Smells Like Trouble for Dell; & 4 More Things to Know Today

5 Best Growth Stocks For 2014

Bloomberg via Getty Images • Here's the last thing you want as a feature on your slick new new laptop: the scent of a litter box. Seems a number of Dell (DELL) customers have been complaining that their Latitude 6430u Ultrabooks smell strongly of cat urine. Dell is assuring everyone that the odor is unrelated to pee of any kind, nor was there a biological contaminant involved. Just a problem in the manufacturing process, which it has sorted out. • Speaking of smells, among expats, China now ranks No. 1 for providing the best overseas experience -- its smog and other pollution issues notwithstanding -- according to HSBC's annual Expat Explorer Survey. Countries were ranked based on a variety of categories related to economics, experience and raising children abroad. China jumped from No. 7 last year to knock off 2012 top dog Singapore, which slipped to No. 3. • Thanks to a class-action settlement between video game titan Electronic Arts (EA) and a group of former college football players, we can now put a price tag on our high-caliber college athletes: Somewhere in the neighborhood of $133 to $200 apiece. Based on the $40 million its setting aside to cover the cost of the deal, that's about what EA will be paying each of the 200,000 to 300,000 past and current student-athletes whose likenesses were used without their consent in NCAA Football games by EA Sports. (And yes, after this year, EA will stop making new games in the franchise.) • It's good news, bad news out of Washington. Good news: The federal deficit for 2013 will be the smallest it's been since 2008, according to the Treasury. The $680 billion deficit is less than half of the record high hit in 2009 of $1.4 trillion. Bad news: While about 4/5 of the decline was due to higher revenues from taxes (yay, improving economy!), the rest came from the painful sequester (those across-the-board spending cuts that were designed to be so horrible that they'd force Congress to find a better solution.) And come January, a whole new round of sequester cuts is due to kick in, even more painful than the first batch. • And finally, during Facebook's (FB) earnings call Wednesday afternoon, CEO Mark Zuckerberg revealed two fascinating new projects under way at the social media giant: Artificial Intelligence, and a better speech-recognition product. No word for Zuckerberg about plans to combine the two, but if Facebook learns how to talk to us, and how to think, ... well, let's just hope this version of SkyNet will "friend" us before it conquers the world.

Can Chipotle Mexican Grill See Higher Prices?

With shares of Chipotle Mexican Grill (NYSE:CMG) trading around $378, is CMG 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

Chipotle Mexican Grill operates restaurants throughout the United States, as well as two restaurants in Toronto, Canada and two in London, England. The company's restaurants serve a menu of burritos, tacos, burrito bowls, and salads. Chipotle Mexican Grill manages its operations and restaurants based on six regions that all report into a single segment. It prides itself in serving the best possible ingredients during a time when consumers are more keen to this detail. The company is well-positioned to see rising profits as consumers become more health conscious and opt for Chipotle Mexican Grill’s food items.

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T = Technicals on the Stock Chart are Strong

Chipotle Mexican Grill stock has formed an explosive move higher over the last several years. Currently, the stock is trading at highs for the year and looks like it wants to test all-time high 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, Chipotle Mexican Grill is trading above its rising key averages which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

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

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Chipotle Mexican Grill Options	23.16%	3%	0%

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

	Put IV Skew	Call IV Skew
June Options	Flat	Average
July 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 low 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 Increasing 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 Chipotle Mexican Grill’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Chipotle Mexican Grill 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)	24.37%	7.75%	19.47%	61.01%
Revenue Growth (Y-O-Y)	13.45%	17.16%	18.36%	20.89%
Earnings Reaction	11.53%	5.72%	-15.01%	-21.51%

Chipotle Mexican Grill has seen increasing earnings and revenue figures over the last four quarters. From these figures, the markets have been pleased with Chipotle Mexican Grill’s recent earnings announcements.

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P = Excellent Relative Performance Versus Peers and Sector

How has Chipotle Mexican Grill stock done relative to its peers, Panera Bread Company (NASDAQ:PNRA), McDonald’s (NYSE:MCD), Jack In The Box (NASDAQ:JACK), and sector?

	Chipotle Mexican Grill	Panera Bread Company	McDonald’s	Jack In The Box	Sector
Year-to-Date Return	26.93%	19.96%	15.13%	27.62%	18.34%

Chipotle Mexican Grill has been a relative performance leader, year-to-date.

Conclusion

Chipotle Mexican Grill provide quick, easy, tasteful, and socially aware food items to consumers worldwide. The stock has seen an excellent run over the last few months and looks like it wants to test all-time high prices. Earnings and revenue figures have been increasing over the last four quarters which has kept investors upbeat. Relative to its peers and sector, Chipotle Mexican Grill has been a year-to-date performance leader. Look for Chipotle Mexican Grill to OUTPERFORM.

Small cap Petmed Express Inc (PETS): The Best Pet Stock? PETM & WOOF

About a week ago, Wall Street was biting small cap pet stock Petmed Express Inc (NASDAQ: PETS) for not living up to its earnings expectations - meaning it might be worth taking a closer look at the stock and compare its performance with other pet stocks like mid cap PetSmart, Inc (NASDAQ: PETM) and small cap VCA Antech Inc (NASDAQ: WOOF). I should also mention that we have recently added Petmed Express to our SmallCap Network Elite Opportunity (SCN EO) portfolio because we think the stock is undervalued in the pet space and has tremendous growth potential moving forward.

What is Petmed Express Inc?

Small cap Petmed Express was founded in 1996 and is America's largest pet pharmacy, delivering prescription and non-prescription pet medications and other health products for dogs and cats at competitive prices direct to the consumer through its 1-800-PetMeds toll free number and on the Internet through its website at www.1800petmeds.com. The company is a licensed pharmacy to dispense prescription medications in all 50 states with over 3,000 SKUs, including a variety of private label products all made in the United States.

For reference, mid cap PetSmart is the largest specialty pet retailer of services and solutions operating around 1,289 stores and more than 196 in-store PetSmart PetsHotels® dog and cat boarding facilities in the United States, Canada and Puerto Rico while small cap VCA Antech is the leading provider of pet health care services in the country with a nationwide clinical laboratory system and over 600 free-standing animal hospitals in 41 US states and Canada.

What You Need to Know About Petmed Express Inc

A look at Petmed Express' investor relations website reveals a letter from the CEO dated June 14th which begins by saying:

Despite fiscal 2013 presenting several challenges - including a manufacturer's suspension of production of several key products, advertising during a presidential election year, unseasonably colder weather, and increased competition - the Company was able to increase gross margins and decrease operational expenses to improve our bottom line results.

On Monday of last week, Petmed Express reported that revenue rose 4% to $60.5 million while net income climbed 5% to $4.2 million thanks to reorders (which rose 5% to $48.9 million), higher online sales (which rose 7% to $47.9 million) and lower operating expenses (which declined from $13 million to $12.7 million mostly on lower advertising expenses). Average order size also rose slightly from $72 a year earlier to $73 but EPS came in at $0.21 when expectations were $0.22 with the rising cost of medicine apparently being to blamed.

Nevertheless, it should be remembered that Petmed Express soared by a double digit amount after it announced earnings in July when it reported a solid trend of new customer and average order growth. That could mean last quarter's slight disappointment on EPS could be just a fluke – especially when you consider how many Americans (perhaps as many as two-thirds of households) own a pet.

Otherwise and back in July, it should be mentioned that Petmed Express raised its dividend to 17 cents from 15 cents. This gives the stock a forward dividend of $0.68 and a yield of 4.60, but this is also on a rather high and probably not sustainable payout ratio of 178%.

Share Performance & Valuation: Petmed Express Inc vs. PETM & WOOF

On Monday, small cap Petmed Express fell 0.94% to $14.70 (PETS has a 52 week trading range of $10.00 to $17.75 a share) for a market cap of $296.86 million plus the stock is up 35.5% since the start of the year, up 36.7% over the past year and down 10.2% over the past five years. Here is a look at the performance of Petmed Express verses pet stocks PetSmart and VCA Antech:

As you can see from the above chart, PetSmart has been the best performer since the financial crisis followed by VCA Antech with Petmed Express trailing both.

Here is a look at the most recent technical charts for all three pet stocks:

Finally and according to Yahoo! Finance data, Petmed Express has a trailing P/E of 16.33 and a forward P/E of 15.64; PetSmart has a trailing P/E of 19.04 and a forward P/E of 16.24; and VCA Antech has a trailing P/E of 47.93 and a forward P/E of 15.98.

