FinancialEdge: The Best Business To Be In During A Recovery (And Why)

The idea that economies expand and contract over a period of years, through a process known as the business cycle, has been around for a long time. French economist Clement Juglar was arguably the first to discuss this in detail in 1860, and Joseph Schumpeter later assigned the labels that are most familiar to us - expansion, crisis, recession and recovery.


Whether the statistical data fully supports the idea or not, the reality is that politicians, business leaders and the media still speak in terms of a recession/recovery/peak/collapse cycle and many investors manage their money accordingly.

While any one company or stock can stand out and perform well in almost any stage of the business cycle, those are the exceptions and not the rule. The rule, by and large, is that stocks move roughly in tandem with their broader industry group. As a result, it makes sense that investors should want to know which groups tend to perform best during various stages of the cycle. So where do most investors want to be in recovery?

To read the full piece, please go to:
http://financialedge.investopedia.com/financial-edge/0810/The-Best-Business-To-Be-In-During-A-Recovery-And-Why.aspx

New EPA Rules Could Stir The Air

Regulation is the ever-present risk for utility companies, and this came to the fore again this week with new potential EPA pollution regulations. In particular, these rules will target emissions of sulfur dioxide, nitrogen oxides and fine particles. If the EPA gets its way and the rules go into effect, it will mean tougher air pollution standards that affect 31 states in the eastern half of the United States. (Check out Save The Earth: Become A Capitalist.) 

Regulations always come with costs, though, and this one is no different. As the primary producers in the affected areas, American Electric Power (NYSE:AEP), Southern Company (NYSE:SO) and Duke Energy (NYSE:DUK) would face the brunt of the new rules.

Although the EPA says the regulations will add $2.8 billion a year in new costs, you can assume that the industry will disagree and point to higher costs. After all, these companies are going to face tough decisions about buying new technology, switching fuels, and shutting down small plants. Couple that with expected new rules on mercury emissions, and the industry is going to be facing some serious budgeting decisions in the coming years. 


For the complete piece, continue on to:
http://stocks.investopedia.com/stock-analysis/2010/New-EPA-Rules-Could-Stir-The-Air-AEP-SO-DUK-HON-FTEK-ACI-BTU0709.aspx