPST)

Capstone Turbine Corporation develops, manufactures, markets, and services turbine generator sets and related parts for use in stationary distributed power generation applications. Its stationary distributed power generation applications include cogeneration combined heat and power (CHP), integrated (CHP), resource recovery, and secure power, as well as combined cooling, heat, and power; and its products are used as battery charging generators for hybrid electric vehicle applications. The company primarily offers microturbine units, subassemblies, and components. It also provides various accessories, including rotary gas compressors with digital controls, heat recovery modules for CHP applications, dual mode controllers that allow automatic transition between grid connect and stand-alone modes, batteries with digital controls for stand-alone/dual-mode operations, power servers for multipacked installations, and protocol converters for Internet access, as well as frames, ex haust ducting, and installation hardware. Further, it remanufactures microturbine engines; and provides after-market parts and services, scheduled and unscheduled maintenance, and factory and on-site training services. The company?s microturbines can be fueled by various sources, including natural gas, propane, sour gas, landfill or digester gas, kerosene, diesel, and biodiesel. It primarily sells its products directly to end users, as well as through distributors in North America, Asia, Australia, Europe, the Russian Federation, and South America. Capstone Turbine Corporation was founded in 1988 and is based in Chatsworth, California.

Stocks climb wall of worry

Bloomberg News

The Standard & Poor's 500 Index (SPX) had its first weekly gain since Aug. 2 as investors weighed minutes of the Federal Reserve's July meeting and economic data to gauge the prospect of monetary stimulus.

Microsoft (MSFT) Corp. rallied 9.3 percent as the world's largest software maker said Chief Executive Officer Steve Ballmer will retire. Best Buy Co. jumped 16 percent after posting its biggest quarterly profit in more than two years. Hewlett-Packard Co. (HPQ), Abercrombie & Fitch Co. and Staples Inc. plunged more than 15 percent as earnings forecasts disappointed investors. Homebuilders slid 2.2 percent as a group as purchases of new U.S. homes plunged.

The S&P 500 added 0.5 percent to 1,663.5 for the five days, the first gain after two weeks of losses. The Dow Jones Industrial Average fell 70.96 points, or 0.5 percent, to 15,010.51. The 30-stock gauge declined for a third week, the longest retreat since November.

“Those who are not as invested in stocks still feel like they are missing something,” Richard Sichel, who oversees about $1.9 billion as chief investment officer at Philadelphia Trust Co., said by phone. “It comes down to the bottom line that interest rates may be going up a bit and they might want to get a little more into stocks.”

Almost all Fed policy makers agreed with plans to reduce the pace of monthly bond purchases if the economy continues to improve in line with forecasts, according to the central bank's minutes released Aug. 21.

Despite the consensus shown in the Fed minutes, three central bank presidents speaking later in the week during the annual conference in Jackson Hole, Wyoming, differed over the timing for easing stimulus. One backed a tapering next month if the economy remains strong and two others said policy makers should take time to assess economic data.

Economic Data

Investors have been weighing whether the economy is strong enough to prompt the Fed to curb its $85 billion in monthly bond purchases. Reports during the week included data showing the fewest workers in more than five years applied for U.S. unemployment benefits over the past month while manufacturing in China unexpectedly improved, offsetting the worse-than-anticipated sales of new homes.

Three rounds of bond purchases by the Fed and better-than-forecast earnings have helped extend the bull market in U.S. equities to a fifth year, with the S&P 500 surging more than 150 percent from a 12-year low in 2009. The benchmark index reached a record high of 1,709.67 on Aug. 2 and has since lost 2.7 percent amid concern rising interest rates may derail an economic recovery. Ten-year Treasury yields approached the highest level in two years during the week.

Computer Malfunctions

Trading during the week was roiled twice by computer malfunctions that raised questions about the reliability of electronic markets. On Aug. 20, a programming error at Goldman Sachs Group Inc. caused unintended ! stock-option orders to flood American exchanges. Two days later, the Nasdaq Stock Market was prompted to halt trading in stocks and options for three hours because of a faulty connection between exchanges.

“It's just another example of machines taking over and shutting things down,” Chris Willox, a Cobleskill, New York-based director of trading at Fenimore Asset Management Inc., said by phone. His firm manages about $1.7 billion. “It undermines confidence.”

The disruption resulted in the slowest week in at least five years, excluding periods surrounding holidays, with an average 5.1 billion shares trading over the five days, according to data Bloomberg began compiling in 2008.

Volatility Gauge

The Chicago Board Options Exchange Volatility Index, or VIX (VIX), declined 2.7 percent to 13.98. The equity volatility gauge reached its highest level this year in June and has since dropped 32 percent.

Nine of 10 main industries in the S&P 500 gained, with consumer-staples companies the only group declining. Raw-materials and technology stocks rose the most, climbing at least 0.8 percent.

Microsoft rallied 9.3 percent, the most since 2009, to $34.75. Ballmer, who has struggled to adapt the company to the shift away from personal computers and toward mobile devices, plans to step down within 12 months. Microsoft, which supplies the software running most PCs, lost almost half its value on Ballmer's watch.

Best Buy surged 16 percent to $35.08. The world's largest consumer-electronics retailer reported a profit of $266 million in the quarter ended Aug. 3 as Chief Executive Officer Hubert Joly trimmed costs and cut prices to spur sales.

Hewlett-Packard

Hewlett-Packard plunged 15 percent, the largest drop in two years, to $22.40. Chief Executive Officer Meg Whitman rescinded a projection for growth in fiscal 2014 as ebbing demand for PCs and lower business spending hamper her turnaround efforts.

Abercrombie & Fitch sank 20 percent to $38.68. The clothing retailer forecast pr! ofit for ! the current quarter that was less than analysts estimated amid declining traffic at its stores. Chief Executive Officer Mike Jeffries has been struggling to reconnect with the clothing chain's teenage customers who have become less enamored of Abercrombie's fashions.

