5 risks that could upend bullish 2014 thesis

Wall Street bulls say the good times can continue in 2014. But despite articulately laying out a bullish case for stocks, they also admit that there are risks to their upbeat forecast.

Here are five things that could go wrong next year, and trigger the first sizable correction since late 2011.

RAGING BULL: Most experts say stocks to climb higher in 2014

RISK NO. 1: A MARKET 'MELT-UP'

A repeat of last year's eye-popping 25% to 40% returns in 2014, market strategists warn, could potentially spawn a 2000-style stock market bubble that could trigger a market decline far worse than a garden-variety 10% correction.

"Melt-ups are fun when they are happening but they tend to end in much bigger corrections," says Liz Ann Sonders, chief investment officer at Charles Schwab.

Wall Street prefers a steady rise in prices from current levels, with gains in the 5% to 10% range, so prices don't get disconnected from earnings, says David Kelly, chief global strategist for JPMorgan Funds.

The reason: The melt-up scenario, which could be driven by a mountain of cash arriving late to the stock market party or a stimulus-fed bubble, will likely turn a market now considered "fairly valued" into overvalued territory.

"Be careful what you wish for," Kelly says.

BULL VS. BEAR: Will stocks go higher or stall in 2014?

LESSONS LEARNED: Stock winners and losers of 2013 offer lessons

RISK NO. 2: A MESSY FED 'QE' EXIT

Investors have become addicted to stimulus. And even though Wall Street in December took news of the start of the Federal Reserve's exit from its bond-buying program in stride, expect more "taper tantrums" in 2014, says Ann Miletti, senior portfolio manager at Wells Fargo Advantage Funds.

"Maybe the Fed executes perfectly and it doesn't create a lot of waves," Miletti says. "But I would anticipate a withdrawal period. Interest rates won't stay ultra-low forever. In the long run the economy not needing as much stimulus is a good thing. But the! re will be disruptions along the way. But we would be buyers at lower entry points because we believe in the longer-run story."

RISK NO. 3: A RETURN OF IRRATIONAL EXUBERANCE

If first-day IPO price pops or the Dow's stunning rise garner more water-cooler chat time than, say, the first outdoor Super Bowl in wintry New York or Beyonce's latest hit, watch out. It could signal that bullishness has gone mainstream and irrational exuberance is back. Everyone knows what happens when everyone thinks stocks or home prices can't go down.

The market is not at an optimistic sentiment extreme yet, Sonders says. Individual investors are just now starting to funnel money back into the stock market after withdrawing cash for five years. And bullishness on Main Street, while rising, is far from prior peaks. Institutional investors like hedge funds also remain underinvested in stocks.

But investor sentiment bears watching. "If you got to an extreme in bullish sentiment you could point to that solely as a reason for the market to consolidate its gains," Sonders says.

RISK NO. 4: A "DEFENSIVE" CLASS OF CEOs

If CEOs are unwilling to go on the offensive and start deploying more of the $1.2 trillion in cash sitting on their balance sheets it could take away a key plank of the economic growth story. "The key question is what are they going to do with all that cash?" says Terry Sandven, chief equity strategist at US Bank Wealth Management.

If CEOs remain tight-fisted, it means less jobs, less spending on tech upgrades, less new plant openings and less M&A activity. In short, less spending means less economic growth.

RISK NO. 5: A "GROWTH SCARE"

Wall Street is betting on faster growth, perhaps a return to 3% GDP.

But faster growth is not assured, given that interest rates are on the rise. And if global growth doesn't materialize, the bull case weakens, says Marty Sass, CEO of money management firm M.D. Sass.

If a market storm does occur in 2014, it will likely ! result fr! om a "growth scare," warns Jeffrey Kleintop, chief market strategist at LPL Financial.

Barclays confirms foreign exchange investigation

London-based banking giant Barclays has joined other global banks confirming that regulators have asked them for information in an investigation of possible manipulation of foreign exchange rates used to set trillions of dollars of investments.

While announcing third-quarter earnings Wednesday, Barclays said it was cooperating with the multi-national investigations, which "appear to involve multiple market participants in various countries."

Barclays said regulators and investigators told the bank the investigations' focus on on foreign currency traders includes "posslble attempts to manipulate certain benchmark currency exchange rates or engage in other activities that would benefit their trading positions."

The bank said it was conducting a separate internal review of its own foreign exchange trading "covering a several year period through August 2013."

The announcement followed similar confirmations Tuesday by UBS, Switzerland's largest bank, and German banking giant Deutsche Bank. Mythili Raman, head of the U.S. Department of Justice's criminal division also said Tuesday that federal prosecutors are investigating possible foreign exchange trading abuses.

Great Britain's Financial Conduct Authority, and Switzerland's Financial Market Supervisory Authority and Competition Commission are also investigating. Additionally, UBS' announcement said the U.S. Commodity Futures Trading Commission is probing the issue.

The official bank acknowledgements followed a Bloomberg News report in June that said some bank traders had shared information about their foreign exchange positions via instant messges, executed their own trades ahead of client orders and tried to manipulate the benchmark foreign exchange rates reported by WM/Reuters.

Those reported rates, considered the industry standard, determine what many pension funds and money managers pay for foreign exchange investments. The Bloomberg account cited five unidentified traders with knowledge of the suspected practic! es.

The foreign exchange investigations are the latest global probes into potential rigging of financial benchmarks that affect trillions of dollars in personal and business transactions. Regulators and law enforcement agencies to date have penalized four banks and a major inter-dealer broker for manipulation of the London Interbank Offered Rate.

Popularly referred to as Libor, that benchmark is used to set rates on mortgages and many types of loans, along with some financial derivatives.

A Renaissance for IPO Investors

The initial public offering (IPO) market is heating up faster than a $10 pistol, and now there’s a new IPO fund on the docket that allows investors to put their favorite new stocks in one basket.

IPO activity is way up these days, with 169 new offerings so far in 2013, which have combined to raise $40 billion in funding. All told, those IPOs have been good to investors, returning, on average, 39 percent over the same time period.

The last three months have been especially active, with 70 IPOs raising $18 billion in new revenues, with investment returns of 30 percent, according to NASDAQ.

With big, brand-name issues like Chipotle (NYSE: CMG) and Facebook (NASDAQ: FB) going public recently, and Twitter (bulging with its network of 200 million active users) set to explode with its own IPO later this year, it’s a great time to kick some tires with a new IPO exchange-traded fund (ETF).

That would be the new Renaissance IPO ETF (NYSE: IPO), released by Renaissance Capital just last week.

The new ETF, which is currently trading in the $21 range after popping up $2 in its first day of trading, is the right fund at the right time, if you ask the folks at Renaissance.

“The launch of the Renaissance IPO ETF is a direct response to increased investor demand for systematic exposure to newly listed IPOs in a low-cost tax-efficient exchange-traded structure,” offers Kathleen Smith, chairwoman at Renaissance Capital. “When added to core US equity holdings, a portfolio of unseasoned publicly traded equities provides investors with more comprehensive exposure to the full set of US public equities.”

Renaissance is looking to mirror the astounding recent success of its Global IPO Fund (IPOSX), which is up 43 percent so far in 2013 (the fund was released in late 1997, and offers a 7 percent average annual return over the past five years).

The new IPO ETF! is specifically designed to track what Renaissance calls “significant newly public companies” by mirroring  the “rules-based Renaissance IPO Index designed by Renaissance Capital’s research team to hold the largest, most liquid newly listed US IPOs,” the company says in a statement.

Renaissance has some hard-and-fast rules about what stocks qualify for the new fund, and when they’ll be kicked out.

The firm says that brand new stocks are plugged into the index “on a fast-entry basis on the fifth day of trading, or upon quarterly review, and are removed after two years when the IPOs become seasoned stocks.”

As of September 30, 2013, the key IPO plays that comprise the fund include: Facebook, at 11 percent of the fund; Zoetis (NYSE: ZTS), an animal health firm, at 10.1 percent; Michael Kors (NASDAQ: KORS), the luxury fashion brand retailer at 9.8 percent; automotive component maker Delphi (NASDAQ: DLPH), at 9.8 percent; and Workday (NASDAQ: WDAY), a cloud-based computing provider, at 4.5 percent.

By and large, IPO targets large-cap stocks, which account for 65 percent of the fund’s holdings. Mid-caps comprise roughly 33 percent, while small caps are an afterthought, making up 2 percent of the fund’s holdings.

Sector-wise, technology rules inside IPO, comprising 24.6 percent of all holdings, followed by financial stocks (18.4 percent) and consumer services (at 16.4 percent).

Renaissance also has its gun sights set on First Trust US IPO Index (NYSE: FPX), which has returned 34 percent so far in 2013, and boasts a three-year average return of 26 percent, and a five-year average annual return of 18 percent (it opened in 2006).

