The best finance business can have is a timely cheap insurance. This does not necessarily have to be a car insurance or a travel insurance, just something for the business. In the same fashion as a home insurance safeguards a home.

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Apparently the world’s largest private wealth manager is up to some dirty tricks helping wealthy U.S. individuals avoid tax. Heinrich Kieber, a bank computer technician in Liechtenstein, blew the whistle and provided 3 compact discs full of names and tax information regarding these tax cheats. UBS has allegedly been helping wealthy American business men hide their assets and income in Liechtenstein shell companies. What is worse is that instead of praising Mr. Kieber, he is in hiding afraid for his life.

UBS has announced that it will stop offering offshore-banking services to U.S. clients through non-U.S. branches. UBS has been one of the most adversely affected companies in the last 6 months because of their large write-down and drop in stock price but this just adds another black eye to the company. Too bad we can’t short this anymore but you can still get into UltraShort Financials (SKF).

My gripe is if you made 5 million dollars, why would it be so suffocating to pay tax on it? I could understand if you made 50 thousand and the government was taking away 40% why you might try to avoid tax. But even with 40% tax, you still have 3 million, much more than enough to live a very opulent lifestyle. Also, I’m quite sure 5 million is the lowest range for these offenders, they probably have an average net worth of 100 million.

The market is definitely going lower tomorrow because of the missed earnings of MFST, GOOG

http://www.abcnews.go.com/Blotter/story?id=5378080

http://www.bloomberg.com/apps/news?pid=20601103&sid=a8Jh8z6NacRs

The recent price retraction of the price of uranium presents a great opportunity to get into this precious resource.

Uranium is a commodity of the future, for these reasons:

1. Uranium is environmentally friendly. A recent Business Week article has shown that green companies have been holding up well during this bear market and uranium releases lower carbon emissions and is considered much cleaner than coal.

2. Nuclear power is becoming a viable option in place of coal. John McCain wants to build 45 new nuclear facilities by 2030 and fund it with 2 billion dollars. Nuclear energy currently provides 15% of the world’s electricity. Another 25% increase in nuclear power plants is under construction or in the planning phase.

3. Supply and demand favors the uranium boom. There is currently a 67 kt/year demand but only a 42 kt/year supply. Furthermore, much of the supply is from old mines and plants with depleted resources. Many European countries have run out of uranium creating an even larger gap.

4. Uranium related company stock prices have been deflated dramatically and the cheap forward PE makes most a compelling buy. Some companies that one should watch out for are CCJ, DNN, USEC, URZ, BHP, NRG, URRG RTP, USEG, USU

I’m not convinced that uranium prices have bottomed out yet especially in a bear market that still hasn’t seen its trough. I do support getting in, but would wait out the storm to see a better timetable.

Uranium prices up to April 08

I came across an article on SeekingAlpha that showed the return on Chinese stocks. While I believe China has a lot of potential, a lot of my colleagues believe the Chinese stock market has gone up too quickly in the recent couple of years and seems to be a bubble. There is a lot of short interest in Chinese stocks and they are winning big time this year. Notice only 5 stocks actually had a positive return in June, CMED because of earnings. Only 8 are positive YTD.

I came across an intriguing article on seekingalpha that brokedown the S&P500 into categories of 50 based on the average number of buy and sell ratings and then pitted this against the performance of the stock to see if there was any correlation. To be expected the stocks with the best ratings did about 4.5 percent better than the stocks with the worst ratings in the two weeks following May 19th. What I found interesting and somewhat deceiving is that the best and worst ratings could be very similar. For example, if 1 group of 50 companies has 5 analysts each and 4 rate them a buy while 1 rates them a hold, while another of group of 50 has 4 rate them a buy and 1 rate them a sell, one is placed higher than the other in terms of ratings. We don’t know if the difference between the best and worth ratings is significant or minuscule. Therefore, the graph doesn’t help us decide whether we should invest because the ratings are good. I only take analyst ratings with a grain of salt. Analysts and clients have relationships that make it hard for the analyst to write an objective review of a company since it jeopardizes future business and relationships.

Heres the chart

I saw an interesting article from seeking alpha on how the percentage of companies which beat expectations has been dropping over the past couple of quarters. This is most likely due to financial companies having huge writedowns and overall pessimistic state of the economy. My intrigue with this graph is comparing it to historical Dow Jones numbers. Does EPS beat rates and the overall economy correlate? In the tech boom no one cared about earnings as long as there was potential. The two charts definitely show correlation but is Wallstreet overreacting and placing too much emphasis on earnings nowadays?