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The Ebola stocks: Effect of an outbreak

Written By limadu on Sabtu, 25 Oktober 2014 | 14.44

NEW YORK (CNNMoney)

Some people have considered canceling visits to big theme parks and have aired worries about whether airports and public areas are safe zones.

It's no wonder that investors are assessing Ebola's impact on the economy. Stocks of companies that make drugs that treat the virus have had a wild ride.

It's no small issue. Ebola has killed nearly 5,000 people, mostly in West Africa. The deadly virus has killed one person in the United States and on Friday, a doctor in New York City became the fourth person to have tested positive for Ebola in the country.

One trader, Dave Lutz of Jones Trading, has compiled a list of stocks that are either directly impacted or could be affected by the spread of Ebola.

tekmira stock

Canadian biotech firm Tekmira Pharmaceuticals (TKMR)' stock surged in September after the FDA authorized the company's drug for patients with Ebola in the United States. Shares have since pulled back. The company has started limited production of its drug, TKM-Ebola, which will be available in early December.

BioCryst Pharmaceuticals (BCRX) is another small biotech company working on a drug that could be used to treat Ebola. Its stock has been on a roller coaster ride lately.

biocryst stock

NewLink Genetics (NLNK) is working with the World Health Organization and other agencies on an Ebola vaccine. Its shares have surged 57% in the past month.

newlink stock

Companies that make protective equipment for healthcare workers or provide services to governments have also seen gains. Lakeland Industries (LAKE) said in September that it was boosting production of the protective suits in response to growing demand. It's stock has surged 76% in the last four weeks.

lakeland stock

Alpha Pro Tech (APT) also makes protective equipment for healthcare workers. Its stock jumped 5% on Friday alone.

Some investors believe the airline industry is also vulnerable to the outbreak. Concerns about air travel rose this month after a Dallas nurse, who treated an Ebola patient, flew round trip between Dallas and Cleveland before being diagnosed with the virus.

Though airline stocks were hurt earlier in the month, they are now near all-time highs after reporting record setting profits.

united american stocks

Cruise ship operators have also been in focus after a healthcare worker who handled Ebola test samples was quarantined on a cruise ship earlier this month. Shares of both Carnival (CCL) and Royal Caribbean Cruises (RCL) have been under pressure recently.

carnival royal caribbean stock

Hotel chains could also be at risk if worries about Ebola cause people to curtail their vacation plans.

Hilton Worldwide (HLT) and Starwood Hotels (HOT) are on Lutz's list...

hilton starwood stock

...as are amusement park operator Six Flags (SIX) and movie theater company Regal Entertainment (RGC).

six flags regal stock

First Published: October 24, 2014: 4:39 PM ET


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NYC tabloids keep a straight face on Ebola

NEW YORK (CNNMoney)

In the hours before Spencer was diagnosed he had gone bowling, rode the A train and stopped by a meatball shop. But there was not a single pun to be found on New York City newsstands Friday morning. No hysteria and no sensationalism.

Instead newspapers like AM New York went with just the facts. The free daily's front page simply said "Ebola in NYC" and showed a picture of Spencer in a hazmat suit while caring for victims in West Africa:

"We didn't want to be alarmists," said Pete Catapano, executive editor of AM New York. "Obviously it's a scary subject... We wanted to be very direct, very straight-forward."

Related: Syracuse University disinvites journalist over Ebola fears

ebola am new york

The Daily News also took a tempered approach with its front page:

ebola daily news

The New York Post (which is infamous for its outrageous covers) was a little more brash with its "Ebola Here!" headline, but did stick to just the facts:

ebola new york post

"A subject like this... people make jokes about it. That's not our place to do that," Catapano said. "We just wanted to be very respectful, and let the story speak for itself."