Renaissance will be quicker on the trigger than FPX, with its two-year window on deep-sixing fund holdings. FPX extends out much further hanging on to its “new issues” up to almost three years.

IPO is also more concentrated than FPX, holding 50 stocks comp! ared to 1! 00 stocks, respectively.

Despite the fact that FPX is more entrenched than IPO (and by a long shot), I like the newer fund’s chances for a quick return, and I’m recommending an immediate “buy” despite reservations over an 0.60 percent expense fee. That’s high for an ETF, but it’s the same 60 basis points charged by FPX, and that hasn’t slowed the First Trust IPO ETF down at all.

The facts on the ground say it’s a good time to be into IPOs, with new offerings like Facebook, Chipotle, and Potbelly (NASDAQ: PBPB) all registering strong gains after going public.

Sure, you can buy up these individual stocks, along with Kors and Workday, and Twitter when it rolls out, but for most investors, that’s not easy to manage given their standing in the IPO pecking order.

But a “ground floor” IPO ETF that allows investors to get in fairly early is a winner in my book, especially given the relative financial health of the IPO market going into 2014.

So go long on the new IPO play on the block. Renaissance looks like it’s ready to come out swinging, and you should, too.

Brian O’Connell is an investment analyst at Investing Daily. He has appeared as an expert financial commentator on CNN, NPR, Fox News, Bloomberg, CNBC, C-Span, CBS Radio, and many other media broadcast outlets.

Harley's Not in Hog Heaven

Back in the grim, dark years when Harley-Davidson's (NYSE: HOG  )  was owned by AMF, the standing joke was that you had to buy two motorcycles: one to ride, and one for parts. Out of all the company's 110-year history, it's not a period that Hog lovers look back on fondly.

Source: SXC.hu

While things may not be so desperate today as they were then, Harley's recall announcement for 29,000 bikes from its 2014 line is not a good omen. The bike maker, which issued a "Do Not Deliver" notice to dealers and a "Do Not Ride" notice to owners, found a problem with its hydraulic clutch that keeps it from engaging, meaning you might not be able to stop when you want to -- or need to.

In 2011 Harley was forced to recall some 300,000 bikes because of a rear brake light problem. This is a order of magnitude smaller, but the risk to the bike maker could be greater. In its 2012 annual report, the biker maker said that over the past three years, it has initiated 12 voluntary recalls of its motorcycles, which cost it some $17.2 million.

Unfortunately, product recalls are a fact of life these days for manufacturers, and bike makers from Honda to Suzuki to Triumph have all had to recall motorcycles. Last year, BMW recalled over 2,000 bikes because of a foaming brake fluid problem that could inhibit braking. Triumph recalled some 12,000 bikes because of a stalling problem. And Polaris Industries (NYSE: PII  ) recalled 6,600 Victory motorcycles for throttle cable problems. In 2011, Honda had to recall 126,000 bikes made between 2001 and 2010, as well as certain models of its 2012 Goldwing because of a braking issue.

Harley's been riding high in recent years, as sales of its iconic bikes recover from the crash of the recession. After peaking at almost 350,000 bikes shipped worldwide in 2006, shipments plunged 40% as the financial crisis gripped the country. They've only just begun to recover, with shipments reporting their first gains in 2011, running 10% higher than the year before, but already they're beginning to stall.

Shipments rose only 6% last year, and even at the high end of its guidance, Harley's estimating it will only match that effort for 2013. Having to recall more than 10% of its estimated production run is worrisome.

Shares of Harley-Davidson sit 59% above the level they traded at a year ago, and at less than 17 times estimates, it compares favorably to rivals like Polaris, whose stock has risen by a like amount. But with growth rates slowing and with a large recall hitting its 2014 line of bikes, I see Harley-Davidson falling from hog heaven.

If you're looking to trade two wheels for four...
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Investors want advisers with complete view of finances

A vast majority of Americans want their investment advisers to manage their wealth comprehensively and to possess designations demonstrating competence, according to a new survey.

The study, conducted on behalf of the Certified Financial Planner Board of Standards Inc., found that 84% of those polled said certifications are important when choosing an adviser. In addition, 91% “expect the advice they receive from a financial adviser to take into account their total financial situation.”

Nearly half of consumers — 48% — ranked “strong knowledge of financial planning" as the most important attribute in an adviser, followed by ethics (20%), years of experience (17%) and the ability to offer a range of financial products (11%).

About 68% of respondents said that the most important advice certification is one that “demonstrates knowledge of multiple financial areas,” such as investments, taxes and insurance. When asked whether they would feel more confident working with an adviser who has a financial planning designation, 87% answered “yes.”

The online survey of 1,012 adults conducted Aug. 8-11, shows plenty of room for growth in the investment advice sector, with 59% of those surveyed saying that they've never worked with an adviser. Most of the respondents, 70%, had less than $100,000 in investible assets.

The CFP Board is using the survey to augment its effort to elevate the name identification of the CFP mark that it grants. The organization administers the exam, education and ethical requirement related to the designation, which is held by about 68,000 investment advisers in the U.S.

“As Americans' finances become more and more complex, they are turning to advisers who can partner with them, look at their total financial picture, put all the pieces together and provide a comprehensive financial plan,” CFP Board chief executive Kevin Keller said in a statement. “As this survey shows, Americans want advisers who are competent in financial planning and have a designation to prove it.”

The CFP Board is trying to make the CFP mark stand out among the approximately 150 investment-adviser designations.

The certified investment management analyst and the chartered financial analyst are two other prominent designations.

The recent CFA Institute & Edelman Investor Trust Study showed that investors rank integrity over performance as the reason that they have faith in their advisers.

“The designation is what gets people interested in an adviser, and then it's the trust and ethics that keep them with that particular adviser,” said Robert Stammers, director of investor education at the CFA Institute. “The rigor of the CFA designation and the ethics compo! nent is something investors appreciate and look for when doing due diligences on their investment adviser.”

A survey of 750 advisers conducted earlier this year by the Aite Group LLC found that those who had earned the CIMA mark achieved higher productivity, managed a higher percentage of client assets and had higher career satisfaction.

Of the 1,200 people who have applied to start the CIMA certification process in the current fiscal year, about 37% came from independent investment adviser firms or independent broker-dealers, according to Sean Walters, chief executive of the Investment Management Consultants Association.

“We've seen our applications broaden,” Mr. Walters said. “Independent advisers are starting to get that they need a CIMA on their team.”

Both the CFP Board and IMCA want to increase the reach of their designations. But they share a core goal — increasing investor confidence in investment advisers.

“Our role is to make sure the letters after a person's name mean something,” Mr. Walters said.

Stocks Slip on Concern Job Picture Sufficient to Warrant Fed Cutback

NEW YORK (TheStreet) - U.S. stock indices slipped Thursday after a weekly jobless claim report was seen as sufficient enough to prompt the Federal Reserve to curb the bond-buying stimulus measures that have fueled the best year in equities since 1997.

The Fed's policy making committee is scheduled to begin a two-day gathering on Sept. 17 to discuss the possible reduction in the roughly $850 billion in bond buying that has helped the U.S. economy recover from the recession of 2008. The central bank is expected to announce its economic projections at the conclusion of the meeting on Sept. 18.

The S&P 500 lost 0.3% to 1,683.42 while the Dow Jones Industrial Average fell 0.2% to 15,300.64. The Nasdaq dropped 0.2% at 3,715.97.

Weekly jobless claims for the week ended Sept. 7 fell by 31,000 to 292,000, the Labor Department reported in data released in Washington. Economists polled by Thomson Reuters were expecting claims to rise slightly to 330,000, up from the prior week's 323,000. The number may have been lower than expected, because two states failed to report for the week. "I think that anybody who is rooting for taper-zero or taper light, I believe the Federal Reserve is going to do the full taper, which is consensus $20 billion [tapering] down to $65 billion," said Doug Cote, chief market strategist at ING Investment Management U.S. The central bank has said its decision to taper would be heavily influenced by the strength of labor market data. Markets generally view tapering as short-term negative for markets as analysts have said the Fed's economic stimulus has boosted stocks from their Great Recession lows in March 2009 past the record highs hit this past summer. In company news, Pandora (P) surged 12% to $23.97 after the online music streaming service named Brian McAndrews its CEO and president. Yahoo! (YHOO) gained 1.6% to 29.65 after CEO Marissa Mayer said Wednesday that the Internet portal has about 800 million worldwide users, a 20% increase since she took control of the company 15 months ago.

-- Written by Joe Deaux in New York.

>Contact by Email.

Follow @JoeDeaux

Another Production Cut at BlackBerry

Just last month, BlackBerry Ltd. (NASDAQ: BBRY) reportedly cut production of its Z10 and Q10 smartphones from a monthly total of 2 million to 1 million after sales in the previous quarter came in short of expectations. Analyst Peter Misek at Jefferies now says that company is slicing at least another 10% from its manufacturing total.