The Bottom Line. Again, small cap Petmed Express's recent earnings "miss" was small and it just might be worth taking a closer look at verses other pet stocks like PetSmart and VCA Antech.

SmallCap Network Elite Opportunity (SCN EO) has an open position in PETS. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.

Apple Q4 Earnings Live Blog Recap

 

NEW YORK (TheStreet) -- Apple (AAPL) reported fourth-quarter earnings after the close, and all eyes were on guidance, as the tech giant gets set for the holiday season.

Cupertino, Calif.-based Apple reported net income of $8.26 per share on $37.5 billion in revenue as iPhone sales topped 33.8 million during the quarter compared to 26.9 million in the same period a year earlier. The company also sold 14.1 million iPads and 4.6 million Macs during the quarter. Gross margin for the quarter was 37%. Analysts surveyed by Thomson
Reuters are looking for Apple to earn $7.96 a share on $36.93 billion in revenue for the fourth quarter.

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Gross margin guidance for the the fiscal first-quarter was a concern, but Apple did its best to alleviate those concerns on the conference call. CFO Peter Oppenehimer said the gross margin guidance, which is between 36.5% and 37.5%, would be higher if it were not for $900 million in deferred revenue for the quarter, due largely to Apple now giving away software, including Mac OS X Maverick, iLife, iPhoto and iWork.

For the holiday shopping season, Apple expects to generate between $55 and $58 billion in revenue, with gross margins between 36.5% and 37.5%. It expects operating expenses to be between $4.4 and $4.5 billion. Analysts surveyed by Thomson Reuters are looking for Apple to generate $13.81 a share in earnings on $55.7 billion in revenue for its fiscal first quarter. Shares of Apple fluctuated between losses and gains in the after-hours session, recently trading lower by 0.26% to $528.49.

--Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia

Treasuries Risk Shown as Fed Distorts Stocks Correlation

U.S. government bonds are acting more like equities than any time since before the credit crisis, making Treasuries a hidden risk to investors becalmed by the prospect of the Federal Reserve prolonging stimulus into 2014.

Ten-year Treasuries are moving 0.024 percent for every one-percent change in the Standard & Poor's 500 Index (SPX) in the same direction, the first time that's happened since July 2007, based on a risk measure known as beta. Prior to this month, the gauge averaged minus 0.12 over the past decade, meaning that bonds have historically moved in the opposite direction.

Treasuries are rising along with stocks as economists say the Fed will keep suppressing borrowing costs to support the world's largest economy after a 16-day government shutdown slowed growth. While government debt was a haven as the U.S. endured the worst recession in seven decades, primary dealers such as Barclays Plc (BARC) and Goldman Sachs Group Inc. say the gains this month show that the Fed's $85 billion of monthly bond purchases are masking the risk of owning fixed-income securities as the recovery in America takes hold.

"Treasuries are just not worth the risk," Thomas Higgins, the Boston-based global macro strategist at Standish Mellon Asset Management Co., which oversees $167 billion of fixed-income investments, said in a telephone interview on Oct. 23. "The economy is certainly not going gangbusters, but the Fed will step away at some point, and that will remove one of the forces of lower yields."

Higgins said Standish Mellon has been reducing its stake in Treasuries this month and plans to keep selling as long as yields on 10-year notes, which fell to a three-month low of 2.46 percent last week, remain below 3 percent.

Bond Buying

The gains in Treasuries in the past month, which pushed down yields on 10-year securities from the highest in two years of 3 percent on Sept. 6, upended the traditional relationship with stocks. On Oct. 16, the day U.S. lawmakers reached an agreement to end the shutdown, the beta for government debt on a total-return basis relative to the S&P 500 turned positive, based on the 26-week moving average compiled by Bloomberg.

While the shutdown restored confidence among debt investors and prompted economists in a Bloomberg survey on Oct. 17-18 to predict the Fed will keep buying $45 billion of Treasuries and $40 billion of mortgage-backed securities each month for at least five more months to buffer the economy, the perils of lending to the U.S. have also increased in the bond market.

Since mid-2008, the amount of outstanding U.S. debt has more than doubled to an unprecedented $11.6 trillion as the government increased borrowing to finance deficits and mitigate the fallout from the financial crisis.

Loss Potential

Potential losses due to rising yields on the longest-dated Treasuries are now approaching the highest level since at least 1996, Bank of America Merrill Lynch indexes show.

The gauge known as duration, which calculates how much prices change when yields rise or fall, for Treasuries due in 10 years or more has climbed to 16.03, within 3.6 percent of the all-time high of 16.6 in May. The reading is about 50 percent higher than the average during the decade before the Fed began its so-called quantitative easing in 2008.

Investors buying Treasuries today face a loss of 2.1 percent if yields for the 10-year notes increase to 2.8 percent by year-end, the median yield estimate from 65 forecasters in a Bloomberg survey. That would deepen this year's losses of 4.5 percent, based on index (BFCIUS) data compiled by Bank of America.

In the past quarter-century, the debt securities have posted annual losses on just three occasions -- in 2009, 1999 and 1994 -- and returned 57 percent in the past five years. That's more than six times the 8.6 percent gain for the S&P 500 over the same span, data compiled by Bloomberg show.

Not Easy

"It's not as easy as it was to own Treasuries," Christopher Sullivan, who oversees $2.2 billion as chief investment officer at United Nations Federal Credit Union in New York, said in a telephone interview. "Over the longer term there is less upside and a lot of risk to go along with that."

Treasuries rose last week, with 10-year yields falling seven basis points, or 0.07 percentage point, to 2.51 percent, according to Bloomberg Bond Trader prices. The 10-year yield was 2.52 percent today as of 1:47 p.m. in Tokyo.

It's premature to assume that yields are bound to increase after reports last week signaled the U.S. economy still needs the Fed's support to ensure its recovery, said Jack McIntyre, a Philadelphia-based money manager at Brandywine Global Investment Management LLC, which oversees $44.5 billion.

Uncertain Landscape

Payrolls rose by 148,000 in September, versus the median forecast for an 180,000 gain by 93 economists in a Bloomberg News survey. The data indicated the economy lost momentum leading up to the government shutdown, which S&P estimates shaved at least 0.6 percent off fourth-quarter growth.

U.S. consumer confidence sank to an eight-month low in the week ended Oct. 20, while more households were pessimistic about the economy than at any time in the past year, according to the Bloomberg Consumer Comfort Index.

"The economic landscape is uncertain at best," McIntyre said in a telephone interview on Oct. 24. "There is still room for Treasury yields to move lower."

Bill Gross, the co-chief investment officer at Pacific Investment Management Co., the world's largest bond fund manager, predicts that 10-year Treasury yields will remain close to 2.5 percent. Policy makers are scheduled to meet Oct. 29-30 to consider whether to slow its bond buying.

The Fed "probably won't be tapering anytime soon," Gross said on Oct. 22 in a Bloomberg Radio interview from Newport Beach, California, where Pimco is based.

Market Complacency

Price swings of Treasuries indicate most bondholders aren't anticipating a sudden jump in borrowing costs. The implied volatility for U.S. government bonds as measured by the Bank of America Merrill Lynch MOVE index has fallen 45 percent in the past month to the lowest since May, when fluctuations were the least since data began 25 years ago.

The diminished volatility is a warning to Michael Gavin, a New York-based market strategist at Barclays, because it underscores the complacency that's pervaded the debt markets as the Fed flooded the economy with cheap money.

Ten-year Treasuries are at their most expensive in four months based its so-called term premium, a valuation model used by the Fed that is calculated by using interest-rate expectations, economic growth and inflation. The gauge, which indicates a security is overvalued when its reading is below 0.4 percent, was 0.14 percent for 10-year notes.

Not Safe

"Bonds are increasingly shifting from risk relievers to securities that add more risk for investors," Gavin, whose firm is one of the 21 primary dealers of U.S. government securities that are obligated to bid at Treasury auctions, said on Oct. 21. "The bond market isn't as safe as it was."

Yields on 10-year Treasuries will increase to 2.75 percent by year-end as the economy regains the momentum it lost because of the government shutdown, Jan Hatzius, the chief economist at New York-based Goldman Sachs, wrote in a report dated Oct. 22.

U.S. gross domestic product will increase by 2.6 percent next year, a full percentage point more than in 2013, based on a Bloomberg survey of 75 economists. By 2015, growth is projected accelerate 3 percent, which would be the fastest in a decade, the polls show.

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Corporate profits for S&P 500 companies have almost doubled since 2008, and earnings in each of the next two years will increase by more than 10 percent, data compiled by Bloomberg show. That's more than twice as much as the 4.8 percent increase that analysts project for 2013.