Related: EU pledges 1 billion euros to fight Ebola

First Published: October 24, 2014: 5:39 PM ET


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The best time to book your holiday flight is...

holiday airfare

NEW YORK (CNNMoney)

A new survey shows the lowest prices for domestic airfares are found eight weeks before the departure date, around 19% below the average fare of $496, according to the Airlines Reporting Corporation, a travel industry research group owned by the airlines.

The report, which was based on ticket sales between January 2013 through July 2014, also found Sunday is the cheapest day to buy plane tickets. This Sunday marks nine weeks until Christmas week, so the clock is ticking.

"It's about time we stop believing in the airfare voodoo that Tuesday is the best day to get good ticket prices," said George Hobica, president of Airfarewatchdog.com. The average domestic fare paid on a Sunday is $71 cheaper than on a Monday, the most expensive day, the report showed.

Getting a deal on holiday travel is always hard, but maybe even more so this year, according to Keith Nowak from Travelocity. He said supply and demand is in full effect, giving airlines the pricing power.

Passengers are flying more this year than in the recent past, but airlines aren't adding more seats, he said. "You've got passenger loads growing faster than seats being added. It's clear given the current load factors, holiday planes are going to be full."

Related: Hottest places to travel this winter

The most recent data from the Department of Transportation showed the number of domestic fliers in July was the highest since the end of the recession. U.S. airlines carried 385 million passengers, up 2.1% from 2013.

Here are four expert tips to snag the best deals this holiday season:

Book early. Booking early doesn't always mean better prices, but you're more likely to get the flight and seat you want, especially given the expected high demand.

It's all about value, said Hobica. "You can get a good deal on an ugly, ill-fitting cashmere sweater, or you can pay a little more and get what you want. Flying out at the crack of dawn, jammed in a middle seat is the ugly sweater."

Related: How much should you really tip housekeeping? A travel tipping guide

Be flexible with dates, airports. Put in multiple nearby airports and try different arrival and departure dates when searching for flights.

"You want to open up as many fare options as possible to increase your chances of finding the best deal," said Nowak.

And it's not just about the ticket price. "Smaller airports might have significantly lower parking prices. If you're gone for a week, that can be a lot of savings," he said.

Be persistent. Travelers can hold seats for up to 24 hours without purchasing them with most airlines now, said Hobica, which can make a plane appear fuller than it is and discourage potential fliers.

"People hold seats and then release them. Keep checking the flight, you never know when something might open up."

Travel on the holiday. Flying on the actual holiday tends to bring lower prices. "If you fly late Christmas Eve, on Christmas Day or on January 1, those are always the cheapest days and times to fly," said Hobica.

Related: $134,700 one-of-a-kind trip for fashionistas

Consider Europe. If visiting grandma in the states isn't a requirement, travelers can find cheap affair to Europe right now, said Hobica.

"And if you are in the mood to splurge, business class seats are 50-60% cheaper to Europe during the holidays."

First Published: October 24, 2014: 3:01 PM ET


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World Series strikes out with lowest Game 1 ratings in history

Written By limadu on Kamis, 23 Oktober 2014 | 14.44

2014 world series The ratings for Game 1 of the World Series weren't a home run.

NEW YORK (CNNMoney)

Tuesday night's opening game of the Major League Baseball World Series brought in 12.1 million viewers for Fox, making it the lowest rated game 1 and the fifth lowest rated World Series game of all time.

The game, which saw the San Francisco Giants stomp the Kansas City Royals 7-1, rated a 3.4 among viewers aged 18 to 49, down 15% from last year's Series, a match-up of the Boston Red Sox and St. Louis Cardinals.

Alternatively, this year's Series includes the small market Royals. They haven't been in the World Series since "Back to the Future" was in theaters.

Kansas City tuned in. Game 1 scored a huge 48.2 overnight in Kansas City. In San Francisco, however, it rated a 29.3 overnight.

Related: Fall TV: the good, the bad, and the incomplete

These ratings weren't a home run for Fox, but they didn't go down swinging either. The 12.1 million viewers meant Fox still beat most other programming on Tuesday, and the network actually won the night in 18-49 demo.