BlackBerry launched a lower-priced version of its keyboard smartphone, the Q5, last week in Canada. A report in the Globe and Mail quotes Misek:

After the Wednesday, Aug. 14 launch of the Q5 in Canada, we contacted dozens of Canada carrier stores (Telus and Bell) and also Future Shop (similar to a Best Buy). Our survey indicates very modest demand across the three different stores and different cities. Most stores indicated that it was a soft launch, and not a big event like the launch of the Z10 and the Q10. Most stores did not receive a large amount and some had not sold any.

Misek concluded that there is "significant risk" to consensus estimates for the next two quarters as a result. He maintained his Buy rating on the stock but lowered the price target from $18 to $15.

Now that BlackBerry has announced that it is looking at the famous "strategic alternatives" that could include a sale of all or parts of the company, poor quarterly results do not weigh as much in investors' attitude toward the stock. As long as there's a chance that someone with deep pockets will come along and rescue them, shareholders will continue to believe. The question remains whether poor results and volatility in BlackBerry's share price will entice a buyer. The answer to that question is left as an exercise for the reader.

Shares of BlackBerry are down 1.2% at $10.39 just before noon on Monday in a 52-week range of $6.22 to $18.32.

Kabe Exploration Announced Loan Agreement with Phoenix Group Capital Markets (OTCMKTS:KABX, OTCMKTS:CLNO)

Kabe Exploration, Inc (KABX)

Today, KABX surged (+25.00%) up +0.0020 at $.0100 with 309,514 shares in play thus far (ref. google finance Delayed: 12:06PM EDT July 9, 2013).

Kabe Exploration, Inc. previously reported it has secured a bridge loan with Phoenix Group Capital Markets, a UK holding company, through its wholly owned micro-cap investment fund. The bridge loan was secured with restricted stock for operating capital purposes. The company had previously entered into a $5,000,000 Reserve Equity Financing Agreement with Phoenix Group in a term sheet announced in May. "This bridge loan affirms the level of investment confidence we are seeing from the professional investment community," said Erik Ulsteen, the company's CE

Kabe Exploration, Inc (KABX) 5 day chart:

Cleantech Transit, Inc. (CLNO)

Today, CLNO has surged (+0.04%) 0.000 at $.259 with 229,233 shares in play thus far (ref. google finance Delayed: 3:24PM EDT July 9, 2013).

Cleantech Transit, Inc. (OTCMKTS:CLNO) (www.cleantechtransit.net ) through its Discovery Carbon subsidiary, develops emissions offset strategies for companies, municipalities, and countries. Today, CLNO has surged (+0.04%) 0.000 at $.259 with 229,233 shares in play thus far (ref. google finance Delayed: 3:24PM EDT July 9, 2013). Earlier this morning (July 8), this company hit as low as $.222 and as high as $.265.

Could it be because of CLNO previously announced it plans to change its name to EQCO2, Inc. and also the plan for a 1 for 5 forward stock split for its common stock? (July 5) Cleantech announced that the process for both is underway and is expected to occur before the end of July.

FYI – (July 5) Cleantech Transit, Inc. Files SEC form 8-K http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9389837

FYI – (July 3) Cleantech Transit, Inc. Files DEF 14C http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9386382

Cleantech Transit, Inc. (CLNO ) 5 day chart:

6 IPOs have doubled this year. Twitter next?

  Container Store keeps employees happy NEW YORK (CNNMoney) Investors have been flocking to initial public offerings this year. And several IPOs have been huge hits.

So far in 2013, there have been six IPOs in which the stock doubled from its offering price on the first day of trading, according to Renaissance Capital, an IPO advisor in Greenwich, Conn. Could Twitter be the seventh?

We'll find out soon enough. But even if Twitter doesn't soar on its first day, it's been an amazing year for IPOs. There haven't been six IPOs that have doubled since 2000, said Kathy Smith, a principal at Renaissance. Only eight IPOs have doubled on the first day in the period between 2001 and 2012, she added.

The Container Store (TCS) was the latest to do so. The retailer priced its IPO at $18 a share last Friday. The stock surged 101% to end the day at $36.20 a share.

There were three other consumer focused companies that more than doubled: sandwich shop Potbelly (PBPB), organic grocery store Sprouts Farmers Market (SFM) and Noodles & Co. (NDLS), a casual dining chain.

"There's a lot of interest, maybe too much interest, in fast-growing consumer expansion stories," said Smith. "I think investors are looking for growth in a slow-growth economy."

The other two IPOs that doubled were voxeljet (VJET), a German maker of 3-D printers, and Benefitfocus (BNFT), which provides "cloud-based" services for employee benefits.

Four of these six stocks have moved higher since their first day of trading. The two exceptions are Potbelly and Benefitfocus, which are down more than 10% since their initial pop.

And the booming IPO market shows no signs of slowing. Six companies started trading on Wednesday. And Thursday brings the much talked about d! ebut of Twitter.

Twitter raised its IPO price range Monday, suggesting the company is anticipating robust demand.

But Smith said she wouldn't compare social media darling Twitter to the IPOs that have doubled this year. Those companies were less well-known to investors and therefore priced conservatively, she said.

  From 140 characters to $13 Billion

The spike in IPO activity this year comes as companies seek to sell shares into a rising stock market.

"Companies like to go public when valuations are at their highest," said James Krapfel, an equity analyst at Morningstar. Higher stock prices have also prompted private equity firms to exit their positions, creating an extra push to go public, he added.

The stock market has been on a tear, with the S&P 500 index is up just under 24% this year. The Dow and S&P 500 have hit a series of record highs in a bull market that started in March 2009.

The First Trust US IPO index (FPX), which mimics an index that measures the performance of recent IPOs, has done even better than the broader market. It has gained 38% this year.

While the IPO market is at a "post-recession high," Krapfel cautioned that a strong debut is not always a good indication of how a stock will perform over the long term.

"Investors should be mindful that a company's long-term prospects may not be fully reflected in the first day of trading," he said.

Facebook (FB, Fortune 500) is an example of how a company can bounce back from a botched IPO. The social network's stock offering was marred by technical glitches and the stock finished its first day of trading barely above the $38 offering price. Shares then quickly sunk in the first few months following its May 2012 IPO due to concerns a! bout earn! ings.

But Facebook shares have rallied 85% so far this year thanks to strong growth in mobile advertising.

So even though Facebook's IPO is still remembered for being a dud, no shareholders are currently complaining. It will be interesting to see if Twitter's investors are as happy as Facebook's 18 months from now.

Don Mattrick Can't Save Zynga From Itself

Zynga (NASDAQ: ZNGA  ) investors have expressed a lot of optimism over new CEO Don Mattrick, who left Microsoft (NASDAQ: MSFT  ) to take the top spot at the social game maker. Shares have gained more than 20% over the past few days following the announcement that Mark Pincus was relinquishing the CEO title. The problem is that not even Don Mattrick can save Zynga from itself.

Who's still the boss?
For starters, Pincus will still exert tremendous control over the company. The founder is staying on as chairman and chief product officer, so he will largely still determine the most important aspect of Zynga's business: the games. He also still controls 61% of all voting power. Make no mistake: What Pincus says still goes.

Under Pincus' tenure, Zynga rightly garnered negative attention for its habit of shamelessly copying rival games, rebranding them, and cross-selling them to Zynga's large (but declining) user base.

Source: SEC filings. MAUs = monthly active users. MUUs = monthly unique users.

More importantly, the small fraction of Zynga's user base that are actually paying customers has fallen to new lows. There were only 2.5 million monthly unique payers, or MUPs, last quarter, representing just 1.7% of MUUs.

Source: SEC filings. MUPs = monthly unique payers.

Zynga's reliance on Facebook (NASDAQ: FB  ) has been declining as the company focuses its efforts on mobile. "Only" 76% of last quarter's bookings were generated on Facebook's platform, down from 85% a year ago. In 2011 and earlier, this figure was consistently well above 90%. Mobile bookings have grown from 12% to 22% over the past year, so it's undeniably making some progress. Facebook is even now interested in becoming a game publisher, which could hurt Zynga's presence on Facebook even further.

Mobile Mattrick?
However, mobile is not Mattrick's forte. This is the exec that led Microsoft's Xbox business for six years, helping lead Microsoft's entertainment and devices division to profitability, but the gaming console platform utilizes an entirely different economic model than mobile platforms.

Game consoles are usually sold at a loss in the early years, with console manufacturers making up for it with hefty licensing fees from developers. This model has always favored larger companies. In contrast, mobile is different in that platform operators simply take a 30% cut of sales, giving the smaller developers a better chance at releasing the next Angry Birds or Temple Run. That's far more competitive, and levels the playing field in many ways as it rewards greater creativity and innovation -- two qualities that Zynga has never demonstrated.