'Better Opportunities'

Of the 244 companies in the index that have reported third-quarter results, 76 percent posted higher-than-estimated earnings, the data show. While earnings have helped fuel a 23 percent advance in the S&P 500 to a record this year, its price-earnings ratio of 16.7 is still less than the average multiple of 19.3 for the past 15 years.

"Because of the growth outlook there are opportunities that provide compensation plus a margin of safety that Treasuries do not," Jeffrey Schoenfeld, the chief investment officer at Brown Brothers Harriman & Co., which oversees $33 billion, said on Oct. 23. "There are better opportunities than Treasuries right now if you do your homework."

Schoenfeld said the New York-based firm sold of all its holdings of Treasuries and is investing in financial company bonds and inflation-protected securities.

U.S. government debt has already lost some of its appeal among foreign investors. They were net sellers of Treasuries for five-straight months ended August, disposing of $133 billion in that span, last week's Treasury data showed.

Latent Risk

The streak is the longest since 2001 as China, the largest overseas U.S. creditor, reduced its holdings to $1.268 trillion, the least since February.

The last time Treasuries moved as closely with equities was in 2007, the year before the collapse of the housing market sparked the deepest U.S. contraction since the Great Depression.

Treasuries soared and stocks plummeted the following year as the risk relationship between the two assets was restored. With the economy recovering from the depths of that recession, Treasuries may be more vulnerable to a selloff this time.

When Fed Chairman Ben S. Bernanke signaled in May that the central bank could taper its stimulus in "the next few meetings" if the U.S. posts sustained growth, Treasuries swooned and caused yields on the 10-year notes to surge by more than a percentage point in 3 1/2 months.

"The interest-rate risk is significant for Treasuries at these low yield levels," Zach Pandl, a Minneapolis-based senior interest-rate strategist at Columbia Management Investment Advisers, which oversees $340 billion, said in a telephone interview. "It doesn't take much. We've already had a reminder of how violent things can get this year."

How do investors benchmark their bond funds?

A: There are two way to look at it. One is that when you invest in a bond fund the worst thing you should do is to look at historical return because these return already come in and they is no guarantee that this fund will deliver similar kind of return. Unlike equity, in a bond you need to look at simple thing that what is the current portfolio maturity and what is the current portfolio yield and if you invest in that product and have that kind of maturity yield and if you stay invested in that fund for that period then yield minus expenses you are going to get it.

If you look at liquid right now, liquid fund have a 60 days maturity, current portfolio yield is 10 percent plus, 25 bps expenses, you are going to get 9.75 to 10 percent for next 60 days. Similarly if you look at accrual products, which are one year plus kind of products where current yield is anything between 11 to 11.5 and 12 percent. You take 1.5 percent expenses, 10 percent plus kind of return you get, suppose you stay invested for one year period, so that is a way one need to look at.

Technically I can answer you that it has to be benchmark against the bond index and all that which for a normal investor doesn't matter. I think the real benchmark for a bond is to look at company FDs. If you have one year company FD, if you have three year company FD and you have product which is one year maturity or three year maturity then that product yield to maturity (YTM) has to be higher than the bank deposit.

Best Buy Can't Save Microsoft Now

Microsoft (NASDAQ: MSFT  ) is starting to open stores inside hundreds of Best Buy (NYSE: BBY  ) locations, but it won't be enough to save the Surface RT tablet. 

In this video, longtime Fool contributor Rick Munarriz explains why Microsoft's pricing strategy on the poorly received tablet isn't going to be helped by greater exposure.

Best Buy and Microsoft can't beat this thinking investor's mobile play
Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it. But it stands to reap massive profits no matter who ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further."

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Who will be the world’s first trillionaire?

One trillion is huge. It's so hard to comprehend that 79% of Americans don't know how many millions are in a trillion. (It's one million times one million.)

But Credit Suisse's annual Global Wealth Report reported something astounding this week: "Two generations ahead, future extrapolation of current wealth growth rates yields almost a billion millionaires, equivalent to 20% of the total adult population. If this scenario unfolds, then billionaires will be commonplace, and there is likely to be a few trillionaires too -- eleven according to our best estimate."

Eleven people worth a trillion dollars. Each.

Crazy, right? It might even sound implausible without hyperinflation.

But look at past trends of billionaire growth, and it makes sense.

J. Paul Getty was widely believed to be the richest man in the world when he died in 1976, worth about $2 billion. Today, Bill Gates is the world's richest citizen, worth $73 billion.

So, in the 37 years from 1976 to 2013, the wealth of the world's richest person grew 36.5-times over, or 10.2% per year.

If the world's richest person grows his wealth at that same growth rate for the next 37 years, how much will he be worth?

$2.7 trillion.

At a 10.2% growth rate, it'll take just under 27 years for the world's richest person to grow her bank account from $73 billion to $1 trillion. (Mind you, the world's richest person decades from now very likely won't be the same person it is today.)

Even if you assume 3% annual inflation, continuing past growth rates would create the world's first inflation-adjusted trillionaire in 39 years. To put that in perspective, the entire gross domestic product of the United States was less than $1 trillion, adjusted for inflation, as recently as 1935.

John D. Rockefeller, the richest American ever, saw his wealth peak in 1913 at around $900 million, or 2.5% of the country's GDP that year, according to biographer Ron Chernow. If today's economy grows by 2% real for the next 39 ye! ars, the world's first trillionaire would be worth about 3% of GDP.

Keep it all in perspective, though. In 1957, Fortune magazine asked Getty about his wealth. "Remember, a billion dollars isn't worth what it used to be," he said.

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Can Verizon Fix Obamacare's Sign-Up Problems Alone?

An all too common sight on HealthCare.gov -- cryptic error messages with no easy way out. Will Verizon be able to plug all the holes in this floundering design? Source: Author.

The government is off to a rocky start with the sign-up system for the Affordable Care Act, also known as Obamacare. Setting up a robust online framework to get millions of Americans on board with health insurance may have been more than its in-house staff and contractors could handle. To turn the troubled HealthCare.gov site around, the feds reached out to a Dow Jones (DJINDICES: ^DJI  ) member with plenty of online experience. Now it's up to Verizon (NYSE: VZ  ) to make this essential part of Obamacare actually work.

Verizon was recently called in to fix the troubled sign-up site, according to a report in USA Today. The appointment has not been made official quite yet, but the Obama administration has openly admitted that it needs some high-powered IT help.

What's wrong?
"Some have had trouble creating accounts and logging in to the site, while others have received confusing error messages or had to wait for slow page loads or forms that failed to respond in a timely fashion," says an official blog post on the HHS.gov site, a front for the Health and Human Services department. "We are committed to doing better. [Our] team is bringing in some of the best and brightest from both inside and outside government to scrub in with the team and help improve HealthCare.gov."

My own experience with the site confirms the need for tech assistance. HealthCare.gov suffers from confusing design, frustrating procedures, slow response times, and too many errors to list. I changed my password at one point, logged in once with the new credentials, and was then thrown back to the old password again for any future log-ins.

The error my penguin contemplates above is the result of clicking on the "verify identity" link -- a necessary step that currently leads to a nonexistent page.

Verizon is not bad choice for this consulting deal, given the company's wealth of experience in computer networking. The company just hired data security expert Eddie Schwartz from storage giant EMC (NYSE: EMC  ) , and his expertise might come in handy for the HealthCare.gov project as well.

But I do believe that Obama's crew needs experts from fields where Verizon is not known for its prowess.

Calling all the experts
Obama could give Microsoft (NASDAQ: MSFT  ) a call to help out with the site's user interface. Microsoft would probably have to tap people from its gaming division to get the job done, as the Xbox Kinect shows a far deeper understanding of usability issues than the twice-botched Windows 8 platform does.

To get a better handle on data collection and management, I can't think of a better contractor than IBM (NYSE: IBM  ) . Big Blue has specialized in exactly that kind of work for decades and is currently in the process of diving even deeper into big data.

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Put these three Dow companies together, and you might just have the silver bullet to kill Obamacare's biggest threat right now. Verizon smooths out the site's massive networking performance issues, IBM puts together a better data-collection process, and Microsoft's Xbox guys put a user-friendly face on it all.

That's one possible version of how this IT drama needs to play out behind the scenes, sooner rather than later. If nobody can sign up for insurance under the new system, then the whole government shutdown was over a purely academic nonissue in the first place. And I'd like to see my insurance options one of these days, rather than just another error message.