Staples tumbled 16 percent to $14.20. The world's largest office-supplies chain reduced its annual profit forecast because of declines in its retail and international business.

The S&P Supercomposite Homebuilding Index fell 2.2 percent as all of its 11 members retreated. Purchases of new U.S. homes plunged 13 percent in July, the most in more than three years, raising concern higher mortgage rates will slow the real-estate rebound.

Lennar Corp. slipped 3.8 perce

"Commission-only" planners could be next group out of pay compliance

CFP holders who describe themselves as “commission-only” could face their own issue with misrepresenting how they're paid under CFP Board rules — a mirror image of the tiff the board has caused among fee-only planners.

About 900 CFP holders are listed as commission-only on the Certified Financial Planner Board of Standards Inc. database. A review by InvestmentNews showed that these commission-based registered representatives work at the wirehouses, several regionals and a number of independent-contractor broker-dealers.

While the listed reps may limit themselves to commission business, their firms don't. All the major firms run investment advisory businesses and earn fees, as do many insurance companies and smaller broker-dealers.

But under CFP Board guidelines, it appears that self-described commission-only CFP holders who are affiliated with firms or related parties that earn fees should describe themselves as receiving both commissions and fees.

Likewise, the board has been clear that CFPs cannot call themselves fee-only if they're affiliated with a firm that earns commissions, even if the planner does not receive any commission income.

The commission-only description creates a disclosure problem similar to the fee-only description, said Brian Hamburger, founder of MarketCounsel LLC, a compliance consultant.

“This is the other side of that” fee-only issue, Mr. Hamburger said.

Dan Drummond, spokesman for the CFP Board, declined to comment specifically about commission-only CFPs, noting that the board has reached out to all of the nearly 69,000 CFP holders to inform them of their disclosure obligations.

Mr. Drummond added that the board's own analysis shows that “only a small percentage” of CFP holders may be incorrectly identifying their compensation method.

But if commission-based planners have to describe themselves as fee-and-commission, “they'd be misrepresenting themselves to the public [because] they're really commission-only,” said one CFP holder, who asked not to be identified.

The CFP Board “really needs to be focusing on what the consumer is paying,” said Rick Kahler, founder of the Kahler Financial Group Inc., a fee-based RIA.

Mr. Kahler said the CFP Board recently told him to describe his compensation as fee-and-commission because he is a shareholder in a separate family-owned real estate business that earns commissions.

“I haven't sold real estate for 10 years,” he said. “If I have to tell the world I am fee-and-commission, that is more dishonest than saying fee-only.”

Mr. Kahler said he would continue to call himself a fee-only planner and drop his CFP designation if necessary.

“Branding myself as fee-only is ! more important than having a CFP,” he said.

Mr. Hamburger, however, doesn't see a problem with the CFP Board's policy on compensation, at least with the larger firms.

Clients using a fee-based wirehouse adviser, for example, contract with the wirehouse, not the adviser, Mr. Hamburger said, and the firm earns commissions and other revenue from the client, which should be disclosed as both fee and commission.

Is In-flight WiFi Stock Gogo, Inc. (GOGO) the Next Iridium?

The Iridium Communications, Inc. (NASDAQ: IRDM) fiasco about a decade ago might offer investors a cautionary tale about getting into small cap in-flight wifi stock Gogo, Inc. (NASDAQ: GOGO) too soon. Moreover, Gogo, Inc. just had an IPO, but Mad Money’s Cramer recently described that IPO as “horrible” and that "it's still bad” plus there are some issues with the company's in-flight wifi service itself.

What Went Wrong With Iridium Communications?

Iridium Communications’ predecessor, Iridium SSC and its satellite mobile service, was launched on November 1, 1998, and you might recall seeing commercials or advertisements showing someone making a call using the Iridium service while standing on top of a mountain. Such a service sounded great in theory but just nine months later on August 13, 1999, the company went into Chapter 11 bankruptcy.

Part of the problem was that the system could not work as advertised until an entire constellation of satellites costing billions of dollars was in place. However, the cost of Iridium’s service was prohibitive for most consumers at the time plus there was poor indoor reception. Moreover, the handsets were bulky and expensive when compared to what was on offer from terrestrial cellular services.

Eventually though, Iridium SSC remerged as publicly traded Iridium Communications which remains the only satellite communications company offering truly global voice and data communications coverage thanks to 66 low-Earth orbiting (LEO) cross-linked satellites. So the next time you want to make a phone call from the top of Mt. Everest or the South Pole, you probably can.

What Might be Wrong With Gogo, Inc. and In-flight Wifi?

Gogo, Inc. allows passengers with laptops and other Wi-Fi enabled devices to go online on all domestic AirTran Airways and Virgin America flights; on selected Air Canada, Alaska Airlines, American Airlines, Delta Air Lines, Frontier Airlines, United Airlines and US Airways flights; and on thousands of business aircraft. In fact, there are more than 6,000 Gogo equipped aircraft to date. In late June, Gogo, Inc. raised $187 million from an IPO where shares were priced at $17, but shares now trade at $13.30.

Nevertheless, Wall Street seems to like Gogo, Inc. as several analysts have the stock rated as a “buy,” “overweight,” “equal weight” and “outperform” but what matters at the end of the day is whether consumers or passengers will like the wifi service the company provides. That’s hard to say right now because Gogo, Inc. charges $14 for a daily pass, $34 monthly for a specific airline and $42 for a monthly pass on any airline with its equipment plus and service sold onboard is sold at a higher price – meaning its not exactly a cheap service to keep the kids entertained as the company obviously expects employers to foot the bill for their traveling executives/managers.

A lengthy BusinessWeek article also pointed out that only 6% of passengers on Gogo, Inc. equipped flights used the service during the first quarter plus every single passenger can’t log onto the service all at the same time as there is just not enough bandwidth to support it. And even with a small number of users, some have complained about a slow connection.