The network has been struggling so far this season with some of its highly marketed shows like "Red Band Society" and "Utopia" failing to find an audience, so it's safe to say Fox hopes the numbers grow over the potential seven game series.

The World Series opener ranked behind last June's NBA Finals Game 1, which brought in 14.9 million viewers, and last week's Thursday night regular season NBA game, which brought in 16.1 million viewers alone.

Related: NFL scores huge ratings despite scandal

First Published: October 22, 2014: 8:02 PM ET


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Macau trumps Vegas with $270 minimum bet

macau 2 The former Portuguese colony of 600,000 people is almost entirely dependent on gambling.

HONG KONG (CNNMoney)

The city's $45 billion casino industry is now roughly seven times bigger than Vegas, and eye-popping growth has attracted the biggest players, including Las Vegas Sands and Wynn Resorts.

Gambling in the former Portuguese outpost has been fueled by a relaxation of regulations and a Chinese populace eager to try their luck.

Here are three things to know about Macau:

1) Mountains of cash

Gamblers in Macau are not messing around. Stakes at top casinos have been rising for years and it's nearly impossible to find a table with a minimum bet of less than $65.

The average minimum bet at a non-VIP table is now at least $270, according to Aaron Fischer, the regional head of consumer and gaming research at CLSA. At Galaxy Macau, it's even higher: $320.

The mind-boggling stakes leave Macau's international competitors in the dust.

hk macau incredible min

But the runaway bets could become a problem, Fischer says. Some gamblers are burning through their stacks of cash too quickly.

"It might be fun to lose $1,000 in two to three hours, but it is definitely not enjoyable to lose your entire gaming budget in one hand of Baccarat," he said.

hk macau betting min 2

2) Gambling with Chinese characteristics

Macau is the only place in China where gambling is legal, making it a dream destination for millions of Chinese tourists.

The city of 600,000 is almost entirely dependent on gambling. When the industry thrives, tax revenue jumps and residents -- most of whom are employed in the business -- receive payouts from the government.

The boom started in earnest in 2002, when restrictions on foreign operators were lifted. But foreign casinos owners must cater to Chinese preferences. And that means baccarat instead of poker or blackjack.

hk macau revenue

3) Macau has problems, too

Casino stocks have taken a beating in recent months following a rare slide in casino revenue.

Analysts say the poor performance is due to Beijing's campaign against corruption and lavish spending, a reduction in tourist visas and a crackdown on junket operators who recruit gamblers.

There is still huge potential in the territory, however. Hotels are planning to increase capacity by 70% over the next few years.

With the VIP market saturated, much of the growth is likely to come from more modest players.

"Macau is merely scratching the surface now, with ample pent-up demand to be captured by new casinos opening from 2015 onwards," Fischer said.

First Published: October 22, 2014: 9:47 PM ET


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Oil will tumble to $70 says new 'bond king'

Jeffrey Gundlach 2 Jeffrey Gundlach is CEO and Chief Investorment Officer of DoubleLine

NEWPORT BEACH, CALIFORNIA (CNNMoney)

That's the message from Jeffrey Gundlach, the star bond investor who predicts oil will plunge another $10 (it's $80 a barrel now).

While another decline in oil prices would bring smiles to American consumers -- think around $2.70 a gallon at the pump as a national average -- it could spell trouble for the boom in shale projects boosting the U.S. economy.

"I think it's going to $70 and if it does, it's bye, bye fracking. Goodbye all of the great job creation from fracking because fracking becomes too expensive if you can buy oil at $70 a barrel," Gundlach said on Wednesday at ETF.com's Inside Fixed Income Conference.

Related: Oil prices are plunging. Don't cheer yet

Those concerns help explain why energy exploration stocks like Apache (APA)and Newfield Exploration (NFX) have been creamed in recent weeks as investors watch the downward spiraling price of oil.

