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The monetary crisis of 2007-2009 led to dividend cuts in many financial companies. Investors who were greatly concentrated in the financial sector suffered in the process. Other dividend investors who maintained a balanced income portfolio though saw their dividend income not merely stabilize but also increase, as most prominent non-financial dividend stocks continued raising or maintaining distributions. For persons who kept receiving dividend checks it seemed as if the fiscal crisis is something that did not affect them. Companies which raised distributions in the face of hardship in the overall economy show that they have sufficient liquidity to invest and nurture their operations and also to share their results with stockholders.

Different than most stocks, where you only make money when you sell them for more than you paid, dividend stocks pay you for just owning them. Since you’re receiving regular cash payments, you can achieve a worthwhile return even in a weak market. Even better, if the market does stay strong, you’ll almost certainly enjoy share price appreciation plus the steady dividend income.

Below are a number of select companies that recently decided to reward their shareholders with fruits of their labor in the form of bigger cash dividends:

CVS Caremark (CVS) is an important operator of both retail drug stores and pharmacy benefit administration services in the U.S. January 12th the company raised its quarterly dividend 15% to $0.0875/share. The dividend is payable February 2, 2010 to holders of record on January 22, 2010. The yield based on the new payout is 1.03%.

Linear Technology (LLTC) manufactures high-performance linear integrated circuits. January 12th the corporation boosted its quarterly dividend to $0.23/share. The dividend will be paid on February 24, 2010 to stockholders of record on February 12, 2010. LLTC has raised its dividend for 17 successive years. The yield based on the new payout is 3.08%.

Shaw Communications (SJR) is a Canadian communications business that provides broadband cable TV, Internet and satellite direct-to-home services to approximately 3.4 million consumers. January 14th the company boosted its dividend 5% to $0.8775/share. Shaw’s dividends are declared and paid on a monthly basis and this increase will begin March 30, 2010. The yield based on the new payout is 4.37%.

Ever since the early part of this century income has been in short supply. Ultra-low policy rates sent investors scrambling for yield, creating a puzzling mix of high volatility, monetary inflation and major instabilities in monetary markets. Yet, investors must still continue to diversify appropriately, control emotion, and, above all, manage risk. For the current climate, staying high up in capital structures, emphasizing excellent yield and a cautious stance are appropriate.

Commercial lender CIT Group Inc., (CITGQ) which is operating under bankruptcy protection, said Wednesday it would ask a court to approve its prepackaged plan to exit Chapter 11 at a hearing on Dec. 8. CIT is the first company to file for bankruptcy after being bailed out by the government last year. Wasn’t it too big to fail? Not even “Cash for Bankers” could save CIT.

On the up side, Chrysler Group LLC is making an operating profit and building cash, the No. 3 U.S. automaker’s boss told reporters and industry executives yesterday as he unveiled a five-year plan to turn around the company. The disclosure of financial information was Chrysler’s first since a restructuring funded by $12 billion from the U. S. government. It aims to streamline its vehicle lineup, focusing its Dodge brand on cars and minivans while turning Ram into a trucks only brand. Richard Palmer, the company’s chief finance officer, said the automaker’s operating income would rise to the breakeven point by 2010 and net income would break even by the following year.

The United States finds itself in the midst of an unprecedented cleanup of toxic financial waste. The response to the credit crunch, housing collapse, and recession by various and sundry government agencies has rung up trillions of dollars in taxpayer liabilities, including bailouts for Fannie Mae (FNM) and Freddie Mac (FRE), General Motors (BGM) and Chrysler (3 times), American International Group (AIG) (4 times), Bank of America (3 times), and Citigroup(C) (3 times). It has forced capital injections into other major banks, and government-engineered mergers involving once-vaunted firms Bear Stearns, Goldman Sachs(GS), Morgan Stanley (MS), Merrill Lynch, and Washington Mutual (WAMUQ)(now in the hands of JPMorgan Chase), and Wachovia, flipped over the course of a weekend to Wells Fargo (WFC).

If we have learned anything about bailouts over the last hundred years, it is that each rescue attempt is more costly than the one that preceded it. This is usually true in terms of the immediate expenditure, but even more so in terms of the long term damage done to the financial system. The costs have raced into the trillions, an unprecedented sum of money, greater than any other single government expenditure in the nation’s history.

