News electroballistics

Start of "Santa rally" dampened by "cliff" worries

Label: Business

NEW YORK (Reuters) - Stocks edged lower on Monday as caution over the potential for volatility driven by worries about the U.S. "fiscal cliff" dampened enthusiasm at the start of a seasonally strong period for equities.

The S&P 500 index <.spx> declined 0.9 percent on Friday, its biggest drop in more than a month, as a Republican plan to avoid the cliff - $600 billion in tax hikes and spending cuts that could tip the U.S. economy into recession - failed to gain any traction on Thursday night.

Sharp moves like that highlight how headlines from Washington can whipsaw markets, especially during the thinly traded period over the Christmas holidays.

Still, with the S&P 500 up 0.8 percent in December and on course for its strongest month since September, some analysts are predicting that stocks will find their footing during a market seasonality known as the "Santa rally."

"Right now we've seen some very constructive action in the market so I think that bodes well for this being a positive seasonal 'Santa' period over the coming seven days," said Ari Wald, a technical analyst at The PrinceRidge Group.

Wald points to an all-time high in the NYSE advance-decline line, which compares the advancing and declining stocks, as indication of strong participation in the rally off November lows that is setting stocks up for their best year since 2009. A large number of advancers to decliners shows there is broad participation across the equity market.

"Pull backs are buying opportunities," said Wald. "There has been really great participation on this move, a lot of small- and mid-cap stocks behaving well, pushing out to the upside; we're seeing some good leadership from offensive sectors of the market as well."

The Santa seasonality covers the last five trading days of the year and the first two of the new year. Since 1928, The S&P 500 has averaged a gain of 1.8 percent during this period and risen 79 percent of the time, according to data from PrinceRidge.

The Dow Jones industrial average <.dji> dropped 35.78 points, or 0.27 percent, to 13,155.06. The Standard & Poor's 500 Index <.spx> fell 3.69 points, or 0.26 percent, to 1,426.46. The Nasdaq Composite Index <.ixic> lost 10.68 points, or 0.35 percent, to 3,010.33.

The S&P 500 remains up more than 13 percent for the year, having recovered nearly all the losses suffered in the wake of the U.S. elections. The yearly gain would be the best since 2009.

Some U.S. lawmakers expressed concern on Sunday the country would go over the cliff, as some Republicans charged that was President Barack Obama's goal. Talks are stalled with Obama and House of Representatives Speaker John Boehner out of Washington for the holidays.

"It does seem like we are continuing through the same drift of the same thing we've had the past couple of weeks - cliff talk," said Nick Scheumann, wealth partner at Hefty Wealth Partners in Auburn, Indiana.

"You can't trade on what you don't know and we truly don't know what they are going to do," he said.

Congress is expected to return to Washington next Thursday as Obama returns from a trip to Hawaii. As the deadline draws closer, a 'stop-gap' deal appears to be the most likely outcome of any talks.

Trading volumes are expected to be muted, with U.S. equity markets scheduled to close at 1 p.m. (1800 GMT) ahead of the Christmas holiday on Tuesday.

In addition, a number of European markets will operate on a shortened session, with other markets closed entirely.

U.S. retailers may not see a sales surge this weekend as ho-hum discounts and fears about imminent tax hikes and cuts in government spending give Americans fewer reasons to open their wallets in the last few days before Christmas.

Aegerion Pharmaceuticals Inc said the U.S. Food and Drug Administration approved Juxtapid capsules in patients with homozygous familial hypercholesterolemia, but will conduct a post-approval study to test long-term safety and efficacy. Shares fell 4.7 percent to $24.50.

Herbalife Ltd dipped 5.8 percent to $25.68 in premarket after the company said it expects to exceed its previously announced repurchase authorization guidance and has retained Moelis & Company as its strategic advisor. The declines put the stock on track for a ninth straight decline.

Yum Brands Inc advanced 1.7 percent to $64.98 after Shanghai's food safety authority said the level of antibiotics and steroids in the company's KFC chicken was within official limits.