What's really at stake here?
Health care as we know it is about to change, but only if the government can make its sign-up procedures work. Do you know how the changes in the health care law will affect you and your portfolio? If not, we're here to help: The Motley Fool has compiled a special new report filled with "Everything You Need to Know About Obamacare." This report is a free offer from us to help you get educated on this important subject. Please click here to access your free copy.

Five things to know about JPMorgan settlement

JPMorgan Chase CEO Jamie Dimon is about to accept a $13 billion mortgage settlement with the Justice Department.

NEW YORK (CNNMoney) The tentative deal that JPMorgan Chase reached over the weekend with the Justice Department will cost the bank $13 billion, a record penalty.

Details of the proposed settlement have yet to be announced, although they are expected soon.

Here are the answers to five questions about the deal:

What was the wrongdoing that this settles?

In the years ahead of the financial meltdown of 2008, the nation's banks took trillions of dollars in individual home mortgages and created investments for people seeking to capitalize on the hot housing market. Some of the mortgages were of questionable quality, given to potential home buyers with weak credit or without verifying income.

Many of the securities were then sold to Fannie Mae and Freddie Mac, two private mortgage-backing firms that had the implicit backing of the U.S. government.

The government says units of JPMorgan were among those that deceived Fannie and Freddie about the quality of the home loans packaged in those securities between 2005 and 2007.

When the housing bubble burst and foreclosures started to soar, Fannie and Freddie both ended up with billions in losses they couldn't afford. That prompted one of the largest bailouts of the financial crisis. Eventually, taxpayers poured $187.5 billion into the two firms.

Who was responsible for the wrongdoing?

While some of the risky mortgages were written and packaged into securities by JPMorgan Chase, the bank says that 80% of the losses from problem loans were from Bear Stearns and Washington Mutual, two companies it acquired during the height of the financial crisis.

Wall Street firm Bear Stearns was bought by the bank at a bargain price in March 2008, when the firm was on the cusp of bankruptcy. Federal authorities, including Treasury and the Federal Reserve, pushed for the deal in the hopes that by finding a buyer it could prevent a broader meltdown in financial markets -- something that occurred six months later when Lehman Brothers filed for bankruptcy.

In the midst of that fall meltdown, JPMorgan stepped in to buy Washington Mutual, the nation's largest savings and loan association at the time and a major mortgage lender. Once again, it was urged to ! make the purchase by federal authorities.

What are the potential criminal charges faced by the bank?

The proposed settlement only covers civil charges. It does not settle the question of whether any of the bankers engaged in criminal wrongdoing. There is an ongoing federal criminal probe based in Sacramento, Calif., the state where Washington Mutual was based.

JPMorgan originally sought to be protected from any criminal charges as part of this deal, but that was rejected by authorities.

Criminal charges against Wall Street firms have been limited. Most of the large fines that have been paid by banks have only settled civil charges. This includes the nearly $1 billion that JPMorgan agreed to pay earlier this year related to so-called London Whale trading losses.

The civil fines are likely to be greater than any criminal penalties. The largest criminal settlement reached with a corporation was the $4 billion that oil company BP (BP) agreed to pay last November when it pleaded guilty to manslaughter charges stemming from the Deepwater Horizon explosion and oil spill in the Gulf of Mexico.

Who will get the money?

A U.S. official familiar with the details of the tentative settlement tells CNN that $9 billion of the payment will be in fines and penalties and $4 billion in "consumer relief," including home loan modifications.

It's not yet clear which agency will receive what fine money. But any money received by the different agencies will eventually find its way to the Treasury Department's general fund.

What does this mean for JPMorgan and its CEO Jamie Dimon?

While $13 billion is a staggering amount of money, JPMorgan is large enough to pay it easily. It is the largest bank in the nation, with assets of $2.5 trillion. Its 2012 net income was $21.3 billion.

Earlier this month, the bank disclosed it has set aside about $23 billion to handle legal costs. Those legal costs caused the company to report a ! loss in t! he most recent quarter. But shares of JPMorgan (JPM, Fortune 500) were little changed in trading Monday on reports of the settlement, and are up more than 20% so far this year.

Dimon was once thought of as President Obama's favorite banker, and had been discussed as a possible candidate for Treasury secretary. That status has certainly been lost, but it's seen as very unlikely that he will lose his job at the head of JPMorgan due to this settlement.

Are Producer Prices Punishing the Dow?

After trading quietly during the first hour of the day, the Dow Jones Industrials (DJINDICES: ^DJI  ) have fallen into the red, down 83 points, or 0.55%, as of 12:15 p.m. EDT. With investors anxiously awaiting news from the Federal Reserve next week, economic releases like this morning's Producer Price Index report take on added significance. Let's take a closer look at the PPI report and what it potentially means.

PPI rises
The Producer Price Index measures changes in prices that manufacturers initially receive for goods and services, typically from other businesses. That distinguishes it from the Consumer Price Index, which reflects retail cost inflation. Because retailers try to pass costs on to consumers as soon as possible, the PPI can provide hints on future trends for the CPI.

The headline number for PPI looked alarming, as a 0.5% increase in the index in May was well above the 0.1% to 0.2% rise economists were looking for. But beyond the headline number are some important details. In May, food and energy price increases were largely responsible for the PPI's gains; the core PPI rose just 0.1% for the month. Moreover, with the PPI having fallen sharply in each of the past two months, the year-over-year rise in the index is just 1.7%, suggesting inflation in check.

Most PPI analysis focuses on finished goods, which are the furthest-advanced in the supply chain. But figures on intermediate and crude goods paint a different picture: Over the past year, intermediate-goods prices have dropped 0.2%, but crude-goods prices have skyrocketed 7.6%. In particular, the energy component of crude goods has driven those gains throughout the past year, with the crude-petroleum subcomponent index rising 5.5% in May alone.

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What the PPI is pointing to
A long-term fear among investors is that accommodative Fed policies will eventually create high levels of inflation. So far, the PPI suggests that this trend hasn't materialized and isn't likely to in the near future, so the Fed seems to have the flexibility to handle monetary policy however it sees fit from an inflationary standpoint.

Drilling down on individual sectors, though, the impact of strengthening energy prices could point to a recovery for the sector. Dow energy giants ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) are less sensitive to changing conditions in the energy sector, as both are integrated companies whose underlying segments often cancel each other out in whole-company results. For instance, when oil prices have fallen in the recent past, Exxon and Chevron would see declining revenue from their exploration and production segments but rising profit in their refining operations. The companies are more sensitive to factors like production volume -- Chevron has done a better job than Exxon of finding new prospects and promising oil-field plays to replace lost production at aging wells.

For smaller companies, though, those dynamics are more important. Rising natural-gas prices should help producers enhance their profits and drive more investment into the nat-gas industry again, boding well for the energy services companies that make natural-gas production possible. Investors are clearly excited, as the Energy Select Sector SPDR (NYSEMKT: XLE  ) has hit new five-year highs just within the past month, and if those trends continue, then energy should have more room to run.

Watch prices
Despite stable current conditions, price levels remain an essential part of the Fed's calculus in determining its course for interest rates. Watching reports like the PPI closely will help you stay informed of trends that could lead the Fed to change course suddenly, and that advance notice could prevent nasty surprises in your portfolio.

There are many different ways to play the energy sector, and The Motley Fool's analysts have uncovered an under-the-radar company that's dominating its industry. This company is a leading provider of equipment and components used in drilling and production operations, and it's poised to profit in a big way. To get the name and detailed analysis of this company that will prosper for years to come, check out the special free report "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this under-the-radar company before the market does. Click here to access your report -- it's totally free.

I Just Got Another "Strong Buy" Signal…

If you've been joining our twice-a-week get-togethers over at Strategic Tech Investor, you know that I'm a focused and disciplined investor - and that I ignore fads and refuse to chase "hot tips."

I'm also very price-sensitive: Although I'm hunting for stocks capable of delivering "moonshot" price gains, I won't pay a penny more than my charts or "black box" system tells me they're worth.

To enforce that discipline - and to help pass along to you all that I've learned through the years - I developed the set of five rules that we talk about here each week.

But one of my best tools is also one of my simplest. It's a roster of companies whose stocks I'd someday like to own, but that don't currently meet my stringent criteria.

I call it my "Watch List."

And through the years, this simple shopping list for stocks has ended up delivering some of my all-time biggest winners...

When Patience Can Double Your Money

The sell-off after the credit crisis of 2008-2009 was the biggest bear market since the Great Depression.

Five years later, however, U.S. stocks are within 5% of the all-time high achieved in mid-September. There are a lot of great companies whose shares I would like to own, but my stringent guidelines signal that these stocks are still overvalued.