Mattrick will be moving from managing a gaming console platform to directly competing within a mobile platform, all while Pincus still calls the shots with products. That doesn't sound like a recipe for success.

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Arrests in U.K. follow Silk Road bust

This artist impression shows Ross William Ulbricht, the man accused of creating Silk Road, appearing in a San Francisco court earlier this month.

LONDON (CNNMoney) British police expect to make "many more" arrests after detaining four men they say were associated with the infamous online drug website, Silk Road.

The FBI shut down Silk Road last week and arrested the man who they say created it: Ross William Ulbricht.

Silk Road had been the go-to black market for all sorts of illegal products and services since its 2011 inception.

The online marketplace offered an easy way to find goods and services and make anonymous transactions. The site had 957,079 registered users, according to the FBI.

The four men arrested in Britain were held on drugs offenses.

"These arrests send a clear message to criminals; the hidden internet isn't hidden and your anonymous activity isn't anonymous," said Keith Bristow, head of the U.K. National Crime Agency.

The only money accepted on Silk Road was the digital currency bitcoin, which was meant to add an additional layer of anonymity to buyers and sellers.

Over the past two and a half years, the FBI said the site generated revenue worth more than 9.5 million bitcoins -- valued at roughly $1.3 billion.

British police said millions of pounds worth of bitcoins had been seized in the operations against Silk Road, and they were working with other countries to investigate the threat presented by virtual currencies.

Silk Road wasn't just used for dealing in illegal drugs. The FBI says it was also used to trade firearms, hire assassins and employ hackers.

The FBI had worked on shuttering Silk Road and tracking down its creator since late 2011. For the investigation, the FBI teamed up with ! the IRS, Drug Enforcement Administration and an investigative unit of the Department of Immigration and Customs Enforcement.

--CNNMoney's Jose Pagliery contributed to this report.

What Buffett Says About Diversification Will Shock You

Working for StreetAuthority, I do a lot of different things.

In the course of a day, I may be writing an article, discussing potential picks with our staff, researching the next investing hotspot -- even going over Stock of the Month ideas with my colleagues.

And with so much going on, I find myself a little frazzled as the day goes on.

To combat this, I try to get to work about an hour earlier than the rest of the staff. Sometimes I work from home before I leave for the office. 

 

I don't do this to show off. I've simply found I can do more in that one hour (when I can focus on one task without distraction) than I can in two hours when the rest of the staff has the office buzzing.

Turning off the background noise allows me to simplify things -- and get better results.

What does this have to do with investing? A ton. 

Why Diversification Is Like Drinking From A Fire Hose
Sometimes the investing waters are as clear as mud to retail investors. After all, there are literally thousands of potential plays out there.

You could try to play a rebound in the automakers. You could day-trade the banks. You could stick with index funds and ride out any storm. You could even try to find companies that are simply undervalued and will rebound once the market notices.

But the problem is that there are too many options -- it's like trying to drink from a fire hose. Too many choices make it hard to nail down the one investment that will make your portfolio a winner.

Instead, like I do every morning by getting an early start, I think successful investors need to turn off the distractions and focus their attention to a small group of the best ideas -- drink from a glass instead of a fire hose.

By shrinking your portfolio, you'll find:

• It's easier to stay on top of your investments: If you have a portfolio of 50 stocks, how well can you pay attention to each one?

Even if you spend just an hour each week reading up on each one, you'd have a full-time job (plus 10 hours of overtime) just to give each holding its due.

And with this market, it's more important than ever to watch your holdings. Instead, a portfolio of just 10 to 12 of your best picks would need significantly less time to track each week, and you'll likely sleep better at night knowing you've done your homework.

• Better portfolio performance: Which do you think would average higher on a test: an entire class full of students, or a handful of the smartest students as picked by the teacher?

The answer is obvious -- and it's the same with your portfolio.

Look through your holdings. If you have upwards of 30, 40, even 50 holdings or more, I bet you'll find some that you think are just OK. Heck, it wouldn't surprise me if you have some you don't even like but simply haven't sold yet.

Instead, what if ! you culled your portfolio to just your favorite picks? Wouldn't your portfolio be in much better shape going forward? You'd have the cream of the crop, instead of the entire field. Remember, it's hard to outperform the market if your portfolio is the market.

• That you're not alone in trimming down your portfolio: Warren Buffett's Berkshire Hathaway (NYSE: BRK-B) holds just 42 publicly traded U.S. stocks. That's a lot for an individual investor, but for a company with billions at its disposal, it's surprisingly few. On top of that, Berkshire's top five holdings make up 73% of its portfolio.

Buffett is a proponent of positioning a portfolio to take advantage of the best picks. He's even gone as far as saying:

"If it's your game, diversification doesn't make sense. It's crazy to put money into your 20th choice rather than your first choice. It's the 'LeBron James' analogy. If you have basketball phenom LeBron James on your team, don't take him out of the game just to make room for someone else."

If the world's greatest investor is following this approach, shouldn't you?

Individual Stocks Can Still Do Well, No Matter The Market
Warren Buffett's school of thought is one of the main tenets of my Stock of the Month newsletter and its $100,000 real-money portfolio. Think about it: Our economy continues to run hot and cold. Investors are still skittish about unemployment, interest rates, housing, the Middle East -- the list goes on.

But no matter what's happening, there are always some stocks doing well. And if you focus on a select group of your best picks, you can profit immensely. 

Take a look at some of my recent picks:

Costco (Nasdaq: COST) is up 27% since I bought it nearly a year ago. Yahoo (Nasdaq: YHOO) is up 51% in the nine months I've owned it. In all of my 41 closed trades, only seven have lost money. And the majority of them have returned double-digit returns.   

Action to Take --> I understand that years of conditioning by the financial media have led millions of investors to think diversification is crucial to success. And it is, if you want to merely match the market. (Not to mention line your broker's pocketbook.) But that's not what I strive to do. I doubt you do either.

P.S. - Remember that I'm not just paying lip service to investing in your best ideas. I have $100,000 in actual cash behind my Stock of the Month portfolio. So far the performance has been great -- 85% of my closed trades have posted positive returns. You can get all the details here.

'Captain America' Chopper Sells for $1.35 Million

Damian Dovarganes/APA "Captain America" Chopper from the 1969 film "Easy Rider." | A star-spangled chopper reportedly ridden by Peter Fonda in the classic film "Easy Rider" sold for $1.35 million, making it one of the most expensive motorcycles ever sold. Auction house Profiles in History sold the bike over the weekend for far above the reserve price of $1 million. The chopper, known as the "Captain America" chopper for the name of Fonda's character in the 1969 film, was owned by Los Angeles collector Michael Eisenberg. The price came despite media reports that cast doubt on the authenticity of the bike. The Los Angeles Times reported that an earlier "Captain America" chopper had been sold that also claimed to be the last remaining of its kind from the film. Fonda told the Times before the sale: "There's a big rat stinking someplace in this."

Harley-Davidson Owners Recall When Their Bikes Didn't Need So Many Repairs

Harley-Davidson had been in high gear until recalls started causing slippage. 

Harley-Davidson (NYSE: HOG  ) really doesn't need this massive motorcycle recall right now.

The bike maker has bounced back strongly from the collapse in sales it suffered during the recession. Though the 260,000 units it shipped last year is not anywhere near the heights it hit in 2006, when it shipped 350,000 units, it still marked a healthy recovery, and its recent unveiling of the 2015 lineup set the stage for another bang-up year.

So, word that Harley is recalling its entire lineup of 2014 touring bikes, as well as its trikes and custom-designed bikes, could cause that surge to stall.

A case of road rash
The issue itself seems relatively minor, all things considered. The clutch can develop a tear that would allow the bike to creep forward when the rider intended to be at a stop, which could cause it to crash, most likely by toppling over. Harley has reported 19 such accidents, and though there have been three injuries associated with it, they've all been minor. The fix is apparently simple as well, requiring the clutch assembly to be rebuilt, which takes less than an hour.

Just because it's not a fatal flaw doesn't mean it's not a problem. Source: Flickr.

Really, the problem lies with the fact that Harley recalled a smaller number of motorcycles last year with the same part. While it only affected 29,000 bikes then, it was a far more serious issue, and a "Do not ride" letter was sent to owners along with a "Do not deliver" letter to dealers until the problem was fixed. Why can't Harley get its clutches right?

Objects are closer than they appear
Competition is heating up this year in ways Harley hasn't experienced in a while. Polaris Industries (NYSE: PII  ) is out with a number of new models that seek to take on Harley head-to-head, and the resurrection of its Indian nameplate is turning riders' attention in a way that its Victory bikes couldn't.

Last quarter, Polaris reported that sales in its motorcycle division doubled year over year to $103.7 million, driven largely by new Indian sales, demand for which was up 50%, and outside North America, where Polaris said it was gaining market share, sales almost doubled as well.