(Reporting By Edward Krudy; Editing by Chizu Nomiyama)

Egyptians back new constitution in referendum

Label: World

CAIRO (Reuters) - An Islamist-backed Egyptian constitution won approval in a referendum, rival camps said on Sunday, after a vote the opposition said would sow deep social divisions in the Arab world's most populous nation.

The Islamist Muslim Brotherhood, which propelled President Mohamed Mursi to power in a June election, said an unofficial tally showed 64 percent of voters backed the charter after two rounds of voting that ended with a final ballot on Saturday.

An opposition official also told Reuters their unofficial count showed the result was a "yes" vote, while party spokesmen said there had been a series of abuses during the voting.

The main opposition coalition, the National Salvation Front, responded to the defeat by saying it was moving towards forming a single political party to challenge the Islamists who have dominated the ballot box since strongman Hosni Mubarak was overthrown two years ago.

Members of the opposition, taking heart from a low turnout of about 30 percent of voters, pledged to keep up pressure on Mursi through peaceful protests and other democratic means.

"The referendum is not the end of the road," said Khaled Dawoud, a spokesman for the National Salvation Front. "It is only the beginning of a long struggle for Egypt's future."

The referendum committee may not declare official results for the two rounds until Monday, after hearing appeals. If the outcome is confirmed, a parliamentary election will follow in about two months.

Mursi's Islamist backers say the constitution is vital for the transition to democracy, nearly two years after Mubarak was ousted in a popular uprising. It will provide the stability needed to help a fragile economy, they say.

The constitution was "a historic opportunity to unite all national powers on the basis of mutual respect and honest dialogue for the sake of stabilizing the nation," the Brotherhood said in a statement.

RECIPE FOR UNREST

The opposition accuses Mursi of pushing through a text that favors Islamists and ignores the rights of Christians, who make up about 10 percent of the population, as well as women. They say it is a recipe for further unrest.

The opposition said voting in both rounds was marred by abuses. However, an official said the overall vote favored the charter.

"The majority is not big and the minority is not small," liberal politician Amr Hamzawy said, adding that the National Salvation Front would use "all peaceful, democratic means" such as protests to challenge the constitution.

The vote was split over two days as many judges had refused to supervise the ballot, making a single day of voting impossible.

During the build-up to the vote there were deadly protests, sparked by Mursi's decision to award himself extra powers in a November 22 decree and then to fast-track the constitutional vote.

The new basic law sets a limit of two four-year presidential terms. It says the principles of sharia, Islamic law, remain the main source of legislation but adds an article to explain this. It also says Islamic authorities will be consulted on sharia - a source of concern to Christians and others.

ABUSES

Rights groups reported what they said were illegalities in voting procedures. They said some polling stations opened late, that Islamists illegally campaigned at some polling places, and complained of irregularities in voter registration.

But the committee overseeing the two-stage vote said its investigations showed no major irregularities in voting on December 15, which covered about half of Egypt's 51 million voters. About 25 million were eligible to vote in the second round.

The Brotherhood said turnout was about a third of voters.

The opposition says the constitution will stir up more trouble on the streets since it has not received sufficiently broad backing for a document that should be agreed by consensus, and raised questions about the fairness of the vote.

In the first round, the district covering most of Cairo voted "no," which opponents said showed the depth of division.

"I see more unrest," said Ahmed Said, head of the liberal Free Egyptians Party and a member of the opposition Front.

He cited "serious violations" on the first day of voting, and said anger against Mursi was growing. "People are not going to accept the way they are dealing with the situation."

At least eight people were killed in protests outside the presidential palace in Cairo this month. Islamists and rivals clashed in Alexandria, the second-biggest city, on the eves of both voting days.

(Writing by Edmund Blair and Giles Elgood; editing by Philippa Fletcher)

Sip This! Try This Naughty Hot Chocolate for Christmas

Label: Lifestyle

By Alison Schwartz

12/23/2012 at 10:15 AM EST

Santa’s Naughty Hot Chocolate

Courtesy Bailey's

There's nothing all that hot about winter (mainly because these guys are wearing sweaters).

