Month: August 2013

By MoneyMorning.com.au

If you talk to a lot of people over the age of 60 they’ll tell you that people were so much more sensible with their money in their day.

They’ll say that people saved before they bought things.

They’ll say that they didn’t take out a big mortgage to buy a house. They may even say that three generations of the family lived in the same house.

It all sounds so frugal and sensible.

It’s also a bunch of junk…

Of course, it isn’t just the over 60′s age group that’s keen to perpetuate the myth of a frugal age.

The West is keen to pin the same myth on an entire race of people too – those from Asian countries.

You’ve heard the spin, ‘Asians are so sensible with their money. They put the West to shame.’

So, is there really a cultural or genetic difference?

If a report in the Financial Times is anything to go by, then the simple answer is ‘no’. And if you accept there’s no difference then it also proves that the older Western generations were no better with their money than people today…

Chinese Household Debt Triples in Five Years

While we’re on the subject of saving and taking care of your wealth, make sure you read family wealth expert Vern Gowdie’s article today.

In our view, it’s his best article yet, and one of the best articles we’ve seen printed anywhere this year.

But that’s for later. First, we’ll show you a key quote from the Financial Times article:

‘The stock of household debt has tripled over the past five years. Average household debt jumped from 30 per cent of disposable income in 2008 to 50 per cent by the end of 2011, according to the Peterson Institute for International Economics. China still has a long way to go or catch up to personal debt levels in the US or Europe – where it exceeds 100 per cent of income – but many Chinese households are making up for lost time.‘

We’ll argue Chinese households don’t have a long way to go at all. If household debt has tripled in five years, who’s to say it won’t double in just two more years?

The FT article makes another mistake. It notes:

‘The older generation, that of Mr Dai’s parents, was famous for its saving prowess. Memories of deprived childhoods in the Maoist era led them to squirrel away most of their earnings even as their fortunes improved alongside China’s fast-growing economy from the 1980s on.‘

Again the ‘Asian saver’ stereotype.

What seems to be lost in all this analysis is that Mr Dai’s parents saved for two reasons. (Mr Dai is the feature of the article. He spends half his income each month on a mortgage.)

First, the lack of a free market economy and communist oppression meant there wasn’t a thriving economy. That means people couldn’t spend their money.

Second, people didn’t borrow because there wasn’t an established financial system in place that provided credit. We’re as sure as heck that if such a system existed, Mr Dai’s parents would have been right into it just as Mr Dai is today.

The same goes for the West’s older generation who criticise the ‘youth of today’ and their lack of saving. If today’s financial system existed in the 1950s and 1960s do you really think people would have said, ‘Oh, no thank you we prefer to save rather than borrow.’

Of course not.

Big Problems When China’s Economy Slows

And so to think the Chinese won’t experience the same fate of excessive borrowing as the West because the Chinese are culturally and genetically different is just naïve.

Our old pal, Sound Money, Sound Investments editor Greg Canavan, has followed the situation in China closely. He says the Chinese economy is heading for one mighty collapse. And it’s largely due to the growing debt problem.

Here’s what he told us yesterday:

‘These stories are representative of what’s happening across China. The debts are high, but income levels are high enough to service them, so there isn’t a big problem…yet. But when economic growth inevitably slows (indicating slowing incomes) the debt will be harder to service and the marginal borrower will get into trouble. That means property prices will come under pressure and then China’s bubble economy will really suffer. We’ve had warning signs of problems in China but so far nothing significant. That will change as the economy continues to slow.‘

It’s hard to argue with Greg’s point. That’s why he has a pretty bleak view when it comes to the outlook for China.

The Chinese are Making Up for Lost Time

But while Greg’s view may be bleak, it’s also realistic.

This isn’t a generational thing where the older generation was smart and frugal whereas the younger generation is dumb and spendthrift.

It’s just that the generations that reached adulthood from the mid-1970s in the West, and the 2000s in China had access to something previous generations didn’t – credit.

Now that the Chinese have access to credit, they sure are making up for lost time.

The Chinese economy may not blow up yet. After all, it took 40 years for Western economies to reap what they had sown. But if you want a clue about how the Chinese economy will develop in the years ahead, look no further than the Western economies.

It turns out the West and the East, the young and the old, aren’t so different after all.