Crude plunged 2.4% to $80.52 a barrel on Wednesday. That's the lowest price since June 2012.

Oil politics: While Gundlach acknowledged China's economic slowdown is hurting oil prices, he mostly pointed to geopolitical drivers to support his bearish energy call.

"I'm convinced that Saudi Arabia wants the price of oil at $70," said Gundlach, CEO and Chief Investment Officer of Los-Angeles-based DoubleLine.

Related: Wall Street bombshell: Bill Gross out at Pimco

That's because the Arab country's budget can withstand lower oil prices than some other oil-producing countries, including arch rival Iran. Saudi Arabia raised eyebrows recently by ramping up production in the face of plummeting prices.

"They don't care if they run a short-term deficit because they love turning the screws on the people that mean them harm in the Middle East," said Gundlach, hinting at Iran.

Another leg down in oil prices would also be bad news for Russia, which relies heavily on oil revenue to balance its budget. Last week, Moody's cited plunging oil prices in its decision to downgrade Russia's credit rating two notches to just above "junk" status.

Related: Crashing oil prices could crush Vladimir Putin

Meet the new 'bond king': Gundlach, 54, has seen his star rise in recent years, especially given the struggles of rival Bill Gross, the founder of bond giant Pimco.

Gundlach's DoubleLine has been a beneficiary of Gross's surprise exit from Pimco last month. Investors have yanked cash from Pimco, while DoubleLine has enjoyed a surge of inflows.

Before he left Pimco, Gross tried to sell Gundlach on the idea of teaming up to form a powerful one-two punch in the fixed-income world.

"I am Kobe. You are LeBron James," the older Gross told Gundlach, according to Reuters.

While the two didn't end up forming an alliance, Gundlach knows something about being forced out. He was fired in 2009 by TCW Group over a disagreement about control of its fixed-income division.

Since then, Gundlach has turned DoubleLine into a leader in the financial world. The firm listed nearly $52 billion in assets under management as of the end of the second quarter. That was before customers started fleeing into Gundlach's arms from Pimco.

First Published: October 23, 2014: 12:31 AM ET


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Warren Buffett loses $2 billion in two days

Written By limadu on Rabu, 22 Oktober 2014 | 14.44

NEW YORK (CNNMoney)

Buffett is known for shunning the quick buck and focusing on the long-term performance of his investments. He'd best not change that this week.

His Berkshire Hathaway (BRKB) investment house holds big pieces of Coke and IBM, both of which have taken a drubbing in the past two days.

He took a $1 billion hit on Coke (KO), which fizzled 6% on Tuesday after the company reported earnings that didn't live up to expectations. Even worse, Coke said it doesn't expect a much better 2015.

Coke is one of Buffett's largest investments. He holds 400 million shares and his son Howard sits on the beverage company's board. And he likes the products too. Buffett is often seen enjoying Cherry Coke.

Related: Battle of the billionaires: Warren Buffett vs. Jack Ma

The pain started on Monday for Buffett. IBM (IBM, Tech30), another top holding, lost $1.3 billion as the stock plunged. The company is looking for a reboot after reporting disappointing earnings and shedding its chip unit at a major loss.

The stock dropped 7% on Monday after then news was announced and slid again on Tuesday. It is off nearly 13% so far this year, and Buffett's company holds over 70 million shares.

Buffett has made a lot of headlines this year for his misses. His investment in British grocery chain Tesco (TSCDY) has also spoiled, dropping nearly 47% this year.

But it's not all bad news for Berkshire.

Investors are sticking with their icon. Berkshire stock climbed slightly on Monday and Tuesday, and is up more than 17% this year -- far outpacing the broader market.

IBM and Coke may be struggling, but Buffett's largest position, Wells Fargo, has climbed 11% this year.

And despite the recent market dip, Buffett has been buying. He said in an interview earlier this month that he was shopping, adding, "the more stocks go down, the more I like to buy."

