Fracking Battle in California Could Be Costly

The following video is from Tuesday's Digging for Value, in which host Alison Southwick and Motley Fool energy analysts Joel South and Taylor Muckerman  get to the heart of the biggest stories in energy investing today.

In this segment, Joel takes investors through the legal battle over fracking in the state of California, and tells investors who could benefit from the enormous amount of reserves located in the Monterey shale.

Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Best Heal Care Stocks To Watch For 2014

Finra backs incentive comp disclosure rule

Chief executive Richard Ketchum says Finra is committed to transparency. Bloomberg News

The board of the Financial Industry Regulatory Authority Inc. has approved a proposal that would require brokers to disclose the amount of incentive pay they received to switch firms.

Recruiting compensation of $100,000 or more — including signing, upfront or back-end bonuses, loans, accelerated payouts and transition assistance — would have to be disclosed to any customer who followed a broker to a new firm within one year of his or her transition. The broker also would have to disclose future compensation based on performance.

The reporting threshold was increased from the $50,000 level in the original Finra proposal released this year.

Firms would have to disclose to customers compensation paid to new recruits in the ranges of $100,000 to $500,000, $500,000 to $1 million and higher. They also would have to report to Finra any significant increases in a new hire's compensation over his or her first year if it amounted to 25% or $100,000, whichever were higher. Finra intends to use the information to target examinations of sales abuses.

In addition, firms would have to tell customers following a broker whether they will incur costs for moving their assets and whether some of them can't be transferred.

The rule now goes to the Securities and Exchange Commission for review and approval. The agency may make revisions and put the proposal out for comment.

Finra officials say the rule is designed to highlight potential conflicts of interest for hotshot brokers who move from firm to firm.

“This proposal is about making sure the customer can make a fully informed decision to follow a broker to a new firm and understand the cost associated with transferring his or her account,” Finra chief executive Rick Ketchum said in a statement. “This proposal reflects our commitment to transparency and investor protection.”

The original proposal generated about 65 comment letters and a steady stream of criticism from independent-broker dealers and financial advisers. Wirehouse firms generally support the rule while critics said the rule should have included retention bonuses. The proposal does not address that issue.

The Financial Services Institute Inc., which represents independent broker-dealers and financial advisers, said it is pleased that the reporting threshold was raised to $100,000 from $50,000 but it is waiting for more details before deciding whether to support the rule.

“We look forward to closely examining Finra's proposal to see if it achieves the goal of providing investors with meaningful disclosure of material conflicts of interest without unnecessarily compromising financial advisers' priv! acy,” said David Bellaire, FSI executive vice president and general counsel.

The higher limit for reporting gives the independent sector a break.

“Most of the transition packages in the independent channel fall under the $100,000 benchmark,” said Jon Henschen, president of Henschen & Associates LLC, a broker recruiting firm. “They won't have any disclosure requirements.”

While the SEC mulls over the rule, its advance may spur some brokers to make career decisions.

“In the short-term, it may accelerate the moves of advisers who are on the fence,” said Mindy Diamond, president of Diamond Consultants LLC, a search and consulting firm.

Advisers with high-net-worth clients aren't too concerned about the rule, according to Ms. Diamond, who said smaller advisers who generate about $1 million in revenue annually and whose clients have about $500,000 in assets might be put off by the new disclosures.

“It's tough to tell those clients you're being paid $3 million to switch firms,” Ms. Diamond said.

Wirehouses are backing the rule because they're getting tired of paying huge recruiting incentives and are looking to Finra for help, Mr. Henschen asserted.

Top Value Stocks To Invest In 2014

“They're the obvious motivators in pushing this through,” Mr. Henschen said. “Crony capitalism lives.”

The regulator weighed input from the comment letters and proposed a rule that achieves “a great balance,” John “Jack” Brennan, the Finra board's lead governor and chairman emeritus of the Vanguard Group Inc., said in a video on Finra's website.

“In many ways, it's the best of the Finra rulemaking process,” Mr. Brennan said.

Silver Spring Networks (SSNI) Plunges: Is This Smart Metering Stock a Smart Investment? (ITRI & ELON)

Although small cap smart metering stock Silver Spring Networks Inc (NYSE: SSNI) recently soared on earnings, it also plunged yesterday after loosing out on important contract – meaning it might be time to take a closer look at it along with other smart metering stocks like Itron, Inc (NASDAQ: ITRI) or Echelon Corporation (NASDAQ: ELON) to see if they are smart investments.

What is Silver Spring Networks?

Small cap Silver Spring Networks calls itself a leader in networking technologies that modernize today's power grid. Specifically, Silver Spring Networks' IPv6 networking platform has 17 million devices delivered connecting utilities such as Baltimore Gas & Electric, CitiPower & Powercor, Commonwealth Edison, CPS Energy, Florida Power & Light, Jemena Electricity Networks Limited, Pacific Gas & Electric, Pepco Holdings, Progress Energy and Singapore Power to homes and business throughout the world. These solutions enable utilities to gain operational efficiencies and improve grid reliability while empowering consumers to monitor and manage energy consumption.

For reference, Itron builds solutions that help nearly 8,000 utilities in more than 100 countries measure, manage and analyze energy and water while Echelon Corporation develops, markets and supports an open standard, multi-application energy control networking platform that is embedded in more than 100 million devices, 35 million homes and 300,000 buildings.