Cheers,
Kris+

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From the Port Phillip Publishing Library

Special Report: Panic of 2013

Daily Reckoning: Emerging Markets Are In Trouble

Money Morning:  Why The Real Reason For Owning Gold Has Returned

Pursuit of Happiness: War: The Reason to Own Gold

Australian Small-Cap Investigator:
How to Make Big Money from Small-Cap Stocks

By MoneyMorning.com.au

When your world consists of the usual money problems – paying bills from minimal savings, meeting mortgage payments, juggling to prioritise expenses etc., it’s easy to understand why people think the ‘lotto win’ will solve their problems.

And they’re right – it will solve the problems they have been conditioned (by their life experiences) to deal with.

However the money world has its own set of problems. It’s just that most people never get to experience these problems, so they have no appreciation of how to manage the issues that suddenly confront them.

The following chart on the average retirement balance of households with superannuation (yellow bar) compared to households without (green bar) shows why the majority are poorly prepared to handle significant amounts of money:

Click to enlarge

The average 55 to 64 year old (with super) has $100,000. While $100,000 may be a reasonable amount of money, it’s unlikely the acquisition of this amount over a lifetime would have provided the owner with more than a basic understanding of finances.

As obvious as it sounds, there are two components to Family Wealth – Family and Wealth.

Receiving a large sum of money provides the Wealth – this is the easy part. The difficult part is managing the expectations – yours and your family’s.

Those who say, ‘money is the root of all evil’ don’t understand money. Money is money – it doesn’t have any emotions or agendas. Money often reveals the true character of people and this is when things can become nasty.

Families are a complex web of characters – each harbouring their own belief systems, prejudices, opinions and emotional baggage.

Managing these family issues successfully is as equally, if not more, important in the quest to retain family wealth than the appropriate asset allocation and tax and legal structures.

Communication and education are crucial to the successful management of family wealth.

Even having money is no guarantee for financial success.

The Packer, Murdoch and Lowy families are examples of how seriously the older generation takes its responsibility to provide their children with financial knowledge.

The older generation taught the younger generation about the business and financial world. This didn’t mean they were immune to making mistakes; rather they are better equipped than most to deal with the pressures and responsibilities that come with wealth.

On the other hand a child of another media baron didn’t fare so well. Warwick Fairfax (part of the Fairfax dynasty) at the ripe young age of 27, tried to privatise his family’s media company in 1987 – this is an extract from Wikipedia:

‘Educated at Oxford and Harvard, he successfully took over the company but on 10 December 1990 the company collapsed and a receiver was appointed. The controversial method of financing and purchasing holdings of the established company from family members and the consequential problems arising in the media group in later years are still cited today in Australian media history.‘

Young Warwick had a blue blood pedigree and formal education to match, but lacked the practical know how. He went to play in a media sandpit that at the time was occupied by Packer, Murdoch, Kerry Stokes etc. He was clearly out of his depth and paid a hefty price.

In her book Fairfax: The Rise and Fall, author Colleen Ryan wrote this about young Warwick’s failed venture:

‘It was a disastrous plan. Warwick would take just three years to blow his inheritance, and banish the family from the empire they had ruled since 1841. In the immediate aftermath of the debacle, Lady Mary (Fairfax) would tell the SMH [Sydney Morning Herald] that her son “had no idea what he was doing”.‘

Here was someone born into money, with the best education money could buy, and yet he couldn’t succeed. So you can appreciate just how difficult it is for the average person to manage wealth.

According to some studies on intergenerational wealth, approximately 60% of family wealth failures stem from poor communication and lack of trust. Inadequate preparation of heirs accounted for another 25% of failures – young Warwick belongs in this category.

The family wealth is lost to other parties – lawyers, business people adept at parting a fool and their money, ‘fair weather’ friends etc.

Practical education on how markets function, budgeting, risk management, sound business principles, asset protection and legal tax minimisation strategies are essential to building, maintaining and advancing family wealth.

No one can learn this overnight.