First Published: October 21, 2014: 6:30 PM ET


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Will your retirement savings last?

NEW YORK (CNNMoney)

The short answer is yes. Although there's no official benchmark for the appropriate margin of safety, I think most advisers would say that an 80% to 90% probability of success is about right for most people.

Fall below 80% and you could find yourself short on money later in retirement. Shoot for a chance of success higher than 90%, on the other hand, and you may end up sitting on a big pile of savings very late in life.

That may not sound like a bad thing, but it could mean that you lived more frugally than you had to during your career and stinted more than necessary in retirement. In other words, you might have been able to spend more freely and enjoy yourself more during both your working and retirement years.

That said, there are some caveats to the probability numbers that advisers generate with their retirement planning software -- or that you can get on your own from calculators like those in my Retirement Toolbox. One major caution: your chances of success can drop pretty dramatically if your nest egg's value takes a sharp dive. Given the stock market's recent volatility, that's a possibility to keep in mind.

Before I get into the nuances surrounding these projections, however, I'm going to briefly explain Monte Carlo simulations.

Related: Investing smart in a rocky market

Named after the famed casino in Monaco, Monte Carlo simulations attempt to incorporate the variability of real life into financial projections. The adviser plugs in such information as how much you saved, how much you're saving on an ongoing basis (if you're still working), how you invest that money, when you plan to retire, how much you plan to withdraw from your savings once you retire and how long you estimate you'll need your savings to last.

Once all this information is entered, the software or calculator creates hundreds or even thousands of different scenarios, or pathways, that your nest egg could take. Some reflect conditions in which the market performs well and inflation remains tame; others factor in a market crash and higher inflation. In some of these scenarios, you run out of money early in retirement. In others, you may never run out. But in most, the length of time your dough lasts falls between these extremes.

So, for example, if you're 55, plan to retire at 65 and want your savings to support you at least until age 95, you would plug in all the information about your savings, investments and projected spending, the software would crunch the numbers and...voila! It will tell you the probability that your savings will sustain you to 95.

If your savings isn't able to generate the income you need to support your spending until age 95 in 15% of the scenarios the software runs, then your probability of success is 85%. If you run short in 30% of the scenarios respectively, your probability of success is 70%.

Now for those nuances.

The results you get when you run Monte Carlo simulations seem very exact, but remember: They're long-term projections based on the assumptions you plug in. So they're not as precise as they seem. No one really knows how the markets will perform over the next 10, 20 or 30 years. Or what inflation will do. Or whether you'll be able to stick to your savings plan or face large unanticipated expenses in retirement (such as larger-than-expected health care costs).

Related: Why women are losing the retirement savings game

So you want to try to keep your assumptions as reasonable as possible -- that is, no 10% or 15% annual returns or overly aggressive investment asset mixes, no unrealistic savings rates or a retirement budget that not even an ascetic could stick to. And you should think of the percentage chance of success more as a possibility than a guarantee.

You can see how your chances of success might rise or fall if you (or the markets) behave differently. Save more during your career, and you'll see the probabilities rise. Likewise, if you tone down spending in retirement.

Keep in mind too that the percentage probability of success that everyone focuses on tells you only whether you'll be able to draw a given amount of income up to whatever age you plug in. It doesn't tell you how much of your savings will be left at that point.

So you may have an 85% chance of success and have $1 of savings left at age 95 in some scenarios. In others, you could have an 85% chance of success and still have nearly as much money as you started with at retirement -- or more.

That's important to know because you're probably better off spending more earlier in retirement than ending up at an advanced age with a huge savings balance, unless you're really set on leaving a big stash to your heirs.

You need to be especially careful if your portfolio's value takes a large hit, especially just before or early in retirement. For example, a 65-year-old who plans to follow the 4% rule -- that is withdraw 4% of his nest egg's value initially and adjust that amount annually for inflation -- could easily see the chances of his portfolio lasting 30 years drop by 25%, if his portfolio took a 20% dive on the eve of retirement. The combination of the investment loss and withdrawals would so deplete the value of the portfolio that it can't recover sufficiently even when the market eventually turns around.