Now, those results are about what Harley makes in a week. Its own second-quarter motorcycle sales were up 16% as revenues hit $1.48 billion, so we're talking orders of magnitude larger than what Polaris is doing.

But sales, while still growing, are growing at a slower rate than they have been. Harley can't afford to have an image of shoddy workmanship since it took a long time for the bike maker to shake off that perception following its ownership by AMF. Back then, there was a running joke that you had to buy two Harleys: one to ride and one for parts.

It was the sale of the company in 1981 that marked the start of its comeback, and it's been a heck of a ride since then. It can't afford to go back.

Not the mother of all recalls
The recall covers Harley's 2014 Touring, CVO Touring, CVO Softail, and Trike motorcycles. It's also recalling about 1,400 of its 500 and 750 Street bikes from the 2015 model year for a possible fuel tank leak.

Earlier this summer, it recalled more than 60,000 2014 Touring and CVO Touring motorcycles because of a problem with the anti-lock braking system that caused the front wheels to lock up without warning. In August, it recalled over 4,500 bikes for a faulty ignition switch. 

This year's recalls still pale in comparison to the massive 300,000 bike recall issued in 2011, but that was simply a rear brake light problem.

In its annual report filed with the SEC in February, Harley said that over the last three years, it had initiated 16 voluntary recalls that cost it some $22 million, almost half of which naturally came in 2011. While the cost decreased markedly to $4 million by the end of 2013, it jumped to almost $7 million in the second quarter, and with the latest recall, we're going to see those numbers rise once more.

For a company reporting $308 million in quarterly net income, even if the liability expenses doubled, it's still a pretty insignificant amount, but it's the credibility issue that becomes more of the problem. Polaris said its North American retail sales fell in the mid-single digits for its Victory brand primarily because of a recall related to a faulty crankcase that could cause it to seize.

Harley-Davidson has been allowing competitors to play catch-up. Source: Flickr user Matthias Schack.

Up on blocks
Quality control issues are bedeviling the auto industry, and though manufacturers are on target to sell more cars this year than ever, recalls are plaguing them, and General Motors alone has recalled nearly 29 million vehicles. At one point, it seemed the carmaker was issuing recalls every week.

If Harley-Davidson wants to avoid having the same kind of reputation for shoddy workmanship that seems to shadow some automakers (and raises the ghost of Harley's past), it would do well to get a tighter grip on this issue and instill once again the pride of craftsmanship that should be the bike maker's hallmark.

You can't afford to miss this
"Made in China" -- an all too familiar phrase. But not for much longer: There's a radical new technology out there, one that's already being employed by the U.S. Air Force, BMW and even Nike. Respected publications like The Economist have compared this disruptive invention to the steam engine and the printing press; Business Insider calls it "the next trillion-dollar industry." Watch The Motley Fool's shocking video presentation to learn about the next great wave of technological innovation, one that will bring an end to "Made in China" for good. Click here!

3 Hot Stocks to Trade (or Not)

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.


Read More: 5 Stocks With Big Insider Buying



From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.


Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.


While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis. Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.


Without further ado, here's a look at today's stocks.

Read More: Warren Buffett's Top 10 Dividend Stocks

RadioShack

Nearest Resistance: $1.60

Nearest Support: $1

Catalyst: Rescue Deal

Shares of beleaguered electronics retailer RadioShack (RSH) are rallying to the tune of 20% on massive volume this afternoon, up following news that the firm is discussing a possible rescue plan with one of its biggest shareholders. RadioShack is in talks with hedge fund Standard General to possibly finance a rescue package that could help the firm avoid bankruptcy. While the possibility of a bailout is far from certain at this stage, the prospect is providing more than enough buying pressure for today's pop.

RadioShack has spent most of 2014 wearing cement shoes – even with today's 20% rally, shares of RSH are still down more than 60% since the calendar flipped to January. But RadioShack could be about to make up for lost ground. Shares officially broke their downtrend last week, and more upside looks likely from here.

Read More: 10 Stocks George Soros Is Buying

Oi SA

Nearest Resistance: $0.70

Nearest Support: $0.50

Catalyst: Acquisition Plan

Brazil's number-four wireless carrier, Oi SA (OIBR) is up 11% this afternoon, following news that the firm had engaged Banco BTG Pactual to review its options for acquiring TIM Participacoes from Telecom Italia (TI). The potentially $8 billion acquisition would be transformative for Oi, ratcheting up the firm's scale, and making it more competitive with its bigger Latin American rivals. More importantly for shareholders of this low-priced name, today's news is breaking the long-term downtrend in OIBR.

OIBR has been a horrific name to own in 2014, down more than 60% year-to-date, even with today's double-digit rally factored in. But the long-term downtrend finally broke on today's breakout. That means that investors who aren't risk-averse can consider piling into shares here.

Read More: 7 Stocks Warren Buffett Is Selling in 2014

Halliburton

Nearest Resistance: $70

Nearest Support: $67

Catalyst: Gabelli Comments

Halliburton (HAL) is seeing big volume this afternoon, down 1.6% following comments by Gamco's Mario Gabelli yesterday on CNBC. Gabelli thinks that Halliburton could be a potential suitor for Weatherford International (WFT) at up to a 50% premium to today's prices. So today, shareholders are selling on worries that such a deal could destroy value for HAL.

Ultimately, today's price action isn't technically significant. Shares have been consolidating sideways since the calendar flipped to August, churning after a big move to start the year. A breakout above $70 resistance is the technical trigger that needs to happen before HAL becomes buyable again.

Read More: 5 Hated Earnings Stocks You Should Love

To see these stocks in action, check out the at Most-Active Stocks portfolio on Stockpickr.



-- Written by Jonas Elmerraji in Baltimore.

RELATED LINKS:

>>3 Stocks Under $10 to Trade for Breakouts

>>4 Dividend Stocks Ready to Pay You More

>>5 Stocks Set to Soar on Bullish Earnings

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in the names mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to

TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

Follow Jonas on Twitter @JonasElmerraji

Mind Your Manners: Business Rules Get a 21st Century Update

Getty Images NEW YORK -- Much has changed about workplace and business etiquette since Emily Post was dispensing advice herself. Post died in 1960, but her family has carried on her love of good manners through the Emily Post Institute in Burlington, Vermont. The latest from the Posts is a third edition of "The Etiquette Advantage in Business," released this month by William Morrow. Great-great-granddaughter Lizzie Post said an update was needed to take into account the explosion in social media and digital communications, along with a more casual work environment in many fields. Some highlights: Social Media and Smartphones When you make a mistake, 'fess up. Post recalled a recent radio show call-in question that went something like this: "'I butt-dialed all of my business contacts while on a 10-hour hike over the weekend. What do I do and is there a term other than butt-dial that I can use?' We say purse- or pocket-dial work, too, and apologize immediately using whatever communication you usually use for each contact." Generally, she said, avoid the urge to get all loosey-goosey. Use email, private message, text and voice mail very, very carefully. "Unless you would feel comfortable posting it on a bulletin board in your town or screaming it to everybody that you know, don't do it," Post said. Hugs and Kisses "I'm always surprised at how much there is of this when I'm doing business. I'm getting hugs and a kiss on the cheek as a hello. Usually it's after the very first meeting. The very first meeting is still usually a handshake." But Post is a fan of hugs and kisses on the job after the first meeting, depending on your field. "I like feeling like I'm doing business with a person who I have a personal connection with. I know many people who want to keep professional professional and they don't want to be hugging somebody that down the line they might have to say, 'Look, we can't work with you anymore.'" Brainstorming Such think sessions have an etiquette all their own. Post warns against passively trying to control through rejection, where a participant brings no ideas to the table but spends the time pooh-poohing the ideas of others. "Sure, there are going to be some ideas that you knock down for a certain reason, whether they conflict with a contract or it's nothing like what the client is going to want, that sort of thing," she said. "But a brainstorming session needs to be the kind of open environment where you let things marinate, you let them percolate. It's one of those places where being the negative Nelly, being the person who's saying no, no, no, no all the time does not make you a team player and it does not make you smarter than everybody else. For me, that is the most annoying person to have on a team." Working From Home You may know exactly how you want this to go, Post said, but your friends and neighbors may have other ideas. "It's really important to lay boundaries with friends, lovers, neighbors. Let them know, 'This really is my work day and I do need to focus and be focused and dropping by just isn't something I can accommodate. I'd love to see you at 5.' " Does that go for spouses, too? Is it OK for an at-office spouse to leave chores for the home-office spouse? "No, not without talking about it first. You need to talk about it ahead of time, because that really is a work day," she said. Post advises making a schedule and sticking to it. And she's not an advocate of staying in PJs. "Take a shower, get dressed. It's still your work day."