What You Need to Know About Silver Spring Networks

Yesterday, Silver Spring Networks apparently plunged after the UK government announced that Capita, CGI, Arqiva and Telefonica S.A. (NYSE: TEF) are the "preferred bidders" for contracts to support the UK's smart meter roll-out – no small project as the entire scheme is expected to worth or cost around £11.5 billion. Silver Spring Networks had partnered with Vodafone Group Plc (NASDAQ: VOD) on a bid to both create and run the telecom infrastructure behind the smart meters, but they will now go away empty handed.   

The opportunity to win a portion of the contract was viewed as being key to the company's future with Brent Bracelin, an analyst at Pacific Crest Securities, recently writing:

"We see this as a binary event. If Silver Spring wins one of the three 10 million smart meter lots, the stock could go up meaningfully on a contract that could be worth more than $1 billion of smart grid infrastructure. If not, it would obviously be a setback and limit visibility into 2015 and beyond."

Another analyst also noted that the IPO lockup period for Silver Spring Networks expires on September 8th and that could lead to some volatility in the stock.

However and back in early August, Silver Spring Networks was soaring after beating Wall Street expectations on both the top and bottom line. Specifically, Silver Spring Networks reported a 17% year-over-year revenue increase to $86.5 million while GAAP net income came in at $9.5 million verses a GAAP net loss of $23.4 million a year ago. The company ended the quarter with $125 million in cash.

Otherwise, it should be noted that Silver Spring Networks' March IPO was priced at $17 a share and the stock opened at $22 for a 29% jump. The company sold 4.75 million shares, a million more than was originally allocated for the IPO, to raise $81 million.

Stock Performance: Silver Spring Networks vs. Itron and Echelon Corporation

On Wednesday, small cap Silver Spring Networks sank 29.79% to $22.25 (SSNI has a 52 week trading range of $15.35 to $33.82 a share) for a market cap of $1.04 billion plus the stock is up about 1.1% since the middle of March. Itron is down 8% since the start of the year, down 8.3% over the past year and down 60% over the past five years while Echelon Corporation is down 9.8% since the start of the year, down 31.4% over the past year and down 80.4% over the past five years:

Finally, here is a quick look at the latest technical charts for Silver Spring Networks, Itron and Echelon Corporation:

The Bottom Line. Given that small cap Silver Spring Networks is being shut out of a massive UK smart metering contract and the IPO lockup period is about to expire, investors will probably want to stay away for the near term while the performance of both Itron and Echelon Corporation has not exactly been awe inspiring either.

Morgan Stanley: 7%+ On The New Preferred Is Attractive

Morgan Stanley (MS) is in the market today with a new preferred stock issue.

Morgan Stanley, a bank holding company, provides diversified financial services on a worldwide basis. The Company operates a global securities business which serves individual and institutional investors and investment banking clients. Morgan Stanley also operates a global asset management business.

The details are (from the prospectus):

Issuer	Morgan Stanley
Size	$250,000,000
Series/Ticker	Series E - MSPrE (expected)
Rating	Ba3/BB+/BB/BBB (Moody's/S&P/Fitch/DBRS)- expected
Rate Type	Fixed to float
Rate	7% plus (closer to 7.25%). Floats after 10/15/2023 at 3mo LIBOR +
Maturity	Perpetual
Optional Redemption	10/15/2023
Cumulative	NO
Tax Treatment	DRD/QDI

Top High Tech Companies To Invest In 2014

In order to discern if there is value (and pricing) a look at their existing preferreds is in order:

(click to enlarge)

The new issue is attractive relative to existing Morgan Stanley and Morgan Stanley Capital Trust issues. Now we must evaluate it versus peers Goldman Sachs (GS), Citigroup (C) and JPMorgan (JPM):

(click to enlarge)

As the above table shows, the new Morgan Stanley is attractive relative to peers as well.

And finally, an equity snapshot to show equity market thoughts on the ! peer group:

MS data by YCharts

From an equity standpoint, Morgan Stanley has been favored by investors and has rewarded their owners more in the last year.

Bottom Line: The new Morgan Stanley preferred stock issue is attractive versus their existing preferred stock (and hybrid) issues and should be considered for income focused portfolios. It must be noted that as the preferred is perpetual (or at a minimum 10 years), it will be significantly impacted by future interest rate movements as well as company specific events.

Source: Morgan Stanley: 7%+ On The New Preferred Is Attractive

Disclosure: I am long C. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

Additional disclosure: This article is for informational purposes only, it is not a recommendation to buy or sell any security and is strictly the opinion of Rubicon Associates LLC. Every investor is strongly encouraged to do their own research prior to investing.

Canaccord Boosts Urban Outfitters To Buy; Sees 25%+ Upside

Although Urban Outfitters (URBN) gave up some of its earlier gains, Canaccord Genuity thinks the stock can ultimately rise more than 25%.

Analyst Laura Champine upgraded the stock to Buy from Hold, with a $48 price target. She writes that the market, which has sent the stock down 11% in the past two weeks, has been overacting to the company's announcement earlier this month that sales were trending mid-single-digit positive so far in the quarter. She sees the sales as indicative of "sustained market share gains given the challenging apparel environment."

"E-commerce penetration of around one-quarter of total sales makes URBN the strongest public specialty apparel retailer online. We expect this channel to sustain rapid growth as management aspirations are at 50% penetration," she writes. "Unit growth is above average. We project the store base growing at a five-year CAGR of 7% versus the average retailer we cover at +5%."