So if I can't recommend the stocks, I do the next best thing: I put them on my Watch List.

And I wait... patiently, and for however long it takes.

I will wait months - even years, at times - to get the right stock at that perfect price.

This discipline can create some fascinating situations: Very often, in fact, I'll see "the crowd" running for the exits, jostling and shoving one another in a panic-driven effort to get as far as possible from a stock that I can see is actually trading at once-in-a-lifetime, bargain-price levels.

So, while those other investors are sobbing inconsolably about the loss they've taken on this stock, I'm inwardly thrilled (and sometimes outwardly grinning) at the "moonshot" magnitude profit potential that has literally fallen into my hands.

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What this means is that I'm able to buy the stock at the optimum "entry point" - just ahead of the next big move higher.

And I believe that's just what we have with the Watch List stock I want to tell you about today.

The company is Santarus Inc. (Nasdaq: SNTS), a San Diego-based biopharmaceutical company whose shares could easily double in just two short years.

Santarus has a unique niche: It markets drugs that address the needs of patients being treated by physician "specialists." In other words, these drugs aren't run-of-the mill antibiotics - they are designed to treat such serious maladies as diabetes, high cholesterol, or autoimmune problems.

This is a stock that's been on a roll, zooming all the way to a record high of $28.10 a share in early August.

That's when the stock stumbled.

And it's also when I added it to my Watch List.

Shares of Santarus have really hit the skids in recent weeks: On Monday, they closed at $22.40, down 20% from that record high.

When a market index suffers through a correction of that magnitude - 20% or more - it's classified as an official "bear market." Bear-market sell-offs are often overdone, setting up a nice rebound for investors who are able to identify the correct opportunity - and deploy the courage to act.

And my analysis of Santarus shows me that it's time to move this stock off the Watch List... and onto the list for Strong Buy profit plays.

To see why that's so, we need to take a closer look at the stock.

Play the "Super-Size Me" Economy

If you want one reason that Santarus has been able to generate such consistent profit growth, it's this: The company has focused a lot of its energy on America's No. 1 "growth" industry - obesity.

Some docs will tell you that U.S. obesity isn't just a problem - it's an outright epidemic.

And they may be right.

Nearly 26 million people in the United States have diabetes.

That's more than 8% of the whole country.

The majority suffer from type 2 diabetes, which is very often associated with being overweight later in life. Obese patients usually have high blood sugar, a condition with lots of complications.

Santarus has two drugs that help these patients improve their blood sugar levels, improving their health as a result.

Glumetza helps keep the levels under control, and Cycloset can lower them without the patient needing to increase insulin levels.

Another drug, Fenoglide, targets high cholesterol levels, another condition related to America's growing waistlines. Then there's Zegerid, which reduces heartburn and other gastric problems.

Earlier this year, Santarus introduced a fifth drug with a big potential upside.

The drug - known as Uceris - is an extended release tablet for patients suffering from ulcerative colitis, an inflammatory bowel disease.

The drug had recent quarterly sales of just $16.2 million. But Santarus is projecting sales will increase some 18-fold to roughly $300 million in the next few years.

A drug with revenue of that magnitude approaches "blockbuster" status - the Holy Grail for any drug maker.

Santarus' current revenue needs are well covered - as are those in the intermediate term.

And the company isn't standing pat - for it has three additional drugs in its pipeline, namely:

Ruconest, designed to treat patients with a rare genetic disorder that causes swelling of the body. Santarus submitted the drug to the U.S. Food and Drug Administration (FDA) last April and expects to get approval in the next few months. Rifamycin SV MMX, which treats travelers' diarrhea, an embarrassing, inconvenient, and sometimes dangerous problem affecting globetrotting business folks and tourists alike. SAN-300, a drug that targets multiple inflammatory and autoimmune diseases. With phase I completed, the drug should enter phase II trials by the end of this year Five Reasons the Stock Will Double

With a market cap of $1.5 billion, Santarus trades at 15 times forward earnings, which is in line with the Standard & Poor's 500 Index. That's not pricey for a stock that my analysis says will double in value from the current level of roughly $22.

Let me show you why by running it through the "five filters" that comprise my tech-investing system.

Rule No.1 - Great Companies Have Great Operations: We look for well-run firms. CEO Gerald T. Proehl has nearly 30 years' experience in the field. He joined Santarus in 1999 after spending 14 years in management roles for global drug maker Hoechst Marion Roussel Inc. He took Santarus public in 2004. The firm has a 36% profit margin and an 84% return on equity (ROE). Rule No. 2 - Separate the Signal from the Noise: If you really want to create wealth, you have to ignore the market's many distractions and find companies with rock-solid fundamentals. The stock corrected in August on profit-taking because of an analyst downgrade that followed stellar earnings. But the company is making all the right moves for the stock to reenter its uptrend. Rule No. 3 - Ride the Unstoppable Trends: We look for stocks in red-hot sectors because they offer the best chance for life-changing gains. That's clearly true in biotech. Because of a steady stream of new drugs approved for sale, the industry has been on fire over the last two years. And the long term looks great as aging Baby Boomers seek to maintain a high quality of life - and benefit from drugs that combat diseases as diverse as cancer, diabetes, and arthritis. Rule No. 4 - Focus on Growth: As a rule, companies with the highest growth rates will give you the highest possible stock returns. In the most recent quarter, Santarus grew sales by nearly 90%, and operating income by 392%. Rule No. 5 - Target Companies That Can Double Your Money: I believe Santarus will grow earnings per share (EPS) by more than 60% next year from this year's estimated $1.26. I'm projecting earnings of about $2.90 a share for 2015. If the stock just continues to trade at the current price/earnings (P/E) multiple of roughly 16, the share price could hit $46 - for a gain of as much as 104%.

This stock meets all five of our double-your-money criteria. And we believe that the shares have that kind of potential. Given the recent sell-off, expect the shares to trade sideways for a time - making this a stock that's in search of a catalyst.

That catalyst could come as soon as November 4, when the company is scheduled to report its third-quarter earnings.

But once the stock is ignited anew, we expect it to head for new highs. The performance will really accelerate once the shares trade consistently above their August closing highs.

We'll keep you posted.

Make sure that you get Michael's update on Santarus' shares as soon as it's time to pull the trigger. By joining Strategic Tech Investor, you'll get Michael's research delivered to your inbox twice weekly, free of charge. Just enter your email address below and click "Submit."

Apple CEO Boasts iPad Usage

Though the year's been full of pro-Google (NASDAQ: GOOG  ) Android headlines and stats, there's no way for Android enthusiasts to talk their way around Apple's (NASDAQ: AAPL  ) stunning usage statistics.

At the All Things Digital conference this week, Apple CEO Tim Cook used one of these recent stats to make an argument for the iPad. As Fool contributor Daniel Sparks explains in the video below, there are plenty of stats like it. When it comes to usage, Apple clearly wins.

Five enter, one leaves
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Asian Stocks Gain as Congress Passes Deal to End Shutdown

(Corrects 11th paragraph to say S&P 500 Index climbed yesterday toward a record.)

Asian stocks rose, sending the regional benchmark index toward a five-month high, after the U.S. Congress voted to end the government shutdown and raise the debt ceiling.

Honda Motor Co., which gets about 46 percent of its car sales from North America, gained 1.3 percent in Tokyo. Kansai Electric Power Co. added 2.6 percent after the Japanese utility reported an unexpected first-half profit. Boral Ltd. advanced 5.9 percent after USG Corp. agreed to pay the Australian company as much as $575 million to create a jointly owned building-materials business spanning Asia and the Middle East.

The MSCI Asia Pacific Index gained 0.7 percent to 142.06 as of 11:34 a.m. in Tokyo, with more than three shares rising for each that fell. The U.S. ended the nation's fiscal impasse as the Senate and the House of Representatives voted to halt the government shutdown and raise the U.S. debt limit as the deadline loomed today. President Barack Obama said he will immediately sign the agreement.

"Even though it doesn't change anything, at least for the moment there's a relief that there will be no U.S. default, at least before the new year," Toby Lawson, head of futures, options and cash equities for the Asia-Pacific at Newedge Group SA in Sydney, said by telephone. "Investors can now focus on economic fundamentals. Europe is showing reasonable signs that the worst is over and the bearish view on China isn't playing out."

China Data

China is scheduled to release a slew of data tomorrow. The world's second-largest economy may have grown last quarter at the fastest pace this year, according to a Bloomberg survey of economists.