Finally, most airports probably now have free wifi at least somewhere on the premises. So unless you are some sort of highflying executive (or Wall Street Analyst) flying cross country during the daytime, its really hard to see how you can’t forgo wifi access for a few hours and instead read a book, a newspaper or magazine, watch a movie or just take a nap and enjoy not being bothered by information overload.

Share Performance: Gogo Inc and Iridium Communications

On Tuesday, Gogo, Inc.  fell 5% to $13.30 (GOGO has a 52 week trading range of $12.34 to $16.72 a share) for a market cap of $1.14 billion while Iridium Communications fell 1.55% to $8.91 (IRDM has a 52 week trading range of $5.25 to $9.51 a share) for a market cap of $682.45 million plus IRDM is up 41.6% since the start of the year, down 6.5% over the past year and down 11.1% over the past five years: 

For technicians, here is a quick look at the latest technical charts for Gogo, Inc. and Iridium Communications:

The Bottom Line. Of course, one can argue that in-flight wifi is still in its infancy, just like satellite mobile service from Iridium Communications was more than a decade ago, and could still take off. With that said, investors still need to remember what initially happened to Iridium as history does tend to repeat itself.

Hot or Not? Three (Promoted) Small Cap Stocks: ATTD, AXLX & USRC

Small cap stocks Attitude Drinks Inc (OTCMKTS: ATTD), Axiologix, Inc (OTCMKTS: AXLX) and Unisource Corporation (OTCMKTS: USRC) have all been getting some attention lately in investment emails or investor alerts thanks in part to paid promotions. And while there is nothing wrong with properly disclosed paid promotions or investor relations activity, such activity can backfire on unwary investors or traders. With that in mind, here is a closer look at all three small cap stocks to help you decide whether they are truly hot or not:

Attitude Drinks Inc (OTCMKTS: ATTD) Says It Has Steady Growth and Consumer Appeal

Small cap Attitude Drinks is a beverage brand development company with a pure milk recovery drink, exploiting recent scientific evidence, confirming the benefits of milk and protein as an exercise recovery aid. On Friday, Attitude Drinks rose 6.45% to $0.0033 for a market cap of $104,834 plus ATTD is up 230% over the past year and down 98.7% over the past five years according to Google Finance.

What's the Catch With Attitude Drinks Inc? According to various disclosures, transactions of $1k, $1.5k, $2.5k and $12k have or will occur in the future to mention Attitude Drinks in various investment newsletters. About a week ago, Attitude Drinks announced the continued growth in order flow from its largest customers as the Florida, New Hampshire and Massachusetts markets have continued to demonstrate steady growth and consumer appeal. Attitude Drinks also launched sales of Phase III®, its revolutionary new protein recovery drink, through its newest partner in Maine, Pine State Trading Co., who it signed on as a distributor back in May. A quick look at Attitude Drinks' financials reveals revenues of $75k (most recent reported quarter), $44k, $115k and $120k along with $345k (most recent reported quarter), $2,518k, $590k and $3,989k. At the end of last June, Attitude Drinks had $36k in cash to cover $7,199k in current liabilities and $9,455k in long-term debt. Those financials aren't particularly great and Attitude Drinks would have intense competition from big beverage names – meaning its going to be a speculative bet for investors.

Axiologix, Inc (OTCMKTS: AXLX) Announces Earnings and Financing

Small cap Axiologix is an International Technology and Services Organization focused on delivering cloud-based Products and Services to small and medium sized businesses primarily in the United States and to operators globally. On Friday, Axiologix closed at $0.0003 for a market cap of $307,400 plus AXLX is down 72.7% over the past year and down 99.9% since July 2010 according to Google Finance.

What's the Catch With Axiologix, Inc? According to various disclosures, transactions of $1k, $1.5k and $15k have or will occur to mention Axiologix in various investment newsletters. Last Thursday, Axiologix announced that on September 12, it and all of its wholly owned subsidiaries closed a Senior Secured Revolving Credit Facility of up to $5 million with TCA Global Credit Master Fund, LP to provide operating capital and fund acquisitions. As a condition of the facility, Axiologix agreed to register its shares of common stock with the SEC, through the filing of a SEC Form 10, within three months of the closing. In addition and last Monday, Axiologix announced revenues of $901,673 for the year ended May 2013 versus $187,139 revenues for the previous year plus a net loss of $1,035,157, down slightly from the net loss of $1,047,607 reported last year. Not really covered in the press release was the fact that Axiologix had $7k in cash to cover $846k in current liabilities and $400k in other liabilities at the end of last May and then of course there are those paid promotions. So maybe investors should sit on the sidelines for now and wait for some more financials to appear.

Unisource Corporation (OTCMKTS: USRC) Announces New Licensing Deals

Small cap Unisource Corporation is a holding enterprise whose strategy is to acquire and combine third party logistics service providers and logistics technology providers in order to offer a unique, cost effective Cloud-based SaaS solution for the global logistics marketplace. On Friday, Unisource Corporation fell 7.1% to $0.385 for a market cap of $33.57 million plus USRC is up 284.6% over the past year and down 61.5% over the past five years in intermittent trading according to Google Finance.

What's the Catch With Unisource Corporation? According to various disclosures, transactions of $1k, $2k, $3k, $3.5k, $15k and $40k have or will occur to mention Unisource Corporation in various investment newsletters. Last Thursday, Unisource Corporation announced that China-based NVOCC (Non Vessel Operating Common Carrier) Greating Shipping had executed a license to deploy Visionship G3 as their primary domestic Transportation Management System. Earlier this month, Unisource Corporation also announced that MEMKING IT Asset Recovery had chosen Visionship G3 as their Asset Recovery and Transportation Management System plus announced that A1 Transport had chosen it as their Transportation Management technology platform. A quick look at Unisource Corporation's financials reveals revenues of $133k (Q2) and $47K (Q1) along with net losses of $1,438k (Q2) and $102k (Q1) for the only quarters posted on Yahoo! Finance. At the end of June, Unisource Corporation had $60k in cash to cover $707k in current liabilities – meaning investors might want to take a wait and see attitude to see how much revenue the latest licensing deals generate for the company.