Also part of her thesis: The fact that Urban is growing its consolidated store base at a compounded annual rate of 7% over the next five years, ahead of the average 5% for the other retailers in her coverage universe. Champine notes that the Anthropologie brand is in the midst of a turnaround as well, with same-store sales growing 9% in the second quarter.

'Fast Money' Recap: Cashing In

NEW YORK (TheStreet) -- The broader markets were able to end the week on a positive note.

On CNBC's "Fast Money" TV show, Pete Najarian said he's raising cash and feels the market's move higher is only short-term. He also stressed that he's not bearish but he wants to lighten up his equity exposure.

Tim Seymour said despite the historical weakness for equities in September, the month has been pretty good the past couple of years. He added that he would take some gains.

Guy Adami said the recent strength in stocks is something to sell into. He added that he likes ConocoPhillips (COP) near $66 and Exxon Mobil (XOM) near $85. Steve Grasso said he sold his position in Tesla Motors (TSLA) and will look to buy on a pullback, and is still long the iShares MSCI Emerging Markets ETF (EEM). He added that the market seems to have baked in about $15 billion per month in tapering from the Federal Reserve. Gold had its worst week since June, but spiked near the end of the day on concerns over Syria. Grasso said that while the Fed does matter for gold, all the focus is on Syria right now. In other commodities, Adami said steel looks to have turned the corner, despite having a bad day on Friday. He added that U.S. Steel Corp. (X) has formed a solid base. Seymour said the industrial side of the world is starting to accelerate and wants to be in three main industries: cyclical industrials, bulks and industrial metals. He added he expects four to six weeks of weakness, but thinks the fourth quarter will be strong. Mary Ann Bartels, CIO of portfolio strategies at Merrill Lynch, was a guest on the show and said she remains very bullish on equities, with a 1,750 year-end target for the S&P 500. She added that stocks have been impressively strong in the face of potential tapering and rising rates. Bartels likes the energy, technology and industrial sectors. Disney (DIS) was the first stock on the show's "Pops & Drops" segment and Grasso said he would buy any weakness in the name.

Delta Air Lines (DAL) jumped 13% for the week. Adami said the stock has been a monster, but suggested selling into the strength for those that have been long.

Valero Energy (VLO) fell 4% this week and Grasso said this would be a good name to buy for those that believe crude oil will head lower.

Apple (AAPL) fell 6% for the week. Najarian said there's just a lot of frustration among investors following the recent product launch.

Najarian said he is thinking about reducing his Facebook (FB) position because of the rapid move higher. He added that a lot of new capital will want in on the Twitter initial public offering, which has already monetized mobile, something Facebook did not do until after it went public. Seymour said the Chinese Internet stocks have been doing well and would stick with Sina (SINA). Adami said if the Twitter IPO is successful, it could give a boost to all the other social media names. For their final trades, Najarian was a buyer of Intel (INTC) and Grasso felt good about holding EEM and trimming other long positions. On the contrary, Seymour said to take profits in EEM and Adami said to buy Triangle Petroleum (TPLM). -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell Follow TheStreet.com on Twitter and become a fan on Facebook.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

Today's Market: We Correctly Predicted Fed Decision, Now What Stocks To Buy

We were not surprised by the Fed's decision yesterday and had stated numerous times that we thought the Fed would not taper. We blatantly stated this in Monday's article (see here) and continued to discuss the idea in this week's morning updates. The talking heads this morning are dismayed, saying the Fed should have lowered their monthly buying program because they had a free pass, etc, etc. The reality of it is that they sound like a bunch of angry old men. They were caught on the wrong side of the trade and we continue to believe that it is because of their piling on that the Fed decided to inflict some pain. The Fed did not lose credibility with this move, in fact they probably gained even more respect and will be able to control markets a little better moving forward.

Chart of the Day:

The Federal Reserve caught many off guard and forced a rebalancing of many people's investment outlook with their delay of tapering. The chart of yesterday's 10 year Treasury shows the huge move we had as the market was surprised, which is a move in size that one does not see very often.

(Click to enlarge)

Source: Yahoo Finance

We have economic news today and it is as follows:

Initial Claims (8:30 a.m. ET): Est: 340k Actual: 309k Continuing Claims (8:30 a.m. ET): Est: 2880k Actual: 2787k Current Acct Balance (8:30 a.m. ET): Est:-$100B Actual:-$98.9 Existing Home Sales (10:00 a.m. ET): Est: 5.30 Million Philadelphia Fed (10:00 a.m. ET): Est: 9.0 Leading Indicators (10:00 a.m. ET): Est: 0.6% Natural Gas Inventories (10:30 a.m. ET): Est: N/A

Asian markets finished higher today:

All Ordinaries -- up 1.11%% Shanghai Composite -- up 0.29% Nikkei 225 -- up 1.80% NZSE 50 -- up 1.05% Seoul Composite -- CLOSED

In Europe, markets are also higher this morning:

CAC 40 -- up 0.96% DAX -- up 1.11% FTSE 100 -- up 1.43% OSE -- down 0.97%

! Financials

Although we were not surprised by the move yesterday we did not take an overly aggressive stance in positioning the portfolio to benefit from the Fed not tapering. We were long, but we did not initiate any trades solely for the purpose to benefit from the announcement. We are more interested in the long-term wealth building of portfolios right now and as such believe that readers should look to our recent winners that had pullbacks yesterday as buying opportunities. Specifically, we like Ameritrade (AMTD), Charles Schwab (SCHW) and MetLife (MET) which all saw pullbacks ranging from 2.5% to a bit over 5.5% in yesterday's session. We highlighted the discount brokers as a sector to watch right before the latest takeoff and our belief is that although rates remain unchanged the brokerage business will continue to perform strongly. The next big move up will be as rates rise, but even if one has to wait for this move it will be well worth it for one's portfolio.