Related: The 3 biggest risks every retirement saver should know about

Given how much your probability of success can fluctuate for any number of reasons, you should have your adviser rerun the simulations -- or rerun them yourself -- every year or so, using more current information about your age, savings balances and such.

You don't have to alter your plans if your odds of success rise or fall just a bit in a given year. But if you notice that the probability has been trending steadily downward over time -- or has suddenly plunged in the wake of a severe market downturn -- then you want to re-examine what you're doing and make adjustments to get back on track, such as saving more if you're still working or paring your spending for a while if you've already retired.

The key, though, is to create a retirement income plan and manage it over time, so you can make relatively small corrections along the way, rather than letting things slide and then having to deal with a crisis.

So kudos to you for planning in the first place, and for arranging your financial affairs so that, at this point at least, you appear to have an excellent shot at a secure retirement. If you keep monitoring your progress and stand ready to make tweaks when necessary, chances are your prospects will remain that way.

Walter Updegrave is the editor of RealDealRetirement.com. If you have a question on retirement or investing that you would like Walter to answer online, send it to him at walter@realdealretirement.com.

More From RealDealRetirement.com:

Investing smart in a rocky market

How smart an investor are you? Take this quiz

How to build a $1 million IRA

Are you diversifying or di-worse-ifying?

First Published: October 21, 2014: 7:21 PM ET


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Joseph Weisenthal leaves Business Insider to join Bloomberg

NEW YORK (CNNMoney)

The move is surprising considering that Weisenthal was one of the first members of Business Insider and is a prominent part of the site's newsroom and operations.

It also comes during a hiring spree and new strategy at Bloomberg, which is grabbing up high-profile talent for coverage across all platforms.

Bloomberg TV did not specify a launch date or time slot for Weisenthal's show, but afternoon is likely, given his focus on market news.

It is expected to hire roughly a dozen people to work with Weisenthal on the markets section of its web site.

In recent months, Bloomberg has hired The Verge's co-founder Joshua Topolsky. It has also upped its political coverage by bringing on journalists John Heilemann and Mark Halperin, who head up the company's digital coverage while hosting a politics show for Bloomberg TV.

Related: The Future of Media

Known on Twitter by his handle "The Stalwart," Weisenthal is well known for his prolific work ethic usually starting everyday with his signature tweet, "what'd I miss?"

"We are sad to say goodbye to Joe, but we will always encourage our colleagues to pursue great opportunities," Business Insider CEO Henry Blodget said in an e-mail to staff.

Blodget also announced the news to Business Insider's New York staff, prompting a round of applause for Weisenthal. The site has not identified a replacement for him.

A statement from Bloomberg also mentioned Weisenthal's dedication to breaking news and legendary competitiveness, which I experienced firsthand as a former employee of Business Insider.

"I had no interest in leaving Business Insider, and I'm incredibly proud of what's being built there," Weisenthal said in a statement. "But what's going on at Bloomberg is truly exciting. I couldn't pass up the opportunity."

First Published: October 21, 2014: 8:42 PM ET


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Total CEO dies in plane crash

Written By limadu on Selasa, 21 Oktober 2014 | 14.44

christophe de m

HONG KONG (CNNMoney)

De Margerie and three crew members were found dead at the scene of the accident, after the aircraft collided with a snow removal machine.

"The thoughts of the management and employees of the Group go out to Christophe de Margerie's wife, children and loved ones as well as to the families of the three other victims," the company said Tuesday in a statement.

De Margerie joined Total right after finishing university in 1974. He has held several positions with the company, including a job leading its Middle East operations. He was named CEO in 2007, and appointed Chairman in 2010.

First Published: October 20, 2014: 11:58 PM ET


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