Microsoft: Look at This Chart Before You Decide

Judging from the 7.28% "Ballmer Bounce" that followed his announcement, the markets love the idea of long-suffering Microsoft CEO Steve Ballmer stepping down.

So do a lot of investors who believe now - finally - it's time to buy Microsoft.

But is it?

Can the company bring in a new CEO with vision? Can it finally begin to understand content? And is it willing to jettison employees and products that aren't "worth" what the legacy suggests?

I could write you some long, eloquent essay on the merits of corporate turnarounds.

Instead, I'm going to show you one simple chart...

To me, it's clear: All good brands have their day.

As recently as March 2009, the Redmond-based behemoth enjoyed a 90% market share in connected devices running Microsoft systems.

Today that's shrunk to less than 25%, which leads me to believe that Microsoft has had its day.

Some could argue that's because the number of devices has increased dramatically over the same time frame. But remember, there are going to be 7 billion interconnected devices on the planet by the end of this year and roughly 50 billion by 2020 - seven for every person alive on the planet today.

Apple recognized this early and changed the game with its tablets and its iPhones. Ballmer misjudged their impact and was dismissive. So did Palm, RIM, Dell, Gateway, Wang... and we know where they are today, after watching their share of interactive utilization and connected devices plummet.

Apple stock shot up more than 5,300% since January 2001. And Microsoft...

Well, let's just say that to call it "stagnant" is an insult to truly stagnant stocks. It's returned 24.26% over the same time period - and that only comes after a 23% rally since the top of 2013 alone.

As for the previously mentioned Ballmer Bounce...

The market quickly gave most of it back, dropping 5% over the following three trading sessions. It looks like the Street doesn't believe a new CEO will have any more luck righting the listless Microsoft ship.

My good friend Barry Ritholtz, CEO of Fusion Capital, put it this way during a recent conversation: "Microsoft stopped setting the agenda 18 years ago."

I agree. Windows was its defining moment, and the company has been playing a game of "me too" ever since.

The real question: Can the stock recover now that Ballmer is going out the door? I wouldn't bet on it.

The Numbers Are Going in the Wrong Direction

About all the company has going for it is legacy contracts that keep Windows and Microsoft Office alive - but only if you're a clod like me who simply cannot work with Google Docs and who finds the Appleware not broadly enough used to warrant a shift away from windows. Or a government contractor who's contractually restricted from any logical alternatives.

If you want to talk devices, the story is the same. Droid phones now account for 79% of worldwide shipments, which is a 14.49% increase in just 12 months. Microsoft is a puny 4% of the market, and Blackberry - remember them? - is a mere 3%. Even Apple is losing share, so I wouldn't bet on a Cupertino comeback either, while we're on the topic.

Still, diehard fans insist that Microsoft can recover.

I don't see how.

The company has to make up ground in just about every category I can think of - smart devices, tablets, desktop computing, cloud computing, form hardware... even office productivity, where substitutes are supplanting the spinning blue Windows "wheel of death" we used to see when a Microsoft-based system crashes.

This is not the 1990s, and consumers are not discovering technology for the first time. Today they're cautious, cynical, and, perhaps most importantly, fickle. Brand loyalty is going by the wayside as devices become platform insensitive. Just ask the "dude, you're getting a Dell" guy.

What's more, Microsoft's business model of small incremental improvements doesn't cut it in an era of instant updates. People just don't give a hoot about a few more farkles on the desktop.

If anything, they've become resistant to too much change. The tiles in Window's latest edition are a great example and the primary reason why my company hasn't upgraded. I don't want to have to figure out how to use software that should be instinctive. We, like many other companies I am familiar with, are moving away byte by byte from Windows and from Office, too, even if we can't let go entirely... yet.

And finally, Microsoft has long pursued everything under the sun, using its size as a weapon. Now it's a liability. Microsoft, despite trying to continually position itself as a growth company, is now a sad version of its former self. At best, Microsoft has transitioned into a value company, although even that's debatable.

As the old Japanese proverb goes, to begin is easy - to continue is hard.

Timeless Insights: Eight Reasons Mimi Would Sell Microsoft...

Apple, Inc. (AAPL): Will Apple Kill Pandora's 185% Rally In 2013?

Any time an 800-pound gorilla moves into the neighborhood current residents have reason to be worried. And that is exactly what is happening with Apple, Inc. (AAPL) and Pandora (P) right now.

Apple has been making headlines lately with the release of its new iPhone and operating system iOS7. But what is turning out to be one of the most interesting components of the release, the iOS7 comes embedded with Apple's new streaming radio service called iTunes Radio. Although iTunes Radio isn't dominating the headlines like the new iPhone 5C, the service is quickly making a big impact on the market and represents a huge threat to Pandora.

At the very top, iTunes Radio offers more than 25 million songs compared to just 1 million for Pandora. That is a huge difference that makes Pandora look like a little kid trying to play with the big boys.

Pandora is also in trouble because half of its 72 million users already use the iPhone, which gives its listeners instant access to a fierce competitor with a much bigger inventory of songs to choose from.

And with hundreds of millions of iPhone users all across the world, Apple has a direct line to an entire new market that Pandora otherwise has little access to.

There may be room for 2 big players in the streaming radio space, but even if that's true, Apple is going to pressure industry margins. That's because streaming radio service providers simply act as distributors and don't control any original content. That makes reach, distribution and margin a simple matter of scale, where the biggest player on the Street can afford lower margins and loss leaders in order to starve smaller players out of profitability.