We are probably in for some sideways movement in the discount brokers we like, however there is upside down the road as rates rise. Buy on the dips to profit on the rips.

(Click to enlarge)

Source: Yahoo Finance

We also think that Regions Financial (RF) should be bought on the weakness in their share price right now. The shares trade roughly $1/share below their 52-week high right now but with what we see happening in the financial space over the next few months and few years we think that this name is a deal under $10/share. Like the discount brokers, as the yield curve steepens the company's profits shall increase and with that taking place and the continued improvement in the company's balance sheet we think share buybacks and dividends will be carried out and even raised.

Technology

It has been a great year for internet companies across the board, but the ! Chinese i! nternet names have fared especially well during this latest run.

(Click to enlarge)

Source: Yahoo Finance

Shares in Sohu.com (SOHU) continued their rapid rise, hitting yet another fresh 52-week high during the session, as the company announced the special dividend from Sohou yesterday (press release located here). Sohu.com will receive nearly $161.2 million in the transaction which is part of the overall $400 million deal with Tencent (TCEHY.PK) which was announced not too long ago. These are exciting times in the internet space as we move from computers to mobile devices, but China's internet landscape looks like the 'Wild West' right now and we expect to see further deals as companies jockey for position in their respective niches and consolidation begins as the larger players look to step up growth and gain exposure to new business segments.

Source: Today's Market: We Correctly Predicted Fed Decision, Now What Stocks To Buy

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

July New Construction Spending Recovers from June Decline

The U.S. Census Bureau reported this morning that construction spending in July increased by 0.6%, to an estimated seasonally adjusted annual rate of $900.8 billion from an upwardly revised estimate of $895.7 billion in June. Compared with July 2012, spending is up 5.2%. For all of 2012, construction spending rose 9.9% compared with 2011.

For the first seven months of 2013, new construction spending is up 5.6%, compared with the first seven months of 2012.

The consensus estimate by economists surveyed by Bloomberg News called for a rise of 0.3% in construction spending for July.

Spending on private residential construction rose 0.5% to $340.6 billion, compared with the revised June total of $338.9 billion. Private nonresidential construction fell 0.8% month-over-month and total private construction spending was up 0.9%, compared with a revised May total of $625.6 billion.

In the private sector, single-family residential construction is 29.3% higher than it was a year ago, and multifamily construction is up 39.3% from July 2012. Private, nonresidential construction is up 2% year-over-year and up 1.3% from June.

In the public sector, seasonally adjusted total spending is down 3.7% year-over-year, continuing a slide begun in September 2012. Spending on educational facilities fell 11.7% month-over-month and 1.5% from June 2013 spending. Public residential construction was down 3.1% month-over-month, and is 2.4% lower year-over-year.

Can Dell See Higher Prices?

With shares of Dell (NASDAQ:DELL) trading around $13, is DELL an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Dell is a global information technology company that offers its customers a range of solutions and services delivered directly by Dell and through other distribution channels. The company operates in four segments: Large Enterprise, Public, Small and Medium Business, and Consumer. Dell serves a wide range of customers: global and national corporate businesses; educational institutions, government, health care, and law enforcement agencies; small and medium-sized businesses; and end users. Through its four segments, Dell is able to provide information technology products to a growing user base around the world. As economies continue to develop, look for a company like Dell to provide important technology products for years to come.

T = Technicals on the Stock Chart are Weak

Dell stock has seen a decline over the last several years. Any progress the stock has made is met with selling. Just recently, Dell is the subject of positive merger press which may have a significant effect on the stock’s price. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Dell is trading around its key averages which signal neutral price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Dell options may help determine if investors are bullish, neutral, or bearish.

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	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Dell Options	24.68%	66%	63%

What does this mean? This means that investors or traders are buying a significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
May Options	Steep	Average
June Options	Steep	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a significant amount of call and put option contracts and are leaning neutral to bearish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Decreasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Dell’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Dell look like and more importantly, how did the markets like these numbers?

	2012 Q4	2012 Q3	2012 Q2	2012 Q1
Earnings Growth (Y-O-Y)	-29%	-44.90%	-12.50%	-26.53%
Revenue Growth (Y-O-Y)	-10.71%	-10.70%	-7.50%	-3.96%
Earnings Reaction	0.21%	-7.32%	-5.34%	-17.17%

Dell has seen decreasing earnings and revenue figures over the last four quarters. From these figures, the markets have been disappointed with Dell’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Dell stock done relative to its peers, Hewlett-Packard (NYSE:HPQ), International Business Machines (NYSE:IBM), Apple (NASDAQ:AAPL), and sector?

	Dell	HP	IBM	Apple	Sector
Year-to-Date Return	32.10%	44.53%	5.69%	-16.82%	6.46%

Dell has been a relative performance leader, year-to-date.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Conclusion

Dell provides valuable and innovative technology products to a range of businesses and consumers around the world. The stock has been in a constant decline over the last several years. However, the company has been the subject of positive merger press in recent times which has lifted the stock a bit. Earnings and revenue figures have been shrinking over the last four quarters which has not really impressed investors. Relative to its peers and sector, Dell has been a year-to-date performance leader. Look for Dell to OUTPERFORM.