Mortgage Applications Rise as Rates Fall

Brian Chan/Alamy NEW YORK -- Applications for U.S. home mortgages rose last week as interest rates declined, an industry group said Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.3 percent in the week ended April 11. The MBA's seasonally adjusted index of refinancing applications jumped 6.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 1.3 percent. Fixed 30-year mortgage rates averaged 4.47 percent in the week, down 9 basis points from 4.56 percent the week before. The survey covers more than 75 percent of U.S. retail residential mortgage applications, according to MBA.

Wanted: Bubble Detector

Imagine if somehow we could rig up a bubble detector: something to tell investors when stock prices had reached unsustainable levels. Would stock market crashes disappear? Or could you at least learn to avoid them?

See Also: Hot Air Behind the Stock Bubble Talk

A professor at the California Institute of Technology thinks he might be onto such a detector. Colin Camerer is a genius, which isn't so unusual on the geek-packed campus of Caltech. But Camerer is certified, having been awarded a so-called genius grant from the MacArthur Foundation last September. The no-strings-attached fellowships bestow a total of $625,000 on each recipient over five years. Camerer will use the windfall to further his studies in the emerging field of neuroeconomics, which uses magnetic resonance imaging to analyze brain activity to better understand human decision-making.

The idea of a bubble detector comes from a recent study coauthored by Camerer in which Caltech students watched replays of trading sessions rigged in a lab. Half of the sessions resulted in bubble markets, in which prices significantly exceeded the value of the asset. The Caltech students, given a stake of $60 at the outset, were periodically asked whether they would buy, sell or hold shares of the asset at the going price. Despite the fact that the fundamental value of the lab-created security was easy to calculate, based on dividend payments that decreased at regular intervals over the sessions, some of the students got swept up in the bubble anyway. "These kids are extremely analytical," says Camerer. "The median math SAT score here is 800 [out of 800]. It's hard to believe they can't count and keep track of a dividend value."

Scans of the students' brains found that susceptibility to bubble markets is associated with two types of activity. One is in the area where we make social calculations—figuring out what other people are going to do, what they want, what they think of us. "That supports the greater fool theory" of bubbles, says Camerer. "It's not that these investors don't realize that in 15 minutes the asset will be worthless. Instead, they think, Maybe I can sell [to a 'greater fool'] and get out."

Camerer also found that the human brain seems to recognize (probably not consciously) that a bubble market has a restless pattern that doesn't conform to the rhythm of normal markets. "People recognize that there's something unusual, some social contagion that's moving prices around," says Camerer. Ultimately, any early-warning system would include information from brain activity, prices and trading volume, as well as chatter in social media and the news. "I'm very optimistic about bubble detection," says Camerer.

Ka-ching Factor

Camerer also looks to the brain to discover why investors tend to sell winning stocks too soon and procras­tinate about dumping losers—behavior documented years ago by finance pro­fessors Terrance Odean and Brad Barber. Camerer found that when people sell winners, even those destined to rise further, activity flares in a part of the brain that assigns value and recognizes rewards. "The ka-ching feeling of locking in that profit, even though it's a mistake, feels good," says Camerer. "The lesson is that you somehow have to override that signal."

If you're reluctant to sell a poorly performing stock because you think it will come back, try this test: Ask yourself if you're willing to double down and buy more. "If your heart and brain tell you that's dumb, that's your way of knowing you don't really think it's going to bounce back," says Camerer.

Sounds a lot like the old Wall Street adage: Cut your losses short, but let your profits run. Camerer says he would not be at all embarrassed if "all we discovered is that Warren Buffett is right."

America's 10 fastest-growing economies

It's been a slow recovery, but according to a recent report, economic growth is expected to pick up in the coming years. The nation's economy grew by 1.9% in 2013. This year, the economy is projected to grow by 2.7%, and in 2015, it is forecast to grow by another 3.2%.

As nationwide growth accelerates, more and more local economies are expected to grow as well. While as many as 97 local economies shrank last year, the gross metro product (GMP) of only seven metro areas is expected to decline this year. In the case of Shreveport-Bossier City, La., the economy shrank more than 5%. On the other side of the spectrum, the economy of Midland, Tex., grew by 7.5%, the most in the nation. Based on data published by the Conference of Mayors and produced by IHS Global Insight, these are the nation's fastest-growing and fastest-shrinking economies.

Many of the nation's economies that contracted the most do not share much in common. These cities are geographically diverse, located from the Northeast to the Gulf Coast and the Midwest. They also have very different economies. Charlottesville, Va., and Binghamton, N.Y., are home to large universities, while in Decatur, Ill., the largest employers are in the manufacturing sector.

While not all the metro areas with the fastest-growing GMPs in 2013 share the same traits, many are benefiting from the U.S. energy boom. Midland and Odessa, Texas, benefit directly from energy production in their areas, while Fargo, N.D., and Pascagoula, Miss., are hubs of oilfield and shipping, respectively.

An important factor that can boost a local economy is trade, either with other parts of the U.S. or with other countries, Alec Friedhoff, senior research analyst at the Brookings Institution, told 24/7 Wall St. "Most of these places all have similar levels of locally-serving jobs — doctors, dentists, barbers, that kind of thing — but the question is how are these places bringing in [outside] income," Friedhoff said. Midland and Odessa, the nation's two fastest g! rowing economies last year, both produce oil, which is always in high demand, while shipbuilding is a major contributor to the Pascagoula economy.

Local economies often rely on one production or trade sector. As long as the sector is booming, it can be a source of economic and job growth, but there can be a downside to this reliance. Local economies often follow the cycles of large companies manufacturing products for the global markets in their backyards, according to Friedhoff. "If you're a small metro area depending on a vulnerable export sector, once that industry goes, you're in big trouble," Friedhoff said. In one prominent example of this, Caterpillar cut hundreds of jobs in Decatur last year in response to a global slowdown in the mining industry. Decatur's economy shrank by nearly 5% last year, and no metro area had a larger proportional job loss.

In metro areas, where economic growth is strong, jobs frequently follow. Many of the nation's fastest-growing metro areas also had rapid job growth. Both Bismarck, N.D., and Midland, Tex., were among the top 10 cities in each measure. Just one top rated metro area, Trenton-Ewing, N.J., had slower job growth than the U.S. overall. Unemployment was also typically low in many of the fastest growing areas, with all but one having lower unemployment rates than the U.S. November rate of 7%. Also, the four metro areas with the lowest unemployment rates that month were among the 10 fastest growing economies in the nation.

For slumping economies,however, the story was often quite different. Some of the metro areas with the largest GMP drops had extremely high unemployment rates. Among these was Yuma, Ariz., where an eye-popping 30.6% of the labor force was unemployed. Yet, both Lafayette, La., and Charlottesville, Va., had two of the lowest unemployment rates in the U.S. as of November despite their economies contracting last year.

Based on the Conference of Mayors' most recent economic report, produced in conjunction with forecasting c! ompany IH! S Global Insight (IHS), 24/7 Wall St. identified the metropolitan statistical areas with the largest growth and contraction in real gross metropolitan product during 2013. Figures for 2013 GMP growth are estimates. Employment changes for 2013, as well as forecasts for 2014, are also from the report. Unemployment rates are from the Bureau of Labor Statistics (BLS), are seasonally adjusted and reflect figures from October. We also utilized employment data from the BLS, as well as economic statistics from the Census Bureau's 2012 American Community Survey.

These are America's fastest-growing economies:

10. Trenton-Ewing, N.J.
> 2013 GMP change: 4.2%
> 2013 change in employment: 2.0% (tied-65th best)
> Projected 2014 GMP change: 1.5% (69th worst)
> Unemployment rate: 6.4% (143rd lowest)

The Trenton area's economy grew at an increasingly fast pace in each of the last three years. The area's GMP growth rate rose from 2.2% in 2011 to 4.2% last year. Employment rose by 2% last year, slightly higher than the national growth rate. However, the area's economic news has not been all positive. The area's GMP growth rate is expected to decrease to 1.5% in 2014, less than the IHS projected U.S. growth rate of 2.7% in 2014. Super Bowl XLVIII, being held at East Rutherford, New Jersey, is expected to benefit many parts of northern New Jersey, as well as New York City. Trenton, however, may not profit as much as other towns despite its relative proximity.

9. Columbus, Ind.
> 2013 GMP change: 4.3%
> 2013 change in employment: 3.5% (13th best)
>Projected 2014 GMP change: 3.8% (14th best)
> Unemployment rate: 5.5% (72nd lowest)

Columbus' economy has had exceptionally strong growth in the last few years. The area's economy grew by nearly 10% in 2012, the fifth fastest rate in the U.S. And although the area's economic growth rate of 4.3% was slower last year, it was still among the fastest rates in the nation. The area is highly dependent on manufac! turing, a! nd according to a 2012 report from Economic Modeling Specialists Intl., it highly "exemplifies the intriguing potential, and inherent risks, that come with relying on the manufacturing sector." Engine and motor vehicle parts makers are a huge part of the area's economy, where manufacturing jobs accounted for nearly 20,000 of the 53,000 total jobs as of November.