The Shanghai Composite Index climbed 0.4 percent, heading for its first advance in three days. China's economy probably expanded 7.8 percent in the third quarter year-on-year, after expanding 7.5 percent in the previous three months, according to the median of 46 estimates in a Bloomberg survey before tomorrow's data. The nation will also release factory output and retail sales figures for September.

Japan's Topix (TPX) index gained 1 percent, while Taiwan's Taiex index increased 0.5 percent. Hong Kong's Hang Seng Index rose 0.1 percent, while Australia's S&P/ASX 200 Index gained 0.2 percent and New Zealand's NZX 50 Index added 0.4 percent.

South Korea's Kospi index advanced 0.1 percent. The nation's producer prices index dropped 1.8 percent in September from a year earlier, after falling 1.3 percent in August, the Bank of Korea said today.

Singapore Exports

Singapore's Straits Times Index climbed 0.7 percent. The nation's exports fell 1.2 percent in September from a year earlier, according to a report by International Enterprise Singapore. Shipments were expected to drop 2.8 percent, according to the median estimate of economists in a Bloomberg survey.

The MSCI Asia Pacific Index gained 1.3 percent last week amid optimism U.S. lawmakers were moving closer to resolving the debt impasse. The gauge traded at 13.6 times estimated earnings, compared with 15.6 for the Standard & Poor's 500 Index and 14.5 for the Stoxx Europe 600 Index.

S&P 500 futures slipped 0.1 percent today. The equity gauge jumped 1.4 percent toward a record yesterday after Republican lawmakers in the House of Representatives signaled that they would let the bill pass.

Failed Goals

The deal concludes a fiscal standoff that began with Republicans demanding the defunding of Obama's 2010 health-care law and objecting to raising the debt limit and funding the government without attaching policy conditions. They achieved almost none of those goals in the agreement.

Pacific Investment Management Co. Co-Chief Investment Officer Bill Gross and BlackRock Inc. Chairman and Chief Executive Officer Laurence D. Fink, who oversee $5.76 trillion, consistently dismissed the likelihood that the U.S. would default should its borrowing authority be allowed to lapse.

Investors should buy three-, four- and five-year Treasuries and inflation-protected securities, Gross said on Bloomberg TV Oct. 1. The government shutdown, which started Oct. 1, will end "very rapidly," BlackRock's Fink said Oct. 3 at an event hosted by the UCLA Anderson School of Management in Beverly Hills, California.

Ask Matt: Where should you invest $15,000?

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.

Q: Where should a 50-year old invest $15,000?

A: With thousands of stocks, mutual funds, bond and other investments to choose from, investors often throw up their hands and do nothing.

But, by being very clear in how much you have to invest, you've already made one of the hardest decisions that stymies many beginning investors. Next, though, you need to understand how much risk you can tolerate. Your threshold for risk will be the biggest determinant of how you should invest.

TRACK YOUR STOCKS: Get real-time quotes with our free Portfolio Tracker

Based on your full question e-mailed to me, you're looking for a simple way to invest money with a brokerage that you don't have to micromanage. For most people looking for a simple way to invest and not worry about it, a blend of a couple exchange-traded funds is usually a blunt but relatively good instrument to use.

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One simple strategy would be to put $7,500 of your money in a Standard & Poor's 500 ETF, such as the Vanguard S&P 500 ETF, which trades by the symbol VOO. You could pair that by putting the other $7,500 into the Vanguard Total Bond Market ETF (symbol: BND). Be sure to check with your broker, since it might offer comparable ETFs that come with lower trading commissions.

You can certainly get fancier as you build your savings and add to your portfolio. But for just starting out, this basic asset allocation will get you started.

How Far Back Can IRS Claim Tax Evasion Or Fraud? Timing Is Everything

Anyone who is hiding income or assets from the taxman should consider how long they need to be looking over their shoulder. Even if you aren't actively hiding anything and did your best with your taxes, you might be worried. After all, taxes are horribly complex. The line between creative or aggressive tax planning and tax evasion is sometimes less clear than you might think.

Even innocent activities can sometimes be interpreted as suspect. It can help your peace of mind to know how long you can be asked to prove income, expenses, bank deposits and more. For all of these reasons, it's good to know about the normal IRS statute of limitations and how a tax evasion or fraud claim from the IRS can turbo-charge a case.

Start with the basic rule that the IRS usually has three years after you file to audit you. If you omit more than 25% of your income, the IRS gets double that time, six years. But statutes are often extended, sometimes voluntarily.

Frequently, the IRS says it needs more time to audit and asks you to sign a form extending the statute, usually for a year. Most tax advisers generally advise clients to agree. However, get some professional advice about your own situation. You may be able to limit the time or scope of the extension.

But what if you file a false return under-reporting income or willfully fail to file? The rules for how long you must worry–and the stakes–go up materially, including potential criminal charges and prison. Section 6531(2) of the tax code says the statute is six years commencing once the return is filed, or from the time you willfully failed to file a return.

In a case of alleged criminal tax evasion, that means the statute hasn't run if the taxpayer is indicted within six years after "willfully attempting in any manner to evade or defeat any tax or the payment thereof." In some cases, though, the statute is "tolled"–so stops running. For example, the statute stops running if the target is outside the U.S. or is a fugitive.

What's more, even when the alleged tax crime is committed can be hard to pinpoint. Does filing a false return start the six year clock? What about failing to file by the due date? How about covering it up later, hiding money, or lying about it?

All are potential problems that might occur many years after the tax return was filed or should have been filed. That means you may have to worry for many years beyond six. The issue is especially important if any later act keeps the statute open. Some courts have concluded that the six year statute doesn't even start to run until the last act of tax evasion.

For example, in United States v. Irby here, the court held the six year statute began to run on the last act of evasion. Mr. Irby used nominee trusts to conceal his assets many years after he failed to file. He may have thought he only had to worry for six years, but his use of nominee accounts delayed when his six years commenced. That meant he could still be indicted, prosecuted and convicted.

Finally, you often hear people say that the statute of limitations never runs on fraud. For civil tax fraud, that's true. The IRS can come after you any time. But it's still rare for the IRS to go back too far. Problems of proof are too great, and the IRS bears a high burden of proof in fraud cases, even civil fraud.

Timing may not be everything, but it's terribly important in tax cases. No one wants to be in the position of lying low and worrying about being caught. Fortunately, sometimes these issues can be resolved in less painful and less expensive ways than you might think. Within the protection of attorney client privilege, it can pay dividends to get some professional advice.

You can reach me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

Short Sellers Switch Allegiances on Chip Stocks

We have tracked the key short interest changes as of September 30 in the following semiconductor leaders: Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD), Micron Technology Inc. (NASDAQ: MU), SanDisk Corp. (NASDAQ: SNDK), Qualcomm Inc. (NASDAQ: QCOM), ARM Holdings PLC (NASDAQ: ARMH), Broadcom Corp. (NASDAQ: BRCM), Marvell Technology Group Ltd. (NASDAQ: MRVL), Nvidia Corp. (NASDAQ: NVDA), Texas Instruments Inc. (NASDAQ: TXN) and Applied Materials Inc. (NASDAQ: AMAT). We also chose to look at how the Market Vectors Semiconductor ETF (NYSEMKT: SMH) has held up.

Intel Corp.’s (NASDAQ: INTC) short interest rose 2.1% to 251.54 million shares. About 5.1% of Intel's float is now short.

Advanced Micro Devices Inc. (NYSE: AMD) saw short interest fall by 4.6% to 108.7 million shares, or 17.8% of the company's total float.

Qualcomm Inc. (NASDAQ: QCOM) short interest rose 10.1% to 26.44 million shares, which represents 1.5% of the company's float.

ARM Holdings PLC (NASDAQ: ARMH) saw a 7.5% drop in short interest to 8.09 million shares, which represents about 1.7% of the firm's float.

Micron Technology Inc. (NASDAQ: MU) showed a drop of 17.6% in short interest, to 92.33 million shares, or about 9% of Micron's float.

SanDisk Corp. (NASDAQ: SNDK) saw short interest fall by 9.5% to 20.36 million shares, or 8.5% of the company's float.

Short interest in Broadcom Corp. (NASDAQ: BRCM) rose 9% to 13.7 million shares. That is 2.6% of the total float.

Marvell Technology Group Ltd. (NASDAQ: MRVL) posted a 13.9% increase in short interest to 13.42 million shares, or about 3.4% of Marvell's float.

Nvidia Corp. (NASDAQ: NVDA) short interest rose by 4% to 41.9 million shares, about 7.6% of the company's float.