The Key Ingredient for Family Wealth

When weighing up the challenges of managing your Family Wealth project, it’s worth remembering Waite Phillips’ saying: ‘Nothing worthwhile was ever accomplished without the will to start, the enthusiasm to continue and, regardless of temporary obstacles, the persistence to complete.‘

If there is one key ingredient to the success or failure of Family Wealth it’s communication. The importance of having the ability to sit down and talk with your family about the following issues cannot be overstated:

• the lessons you have learned
• the mistakes (and these are equally as important as the successes) you have made
• how you approach the management of your financial situation
• your estate planning decisions (especially if there are any contentious ones)
• the people you have learned to trust for guidance

Irrespective of the amount involved, it’s absolutely critical you engage your family members in the discussion. From my personal experience you will be surprised what they absorb – the things my daughters now repeat back to me and my observation of the way they handle their finances tells me all those chats around the dinner table must have had some influence on them.

Communication and learning is a two way street. Sometimes the feedback will surprise you. The veracity of your opinions will be tested and you will be sent in search for answers. This is healthy, as no one is the font of all knowledge.

Financial illiteracy is a major reason behind so many lost fortunes.

To minimise the prospect of you and your family becoming another one of the sad statistics, follow the example of financially successful families – commit to acquiring knowledge and sharing it with those you love.

On a personal note, I wonder if Kerry Packer had mentored Warwick Fairfax, would the outcome have been different. My gut feeling is it would have been.

Quality knowledge leads to quality outcomes.

Vern Gowdie+
Editor, Gowdie Family Wealth

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From the Archives…

Why Risky Stocks are Best in Risky Markets
23-08-2013 –  Kris Sayce

Why Al Gore Won’t Like Big Data
22-08-2013 –  Kris Sayce

Debt and the the Patient Investor
21-08-2013 – Vern Gowdie

How to Apply Reynold’s Law to Your Retirement Savings
20-08-2013 – Nick Hubble

Holding Cash is an Investment Strategy Too
19-08-2013 – Vern Gowdie

Article by Investazor.com

Due to exports, the trade balanced managed to reduce by 0.8% and the American GDP grew by 2.5% from the last quarter’s report of 1.7% improvement. The most important fields of the U.S. economy, the labor market and the housing market, are showing a recovery, making the FOMC’s decision on September more evident. The unemployment claims (331k) are still on a descending trend, even if not far from the last release. Today the U.S. dollar appreciated against euro, as the economy proved to remain on track.

Also today, Federal Reserve Bank of Richmond President Jeffrey Lacker emphasized the idea that central banks from all over the world will be defined by their power as lenders. Although lending should be wisely spread over the sectors of the economy, central banks should also be careful not to use this tool incorrectly (currently, in order to maintained the financial stability, central banks are entitle to use all tools they have in their portfolio). As it concerns the future presidency of Fed, Janet Yellen seems to remain the favorite candidate to replace Ben Bernanke in January, after winning the backing of U.S. labor leaders. She is known as a supporter of the current QE program. Chances are that the monetary stimulus will stay in place, or at least will be an available alternative, until the labor market will recover completely.

The post United States Closer To Taper QE3 appeared first on investazor.com.

Article by Investazor.com

Last week the Euro has reached a top at 1.3450, but it did not remain to long there because the US dollar started to recover. This week started with a consolidation around 1.3400. When the problems in Syria started and the US rushed with their affirmations to blame the Assad government the risk aversion was established among investors.

If a war is to be occurred the safe heavens would start to appreciate and also the price of oil to rally. This time it took only some press declaration for the safe heavens to start appreciation. The Japanese yen reached monthly highs and also the US dollar started to gain in front of his counterparts. Today the conflict in Syria came second after the release of the United States GDP. It was expected an economic growth of 2.2%, but the official number was actually a 2.5% rise.

Chart: EURUSD, Daily

The publication of the GDP triggered new buys for the US dollar so the EURUSD drop under 1.3250 support and reached 1.3200. Here, Euro has found some buyers, but the drop might not be finished yet. We are expecting a short drop under 1.3180 before another correction, as you can see on the chart. There is a possibility for the buyers to hold on at 1.32, if this would be the case, then we could expect a rally back to 1.3400.

The post EURUSD Daily Technical Perspective after GDP Release appeared first on investazor.com.

Source: Peter Byrne of The Life Sciences Report (8/29/13)

http://www.thelifesciencesreport.com/pub/na/biotech-investor-realism-with-andrew-fein

Expert healthcare company watcher Andrew Fein of H.C. Wainwright & Co. knows how the sausage is made in the stock analyst factory. And he doesn’t pull any punches: In this interview with The Life Sciences Report, Fein dishes out praise for sticking to sellside fundamentals and suggests skimming off bloggers who have yet to earn their analytical chops. He rounds out the menu by naming biotech companies with the potential to rise to the top of the simmering biotech market.