But it's clear the market doesn't care. Or isn't paying attention. Because Pandora is up 185% in 2013 and trading deep into an all-time high. But those gains aren't being driven by earnings, because Pandora is expected to lose 16 cents this year. 2014 doesn't look much better, when Pandora is supposed to earn a grand total of 6 ! cents.

With shares just shy of $27, that has Pandora trading with a forward P/E of 450x. For comparison sake, it Apple had that same valuation, shares would be trading at $18,000.

 

The Takeaway

Any time the biggest and baddest kid on the Street moves onto your block it's time to get nervous. And that's exactly what Apple is going, making a bold move into Pandora's turf with its entrance into the streaming radio market. But while this huge threat has emerged, Pandora is up 185% on the year and continues to move deeper into an all-time high. That makes Pandora at risk for both short and long-term losses as the market contemplates this new threat in the face of a ridiculously overvalued share price.

For more top stock picks and analysis, check out a 4-week free trial to Michael's premium newsletter the iStock Growth Trader. The iStock Growth Trader is loaded with the hottest trends, the best stocks and detailed analysis that will keep your portfolio one step ahead of the game.

7 Stocks Moving on Unusual Volume

DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

With that in mind, let's take a look at several stocks rising on unusual volume today.

Kraton Performance Polymers (KRA)

This company is a producer of styrenic block copolymers and other engineered polymers. This stock closed up 5.3% to $20.76 in Wednesday's trading session.

Wednesday's Volume: 605,000

Three-Month Average Volume: 269,288 Volume % Change: 125% From a technical perspective, KRA ripped higher here back above its 50-day moving average of $19.96 with above-average volume. This move also pushed shares of KRA into breakout territory, since the stock took out some near-term overhead resistance at $20.07. This move is starting to push shares of KRA within range of triggering another big breakout trade. That trade will hit if KRA manages to take out Wednesday's high of $21.18 and then once it clears more resistance at $22.16 to $23.17 with high volume. Traders should now look for long-biased trades in KRA as long as it's trending above its 50-day at $19.96 or above Wednesday's low of $19.63, and then once it sustains a move or close above those breakout levels with volume that hits near or above 269,288 shares. If that breakout hits soon, then KRA will set up to re-test or possibly take out its next major overhead resistance levels at $25 to $27.

Net 1 Ueps Technologies (UEPS)

This company is a provider of payment solutions and transaction processing services across multiple industries. This stock closed up 7.5% to $11.92 in Wednesday's trading session.

Wednesday's Volume: 364,000

Three-Month Average Volume: 157,230 Volume % Change: 133% From a technical perspective, UEPS ripped sharply higher here right above some near-term support at $11 with strong upside volume. This stock recently gapped up sharply from $7 to $11 with strong upside volume. Following that move, shares of UEPS have trended sideways inside of a consolidation chart pattern. This move on Wednesday has now pushed UEPS into breakout territory, since the stock took out the upper-end of its sideways range at $11.63. Traders should now look for long-biased trades in UEPS as long as it's trending above support at $11, and then once it sustains a move or close above Wednesday's high of $12.18 with volume that hits near or above 157,230 shares. If we get that move soon, then UEPS will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that move are $14 to $15.

Theravance (THRX)

This is a biopharmaceutical company with a pipeline of internally discovered product candidates and strategic collaborations with pharmaceutical companies. This stock closed up 2.5% at $38.74 in Wednesday's trading session.

Wednesday's Volume: 1.69 million

Three-Month Average Volume: 916,688 Volume % Change: 140% From a technical perspective, shares of THRX jumped modestly higher here back above its 50-day moving average of $37.88 with strong upside volume. This stock has been trending sideways for the last month and change, with shares moving between $39.73 on the upside and $34.76 on the downside. Shares of THRX are now starting to move within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern. That breakout will hit if THRX manages to take out Wednesday's high of $39.28 and then once it clears more resistance at $39.73 with high volume. Traders should now look for long-biased trades in THRX as long as it's trending above its 50-day at $37.88 or above $36, and then once it sustains a move or close above those breakout levels with volume that hits near or above 916,688 shares. If that breakout hits soon, then THRX will set up to re-test or possibly take out its 52-week high at $42.96.

Treehouse Foods (THS)

This company is a food manufacturer servicing mainly the retail grocery and foodservice distribution channels. This stock closed up 1.3% to $68.30 in Wednesday's trading session.

Wednesday's Volume: 411,000

Three-Month Average Volume: 138,234 Volume % Change: 196% From a technical perspective, THS trended modestly higher here with above-average volume. This stock recently downtrended badly from its August high of $74.54 to its low of $63.37. During that move, shares of THS were consistently making lower highs and lower lows, which is bearish technical price action. Since hitting that low of $63.37, shares of THS have rebounded sharply and it's now trending within range of triggering a near-term breakout trade. That trade will hit if THS manages to take out some near-term overhead resistance at $68.62 to its 50-day moving average of $68.97 with high volume. Traders should now look for long-biased trades in THS as long as it's trending above some key near-term support at $67, and then once it sustains a move or close above those breakout levels with volume that hits near or above 138,234 shares. If that breakout triggers soon, then THS will set up to re-test or possibly take out its next major overhead resistance levels at $72 to $74.

Gogo (GOGO)

This company provides a suite of connectivity solutions and other services, including Passenger Connectivity, Passenger Entertainment, In-Flight Portal as well as Operations-Oriented Communications Services. This stock closed up 10.7% at $13.57 in Wednesday's trading session.

Wednesday's Volume: 3.02 million

Three-Month Average Volume: 759,941 Volume % Change: 432% From a technical perspective, GOGO bounced sharply higher here right above its 50-day moving average of $12.01 with heavy upside volume. This stock has been uptrending strong for the last month, with shares moving higher from its low of $9.71 to its intraday high of $13.75. During that move, shares of GOGO have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GOGO within range of triggering a big breakout trade. That trade will hit if GOGO manages to take out some near-term overhead resistance levels at $13.89 to $14.35 with high volume. Traders should now look for long-biased trades in GOGO as long as it's trending above $13 or $12.50, and then once it sustains a move or close above those breakout levels with volume that this near or above 759,941 shares. If that breakout hits soon, then GOGO will set up to re-test or possibly take out its next major overhead resistance levels at $15.50 to its all-time high at $17.