Historically, excessive greed, recklessness, and foolish speculation were punished by the market. Speculators lost their reputation, their capital and their influence. (Back in the day when skyscrapers had windows that opened, some even lost their lives). Their pools of cash migrated to the hands of people who handled risk in a more intelligent fashion. This is – or perhaps was – the great virtue of capitalism: Money finds its way to where it’s treated best. Capital gravitates toward those who can balance risk and reward, and who can obtain positive investment results, without blowing up. It’s no coincidence that the largest venture capital firms, the biggest hedge funds, and the longest lasting private trusts know how to manage risk. They preserve their capital. They have a healthy respect for losses, and strive to keep them manageable. They do not, as so many have done recently, put all their money on a single number, spin the roulette wheel and hope for the best.

Government intervention thwarts this migration of capital. Instead of the relentless efficiency of the marketplace we have instead politically expedient shortcuts that bypass this process. In the end, this results in a misallocation of capital, and an embracing of risk and short term motives that leads to utter recklessness.

First Solar Inc. (FSLR) this week posted revenue far below Wall Street’s view as weak demand and heavy competition weighed on prices. First Solar (FSLR) said it had third quarter revenue of $153 million, up $99 million, or $1.20 a share from a year ago. That beat analysts’ average view of $1.74 per share. But the company generated revenue of $481 million in the quarter, sharply below the $529 million expected by analysts.

One of the biggest hurdles any new investor in solar stocks faces is getting up to speed on the technology. As with all technologies, the rapid pace of progress can leave investors uncertain as to where to place their bets. How can you tell which companies are the most promising? There are four important criteria to keep in mind when evaluating solar companies.

CUSTOMER CONCENTRATION

A company heavily dependent on a few major customers is more exposed to the risk of losing one or more of its top customers and would also have less bargaining power with its customers. For example, BP Plc’s (BP) BP Solar accounts for about 30 percent of JA Solar’s (JASO) sales, and the investor  would like to see a more diverse mix of customers.  Similarly, First Solar (FSLR) derives a significant percentage of its revenues from a small core group of customers primarily within Europe and specifically Germany- the world’s biggest solar market.  For Energy Conversion Devices (ENR), 40 percent of revenues come from its top five customers. An investor would ideally want to invest in a solar company with a broad, diversified customer base.

TRACK RECORD IN ACHIEVING SCALE

It is important for a solar company to be able to move technology from the laboratory to the factory as soon as possible. As Yingli Green (YGE) notes in an SEC filing, “Deviations in the manufacturing process can cause a substantial decrease in output and, in some cases, disrupt production significantly or result in no output.” If a company has a reliable approach to replicate its production lines in order to ramp up, it would be able to achieve scale with more ease and reliability.

Energy Conversion Devices(ENR) presents an interesting case where ramp times have decreased dramatically over the last few quarters. As execution risk may have several or many underlying causes, a company’s ability to scale commercially is a significant risk and must not be underestimated. Thin film technologies have a scalability advantage in the sense that the deposition techniques they employ can be more easily moved from the laboratory to the factory.

Suntech Power (STP) plans to manufacture higher efficiency solar cells using Pluto technology and has in place a pilot line to achieve conversion efficiencies of 18 to 19 percent. Given its relatively limited operating history investors would want to know how feasible it is for the company to achieve the required scale. Despite the newness of many solar companies, the investor must judge execution risk by allowing for increases in his discount rate for either or both new companies and new technologies.

MANAGEMENT QUALITY AND CORPORATE GOVERNANCE

Management quality is a parameter which is a crucial element of an investor’s decision parameters. Corporate governance is another area where investors seek reassurance. He or she would want to know if there are any potential pitfalls related to conflicts of interest.

Management’s experience in the Company and Industry is a simple yet reliable indicator of a company’s ability to deliver on its plans.

Top management at JA Solar (JASO) includes several officers who are very new to the company.

Management at SunPower (SPWR) has been stable over the last five years. Key management personnel come with strong experience and credentials in the solar industry.

Evergreen Solar (ESLR) also has an experienced management team.