The Life Sciences Report: How has the nature of biotech investing changed since you began analyzing healthcare biotech equities in 2000?

Andrew Fein: Clearly, the web as a source of “investment analytics” is a new paradigm. With so much collectively generated information available on the web, investors are forgetting to analyze individual data points, such as talking directly to physicians and medical experts. Folks who write opinionated investment blogs and emit endless Twitter streams are disproportionately influencing the movement of stocks outside of the traditional analytical Wall Street paradigm. There is always room for new and thoughtful analysis, but it is troubling when the background of the source of what is promoted as important information is unclear. And, unfortunately, hidden biases and agendas often influence the opinion of the non-traditional analyst—such as trying to pump up his or her book.

TLSR: How can investors distinguish between the professional abilities of competing analysts?

AF: When I started in this game, the folks who held senior spots at the big banks were legendary analysts with tremendous tenure and gravitas. The overall experience level at the biggest banks has contracted during the past few years, as sellside analysts have retired or migrated to the buyside or to industry. The interesting upshot of this phenomenon is that there is now an opportunity to take advantage of the online information disconnect by sticking to traditional analytical fundamentals.

Judging the true capability of an analyst goes beyond whether he or she has a track record of being directionally right, because the froth of both bull and bear market analytics can hide a lot of sloppy research. It is easy to look like a seer in a bull market, and it is not hard for a cynic to look correct in a bear market. But it is not just the directional movement of the stock that matters: It is the depth of the underlying research that separates out the best analysts. I listen to bank analysts with a good track record and a history of doing highbrow, thoughtful research with quality quotients based on market fundamentals. Thorough diligence will always drive the day.

TLSR: How does following the fundamentals play out in practice?

AF: The fundamentals include speaking directly with physicians and people in the industry, doing surveys and intermingling with folks at various scientific conferences—especially the one-off meetings, not just the ones with hundreds of people in attendance, like the annual American Society of Clinical Oncology (ASCO) conference. The information garnered at a large conference is not very proprietary, but when I go to the random European medical conference, with not a lot of people milling about schmoozing, I can find proprietary information. The lesser-known gatherings are where an analyst really gets a chance to stress test a thesis by talking to experts and thinking about things in a different light.

And a good analyst will not only cover smaller companies. Analytical chops are earned by making excellent research calls on stocks that are large enough and liquid enough to matter to the big institutions. Alternatively, if the analyst just covers the large names, his or her clients will miss out on a lot of the great, disruptive science happening at the smaller companies. To gain a thorough understanding of the therapeutic landscape, a healthcare analyst must cover companies across the market cap spectrum, in my opinion.

TLSR: Will a good analyst say when it is time to sell?

AF: If an analyst uses a structured valuation methodology and a company hits its price target, it only makes sense to reduce exposure to the name and take the profits—unless there is a material event or catalyst that causes the analyst to readjust the probability of continued success.

TLSR: Will we return to the glory days of biotech IPOs?

AF: The overall quality of the IPO group this year has been quite good. The closed IPO window of the past several years has allowed the various technologies housed within private companies to mature. We are seeing a macro shift toward the orphan disease space, which is very investor-friendly because it shortens the regulatory timeline. It is certainly more reasonable for a small company to focus on an orphan disease than to go into products that require command of a larger resource base, such as addressing psoriasis, rheumatoid arthritis or cardiovascular disease.

TLSR: Where do small biotechs access capital these days?

AF: The financing market is quite friendly toward both large and small biotechs. The biotech market is, in fact, hot, and we are seeing more generalists’ money flow into it. There is no shortage of capital. This is very different from 2008, when companies simply could not access capital.

But it is not a free-for-all. Firms must still validate claims with data. And small companies that were around before the crash may need to redefine themselves—sometimes a company needs a second baptism to get back onto the radar screens of analysts. They need to reintroduce themselves and let investors know how their pipelines have advanced and, especially, how they have rebranded preexisting programs as new constructs that are better suited to the newest technologies.

TLSR: What about licensing deals?