6-Step Guide to Getting Rich Is Buried In 76-Year-Old Book

The Booklight/Flickr Thousands of personal finance books on shelves today promise to teach you to spend less, save more, invest better, retire earlier, get out of debt faster, and solve just about every financial conundrum in between. But perhaps none said it better than a book published in 1937. Napoleon Hill, a Great Depression-era author and former adviser to President Franklin D. Roosevelt, interviewed "more than five hundred of the most successful men this country has ever known" to figure out the key to their good fortune. He wrapped all of his insights in a 200-page package and published "Think and Grow Rich," which went on to become one of the best-selling books of all time. Don't expect to find any stock-picking or gambling advice in it. Despite Hill interviewing some of the most iconic businessmen of his day, none of his findings involved any particularly hard-to-attain skills. His entire premise is helping people overcome the psychological barriers that keep them from wealth. "Wishing will not bring riches," Hill writes. "But desiring riches with a state of mind that becomes an obsession, then planning definite ways and means to acquire riches, and backing those plans with persistence which does not recognize failure, will bring riches." In one passage, he sums up six steps to turning a desire for wealth into "its financial equivalent":

First. Fix in your mind the exact amount of money you desire. It is not sufficient merely to say "I want plenty of money." Be definite as to the amount. (There is a psychological reason for definite- ness which will be described in a subsequent chapter). Second. Determine exactly what you intend to give in return for the money you desire. (There is no such reality as "something for nothing.") Third. Establish a definite date when you intend to possess the money you desire. Fourth. Create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action. Fifth. Write out a clear, concise statement of the amount of money you intend to acquire, name the time limit for its acquisition, state what you intend to give in return for the money, and describe clearly the plan through which you intend to accumulate it. Sixth. Read your written statement aloud, twice daily, once just before retiring at night, and once after arising in the morning. AS YOU READ, SEE AND FEEL AND BELIEVE YOURSELF ALREADY IN POSSESSION OF THE MONEY.

It seems basic, but if you actually compare this to just about any personal finance guide out there, you'll find exactly the same simple steps. They just come with a lot more bells and whistles. If anything, Hill's book is a reminder that one of the only ways to achieve true wealth is to understand that more often than not our emotions and our mindset are what keep us from succeeding, and that it's our job to come up with a plan to overcome them.

Top Small Cap Stocks To Invest In Right Now

When investors have the willingness to take short term positions and the ability to bear a certain degree of risk, small-cap funds could be the correct choice. These funds generate significant demand driven sales during a market upswing, which lead to an increase in their prices. Smaller firms also look to continuously reinvest their profits back into their business. This reassures shareholders of superior performance and higher profit potential from such companies. Small Cap funds therefore make excellent additions to a well-diversified portfolio.

Below we will share with you 5 top rated small-cap mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all small-cap funds, investors can click here to see the complete list of funds.

Top Small Cap Stocks To Invest In Right Now: InterDigital Inc.(IDCC)

Interdigital, Inc. engages in the design and development of digital wireless technology solutions. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. It holds patents related to the fundamental technologies that enable wireless communications. The company licenses its patents to equipment producers that manufacture, use, and sell digital cellular and IEEE 802-related products; and licenses or sells mobile broadband modem solutions, including modem IP, know-how, and reference platforms to mobile device manufacturers, semiconductor companies, and other equipment producers that manufacture, use, and sell digital cellular products. InterDigital?s solutions are incorporated in various products comprising mobile devices, such as cellular phones, tablets, notebook computers, and wireless personal digital assistants; wireless infrastructure equipment, such as base stations; and components, dongles, and modules for wireless devices. The company was founded in 1972 and is headquartered in King of Prussia, Pennsylvania.

Advisors' Opinion:

• [By SmallCap Investor]

  The wireless technology company said it's exploring its options, including a possible sale, following last month's successful auction of Nortel Networks intellectual property which brought in $4.5 billion. IDCC owns about 1,300 patents related to mobile phone technology.

Top Small Cap Stocks To Invest In Right Now: EZchip Semiconductor Limited(EZCH)

EZchip, a fabless semiconductor company, engages in the development and marketing of Ethernet network processors for networking equipment. Its products include network processor chips, evaluation boards and network-processor based systems, and development software toolkits. The company offers network processors for use in forming the silicon core of networking equipment, such as switches and routers; and for voice, video and data integration in various applications. Its network processors are single-chip solutions, which enable its customers to design multi-port line cards, such as processing and classification engines, traffic managers, media access controllers, as well as a range of specialized hardware blocks that accelerate various functions. The company offers Evaluation systems which enable customers to test NPU-based systems; and toolkits that assist customers in creating, verifying, and implementing solutions based on its network processors. It provides a library f eaturing data plane code for a range of applications, which include Metro Ethernet protocols, Multi-Protocol Label Switching, IPv4 and IPv6 routing, Access Control Lists, GPON/EPON OLT functionality, Network Address Translation, and Server Load Balancing. The company sells its products directly, and through contract manufacturers and distributors to network equipment vendors. It markets its products in Israel, China, Hong Kong, the Far East, Canada, the United States, and Europe. The company was formerly known as LanOptics Ltd. and changed its name to EZchip Semiconductor Ltd. in July 2008. EZchip Semiconductor Ltd. was founded in 1989 and is based in Yokneam, Israel.

Advisors' Opinion:

• [By Paul]  

  Known for designing high-speed networking equipment chips. They had a solid first quarter as revenue gained 38% and now they are sitting on $75 million of cash with no expenses or debt. I believe this is a strong technology bet and I place a target of $30.