Energy Conversion Devices (ENR) has leading photovoltaic experts such as Dr. Subhendu Guha and Michael  Fetcenko in its management ranks. On the other hand, several of the other management personnel – including the President and CEO – are relative newcomers to the company and industry.

The management team members at First Solar(FSLR) are generally composed of personnel experienced in high technology industries.

Such an analysis of the company’s management credentials and track record would lend strong support to an investor’s decision on whether to invest in the company.

POTENTIAL CONFLICTS OF INTEREST AND OTHER COPORATE GOVERNANCE ISSUES

An investor would want to know up front about any conflicts of interest that senior management members might have. For example, JA Solar’s  (JASO) chairman is also the chairman of one of its major suppliers. Further, some companies have antitakeover measures incorporated in their charter. An investor in a solar company would want to look at these provisions and study their potential impact in the future. In the case of First Solar (FSLR), a significant percentage of shares (>45 percent) is held by a single shareholder and affiliates.

My personal picks are:  Sunpower (SPWR) and Evergreen (ESLR). They still have significant upside left, as well as a stable and experienced management team.

Market timing can be an essential part of option trading success. Unfortunately, the mistake that  too many traders make is that they fail to realize that there is more to option trading success than just market timing. Not only is this kind of trading obviously bad for your trading account, but the experience of making a good market timing call and still losing money can be extremely damaging psychologically.

The problem is often that many unwary option traders view option trading as the same game as buying and selling stocks. In option trading, there is any number of additional factors that can play a role in affecting a trade’s profitability.

If you buy a far- out -of –the- money option, typically the underlying security must make a very large move simply to reach a breakeven price let alone to show a meaningful profit. Likewise, if you buy an option that is trading at an extremely high-implied volatility, and that volatility level falls significantly after you enter the trade, the amount of time premium in the option that you bought may also collapse.

In order to avoid this mistake, you must make a commitment to go the extra step once your market timing mechanism has generated a signal. One useful technique is to compare the current level of implied volatility with the historical range of volatility for the particular security you are considering to objectively determine whether the current level is high or low. Market timing is only one part of a much bigger picture.

One of the most common mistakes that even disciplined, systematic traders make is to abandon their well thought-out trading approach at exactly the wrong time. Consider an individual who decides to devote himself to developing a profitable trading technique. Once the criteria are set and the hypothetical trading results are deemed acceptable, he then begins watching the technique in the markets in real time. Pleased with the real time results, the trader decides to “take the plunge” and begin trading using his newly developed technique.

As with all things when it comes to trading, eventually his trading technique goes flat for awhile. Then, suddenly, out of the blue, the bottom drops out – even if only temporarily – and the trader begins to lose money at a much faster clip than he is mentally prepared for.  Ultimately, the fear of losing even more money overcomes him and our trader decides to “pull the plug” in order to stop the pain. And if he is like many other traders, in the next few days, weeks, or months, he will watch his technique begin to work well again, quickly earning back the money that had previously been lost and garnering new profits. But while the system itself is doing well, the trader is left behind, afraid to jump back in now that he has “missed the bounce”.

No matter how “accurate” a trader believes his or her market timing method to be, the probability of a given underlying security moving in the predicted direction between the time the option is purchased and the expiration date for that option is exactly 50/50. This statement has stirred some debate in the past and is not accepted by many ardent traders. The true odds are always 50/50. Thus, the ardent market timer enters each trade with the flawed perception that the odds are 80/20 in his favor, while in fact they are no better than 50/50. Option premiums may fluctuate independently based on several factors that are never considered by the market timer, such as time decay and changes in implied volatility.

The United States should welcome China’s advancing prosperity. For sixty years, the United States has promoted global prosperity to undergird our own, engineering an international system of open trade and efficient international markets. China’s emergence should not persuade us to smash that cornerstone of U.S. policy. In any case, a trade war with China would not be in our interests and would not be containable; it could spark recession throughout East Asia and depress our own economy. China is by far our fastest growing large market. That means jobs for Americans. China is also a supplier of low cost everyday products that Americans purchase to the tune of tens of billions of dollars a year. This helps to keep inflation in check. The People’s Republic of China is also a major purchaser of U.S. Treasury instruments, which helps to keep down interest rates. Further, access to the Chinese market is fundamental to the global strategy of many American companies.