But Brooke Parkhurst and James Briscione, the chefs behind newlywed kitchen guide Just Married and Cooking, are changing that one sip at a time.

Whip up their adult spin on a cup of hot cocoa, which would only taste better if you were drinking it with one of the aforementioned shirtless guys.

Santa's Naughty Hot Chocolate

Serves 2

• 8 oz. almond milk
• 3 tbsp. cocoa powder
• 2 tsp. sugar
• 6 oz. hazelnut liqueur (recipe recommends Baileys hazelnut liqueur)
• 1 oz. chocolate vodka (recipe recommends Godiva chocolate-infused vodka)

Combine the almond milk, cocoa powder and sugar in a sauce pot. Bring the mixture to a simmer, and whisk to dissolve the cocoa. Stir in the liqueur and vodka, and then remove from the heat. Pour into two glasses or mugs, and garnish with marshmallow skewers.

Marshmallow Skewers

• 2 large marshmallows
• Pinch of ground cinnamon, cocoa powder and/or espresso powder
Cut the marshmallows crosswise into three equal-sized disks. Dust each piece with cinnamon, cocoa or espresso powder. Arrange the marshmallow pieces on a skewer, with the cut sides facing out. Garnish drinks with skewers and enjoy!

Predicting who's at risk for violence isn't easy

Label: Health

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

___

Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

Label: Business

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.

A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.

Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.

Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.

"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.

"The markets still basically believe that something will be done," he said.

If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.

For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.

Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.

IT COULD GET A LITTLE CRAZY

Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.

If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.

"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.

"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."

Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.

Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.

"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.

"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."

Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.

The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.

Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.

U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)

(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

Vice president quits as Egypt votes on constitution

Label: World

CAIRO (Reuters) - Egypt's vice-president resigned on Saturday as Egyptians voted in a referendum that is expected to approve a new constitution that lays the foundations for the country's transition to democracy but will strip him of his role.

Authorities extended voting by four hours in the second and decisive round of the plebiscite on an Islamist-drafted constitution that the opposition has criticized as divisive and likely to cause more unrest.

Just hours before polls closed, Vice President Mahmoud Mekky announced his resignation, saying he wanted to quit last month but stayed on to help President Mohamed Mursi tackle a crisis that blew up when the Islamist leader assumed wide powers.

Mekky, a prominent judge who said he was uncomfortable in politics, disclosed earlier he had not been informed of Mursi's power grab. However, the timing of Mekky's move appeared linked to the fact there is no vice-presidential post under the draft constitution.

In a resignation letter, Mekky said that although he had held on in the post he had "realized for some time that the nature of political work did not suit my professional background as a judge".

Islamist supporters of Mursi say the charter is vital to move towards democracy, nearly two years after an Arab Spring revolt overthrew authoritarian ruler Hosni Mubarak. It will help restore stability needed to fix a struggling economy, they say.

But the opposition says the document is divisive and has accused Mursi of pushing through a text that favors his Islamist allies while ignoring the rights of Christians, who make up about 10 percent of the population, as well as women.

"I'm voting 'no' because Egypt can't be ruled by one faction," said Karim Nahas, 35, a stockbroker, heading to a polling station in Giza, a province included in this round of voting which covers parts of greater Cairo.

At another polling station, some voters said they were more interested in ending Egypt's long period of political instability than in the Islamist aspects of the charter.

"We have to extend our hands to Mursi to help fix the country," said Hisham Kamal, an accountant.

Queues formed at some polling stations around the country and voting was extended by four hours to 11 p.m. (2100 GMT).

Unofficial tallies are likely to emerge within hours of the close, but the referendum committee may not declare an official result for the two rounds until Monday, after hearing appeals.

CHEATING ALLEGED

As polling opened on Saturday, a coalition of Egyptian rights groups reported a number of alleged irregularities.