British American Tobacco (BTI)

This is a holding company that owns, directly or indirectly investments in the numerous companies constituting the British American Tobacco Group of companies. This stock closed up 0.66% at $105.41 in Wednesday's trading session.

Wednesday's Volume: 2.37 million

Three-Month Average Volume: 201,433 Volume % Change: 1122% From a technical perspective, BTI trended modestly higher here right off its 50-day moving average of $104.64 with heavy upside volume. This stock has been uptrending strong for the last few weeks, with shares moving higher from its low of $100.83 to its intraday high of $105.53. During that move, shares of BTI have been consistently making higher lows and higher highs, which is bullish technical price action. Traders should now look for long-biased trades in BTI as long as it's trending above its 200-day at $104.13, and then once it sustains a move or close above Wednesday's high of $105.53 to more resistance at $106 with volume that hits near or above 201,433 shares. If we get that move soon, then BTI will set up to re-test or possibly take out its next major overhead resistance levels at $107.53 to $110.

Xoom (XOOM)

This company provides online consumer-to-consumer international money transfers in close to 30 countries. The company's customers use its website to send money to friends and families in these countries. This stock closed up 5.5% at $32.38 in Wednesday's trading session.

Wednesday's Volume: 3.96 million

Three-Month Average Volume: 265,931 Volume % Change: 1201% From a technical perspective, shares of XOOM gapped sharply higher here and broke out above some near-term overhead resistance at $32 with heavy upside volume. This stock recently pulled back sharply from its July high of $36.46 to its recent low of $26.34. It looks like the downside volatility for XOOM is over in the short-term now that this stock has trended back above its 50-day with heavy upside volume flows. Traders should now look for long-biased trades in XOOM as long as it's trending above $30, and then once it sustains a move or close above Wednesday's high at $33.46 with volume that's near or above 265,931 shares. If we get that move soon, then XOOM will set up to re-test or possibly take out its 52-week high at $36.46. -- Written by Roberto Pedone in Delafield, Wis. RELATED LINKS: >>5 Tech Stocks Spiking on Big Volume >>5 Stocks Setting Up to Break Out >>4 Red-Flag Stocks to Sell This Fall Follow Stockpickr on Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Top Growth Stocks For 2014

Emerging-market stocks fell for the first time in four days after HSBC Holdings Plc (HSBA) said slower growth in developing economies curbed profit and investors speculated the U.S. Federal Reserve will reduce stimulus soon.

Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. dropped at least 1 percent in Hong Kong after HSBC said the mainland Chinese market slowed unexpectedly. Longfor Properties fell the most in three weeks after China�� top planning body reiterated the government would maintain curbs on the real-estate industry. Benchmark indexes in the Philippines, Poland and Russia lost at least 0.5 percent as better-than-expected U.S. service industries data fueled speculation the Fed will scale back monthly bond purchases.

The MSCI Emerging Markets Index lost 0.7 percent to 949.89 at 4:20 p.m. in Hong Kong. The HSBC Emerging Markets Future Output Index, a monthly gauge of company executives�� expectations for production in a year, contracted for the first time since April 2009, HSBC said. Fed Bank of Dallas President Richard Fisher warned investors yesterday not to rely on the central bank�� $85 billion in monthly bond purchases.

Top Growth Stocks For 2014: Intuitive Surgical Inc.(ISRG)

Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci surgical systems for various surgical procedures, including urologic, gynecologic, cardiothoracic, general, and head and neck surgeries. Its da Vinci surgical system consists of a surgeon?s console or consoles, a patient-side cart, a 3-D vision system, and proprietary ?wristed? instruments. The company?s da Vinci surgical system translates the surgeon?s natural hand movements on instrument controls at the console into corresponding micro-movements of instruments positioned inside the patient through small puncture incisions, or ports. It also manufactures a range of EndoWrist instruments, which incorporate wrist joints for natural dexterity for various surgical procedures. Its EndoWrist instruments consist of forceps, scissors, electrocautery, scalpels, and other surgical tools. In addition, it sells various vision and accessory products for use in conjunction with the da Vinci Surgical System as surgical procedures are performed. The company?s accessory products include sterile drapes used to ensure a sterile field during surgery; vision products, such as replacement 3-D stereo endoscopes, camera heads, light guides, and other items. It markets its products through sales representatives in the United States, and through sales representatives and distributors in international markets. The company was founded in 1995 and is headquartered in Sunnyvale, California.

Advisors' Opinion:

• [By Joseph Hogue]

  Enter Intuitive Surgical (Nasdaq: ISRG) and Da Vinci, a robotic arm that allows surgeons to operate with just a single incision less than an inch in size.

Top Growth Stocks For 2014: CNO Financial Group Inc. (CNO)

CNO Financial Group, Inc., through its subsidiaries, engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. The company markets and distributes Medicare supplement insurance, interest-sensitive and traditional life insurance, fixed annuities, and long-term care insurance products; Medicare advantage plans through a distribution arrangement with Humana Inc.; and Medicare Part D prescription drug plans through a distribution and reinsurance arrangement with Coventry Health Care. It also markets and distributes supplemental health, including specified disease, accident, and hospital indemnity insurance products; and life insurance to middle-income consumers at home and the worksite through independent marketing organizations and insurance agencies. In addition, the company markets primarily graded benefit and simplified issue life insurance products directly to customers through television advertising, direct mail, Internet, and telemarketing. It sells its products through career agents, independent producers, direct marketing, and sales managers. CNO Financial Group, Inc. has strategic alliances with Coventry and Humana. The company was formerly known as Conseco, Inc. and changed its name to CNO Financial Group, Inc. in May 2010. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.