Top Canadian Stocks To Own For 2014: ATA Inc.(ATAI)

ATA Inc., through its subsidiaries, provides computer-based testing services in the People?s Republic of China. It offers services for the creation and delivery of computer-based tests utilizing its test delivery platform, proprietary testing technologies, and testing services; and provides logistical support services relating to test administration. The company?s computer-based testing services are used for professional licensure and certification tests in various industries, including information technology (IT) services, banking, securities, teaching, and insurance. Its e-testing platform integrates various aspects of the test delivery process for computer-based tests ranging from test form compilation to test scoring, and results analysis. ATA also provides career-oriented educational services, such as single course programs, degree major course programs, and pre-occupational training programs focusing on preparing students to pass IT and other vocational certification tests; test preparation and training programs and services to test candidates preparing to take professional certification tests in securities, futures, banking, insurance and teaching industries; online test preparation and training platform for the securities and banking industries; and test preparation software for the teaching industry. In addition, the company offers HR select employee assessment solution, an online system that utilizes its proprietary software and an inventory of test titles to help employers improve the efficiency and accuracy of their employee recruitment process. As of March 31, 2010, it had contractual relationships with 1,988 ATA authorized test centers. The company serves Chinese governmental agencies, professional associations, IT vendors, and Chinese educational institutions, as well as individual test preparation services. ATA Inc. was founded in 1999 and is based in Beijing, the People?s Republic of China.

Advisors' Opinion:

• [By Wyatt Research Staff]

  The Chinese-based educator spiked higher recently after it exceeded analysts' expectations. Revenue and adjusted earnings soared 78% and 269%, respectively. Its long-term annual growth rate is 15%.

  Analysts at Zacks Investment Research upgraded shares from "neutral" to "outperform". 

Top Small Cap Stocks To Invest In Right Now: Sify Technologies Limited(SIFY)

Sify Technologies Limited provides enterprise and consumer Internet services primarily in India. The company offers various corporate network/data services comprising e-commerce and network connectivity solutions, such as end-to-end services network, application, and security services; voice origination and termination services; co-location and managed hosting services; and system integration services for data centre build, hardware distribution, security solutions, and turnkey projects. It also provides application services, including SLEMS and Microsoft Exchange messaging platforms; I-test for online assessment and LiveWire, which enable management of training processes across the organization; document management system for the management of documents electronically; and Forum, a forward supply chain solution. In addition, the company operates e-Ports that offer browsing, chat, email, gaming, utility bill payment, travel ticketing, hotel booking, mobile recharge, Intern et telephony, and online share trading services; and portals, which provide news, views, reviews, interactions, and services in the areas of movies, sports, finance, food, videos, astrology, online games, shopping, and travel, as well as offers content offerings and broadband services. Further, it provides infrastructure management services, such as network management, datacenter and helpdesk outsourcing, desktop and storage outsourcing, IT security outsourcing, LAN and WAN outsourcing, database and telecom outsourcing, and application monitoring and management services to automotive, chemical, media, and financial enterprises; and virtualization design, integration, and deployment services for servers, storage, networks, and end user clients. Sify has approximately 1,278 e-Ports in 200 towns and cities; and serves 1,06,000 broadband subscribers through 1500 cable TV Operators. The company, formerly known as Sify Limited, was founded in 1995 and is based in Chennai, India. Advisors' Opinion:

• [By Wyatt Research Staff]

  Shares of SIFY skyrocketed last week after the company announced a new partnership with Saudi telecom. SIFY will provide ICT services to the Middle East's largest telecom carrier.

  Shares of the Indian-based internet and network services have doubled over the past four months.

Top Small Cap Stocks To Invest In Right Now: bebe stores inc.(BEBE)

bebe stores, inc. engages in the design, development, and production of women?s apparel and accessories. Its products include a range of separates, tops, dresses, active wear, and accessories in career, evening, casual, and active lifestyle categories. The company markets its products under the bebe, BEBE SPORT, bbsp, and 2b bebe brand names targeting 21 to 34-year-old woman. As of July 2, 2011, it operated 252 retail stores, and an online store at bebe.com in the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Japan, and Canada, as well as 60 international licensee operated stores in south east Asia, the United Arab Emirates, Israel, Russia, Mexico, and Turkey. The company was founded in 1976 and is headquartered in Brisbane, California.

Advisors' Opinion:

• [By Wyatt Research]

  The women's apparel retailer reported fiscal fourth-quarter sales and same-store sales both rose 7 percent. The stock is up 30 percent year-to-date.

• [By CRWE]

  bebe stores, inc. (Nasdaq:BEBE) reported that its Board of Directors declared bebe�� quarterly cash dividend of $0.025 per share. The dividend is payable on December 4, 2012 to shareholders of record at the close of business on November 20, 2012

Top 5 Clean Energy Stocks To Own Right Now

In the U.S., when the topic of clean energy comes up, we like to debate concepts like climate change or global warming, turning it into a political debate more than a strategic one. Subsidies to industries such as wind or solar, no matter how small, take criticism from politicians and the media while the government continues to subsidizes oil, gas, coal, and nuclear production to the tune of billions of dollars each year. We neglect to account for externalities such as the cost of war ships keeping the Suez Canal open when Iran threatens to close it, oil spills inland and offshore, the wars in Iraq, and the limited liability given to the operators' nuclear plants. If Fukishima happened here, it would be no problem for U.S. companies -- Uncle Sam would pick up the tab.