They said some polling stations had opened late, that Islamists urging a "yes" vote had illegally campaigned at some stations, and complained of irregularities in voter registration irregularities, including the listing of one dead person.

Last week's first round of voting gave a 57 percent vote in favour of the constitution, according to unofficial figures.

Analysts expect another "yes" on Saturday because the vote covers rural and other areas seen as having more Islamist sympathizers. Islamists may also be able to count on many Egyptians who are simply exhausted by two years of upheaval.

Among the provisions of the new basic law are a limit of two four-year presidential terms. It says the principles of sharia law remain the main source of legislation but adds an article to explain this further. It also says Islamic authorities will be consulted on sharia - a source of concern to Christians and other non-Muslims.

If the constitution is passed, a parliamentary election will be held in about two months. If not, an assembly will have to be set up to draft a new one.

After the first round of voting, the opposition said alleged abuses meant the first stage of the referendum should be re-run.

But the committee overseeing the two-stage vote said its investigations showed no major irregularities in voting on December 15, which covered about half of Egypt's 51 million voters.

MORE UNREST

Even if the charter is approved, the opposition say it is a recipe for trouble since it has not received sufficiently broad backing from the population. They say the result may go in Mursi's favour but it will not be a fair vote.

"I see more unrest," said Ahmed Said, head of the liberal Free Egyptians Party and a member of the National Salvation Front, an opposition coalition formed after Mursi expanded his powers on November 22 and then pushed the constitution to a vote.

Protesters accused the president of acting like a pharaoh, and he was forced to issue a second decree two weeks ago that amended a provision putting his decisions above legal challenge.

Said cited "serious violations" on the first day of voting, and said anger against Mursi and his Islamist allies was growing. "People are not going to accept the way they are dealing with the situation."

At least eight people were killed in protests outside the presidential palace in Cairo this month. Islamists and rivals clashed on Friday in the second biggest city of Alexandria, hurling stones at each other. Two buses were torched.

The head of the Muslim Brotherhood, an Islamist group that represents Mursi's power base, said the vote was an opportunity for Egypt to move on.

"After the constitution is settled by the people, the wheels in all areas will turn, even if there are differences here and there," the Brotherhood's supreme guide, Mohamed Badie, said as he went to vote in Beni Suef, south of Cairo.

"After choosing a constitution, all Egyptians will be moving in the same direction," he said.

The vote was staggered after many judges refused to supervise the ballot, meaning there were not enough to hold the referendum on a single day nationwide.

The first round was won by a slim enough margin to buttress opposition arguments that the text was divisive. Opponents who include liberals, leftists, Christians and more moderate-minded Muslims accuse Islamists of using religion to sway voters.

Islamists, who have won successive ballots since Mubarak's overthrow, albeit by narrowing margins, dismiss charges that they are exploiting religion and say the document reflects the will of a majority in the country where most people are Muslim.

(Additional reporting by Tamim Elyan; Writing by Edmund Blair and Giles Elgood; Editing by Mark Trevelyan and Jason Webb)

Analysis: Apple’s swoon exposes risk lurking in mutual funds

Label: Technology

NEW YORK (Reuters) – The nearly 28 percent decline in shares of Apple Inc since mid-September isn’t just painful to individual shareholders. It’s also being felt by investors who chased hot mutual funds that loaded up on Apple as the stock raced to a record $ 705 per share.

Apple makes up 10 percent or more of assets in 117 out of the 1,119 funds that own its shares, according to data from Lipper, a Thomson Reuters company. Those big stakes have contributed positively to each fund’s annual performance to date, with Apple still up about 32 percent for the year. It was trading at $ 527.73 soon after the opening on Friday.

But that year-to-date outcome may not accurately reflect the performance of the funds for individual investors. All told, approximately $ 4.5 billion has been added to funds with overweight stakes in Apple this year, according to Morningstar data. The majority of these dollars were invested after March and after Apple first exceeded $ 600 per share – meaning many investors have been riding down with the decline.