Texas Instruments Inc. (NASDAQ: TXN) saw short interest fall by 6% to 22.5 million shares, or 2.1% of the float.

Top 5 Insurance Companies To Invest In 2014

Applied Materials Inc. (NASDAQ: AMAT) short interest rose 34.7% to 21.2 million shares, which is about 1.8% of the company's float.

The Market Vectors Semiconductor ETF (NYSEMKT: SMH) showed a drop of 6.1% in short interest to 9.27 million shares.

Short interest in Micron fell off a cliff in the latter two weeks of the month. Reports that DRAM prices are rising and demand is improving have given the company a real boost. Applied Materials was the other big short play, mostly following its announced merger with Tokyo Electron. The stock jumped to a 52-week high after the announcement and the shorts loved the play.

10 Best Stocks To Own Right Now

Private equity firm Apollo Global Management (NYSE: APO  ) has reported first-quarter earnings, with profit up 72% to $792. However, this is an industry full of volatility, and there's a lot to understand here before jumping in. Where should investors be looking? In this video, Fool financial analysts David Hanson and Matt Koppenheffer discuss some of the key metrics involved in understanding the private equity business and compare some of the biggest players in this space.

During the financial crisis, Goldman Sachs did so well pivoting to avoid the worst of the fallout that it had to downplay its success to duck public ire and conspiracy theories. Today, Goldman is still arguably the powerhouse global financial name, and yet its stock trades at a valuation of less than half what it fetched prior to the crisis. Does this make Goldman one of the best opportunities in the market today? To answer that question, check out The Motley Fool's special report on the bank. In it, Fool banking expert Matt Koppenheffer uncovers the key issues facing Goldman, including three specific areas Goldman investors must watch. To get access to this report, just click here.

10 Best Stocks To Own Right Now: Electrocomponents(ECM.L)

Electrocomponents plc distributes electronics and maintenance products to engineers in the United Kingdom, rest of continental Europe, North America, and the Asia Pacific. It offers electronics, electrical, industrial, and commercial supplies and services primarily under the RS brand, as well as under the Allied brand. The company sells its products through catalogues, trade counters, third party distributors, and ecommerce operations, as well as trading Web sites serving electronics and maintenance engineers. Electrocomponents plc was founded in 1937 and is based in Oxford, the United Kingdom.

10 Best Stocks To Own Right Now: Pitney Bowes Inc(PBI)

Pitney Bowes Inc. provides mail processing equipment and integrated mail solutions worldwide. It offers a suite of equipment, supplies, software, services, and solutions for managing and integrating physical and digital communication channels. The company?s Small & Medium Business Solutions group engages in the sale, rental, and financing of mail finishing, mail creation, and shipping equipment and software; provision of supply, support, and other professional services; and provision of payment solutions. Its Enterprise Business Solutions group sells, supports, and offers other professional services for high-speed production mail systems, and sorting and production print equipment; and sells and provides support services for non-equipment-based mailing, customer relationship and communication, and location intelligence software. This group also offers facilities management services; secure mail services; reprographic document management services; and litigation support and eDiscovery services, as well as provides presort mail services and cross-border mail services; and direct marketing services. Pitney Bowes Inc. markets its products and services through its sales force, direct mailings, outbound telemarketing, and independent distributors and dealers to various business, governmental, institutional, and other organizations. The company, formerly known as Pitney Bowes Postage Meter Company, was founded in 1920 and headquartered in Stamford, Connecticut.

Advisors' Opinion:

• [By Dan Caplinger]

  You can find many examples of this phenomenon recently:

  Late last month, Pitney Bowes (NYSE: PBI  ) cut its dividend in half after announcing worse-than-expected sales and income. The stock had suffered from weakness in Pitney Bowes' core mailing and enterprise business solutions segments, and the company chose to sacrifice its former double-digit yield in order to shore up its financial condition. Even after the cut, the stock still yields a fairly high 5%. In February, CenturyLink (NYSE: CTL  ) cut its dividend by about 25%, again after reporting weak guidance for its earnings for the remainder of 2013. Even though the rural telecom company chose simply to put cash previously earmarked to pay its former yield of 7% toward share buybacks instead, the stock plunged more than 20% in response to the move, although it has rebounded significantly since then as investors recognized the fundamental benefits to the company from the capital reallocation. Until three months ago, Cliffs Natural Resources (NYSE: CLF  ) had a high dividend yield approaching 7% despite terrible conditions in its iron-ore and metallurgical-coal businesses. After announcing earnings in mid-February, the company cut its dividend by more than three-quarters in a move that will conserve cash for the ailing producer of raw materials for steel production. Now, the stock yields just 2.6%.

  That's not to say that all of the highest dividend paying stocks are doomed to reduce their payouts. Businesses that are designed to focus on maximizing cash flow rather than seeking growth can often sustain very high yields for years. Vanguard High Dividend Yield (NYSEMKT: VYM  ) and other dividend ETFs use a combination of factors beyond simple yield to choose stocks with sustainable high payouts.

• [By John Divine]

  Business equipment and communications company Pitney Bowes (NYSE: PBI  ) is second on today's list, after plummeting 5.9%. Shares in the company are extremely volatile and fluctuate more than 70% more wildly than the market itself does. After a recent 50% cut in its dividend, the yield still sits at just more than 5% annually, which, for income-oriented investors, can look scrumptious from a distance. The business itself, however, still needs to prove its long-term viability in a world of increasingly digital communications.

• [By Sean Williams]

  Finally, software and hardware solutions developer for the logistics industry Pitney Bowes (NYSE: PBI  ) advanced 3.9% despite no company-specific news. The story here could be more related to short-sellers than anything else. Pitney Bowes is consistently among the S&P 500's most short-sold companies, meaning any slight rally can be exacerbated by short-sellers covering their positions. While today's move certainly gave optimists the upper hand, it does nothing to change the long-term investing thesis that Pitney Bowes' revenue is shrinking, and it's already had to slice its dividend in half to conserve its free cash flow. In my book it's still a stock to steer clear of.

Hot Canadian Stocks To Own For 2014: Algeta ASA (ALGETA.OL)

Algeta ASA is a Norway-based biotechnology company engaged in the development of targeted cancer therapies based on its alpha-pharmaceutical platform. The Company�� principal product is Alpharadin for the treatment of bone metastases resulting from castration-resistant prostate cancer. The Company�� pipeline also includes Alpharadin for the treatment of bone metastases resulting from breast cancer, a combination of Alpharadin with Taxotere for the treatment of bone metastases resulting from prostate cancer and Thorium-227 showing various cancer indications. The Company develops Alpharadin in a development and marketing cooperation with Bayer Schering Pharma. Algeta ASA is active through the two wholly owned subsidiaries, Algeta Innovations AS and Algeta UK Limited. On April 12, 2012, the Company announced that it estabilished a subsidiary active in the United States, Algeta US.

10 Best Stocks To Own Right Now: Polaris Minerals C Com Npv (PLS.TO)

Polaris Minerals Corporation engages in the development and operation of construction aggregate properties and projects. The company holds an 88% interest in the Orca Quarry, a sand and gravel project, which covers an area of approximately 350 hectares of land located in the northwest of Port McNeill, British Columbia; and a 70% interest in the Eagle Rock Quarry project, a granite resource that covers an area of approximately 339 hectares situated on deep tidewater alongside the Alberni Inlet near Port Alberni, British Columbia. It serves various customers involved in concrete manufacturing in North America and Hawaii. The company has a strategic alliance with Cemex, Inc. for the development of a terminal and quarry. Polaris Minerals Corporation was incorporated in 1999 and is headquartered in Vancouver, Canada.

10 Best Stocks To Own Right Now: Riverstone Resources Inc.(RVS.V)

Riverstone Resources Inc., an exploration-stage company, engages in the acquisition, exploration, and development of mineral resource properties in Burkina Faso, West Africa. The company primarily explores for gold. Its principal project is the Karma project that consists of six contiguous permits in Goulagou, Rounga, Youba, Tougou, Kao, and Rambo deposits located in the north-central part of Burkina Faso. The company is headquartered in Vancouver, Canada.

10 Best Stocks To Own Right Now: Dragonwave Inc(DRWI)

Dragonwave Inc. provides wireless Ethernet equipment for emerging Internet protocol networks worldwide. It designs, develops, markets, and sells carrier-grade microwave radio frequency networking equipment that wirelessly transmit broadband voice, video, and other data between two points. The company?s products have application in the backhaul function in a wireless communications network, as well as in point-to-point transport in private networks, including municipal and enterprise applications. It markets its wireless carrier-Ethernet links under the Horizon trade name. The company also offers service delivery unit solution products based on pseudowire technology. It markets its products to communications service providers comprising cellular service providers and broadband wireless access service providers; wireless extension of fixed-line networks to directly connect high-bandwidth end-customers to the core network; and private networks of large multi-site organizatio ns directly, as well as through distributors and regional value-added resellers. The company was founded in 2000 and is headquartered in Ottawa, Canada.