In China, the energy debate is very different. When China sees its imports of coal rising and dependence on foreign oil growing, it springs into action. Not by screaming, "Drill, baby, drill," but by investing billions of dollars in home-grown energy sources. Yes, I'm talking about clean, renewable energy, and China's investment in these energy sources make U.S. subsidies look like the half-hearted effort they are.

Top 5 Clean Energy Stocks To Own Right Now: World Precision Machinery Ltd (B49.SI)

World Precision Machinery Limited, an investment holding company, engages in the manufacture, supply, and distribution of stamping and complementary machines, and metal parts in the People�s Republic of China. The company�s products include conventional and CNC stamping machines; high performance and high tonnage stamping machines, which are used to produce automotive parts, such as car hoods and doors; and bending, cutting, and CNC punching machines, as well as complementary machines. It serves the automotive, home appliances, railway, and aerospace industries. The company also exports its products to southeast Asia, Europe, South America, and South Africa. World Precision Machinery Limited markets its conventional, high performance, and high tonnage stamping machines under the WORLD brand. The company was formerly known as Bright World Precision Machinery Limited and changed its name to World Precision Machinery Limited in April 2011. The company is based in Danyang Ci ty, China. World Precision Machinery Limited operates as a subsidiary of World Sharehold Limited.

Top 5 Clean Energy Stocks To Own Right Now: HENDERSON GROUP PLC ORD GBP0.125(HGG.L)

Henderson Group plc is an asset management holding entity. Through its subsidiaries, the firm provides services to institutional, retail clients, and high net worth clients. It manages separate client-focused equity and fixed income portfolios. The firm also manages equity, fixed income, and balanced mutual funds for its clients. It invests in public equity and fixed income markets, as well as invests in real estate and private equity. Henderson Group plc was founded in 1934 and is based in London, United Kingdom with additional offices in Jersey, United Kingdom and Sydney, Australia.

Top Penny Stocks To Own For 2014: Miranda Gold Corp (MAD.V)

Miranda Gold Corp., a mineral exploration company, engages in the acquisition, exploration, and development of mineral properties in the United States and Colombia. The company primarily explores for gold properties. It holds interests in various properties located in Nevada, Alaska, and Colombia. The company was founded in 1993 and is headquartered in White Rock, Canada.

Top 5 Clean Energy Stocks To Own Right Now: Blackrock California Municipal 2018 Term Trust (BJZ)

Blackrock California Municipal 2018 Term Trust is a closed ended fixed income mutual fund launched by BlackRock, Inc. It is managed by BlackRock Advisors, LLC. The fund invests in fixed income markets. It invests primarily in portfolio of municipal securities. It invests in companies operating across transportation, hospital, lease, education, housing, industrial and pollution control, water and sewer, power, and tobacco sectors. Blackrock California Municipal 2018 Term Trust was formed in October 2001 and is domiciled in United States.

Top 5 Clean Energy Stocks To Own Right Now: Harmony Gold Corp (H.V)

Harmony Gold Corp., a junior mining company, engages in the acquisition, exploration, and development of mineral properties worldwide. The company was formerly known as Avantec Technologies Inc. and changed its name to Harmony Gold Corp. in August 2009. Harmony Gold was incorporated in 1999 and is based in Vancouver, Canada.

Is Microsoft a Worthwhile Investment?

With shares of Microsoft (NASDAQ:MSFT) trading around $33, is MSFT an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Microsoft is engaged in developing, licensing, and supporting a range of software products and services. The company also designs and sells hardware, and delivers online advertising to the customers. It operates in five segments: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division. Through its array of divisions, Microsoft is able to provide products and services to a wide range of consumers and businesses across different industries around the world. As a mature company, Microsoft is also offering a stable dividend that is currently yielding around 2.74% annually.

T = Technicals on the Stock Chart are Strong

Microsoft stock has traded in a fairly consistent range extending back to the early 2000s. The stock is now near the top-end of its range but seems to be rejecting those prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Microsoft is trading slightly above its rising key averages which signal neutral to bullish price action in the near-term.

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(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Microsoft options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Microsoft Options	26.06%	93%	90%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
July Options	Flat	Average
August Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Mixed Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Microsoft’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Microsoft look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	20.00%	-2.56%	-22.06%	-108.70%
Revenue Growth (Y-O-Y)	17.71%	2.78%	-7.83%	3.97%
Earnings Reaction	3.36%	0.90%	-2.91%	-1.76%

Microsoft has seen decreasing earnings and rising revenue figures over the last four quarters. From these numbers, the markets have been happy with Microsoft’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Microsoft stock done relative to its peers, Apple (NASDAQ:AAPL), Oracle (NASDAQ:ORCL), Google (NASDAQ:GOOG), and sector?

	Microsoft	Apple	Oracle	Google	Sector
Year-to-Date Return	25.72%	-21.37%	-0.48%	25.39%	14.88%

Microsoft has been a relative performance leader, year-to-date.

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Conclusion

Microsoft provides innovative, valuable, and essential software products and services to consumers and companies all across the globe. The stock has been part of a steady range extending back to the early 2000s and is now at the top-end of this range. With the stock rejecting these prices, look for the divided yield to only become juicier. Over the last four quarters, earnings have decreased while revenues have increased which has kept investors in the company generally happy. Relative to its peers and sector, Microsoft has been a year-to-date performance leader. WAIT AND SEE what Microsoft does this coming quarter.

3 High Yielders To Buy First After The 'October Surprise'

They are a rarity on the market today.