While we must avoid a trade war, we need to defend our trade and investment interests. The Obama administration will do well to place our bilateral economic relationship in the context of broader issues of growth and reform. We should encourage China to move away from an export driven strategy toward a demand driven strategy. Adjusting the yuan to a market determined level should be part of that strategy. We need to persuade China’s leaders to reinvigorate reform by creating a financial services sector that encourages rational allocation of capital by eliminating subsidies to bankrupt state owned enterprises.

Nothing about the world’s current political and financial predicament is new. Indeed, today’s world economy bears a striking resemblance to the integrated markets and overwhelming prosperity of the period from 1870 to 1914. That, too, was a period punctuated by continual financial crises. Ironically, today we ask the same questions they did in 1914: What does it take to sustain this new, successful global economic system. What policy making perils could reverse this wealth creation? Stagflation? Deflation? Protectionism? What unexpected financial explosion or implosion could create waves that the world remains unprepared to handle except through trade wars and other beggar-thy-neighbor policies?

A senate bill introduced last month would extend the $8,000 first-time homebuyer tax credit for six months after its current November 30 expiration date. The National Association of Realtors is in full support of the potential increase, and believes that “expanding the credit to all buyers and raising it to $15,000 could be what brings down inventories and creates stabilization in the housing market.”

Of course, opposition exists. JP Morgan Chase feels that the venture will be a positive spark in the housing market, but thinks that the tax credit should be limited to first-time homebuyers. Others feel that adding such a significant amount to the deficit may put us in a bind in the coming years.

This tax credit is a government giveaway of up to $8,000 to help stimulate the housing market. It is 100% true that homes have dropped drastically in value and we have a number of years of surplus homes on our hands. But is this really why our economy is in trouble right now? Our economy is in trouble because we have too much debt and not enough good jobs.

This first time home buyer’s credit is like using morphine. It eases the pain but does nothing to alleviate the underlying cause. The deception is that it doesn’t ensure people will be able to afford homes on their own by having a job at a decent wage.

Creating a job may not make you feel any better about the loss of value in your home if you already have a job. It will, however, help us reduce our debt because people will have a source of income.

I don’t think anyone in America wants the government to be giving people money to buy a home. Isn’t that part of what got us into this mess? Allowing people to have a loan which has a value higher than that of the home?

Policy efforts to revive housing have had little impact to date on either rising repossessions or falling house prices. Worries about employment and future house price declines are keeping potential homebuyers on the sidelines.

Despite some signs of stabilization, housing markets remain weak and susceptible to further economic disruption. Policy attempts to revive housing, including foreclosure moratoriums, mortgage modification programs and federal subsidies for first-time homebuyers, have had little impact to date on either rising repossessions or falling house prices; this only adds to potential homebuyers’ worries.

The $8,000 housing tax credit for first-time homebuyers passed by Congress in February has helped spur some buying activity but hasn’t produced the expected flurry of activity. Expanding eligibility for the tax credit to more homebuyers might be a solution but could introduce some perverse incentives. At its root, the credit’s lack of efficacy may be its failure to address the fundamental issue keeping potential buyers out of the housing market: Fear.

Even with real estate discounted more than 50% below last year’s prices in some markets, buyers worry that values could sink further. With consumer credit restricted across the board, a more cautious, risk-adverse attitude is not only rational but wholly justified.

One problem is that such a one-time tax credit may subsidize buyers who were already planning to purchase a house. With its short expiration date, the credit may also lift prices (or slow their decline) in the short run, only to produce a sharp reversal in the trend after it expires on December 1. Housing tax credits are generally more effective at motivating buyers to choose specific locations than at affecting the timing of their purchases. As a means of converting renters to borrowers the tax credit’s impact has been much more limited.

In the wake of the recent meltdown, it is clear that government will play an important regulatory and stabilizing role in housing and mortgage markets. The tax-deductibility of mortgage interest, and the capital-gains exemption for the sale of primary homes are two examples where policy has affected prices. Backers of the credit hope it will prime the pump for self-sustaining growth in the housing market, but there is the distinct possibility that the stimulus will peter out when the program expires.