Advisors' Opinion:

• [By Monica Gerson]

  DragonWave (NASDAQ: DRWI) dropped 17% to $2.05 after the company priced US$25 million public offering of units.

  SmartPros (NASDAQ: SPRO) dropped 11.82% to $1.79. SmartPros' trailing-twelve-month ROE is -16.31%.

10 Best Stocks To Own Right Now: American Strategic Income Portfolio II (BSP)

American Strategic Income Portfolio Inc. II is a close-ended fixed income mutual fund launched and managed by U.S. Bancorp Asset Management, Inc. It is co-managed by Nuveen Fund Advisors, Inc. and Nuveen Asset Management, LLC. The fund invests in the fixed income markets. It invests in securities of companies operating across diversified sectors. The fund invests in whole-loan mortgages. It benchmarks the performance of its portfolio against the Lehman Brothers Mutual Fund Government/Mortgage Index. American Strategic Income Portfolio Inc. II was formed on July 30, 1992 and is domiciled in the United States.

10 Best Stocks To Own Right Now: Focus Ventures Ltd (FCV.V)

Focus Ventures Ltd., an exploration stage company, engages in the acquisition and exploration of mineral properties in Peru, Mexico, and Colombia. It primarily explores for gold, silver, copper, zinc, molybdenum, and phosphates deposits. The company is based in Vancouver, Canada.

10 Best Stocks To Own Right Now: Stagecoach Hdg(SGC.L)

Stagecoach Group plc, together with its subsidiaries, provides public transport services in the United Kingdom, the United States, and Canada. It provides bus, coach, train, and tram services. The company operates city buses primarily in London, Liverpool, Newcastle, Hull, Manchester, Oxford, Sheffield, and Cambridge. As of September 19th, 2011, it operated 8,100 buses on a network stretching from south-west England to the Highlands and Islands of Scotland. The company also provides commuter/transit, inter-city, tour and charter, sightseeing, and school bus services through a fleet of 2,800 coaches in North America. In addition, it operates South Western commuter rail franchise comprising the South West Trains that provide 1,700 train services in south west England out of London Waterloo railway station, as well as Island Line, which operates on the Isle of Wight; East Midlands rail franchise that comprises main line train services running to London St Pancras, regional ra il services in the East Midlands area, and inter-regional services between Norwich and Liverpool; and Supertram, a light rail network incorporating three routes in the city of Sheffield. Further, the company provides accounting and payroll, and claims handling services. Stagecoach Group plc was founded in 1980 and is headquartered in Perth, the United Kingdom.

10 Best Stocks To Own Right Now: TomTom NV (OEM)

TomTom NV is a Netherlands-based supplier of location and navigation products and services. The Company�� structure consists of four customer facing business units, namely Consumer, Automotive, Business Solutions and Licensing. The first three business units provide targeted solutions for the Company�� customers, including private consumers, car manufacturers and fleet owners. Licensing sells its content and services to multiple customer groups including portable navigation devices (PNDs) and wireless companies, governments and enterprises. The Company�� business units embed 11 product units, such as digital maps, traffic intelligence, navigation software, PNDs, automotive systems, fleet management services (FMS), smart phone applications, sports watches, points of interest, location based services (LBS) and speedcam intelligence. As of December 31, 2011, the Company was active in 35 countries. In July 2013, it acquired Coordina (Gestion Electronica Logistica, S.L.).

Dr. Reddy's Laboratories Beats on Both Top and Bottom Lines

Dr. Reddy's Laboratories (NYSE: RDY  ) reported earnings on May 14. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q4), Dr. Reddy's Laboratories beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly. GAAP earnings per share expanded significantly.

Gross margins contracted, operating margins grew, net margins increased.

Revenue details
Dr. Reddy's Laboratories reported revenue of $615.1 million. The 16 analysts polled by S&P Capital IQ expected to see revenue of $562.4 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $522.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.62. The two earnings estimates compiled by S&P Capital IQ predicted $0.57 per share. GAAP EPS of $0.62 for Q4 were 55% higher than the prior-year quarter's $0.40 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 50.4%, 220 basis points worse than the prior-year quarter. Operating margin was 22.2%, 240 basis points better than the prior-year quarter. Net margin was 17.1%, 420 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $547.7 million. On the bottom line, the average EPS estimate is $0.41.

Top 5 Oil Companies To Watch In Right Now

Next year's average estimate for revenue is $2.33 billion. The average EPS estimate is $2.01.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 479 members out of 504 rating the stock outperform, and 25 members rating it underperform. Among 102 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 99 give Dr. Reddy's Laboratories a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dr. Reddy's Laboratories is outperform, with an average price target of $37.69.

Add Dr. Reddy's Laboratories to My Watchlist.

Stocks mixed in early trading

Stocks were slightly lower in early trading Wednesday as worries about a debt default persist.

The International Monetary Fund warned about the harm to the global economy if the U.S. failed to raise its borrowing limit.

Investors were generally pleased by President Obama's plan to nominate Janet Yellen to succeed Ben Bernanke to be the next chief at the Federal Reserve.

"I think it's more politics than reality, but it's slightly positive for investor sentiment, certainly," said Andrew Sullivan, director of Asian sales trading at Kim Eng Securities.

YELLEN: 5 things you may not know about her

FEDERAL RESERVE: Wall Street encouraged with Obama's nod to Yellen

The Dow Jones industrial average was down about 10 points, or 0.1% and the Standard & Poor's 500 index dropped 0.1%. The Nasdaq composite index took the biggest hit, falling 0.7%.

In the prior session, the Dow fell 1.1% to close at 14,776.53 while the S&P 500 dropped 1.2% to 1,655.45. The Nasdaq declined 2% to 3,694.83. The steep drops came as investors are getting nervous about an approaching Oct. 17 deadline to raise the debt ceiling.

TUESDAY: Nasdaq tumbles 2% as shutdown drags on

Markets in Asia were mixed Wednesday. Japan's Nikkei 225 index added over 1% to 14, 037.84 but Hong Kong's Hang Seng index dropped 0.6% to 23,033.97.

In Europe, the major benchmarks were also mixed. Britain's FTSE 100 index was off 0.1%.

Benchmark crude for November delivery fell$1.01 to $102.48 a barrel. The contract rose 46 cents to settle at $103.49 on Tuesday.

Janet Yellen, vice chair of the Board of Governors of the Federal Reserve System, places her name plate at her seat at the International Monetary Conference on June 3 in Shanghai. President Obama has selected Yellen to succeed Ben Bernanke as chairman of the Federal Reserve.  Eugene Hoshiko, APFullscreen Federal Reserve Board nominee Janet Yellen testifies on July 22, 1994, before the Senate Banking Committee on Capitol Hill in Washington.  John Druricka, APFullscreen Janet Yellen, chairman of the President's Council of Economic Advisers, poses for a photograph on April 14, 1997.  Matt Mendelshon, USA TODAYFullscreen Vice President Al Gore, left, trade representative Charlene Brashefsky, President Clinton and Council of Economic Advisers Chairwoman Janet Yellen conduct an April 1, 1997, news conference about the state of the economy in the Rose Garden at the White House in Washington.  Ruth Fremson, APFullscreen Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, is photographed in her office on Jan. 21, 2005.  Martin Klimek for USA TODAYFullscreen Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, speaks about foreclosures to the Bay Area Council Outlook Conference on April 16, 2008, in Alameda, Calif.  Paul Sakuma, APFullscreen Janet Yellen, vice chairwoman of the Federal Reserve Bank, speaks on April 11, 2011, at the Economic Club of New York.  Mark Lennihan, APFullscreen Federal Reserve Chairman Ben Bernanke makes opening remarks at a meeting of the Federal Reserve Board of Governors with Federal Reserve board member Janet Yellen at the Federal Reserve in Washington.  Charles Dharapak, APFullscreen Janet Yellen, attends a seminar during the International Monetary Fund and the World Bank annual meeting on Oct. 10, 2012, in Tokyo.  Franck Robichon, epaFullscreenLike this topic? You may also like these photo galleries:ReplayAutoplayShow ThumbnailsShow CaptionsLast SlideNext Slide

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Contributing: Associated Press