Most of the headlines over the summer have been about how the stock market is nearing all-time highs... making it difficult for investors to find a good entry point for many stocks.

But that could be changing. In August, the S&P 500 fell about 4.5%, while the Dow Jones Industrial Average fell 5.4%.

Could the bull market we've experienced over the past few years be coming to an end? It's entirely possible. As I reported last week, it all has to do with the looming Bernanke bond bubble burst or what I'm calling the "October surprise."

 

But a slow down, or a complete turnaround in the stock market, should not be looked at as a bad thing. It should be viewed as an opportunity.

What if there was a way to invest just 90 cents and get a full dollar's worth of interest-earning power? In other words, what if we could easily buy stocks discounted by 10% or more and boost the dividend yield we collect from them at the same time?

There is a way we can do that. But first, let me explain how we got to this point...

For the past few years, interest rates have been tilted in the borrower's favor, which has allowed companies to borrow cash cheaply and use it to quickly expand. But short-term interest rate hikes could throw a wrench into the works.

This isn't just a distant threat. Rates have already shot higher in recent weeks as traders prepare for a new reality without quantitative intervention from the Federal Reserve.

With historically low interest rates, the playing field is still tilted in the borrower's favor, but it's much tougher for companies to grow than it was just a few months ago. And asset prices have fallen accordingly.

But as stocks fall, there are some that go too low -- to the point of becoming bargains. And one of the easiest ways to find stocks that are trading as bargains is to look at closed-end funds.

Closed-end funds are simply mutual funds that hold stocks. Unlike open-end mutual funds, which most people hold in their 401(k) and offer as many shares as investors are willing to buy, closed-end funds carry a fixed amount of shares that investors can purchase on the market.

I could go through every detail, but basically because closed-end funds can't increase their share count, their market value can fluctuate and be much different than their "net asset value" (NAV), which represents how much the holdings are worth.

And if closed-end funds should sell off along with the rest of the market, it could mean we have an opportunity to buy a basket of quality stocks at discounts of 5%, 10% or more compared with what they're really worth.

Let me give you a real-life example to explain.

Consider the Zweig Fund (NYSE: ZF). It's a closed-end fund that has $340 million in net assets, which are invested in a diverse basket of blue-chip stocks such as PepsiCo, Apple, JPMorgan, Comcast, U.S. Bancorp and Qualcomm.

With 22.8 million shares outstanding, each share of the fund is worth $14.93 (according to the NAV). But here's the good part: You don't have to pay full price. ZF shares have dipped deep below NAV, so you can get $14.93 worth of dividend-paying stocks for just $13.00.

That means we can essentially buy shares in each of those quality companies at a 13% discount. If you bought this fund today, you'd pay just $424 for each share of Apple it holds -- which last traded around $487 per share on the market. You get the same 13% discount for all the other stocks held in the fund, too.

Not to mention you get to collect the dividend income from those stocks. But because you paid less for your shares, you're effectively getting higher yields. So instead of collecting a 2.5% yield from Apple, you're getting 2.87% ($12.20 per share dividend on $424 shares = 2.87% yield).

Now, that doesn't automatically make ZF a buy. If for no other reason, overall total returns have been lackluster over the long haul.

With that in mind, I conducted a screen for funds with lofty 5%-plus yields, no leverage (and no exposure to rising rates) and double-digit discounts to NAV. I also looked for funds with superior performance whose trailing three-year returns outrun their respective benchmarks.

Here's what I found:

The advantages of buying an income-paying fund at a double-digit discount are obvious, particularly when the stocks or bonds inside that portfolio are themselves undervalued.

If a quality fund that typically trades at a slight 1% to 2% discount suddenly slides to a 10% discount in a broad market pullback, there's an opportunity. There's usually a reversion to the mean. But don't automatically assume that a discounted fund will close the NAV gap -- some stay underwater for years, always showing somewhat of a discount. That's why it's more instructive to compare a fund's current discount with its historical average.

But this list is a good starting point to conduct more research on whether one of these funds would make a good investment. And if Bernanke & Co. do indeed decide to taper the Fed's bond purchasing program and the market takes a hit, which is very likely, these funds will be some of the first investments I'll look at to buy on a pullback.

P.S. -- As I mentioned earlier, I'm predicting an "October Surprise" in the market this year, and it's all Ben Bernanke's fault. Thanks to the Fed's reckless monetary policy, this collapse could affect millions of investors -- and anyone not prepared for it could lose a fortune. But I have a plan. To learn how I'm preparing for this collapse, read this special report.

Timkin Splitting In Two, Stock Higher After Hours

Timken said after the close Thursday that it would split into two businesses: engineered steel, and bearings and power transmission.

Shares of the specialty steel-products company Timken  (TKR) were up 3% Thursday to close at $60.26, and they rallied another 6% to $64, a new 52-week high, after the close.

The Canton, Ohio company said that “upon separation,” the current CEO James W. Griffith, 59, will retire.

The company said in a prepared release that Timken steel would be a tax-free spinoff to be completed in the next 12 months. Ward J. Timken, Jr. will be chairman and CEO of new engineered steel company, which would have $1.7 billion in revenue. Richard G. Kyle is to be president and CEO of the global bearings and power transmission company, with $3.4 billion in revenue. John M. Timken, Jr. will be non-executive chairman. 

5 Best Financial Stocks To Watch For 2014

As we reported last fall, activist fund Relational Investors wanted Timken to split into two publicly traded companies, and the idea also had support from the California State Teachers' Retirement System.