AF: A small biotech company will get much better terms from a potential partner if it takes enough money from the investment community to allow its science to mature and to accumulate the validating data it will need to engage potential partners. Historically, some companies were so desirous of gaining the perceived validation that comes from larger pharma or larger biotech partners that they gave up a lot on the backend, which ended up hurting them down the road.

Pharma does not have a lot of risk tolerance. The majors are highly interested in disruptive science, but they require solid validation of the scientific approach before they’re willing to go in whole hog. Pharma is valuation-sensitive and not willing to chase stocks or partners at any price.

TLSR: What biotech stocks are good values today?

AF: On the large-cap side, we like United Therapeutics Corp. (UTHR:NASDAQ) and Vertex Pharmaceuticals Inc. (VRTX:NASDAQ). United Therapeutics, in particular, has fallen out of favor somewhat, especially relative to the level of investor interest in the name 5–6 years back. Institutional holders have shifted from a largely biotech specialist group to a mix of value and generalist stocks. The upshot is that incremental buying on the part of healthcare specialists, as they reengage with the name, ought to have a very positive impact on United Therapeutics’ share price.

As for Vertex, as we get closer to the 2014 data readout in the company’s ongoing combination study of ivacaftor + VX-809 in cystic fibrosis (CF), investors will start to realize that Vertex’s study is extraordinarily overpowered and that the product’s probability of success is really high. Given that this will be the first corrector-potentiator combination available in the cystic fibrosis market, Vertex is going to define its own level of clinical significance.

What I do expect, though, is increased focus on the secondary endpoints (such as weight gain) as we get closer to the time of data readout. This could prove fodder for shorts, as we have not seen enough data to support secondary endpoint improvements. Nonetheless, it will simply be noise, as a statistically significant improvement in the study’s primary endpoint (relative improvement in lung function; forced expiratory volume in one second [FEV1]) ought to lead to approval.

TLSR: What is overpowered about the Vertex study?

AF: Vertex is a rock star within the cystic fibrosis patient community. A simple perusing of the various cystic fibrosis patient blogs readily drives home this point. The VX-809 phase 3 studies are powered at 90% to detect a 5% difference in relative FEV1 improvement. Given that just about every cystic fibrosis patient wants to be involved with its state-of-the-art clinical study, the company is able to enroll the ideal patients, those with forced expiratory volume predicted in the range of 40–90%. Patients in that range at baseline are best suited to demonstrate small changes in lung capacity. The company’s positive perception within the CF community should also yield “flash” over-enrollment in the study, shortening the study’s timeline and padding its statistical buffer.

Then the question becomes: Are the results clinically significant or statistically significant? We believe the statistical significance bar will likely be regarded as a substitute for clinical significance, given the absence of a gold standard for clinically significant benefit in CF. Upon approval, we think even a modestly efficacious drug will become a significant commercial success.

TLSR: Does United Therapeutics have something similar going on?

AF: The big question mark with United Therapeutics is the degree to which it will be impacted by patent expirations. It holds a greatly underappreciated patent through 2029, which means that there is overlooked inherent value in United Therapeutics.

TLSR: What is that patent?

AF: United Therapeutics has a patent on the diluent used with Remodulin (treprostinil), one of its pulmonary arterial hypertension (PAH) therapies. Several years back some patients developed sepsis while using intravenous Remodulin, and to address that issue, United Therapeutics developed a new diluent with a higher pH for use with intravenous Remodulin. The company patented the diluent very smartly. The legal result is that even if a generic version of Remodulin is introduced, it cannot be introduced with the new diluent. A patient using the generic will likely feel the psychological threat of being at an increased risk for sepsis infection—a threat that could be niftily avoided by using the branded product with the branded diluent.

Remember too that physicians are, by nature, risk adverse, and unlikely to switch a patient’s treatment regimen if it is producing results, particularly in a complex disease like PAH. Additionally, United Therapeutics has strong physician advocates in the U.S., and we believe their long-standing relationships with the company will lead, at most, to a slow phasing-in of any generic into their clinical practice. Last, if United Therapeutics is successfully able to introduce implantable pump delivery, the company may maintain patients on Remodulin for the long term.

TLSR: Do you have any companies in the mid-cap arena, around $450 million ($450M)?

AF: Kamada Ltd. (KMDA:NASDAQ) is a relatively unknown Israeli company that is doing very well. It is listed on the Tel Aviv Stock Exchange and the NASDAQ. It has an intravenous form of a drug for alpha-1 antitrypsin (AAT) deficiency, which causes lung and liver disease, that is partnered with Baxter International Inc. (BAX:NYSE).