Top Stocks To Invest In: MEDIFAST INC(MED)

Medifast, Inc., through its subsidiaries, engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. The company?s product lines include weight and disease management, meal replacement, and vitamins. It also operates weight control centers that offer Medifast programs for weight loss and maintenance, customized patient counseling, and inbody composition analysis. The company markets its products under the Medifast and Essential brand names, including shakes, appetite suppression shakes, women?s health shakes, diabetics shakes, joint health shakes, coronary health shakes, calorie burn drinks, calorie burn flavor infusers, antioxidant shakes, antioxidant flavor infusers, bars, crunch bars, soups, chili, oatmeal, pudding, scrambled eggs, hot cocoa, cappuccino, chai latte, iced teas, fruit drinks, pretzels, puffs, brownie, pancakes, soy crisps, crackers, and omega 3 and digestive health products. Medifast Inc. sells its products through various channels of distribution comprising Web, call center, independent health advisors, medical professionals, weight loss clinics, and direct consumer marketing supported via the phone and the Web; Take Shape for Life, a physician led network of independent health coaches; and weight control centers. The company was founded in 1980 and is headquartered in Owings Mills, Maryland.

Top Growth Stocks For 2014: Crocs Inc.(CROX)

Crocs, Inc. and its subsidiaries engage in the design, development, manufacture, marketing, and distribution of footwear, apparel, and accessories for men, women, and children. The company primarily offers casual and athletic shoes, and shoe charms. It also designs and sells a range of footwear and accessories that utilize its proprietary closed cell-resin, called Croslite. The company?s footwear products include boots, sandals, sneakers, mules, and flats. In addition, it provides footwear products for the hospital, restaurant, hotel, and hospitality markets, as well as general foot care and diabetic-needs markets. Further, the company offers leather and ethylene vinyl acetate based footwear, sandals, and printed apparels principally for the beach, adventure, and action sports markets; and accessories comprising snap-on charms. The company sells its products through the United States and international retailers and distributors, as well as directly to end-user consumers th rough its company-operated retail stores, outlets, kiosks, and Web stores primarily under the Crocs Work, Crocs Rx, Jibbitz, Ocean Minded, and YOU by Crocs brand names. As of December 31, 2010, it operated 164 retail kiosks located in malls and other high foot traffic areas; 138 retail stores; 76 outlet stores; and 46 Web stores. Crocs, Inc. operates in the Americas, Europe, and Asia. The company was formerly known as Western Brands, LLC and changed its name to Crocs, Inc. in January 2005. Crocs, Inc. was founded in 1999 and is headquartered in Niwot, Colorado.

Top Growth Stocks For 2014: Checkpoint Systms Inc.(CKP)

Checkpoint Systems, Inc. manufactures and markets identification, tracking, security, and merchandising solutions for the retail and apparel industry worldwide. The company operates in three segments: Shrink Management Solutions, Apparel Labeling Solutions, and Retail Merchandising Solutions. The Shrink Management Solutions segment provides shrink management and merchandise visibility solutions. It offers electronic article surveillance systems, such as EVOLVE, a suite of RF and RFID-enabled products that act as a deterrent to prevent merchandise theft in retail stores; and electronic article surveillance consumables, including EAS-RF and EAS-EM labels that work in combination with EAS systems to reduce merchandise theft in retail stores. This segment also provides keepers, spider wraps, bottle security, and hard tags, as well as Showsafe, a line alarm system for protecting display merchandise. In addition, it offers physical and electronic store monitoring solutions, incl uding fire alarms, intrusion alarms, and digital video recording systems for retail environments; and RFID tags and labels. The Apparel Labeling Solutions segment provides apparel labeling solutions to apparel retailers, brand owners, and manufacturers. It has Web-enabled apparel labeling solutions platform and network of 28 service bureaus located in 22 countries that supplies customers with customized apparel tags and labels. The Retail Merchandising Solutions segment offers hand-held label applicators and tags, promotional displays, and queuing systems. The company serves retailers in the supermarket, drug store, hypermarket, and mass merchandiser markets through direct distribution and reseller channels. Checkpoint Systems was founded in 1969 and is based in Thorofare, New Jersey.

Top Growth Stocks For 2014: TrueBlue Inc.(TBI)

TrueBlue, Inc. provides temporary blue-collar staffing services in the United States. It supplies on demand general labor to various industries under the Labor Ready brand; skilled labor to manufacturing and logistics industries under the Spartan Staffing brand; and trades people for commercial, industrial, and residential construction, and building and plant maintenance industries under the CLP Resources brand. The company also provides mechanics and technicians to the aviation maintenance, repair and overhaul, aerospace manufacturing, and assembly industries, as well as to other transportation industries under the Plane Techs brand; and temporary drivers to the transportation and distribution industries under the Centerline brand. It primarily serves small and medium-size businesses. The company was formerly known as Labor Ready, Inc. and changed its name to TrueBlue, Inc. in December 2007. TrueBlue, Inc. was founded in 1985 and is headquartered in Tacoma, Washington.

Top Growth Stocks For 2014: Eastern Insurance Holdings Inc.(EIHI)

Eastern Insurance Holdings, Inc., through its subsidiaries, provides workers compensation insurance and reinsurance products in the United States. The company?s Workers Compensation Insurance segment provides traditional workers compensation insurance coverage products, including guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies, and alternative market products to employers. This segment distributes its workers? compensation products and services through its independent insurance agents primarily in Pennsylvania, Delaware, North Carolina, Maryland, Indiana, and Virginia. Its Segregated Portfolio Cell Reinsurance segment offers alternative market workers compensation solutions comprising program design, fronting, claims administration, risk management, segregated portfolio cell rental, asset management, and segregated portfolio management services to individual companies, groups, and associations. Eastern Insurance Holdings, Inc. is headquartered in Lancaster, Pennsylvania.