8. Cheyenne, Wyo.
> 2013 GMP change: 4.4%
> 2013 change in employment: 3.6% (10th best)
> Projected 2014 GMP change: 1.1% (34th worst)
> Unemployment rate: 4.6% (32nd lowest)

Cheyenne is Wyoming's capital and its most populous city. While the city's economy grew by a fast 4.4% clip last year, its expansion hasn't been consistent in the last few years. Cheyenne's economy actually contracted by 1.2% in 2011, even as the GMP of more than 260 of the nation's 363 metro areas grew that year. Last year's high growth rate isn't expected to continue this year. IHS Global Insight estimated that the area's output will increase by just 1.1% in 2014, lower than the 2% growth rate estimated for the vast majority of metro areas.

7. St. Joseph, Mo.
> 2013 GMP change: 4.5%
> 2013 change in employment: 1.8% (92nd best)
> Projected 2014 GMP change: 2.3% (tied-144th best)
> Unemployment rate: 5.2% (61st lowest)

The St. Joseph metro area's economy grew by almost 10% in 2012. And while the area failed to grow at the same pace last year, the unemployment rate in the area, as of November, was just 5.2%, well below the national rate. The area is a major center for agricultural sciences and animal health businesses. According to IHS estimates, construction activity in area is expected to increase substantially in the next few years, while wages are expected to rise steadily as well.

6. Bismarck, N.D.
> 2013 GMP change: 4.9%
> 2013 change in employment: 3.0% (25th best)
> Projected 2014 GMP change: 3.5% (27th best)
> Unemployment rate: 2.4% (the lowest)

North Da! kota has ! been going through one of the largest economic booms of any state in the last few years due to increased activity in the Bakken formation. Bismarck has reaped the benefits of this boom. The metro area's GMP grew by 8.5% in 2012, the seventh largest growth rate of any metropolitan area that year. As of November, no metropolitan area had a lower unemployment rate than Bismarck, where just 2.4% of the labor force was without a job. According to The Bismarck Tribune, the pace of the oil boom in the region has slowed but is still expanding rapidly. IHS estimates Bismarck's GMP will increase by 3.5% this year, still one of the largest increases of any metro area.

5. Fargo, N.D.
> 2013 GMP change: 5.0%
> 2013 change in employment: 3.2% (20th best)
> Projected 2014 GMP change: 3.2% (44th best)
> Unemployment rate: 3.0% (2nd lowest)

Although on the other side of North Dakota from the Bakken formation, Fargo has also benefited from the state's oil boom. In each of the past two years, the Fargo metro area's economy has grown by at least 5%. Employment growth has been solid as well, at around 3% per year in the last two years, while the unemployment rate in the area is projected to be just 3% in 2014. Casselton, a small town outside Fargo, has become a major hub for oil transportation, which has shifted to trains because the U.S. lacks pipelines to move oil from North Dakota. However, a recent 400,000 gallon oil spill in the town has prompted safety concerns.

4. Sioux Falls, S.D.
> 2013 GMP change: 5.2%
> 2013 change in employment: 2.0% (tied-65th best)
> Projected 2014 GMP change: 2.9% (70th best)
> Unemployment rate: 3.1% (tied-3rd lowest)

While South Dakota has not benefited from the oil boom as North Dakota has, parts of the state still recorded robust growth last year. The economy of Sioux Falls, the state's largest city by population, grew by 5.2% last year, and it is projected to grow another 2.9% this year. One of Sioux Falls' strengths! has been! its financial sector. Citibank has a substantial presence there, as do several other banks. As of November, 11% of the metro area's jobs were in the finance sector. The city's population has been growing, and Sioux Falls set a city record for construction in 2013 at $588.2 million worth of building permits issued.

3. Pascagoula, Miss.
> 2013 GMP change: 6.2%
> 2013 change in employment: 3.1% (23rd best)
> Projected 2014 GMP change: 2.3% (tied-144th best)
> Unemployment rate: 9.0% (54th highest)

Shipbuilding is a major industry in South Mississippi and the Pascagoula area. Located in Pascagoula, Ingalls Shipbuilding claims to be the state's largest manufacturing employer, with 11,000 workers. The U.S. energy boom has benefitted Pascagoula as well. Shipments of liquefied natural gas through the Port of Pascagoula have been rising, although exports are still approved by the U.S. government on a case-by-case basis. Although the area's economy grew by an impressive 6.2% last year, growth has been volatile in recent years. Pascagoula's economy shrank by 5.6% in 2011. Additionally, the unemployment rate remained fairly high, at 9% as of November.

2. Odessa, Tex.
> 2013 GMP change: 6.7%
> 2013 change in employment: 5.2% (2nd best)
> Projected 2014 GMP change: 3.1% (50th best)
> Unemployment rate:3.7% (11th lowest)

Similar to North Dakota, the energy sector contributed to rapid economic growth in parts of Texas, in large part due to the development of hydrofracking technology. Odessa has been at the heart of the West Texas oil boom, with 2012 drilling activity surpassing early 1980s levels — when the area last experienced a major boom — according to the Dallas Morning News. Employment in the region grew by more than 5% in 2013 alone. In the past 10 years, employment in the mining, logging, and construction sector has roughly tripled.

1. Midland, Tex.
> 2013 GMP change: 7.5%
> 2013 change in employment: 6.3% (the best)> P! rojected 2014 GMP change: 3.9% (10th best)
> Unemployment rate: 3.1% (tied-3rd lowest)

While they are technically in separate metropolitan statistical areas, Midland and Odessa are less than 25 miles apart. Midland, like Odessa, has reaped the benefits of the West Texas oil boom. According to the Dallas Morning News, the city's population has expanded so rapidly that there is a severe housing shortage. If the IHS estimate for 2014 is correct, the Midland area will have among the top 10 GMP growth rates four years straight. Midland was also the fastest-growing in the past two years. Its GMP grew by 14.4% in 2012 and by 7.5% in 2013. Between November 2009 and November 2013, the number of nonfarm jobs in the metro area increased by 35%, versus just 5.5% for the U.S. overall.

MORE: Click here to see a list of fastest-shrinking economies

MORE: Countries where children have the best opportunities

MORE: States with the least (and most) government benefits

24/7 Wall St. is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

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Big Stock Buyback Trumps Convertible Debt Offering by Yahoo!

Yahoo! Inc. (NASDAQ: YHOO) has made two announcements hidden in one announcement after the close on Tuesday. The first announcement is a $1.0 billion convertible senior notes offering which will mature in 2018. The more important announcement is that Yahoo! has increased its common share buyback authorization by $5.0 billion.

Today’s note offering is a private placement as a Rule 144A under the Securities Act of 1933, meaning that they will not be registered securities and will never see the light of day for retail investors. The notes will be convertible into cash, shares of Yahoo's common stock or a combination of cash and shares of common stock, at Yahoo's election. Yahoo! said that it may use up to $200 million of the net proceeds to repurchase shares of its common stock from purchasers of notes in the offering in privately negotiated transactions.

Back on July 22, Yahoo! announced that it had entered into an agreement to repurchase 40 million shares of its common stock owned by Third Point LLC at a purchase price of $29.11 per share. Shares closed down almost 1% at $34.63 on Tuesday, but the shares are back up almost 2% more at $35.40 in the after-hours after this report. Yahoo!’s stock has traded in a 52-week range of $18.19 to $36.19.

As far as what another $5 billion translates to in real world terms, the stock’s market cap according to Yahoo! Finance is just over $36 billion.

Tech stocks end higher as Netflix, Apple rally

SAN FRANCISCO (MarketWatch) — Technology stocks ended higher on Monday, tracking the broader stock market as shares of Netflix Inc. and Apple Inc. rallied.

Netflix (NFLX)  rose 7.8% to close at $324.36 after The Wall Street Journal reported that the company is in talks with cable operators to include its streaming-video service in set-top boxes.

Netflix Netflix's original show "Derek" starring Ricky Gervais.

Apple (AAPL)  rose about 1% to close at $496.04. In a Sunday note, Mizuho Securities analyst Abhey Lamba wrote: "We expect a slight revenue and earnings per share beat driven primarily by strong iPhone shipments, which could offset any weakness in iPads."

The start of a new week with the federal government still shut down sent stocks falling in early trades, but the Nasdaq Composite Index (COMP)  recovered, rising 0.6% to close at 3,815.27. The Dow Jones Industrial Average (DJIA)  also turned positive, closing up 0.4% on news of a possible budget deal in Washington D.C.

Facebook Inc. (FB)  shares rose 0.8% to close at $49.51 after the social network announced its acquisition of Onavo, a privately held compression technology and mobile analytics company.