With $74M/year in revenue expected in 2013 (per company guidance), Kamada’s earnings before interest, taxes, depreciation and amortization (EBITDA) are positive, which is extremely rare for a small biotech. It also owns 100% of the rights to an inhaled formulation of its AAT therapy coming down the pike. The phase 3 study in Europe for the inhaled formulation should read out in January 2014. If the data are positive, the situation should mirror what happened after United Therapeutics introduced inhaled Remodulin, which did not cannibalize sales of intravenous Remodulin. The inhaled product grew the overall market size, because patients who were not on the intravenous therapy of necessity now had a more user-friendly therapy available to them. I think the same is likely to happen in the AAT deficiency space.

TLSR: What are the advantages of Kamada’s inhaled therapy?

AF: It is easy to use in the home—a patient takes a twice-daily inhalation with a portable nebulizer, so he or she is not tethered to an IV once a week. Much like the business model for United Therapeutics, Kamada is extraordinarily leveraged. The selling, general and administrative spend required is extremely low. The company could easily be earning in excess of $7/share by 2020 if the inhalation therapy study is successful.

TLSR: Is there a target price?

AF: We have a $17 target price on Kamada.

TLSR: How about mid caps or large caps in the weight-loss space?

AF: I harbor some concern about the current product lines of a number of the obesity names. It is hard to see patients lining up for some of these weight-loss products when the side effects are so annoying. Dry mouth, for example, does not seem particularly scary when listed as a side effect on a chart, but it is awful to live with on a daily basis. And the user who is not committed to the daily intake of these medications will not experience the promised weight loss.

The bottom line is that these are just not great drugs as a class. At the end of the day, the marketing spend required in the current obesity space is extremely high. I do not see any material event coming that will fundamentally alter the revenue course in that class of drugs. The obesity space, with the currently marketed therapies, may be fundamentally broken. Of the group, one can highlight Orexigen Therapeutics Inc. (OREX:NASDAQ) as having an investable catalyst ahead, but its longer-term prospects are unlikely to differ from those of the other companies in the space.

Looking forward, there are two private companies, Zafgen Inc., and Rhythm Pharmaceuticals that have very interesting data on new drugs that could be game changers in the obesity space. Keep your eyes on them.

TLSR: What about the small caps?

AF: Synthetic Biologics Inc. (SYN:NYSE.MKT) should be partnering its multiple sclerosis program soon. That ought to free up enough capital for the firm to focus exclusively on the anti-infective space and, most notably, on its Clostridium difficile (C. difficile) program. The preclinical data for a trial is early at this point, but the scientific rationale makes a lot of sense. And the company has a very solid management team.

TLSR: What is the scientific rationale?

AF: Rather than treat C. difficile after it occurs, Synthetic’s approach treats it prophylactically. The company’s drug (SYN-004) is a second-generation beta-lactamase enzyme developed to preserve gastrointestinal microflora and prevent opportunistic C. difficile infection, which is a growing problem in healthcare facilities and has overtaken methicillin-resistant staphylococcus aureus (MRSA) as the most frequent hospital-acquired infection. Given the wave of consolidation and investor interest in the anti-infective space, Synthetic’s stock could do well.

TLSR: Any more names in the small-cap space?

AF: NeoStem Inc. (NBS:NYSE.MKT) and CytRx Corp. (CYTR:NASDAQ) are examples of stocks that investors need to get reacquainted with. Both stocks have been around for a while, as have the management teams.

NeoStem is slated to have data readout next year, which ought to validate its stem cell-based treatment for heart disease. The company’s lead therapy, AMR-001, is an autologous bone marrow enrichment of two cell types, and is in a phase 2 study called PreSERVE for ST-segment elevation acute myocardial infarction (STEMI). Enrollment in the study is on track to complete by year-end 2013, and we should get phase 2 data by the second quarter of next year. We believe the study is well powered to show a meaningful benefit in therapy.

CytRx has had a few interesting data points of late. In mouse models in the treatment of glioblastoma, the company has shown that its new drug, aldoxorubicin, can cross the blood-brain barrier. Doxorubicin, which is used in the treatment of a variety of cancers, is not able to cross that barrier. Additionally, by year-end, we should get phase 2b study results from a head-to-head comparison of aldoxorubicin and doxorubicin in treatment-naïve soft tissue sarcoma. We believe results from this study will be positive and ignite investor interest in CytRx.