Top Growth Stocks For 2014: Nordstrom Inc.(JWN)

Nordstrom, Inc., a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. It offers a selection of brand name and private label merchandise. The company sells its products through various channels, including Nordstrom full-line stores, off-price Nordstrom Rack stores, Jeffrey? boutiques, treasure & bond, and Last Chance clearance stores; and its online store, nordstrom.com, as well as through catalog. Nordstrom also provides a private label card, two Nordstrom VISA credit cards, and a debit card for Nordstrom purchases. The company?s credit and debit cards feature a shopping-based loyalty program. As of September 30, 2011, it operated 222 stores, including 117 full-line stores, 101 Nordstrom Racks, 2 Jeffrey boutiques, 1 treasure & bond store, and 1 clearance store in 30 states. The company was founded in 1901 and is based in Seattle, Washington.

ETFs for the Fed's Effect on Housing

NEW YORK (ETF Expert) -- Take a quick walk with me down Flashback Lane. The year is 2004. Homes, by most measures, are no longer affordable. Yet home prices did not peak until two years later in the early months of 2006.

The stock market, a forward-looking beast, tends to recognize bad (and good) trends roughly six months in advance. Not surprisingly then, one of the premier home builders, Toll Brothers (TOL), catapulted roughly 200% from $20 per share to $60 per share between the start of the bubble in 2004 and mid-2005. Toll Brothers then spent the next six months depreciating 50% in value as it dropped back down to $30 per share. It made it to $20 and below by the end of the real-estate collapse in late 2008.

Back in the present, homes are once again stretching the boundaries of affordability. With a little help from John Carney of CNBC and the folks at the St. Louis Federal Reserve bank, one can see that housing has crossed below its long-term trend on affordability for the first time since 2004. Does that mean homes will depreciate in value tomorrow? Not likely. Real estate didn't hit its maximum price capacity until 2006 and the bubble didn't really pop until 2007. Does that mean that home builder stocks are about to get crushed? Not necessarily. Toll Brothers ran up 200% from the onset of a downtrend in affordability to six months prior to the peak in home prices. Indeed, the SPDR S&P Homebuilder ETF (XHB) appears to have found solid support near its 200-day moving average. Moreover, there appears to have been an ample number of tests near $28 per share for XHB; in every instance, XHB has bounced higher. Clearly, the Federal Reserve's upcoming decision on the future of monetary policy on Sept. 18 is crucial for stock investors. The recent upswing in funds like SPDR S&P Homebuilder ETF and iShares DJ Home Construction (ITB), as well as a broader-based seven-day winning streak for the S&P 500, suggests that most expect the Fed to do little more than "save face" with a token amount of tapering; the Fed is still expected to provide as much bond-buying with electronically created dollars (a.k.a. quantitative easing) at the same rate as "QE2"�� from 2010-11.

On the other hand, what if the committee members vote in favor of waiting a few more months? What if they collectively decide that the economy is not genuinely strong enough for tapering just yet? What if Chairman Bernanke prefers to let a significant policy change be made by the incoming chairman, not himself?

If tapering is put on hold entirely, the Fed would effectively be inflating a housing bubble some more, sending the 10-year Treasury yield plummeting back toward the 2.6% to 2.5% level. If the Fed were to essentially insinuate that job data or the economy were not strong enough for the removal of a very modest amount of emergency bond buying, one should also expect a wave of confusion for most U.S. stocks.

The exchange-traded winners would be the interest-rate sensitive assets -- PDR Select Sector Utilities (XLU), iShares Mortgage REITs (REM), Vanguard REIT (VNQ), Homebuilders, iShares 20-Year Treasury (TLT), iShares Preferred (PFF), iShares 7-10 Year Treasury (IEF), etc.

Is it likely that the Fed will attempt to stand pat? It might be too difficult to achieve, considering how far the bond market has gotten out in front of the Fed. It is far more probable that they will taper by the smallest and most insignificant of amounts, hoping that bond yields refrain from climbing further while still bolstering stock market enthusiasm. And then there's the most unlikely scenario of all -- but it is not beyond the realm of possibility. What if Fed Chairman Bernanke wants to make a more definitive statement prior to his exit? What if Bernanke sides with hawks who feel that "enough is enough" on the stimulus? What if instead of trying to keep longer-term rates below 3% by emphasizing the need for ultra-accommodating monetary policy, committee members exclaim that labor trends and economic trends are actually showing signs of accelerating? And what if Fed members see the long-term trend on declining housing affordability worry about creating yet another bubble, and subsequently decide that significant tapering is needed to keep mortgage rates closer to 5% than 3.5%? Most investors would be deterred by "Large-Scale Taper" when most are expecting "Taper Lite." A sell-off for broader U.S. stocks would be in the cards. Bond yields might also surge, creating price depreciation across the income spectrum as well. The exchange-traded winners would likely be short positions such as ProShares Short Dow 30 (DOG), ProShares Short S&P 500 (SH), as well as Ultra Short 7-10 Year Treasury (PST) and Ultra Short 20 Year Treasury (TBT). Again, investors are likely to get what they are expecting here -- a light peppering of taper around a meager 10% ($8.5 billion) of the $85 billion. Bonds might gain (yields decrease) on a "buy the rumor, sell the news" event. Stocks might rocket ahead at first, but they would likely come back down to earth with debt ceiling debates and earnings warnings on tap. Nevertheless, there are ETFs if the Fed goes against conventional wisdom, whether they encourage the "housing recovery" by shelving the tapering discussion, or whether they squelch speculative real estate altogether with an unusually large decrease in the amount of bonds that they purchase. Courtesy of StockCharts.com Follow @etfexpert This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site. Gary Gordon reads: Real Clear Markets Jeff Miller indexuniverse Charles Kirk On Twitter, Gary Gordon follows: Jonathan Hoenig Doug Kass Hard Assets Investor