But Expedia Inc. (EXPE)  fell 6.2% to close at $48.51 after Deutsche Bank analyst Ross Sandler cut his rating on the online travel agency to hold from buy, citing intensifying competition in the U.S. market. Sandler also pointed to worries about management changes at Hotels.com.

• Government shutdown: Track the latest news out of Washington »
/conga/story/2013/10/governmentshutdownstream.html 282136

Other major tech issues were in the red, including Yahoo Inc. (YHOO)  , AOL Inc. (AOL)  and Groupon Inc. (GRPN) .

The Philadelphia Semiconductor Index (SOX)  was up a fraction, as some major chip stocks posted gains. Advanced Micro Devices (AMD)  climbed 3.7% to close at $3.97.

Wedbush analyst Betsy Van Hees raised her rating on the stock to outperform from neutral, telling clients in a note: "We believe in the near-term AMD will benefit from the ramp of gaming consoles and a modest lift from second half of the year seasonality, and longer-term is well positioned to gain market share in servers with its dual architecture strategy."

Shares of Intel Corp. (INTC) , Nvidia Corp. (NVDA)  and SanDisk Corp. (SNDK)  also posted gains.

The Best Entry-Level Finance Jobs For 2013

While the national rate of unemployment in America may have risen slightly between April and May this year, it has generally continued along a downward trend since the final financial quarter of 2012. The portents of moderate but sustained growth were continued in June. Although applications for U.S. unemployment benefits rose by 18,000, this remained consistent with the current level of job creation.

Further inspection of these statistics reveals a slightly different perspective, however, especially with regard to the type of jobs that are being created in the contemporary employment market. While the U.S. economy added an estimated 175,000 new jobs in May, for example, the majority of these were low paid, entry-level positions that delivered less than a living wage.

Maximizing Your Earning Potential in the Current Job Market
With youth unemployment in the United States also remaining uncomfortably high at 16.2%, it is clear that the job market poses considerable challenges to the majority of social demographics. The issues facing college graduates and America's unemployed youth offer a fascinating insight into the mindset of employers, however, as a lack of practical work experience often undermines any academic qualifications that candidates have acquired. With this in mind, entry-level jobs actually offer individuals a unique opportunity to maximize their current earning potential as they gather valuable industry experience. The key is to identify the most rewarding entry-level jobs, both in terms of salary and future career prospects. Consider the following options:

Financial Analyst
While the current economic recovery may be extremely tentative, it has at least been sustained since the opening financial quarter of 2013. This triggered a rise in business confidence during June, as firms begin to look toward expansion and the investment of their accrued capital. In order to make wise and responsible decisions, however, organizations often turn to financial analysts for guidance and relevant market advice that help to maximize their potential returns.

Requiring a bachelor's degree and accessible to individuals who have no practical experience within the industry, it carries a median annual wage of $60,000, according to Glassdoor.com, and offers tremendous opportunities to recently graduated individuals.

Investment Banking Analyst
If you are motivated by a high bottom line salary and wish to apply your skills in a more clearly defined financial sector, becoming an investment banking analyst may be the ideal career choice. With a competitive median annual salary of approximately $73,000, it requires you to interpret financial data and economic trends while offering actionable investment advice. Clients can vary from wealthy investors to government agencies that are looking to issue stocks and bonds, so you must display diverse communication skills alongside your bachelor's or master's degree.

This job role is the ideal starting point for college graduates who are looking to forge a career in investment banking, which means that competition for positions is usually intense and extremely challenging.

Junior Tax Associate
There have been positive signs of growth in the financial services sector during the formative stages of 2013, with business lending, life insurance and the asset management industry all benefiting from increased demand. Some financial services remain in constant demand, however, especially those that are associated with taxation and the need to comply with changeable financial legislation.

With this in mind, the role of a junior tax associate is ideal for college graduates who are looking to develop valuable workplace experience in the financial sector. Although it boasts a relatively moderate annual median salary of $53,000, it allows you to work alongside experienced tax associates and review client's internal fiscal reporting systems. It is a job accessible to anyone with a bachelor's degree in accounting and any additional accreditations.

Financial Auditor
Regardless of your salary expectations or long-term career goals, you may decide to select a financial sector role that has both immediate and long-term potential for growth. The role of financial auditor provides a relevant example, as the recent global recession and its aftermath has forced businesses to place their spending and fiscal reporting under more stringent scrutiny as they look to learn valuable economic lessons.

As an auditor, you will review companies' financial statements and ensure that their public records are kept accurately and in compliance with existing legislation. You will also secure an annual median salary of $49,000, while a four-year bachelor's degree is the minimum academic requirement for applicants. To improve your prospects and compete in this well-populated sector, you should also consider completing an advanced degree course in accounting or business administration.

The Bottom Line
As entry-level jobs, these positions offer graduates of all ages an opportunity to forge a career in the growing financial services sector. They remain accessible to anyone with a bachelor's degree, regardless of each individual candidate's level of practical workplace experience and industry knowledge; they also deliver relatively competitive financial remuneration. So while an excess of low paid, entry-level jobs may be the source of controversy in the current employment market, it is possible for those with the necessary academic qualifications to maximize their earning potential both now and in the future.

How to Lead by Example

We've heard it since kindergarten: the best way to lead is to lead by example. 

Whether it has to do with honesty, work ethic, or customer service, social norms are hugely influential in how we behave and treat others. And, of course, the best way to establish a social norm as a leader is to embody those traits that you want to see in others.

It sounds simple, but how do you actually implement it? 

Start with one thing at a time 
Building a culture of excellence, communication, and respect isn't going to happen overnight -- especially if you're just starting out on this whole leading by example thing. 

Instead of trying to fit in everything but the kitchen sink, sit down and think about the specific norms and traits you most want to see established. Better yet, make a list. It might have three items on it or fifteen, but writing it down will keep it fresh in your mind as you go through the process, and will help you stay focused on these big-ticket, big-picture goals. 

From there, choose one thing. Maybe your trait is "Listen to other people's opinions." Put it on Post-it notes, set a reminder on your phone -- whatever it takes, make it a priority to establish this habit over time. Every day, remind yourself to seek out and listen to the opinions of others.

Once it becomes second nature, say after two weeks, you can go to the next item on the list. It sounds slow perhaps, but do this every day over the course of a year and you've suddenly established 17 killer new habits that you can be proud of. 

Don't ask of others that which you won't do yourself 
If you want your team or your colleagues to deliver on time, be sure you deliver on time. If you want to see great customer service from others, be sure to give it yourself. 

When people see that you are willing and able to do what you say needs to be done, they'll be more likely to do it themselves. This is partially due to social norms (for better or for worse, we tend to mimic others' behaviors), but it's also partly because setting an example demonstrates that the behavior is possible. 

That is to say, sometimes it can be hard to believe that you can maintain patience and an upbeat attitude when a customer is being rude. But if you see someone else demonstrating how to do it, suddenly it's no longer an unattainable ideal. 

On that note, help others reach their potential 
Setting an example is a powerful way of teaching: you show how something gets done by doing it, and people learn by watching. 

And just like your kids, your colleagues see pretty much everything. What they might not see is all the intellectual work that goes into your new great habit; for example, maintaining your cool with that abusive customer. Everyone can see that you've done it, but maybe someone needs a bit more help in learning how to do it. 

If you suspect that might be the case (someone asking you, "Wow, how did you do that!?" is a great hint that it is), be very free with sharing your techniques. Maybe you counted to ten, or pretended the customer was in their underwear, or channeled the example of a really patient person you know.

Whatever it is, share your techniques with others so that they can also learn how to live up to your example. 

Take responsibility 
If you want other people to behave in a moral, professional, or innovative manner, they need to be empowered to take responsibility for their actions -- so of course it's imperative that you as well take responsibility for your actions.

That means that when you fail, own up to it. When you get it wrong, admit it. 

We all lose our cool at the wrong time or slip into a bad habit that we've been trying to break. These shortcomings don't make us losers, they make us human. 

But that doesn't mean they shouldn't be acknowledged and overcome. Taking responsibility for where you've gone wrong will not only humanize you with your colleagues, it will help give them the courage to try to follow your lead and learn from your mistakes. That's because you're showing that mistakes are OK and that they can be overcome. 

By showing up every day and taking responsibility for overcoming those mistakes, you're setting the most important example of all: that self-improvement and excellence are valid, important, and achievable goals. 

How one Seattle couple secured a $60K Social Security bonus -- and you can too
A Seattle couple recently discovered some little-known Social Security secrets that can boost many retirees' income by as much as $60,000. They were shocked by how easy it was to actually take advantage of these loopholes. And although it may seem too good to be true, it's 100% real. In fact, one MarketWatch reporter argues that if more Americans used them, the government would have to shell out an extra $10 billion… every year! So once you learn how to take advantage of these loopholes, you could retire confidently with the peace of mind we're all after, even if you're woefully unprepared. Simply click here to receive your free copy of our new report that details how you can take advantage of these strategies.