TLSR: Anything in the cancer treatment space?

AF: CEL-SCI Corp. (CVM:NASDAQ), which targets cancers and other diseases with immunotherapies, is in a very large, phase 3 study with its Multikine (leukocyte interleukin injection) program in head-and-neck cancer, but we do not know when we will get the data. The company needs to create news flow and investment catalysts, which it is not currently generating from the Multikine program. Stay tuned.

TLSR: Any final thoughts?

AF: It has been a great time for biotech. The macro indicators suggest that the ride will not end any time soon.

TLSR: Thanks, Andrew.

AF: My pleasure.

In May 2013, Andrew Fein joined H.C. Wainwright & Co. as managing director and senior biotechnology analyst to cover companies in the biotechnology and life sciences sectors. He has 13 years of experience in healthcare and biotechnology equity research. He was previously a senior analyst at Chardan Capital Markets and held prior research positions at Jefferies & Co., Piper Jaffrey, Collins Stewart, Leerink Swann LLC and J.P. Morgan.

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DISCLOSURE:

1) Peter Byrne conducted this interview for The Life Sciences Report and provides services to The Life Sciences Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Synthetic Biologics Inc., CytRx Corp., NeoStem Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Andrew Fein: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: CytRx Corp. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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By www.CentralBankNews.info     Moldova’s central bank held its basic rate steady at 3.5 percent for the fifth month in a row, along with its other main rates, the rate on overnight deposits and the overnight lending rate, at 0.5 percent and 6.5 percent, respectively.
    The National Bank of Moldova last cut its rate in April by 100 basis points.
    Last month the central bank said the main risks is was facing were from deflation from Europe, Russia and international food prices while inflationary pressures could arise from a recovery in domestic demand and higher oil prices.
    Moldova’s inflation rate eased to 4.3 percent in July from 5.5 percent in June, in line with the bank’s forecast for this year. In 2014 inflation is forecast at 3.8 percent, below the bank’s 5.0 percent target.
    Moldova’s Gross Domestic Product expanded by an annual 3.5 percent in the first quarter, up from a 2.5 percent contraction in the previous quarter.

    www.CentralBankNews.info

By www.CentralBankNews.info     Fiji’s central bank kept its Overnight Policy Rate (OPR) steady at 0.5 percent, saying the current accommodative policy stance remains appropriate to support domestic growth given the “comfortable outlook for foreign reserves and inflation.”
    The Reserve Bank of Fiji, which has maintained its rate since December 2011, said Fiji’s economy had shown great resilience so far and was forecast to expand by 3.2 percent this year on the back of strong domestic consumption and investment.
    Earlier this month, the central bank revised upward its 2013 growth forecast to 3.2 percent from 2.7 percent in the national budget, compared with 2012’s estimated 2.2 percent growth. If the forecast rate is achieved, it will be the strongest growth rate since 2004.
    Growth in 2014 and 2015 is forecast at 2.5 percent and 2.4 percent, respectively.
    The central bank’s mid-year survey showed improvements in business and investor confidence and indicates continued robust economic activity well into next year while the financial system remains “awash with liquidity” and lending rates are low, providing further impetus for economic activity.
    The central bank noted that its twin objectives remained intact, with July’s inflation rate rising to 1.9 percent in July from 1.5 percent in June, and foreign reserves of around $1.834 billion, sufficient for 5.1 months of imports.
   
    www.CentralBankNews.info

By The Sizemore Letter

Every portfolio needs an allocation to real estate.  It is an income-producing asset class with a strong built-in inflation hedge and favorable tax treatment.  And at a time when paper profits can be fleeting, real property can offer a stable store of value. What more can you ask for in an investment?

But investors who focus exclusively on U.S. REITs are missing out on a world of potential opportunities.

In my last article on international real estate investing, I gave the rundown on British REITs.   Today, we’re going to move further east.

Outside of the United States and Britain, the largest and most liquid REIT stocks are in Japan, Hong Kong, Singapore, and Australia.

We’ll start with Japan’s largest property developer, Mitsubishi Estate (Japan: 8802, OTC:MITEY).  Mitsubishi Estate is not a REIT, per se, though it does act as an asset manager for Japanese REITs (“J-REITS”), and its size and importance to the Japanese real estate market make a mention of it unavoidable.  (On a side note, Mitsubishi gained notoriety by buying the Rockefeller Center in New York in 1989.)

If you are a believer in Abenomics—or believe that Japanese inflation is right around the corner—then Mitsubishi is an attractive option.  But I would tread carefully here.  The stock pays virtually nothing in dividends, and given the debt and demographic issues the country faces, I can think of a lot of other assets I would prefer to own than Japanese real estate.  At the risk of being overly simplistic, a shrinking Japanese population means less demand for residential, retail, and office properties in the years ahead…which should mean lower rents and higher vacancies for landlords.

Still, if you’re bound and determined to invest in Japanese real estate, the Nippon Building Fund (Japan:8951) offers a respectable dividend yield at 3.01%, has a reasonably large market cap at nearly $8 billion, and has better liquidity that most J-REITs.

Moving on to more promising countries, let’s take a look at Hong Kong and Singapore.

I’ll start with The Link REIT (Hong Kong: 823, OTC:LKREF), the first Hong-Kong-listed REIT and one of the largest in the world by market cap.  The Link’s property empire boasts 11 million square feet of retail space and approximately 80,000 garage parking spaces.  This is a veritable Hong Kong property juggernaut.

Following most income-oriented investments, the Link has had a rough couple of months.  After peaking in July, the REIT shed nearly a quarter of its value in the “taper scare” that followed.   But if you’re broadly bullish about Asia’s prospects and about Hong Kong as one of its premier financial and business centers, then there is a lot to like in the Link.   Shares trade at book value and yield 4.05% in dividends.  And unlike real estate investments in much of the rest of the world, the Link actually grew its dividends throughout the crisis.  The REIT has raised its dividend every year since 2006.

Moving to nearby Singapore, we see much the same story.  Rising bond yields caused an across-the-board sell-off in income stocks such as REITs, many of which now offer very attractive yields.  Take CapitaCommercial Trust (Singapore:C61U, OTC:CMIAF).  Singapore’s first—and largest—publically-traded office REIT sports a dividend yield of 5.96% and trades at a 20% discount to book value.

CapitaCommercial invests primarily in office buildings, which took a beating during the global financial crisis.  But with Singapore’s supply of quality office space starting to get tight, rents are expected to rise significantly over the next few years.  And importantly, the REIT was able to maintain and raise its dividend throughout the hard times.  Of all the REITs discussed in this article so far, I consider CapitaCommerical Trust to be the most attractive, both as a short-term trade and as a long-term income investment. 

And finally, we get to Australia.  I’m a little wary of investing in Aussie property at this time, as the global commodities boom that has underpinned the country’s prosperity is, in all likelihood, dead for the foreseeable future.  After more than a decade of solid gains, I expect the Aussie dollar to drift lower in the years ahead, which will eat into any would-be capital gains and dividends for foreign investors.

I’m not a doom-and-gloomer, and I’m not expecting a major crash in Australia.  In fact, I’m actually very impressed with the country’s fiscal management.  Virtually alone in the developed world, Australia has no sovereign debt problem.  At just 29% of GDP, Australia’s debts are about one third of the American and European average and one eighth of Japan’s gargantuan debt load.  This is a country with its fiscal house in order.

Unfortunately, it’s also a country with some of the world’s most unaffordable housing, raising the possibility of a broad-based housing crash that would weaken Australia’s banking sector.

If you’re dead set on buying Aussie real estate, I would go for a diversified option like Stockland (Australia:SGP, OTC:STKAF), Australia’s largest and most diversified REIT.  The company develops and manages retail centers, residential communities and office and industrial properties.

Stockland trades at a slight premium to book value and pays a 6.45% dividend.

NOTE: Most of the securities covered here trade in the U.S. as ADRs, and I included the ticker symbols to help you identify them.  But if you decide to try your luck on any of these, I recommend you trade the shares in the local market where the liquidity is better.  Most of the ADRs listed in this article are thinly traded and will not be appropriate for most investors.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he had no position in any stock mentioned. Click here to learn about his top 5 global investing trends and get your copy of “The Top 5 Million Dollar Trends of 2013.”

This article first appeared on Sizemore Insights as International REITs: Looking to Asia

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