The $ 302 million Matthew 25 fund, for instance, holds 17.4 percent of its assets in Apple, according to Lipper. The fund’s 31.9 percent gain through Thursday makes it one of the top performing funds for the year.

Most of its Apple shares were bought years ago at a bargain basement price of about $ 125 per share. But $ 158.9 million of the fund’s assets – or 53 percent – were invested after the end of March, when Apple was trading near $ 615 per share, according to Morningstar data.

For those investors that bought after March, all that concentration in Apple hasn’t led to a stellar gain but rather a drag on the portfolio. Someone who invested in Matthew 25 in early April has seen the value of the fund’s Apple stake fall about 19 percent, while someone who invested at the beginning of September has watched that outsized Apple stake drop 27.2 percent.

In turn, the majority of the fund’s investors have reaped a much more modest performance than its year-end numbers suggest. Since the end of March, the fund has gained 6.7 percent, according to Morningstar data, far less than its 31 percent year-to-date gain and about two percentage points more than the benchmark Standard & Poor’s 500 index.

Since, September the fund is down nearly 3 percent through Thursday’s close, compared with a 1.1 percent decline in the S&P 500 in that period.

The impact of Apple’s falling stock price shows some of the drawbacks of portfolio concentration, experts say. These stakes can leave the funds overexposed to the ups and downs of one company – counter to what most mutual funds are supposed to do for investors.

“Any time you get over 10 percent of the portfolio in one company it’s a red flag,” said Michel Herbst, director of active fund research at Morningstar. Many fund managers do have risk management rules that prevent them from devoting more than 5 percent to 6 percent of their portfolio to any one stock, he said.

Then again, some funds purposely invest in just a few stocks. Mark Mulholland, the portfolio manager of the Matthew 25 fund, said that taking concentrated positions in companies is the only way to beat an index over longer periods of time.

‘RIGHT-SIZING’ PORTFOLIOS

Along with concerns about iPhone sales in China and tax-motivated selling among people who want to avoid potentially higher capital gains taxes in 2013, the wide fund ownership of Apple may be a factor in the size of the stock’s recent declines, fund managers said. In addition, with so many funds already heavily invested in the high-priced stock, there may be fewer marginal buyers available to push prices up again when shares begin to dip.

“The stock didn’t go from $ 700 to $ 520 because people didn’t like the new iPad. It’s become a favorite short of hedge funds because they know they can get in on this,” said Mark Spellman, a portfolio manager of the $ 300 million Value Line Income and Growth fund with a small position in Apple.

Short interest in the stock rose to 20.6 million shares at the end of November from 15.1 million shares at the end of September, according to Nasdaq.

“Some of my competitors have 12 percent of their assets in Apple, which I think is ludicrous”, said Spellman, who said the company is no longer trading on its fundamentals.

Sandy Villere, who has a 2.5 percent weighting of Apple in his $ 276 million Villere Balanced fund, said that some mutual fund managers are selling shares because of the over-weighting.

“Right now many people who did take huge overweight positions are right-sizing their portfolios to get it in line with their regular weightings,” he said.

Still, some bullish investors see the stock’s recent declines as a buying opportunity.

Mulholland, the Matthew 25 portfolio manager, continues to say that shares should be priced at over $ 1,000 per share based on his valuation of the company at 10 times enterprise value divided by earnings before interest, taxes, depreciation and amortization (EBITDA). Apple trades at about 7 times that figure now.

Wall Street analysts’ average price target as of Thursday is $ 742.56, according to Thomson Reuters data. But Mulholland is happy to be more bullish than his peers.

“I’m glad that I’m able to get it at these prices,” he said.

(Reporting By David Randall; Editing by Jennifer Merritt)

Tech News Headlines – Yahoo! News

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Emily VanCamp: My Boyfriend Likes When I Take Off My Makeup

Label: Lifestyle

12/22/2012 at 12:15 PM EST

Josh Bowman prefers his girlfriend Emily VanCamp to be au naturel.

"When I take off my makeup, that's my boyfriend's favorite," the Revenge star, 26, tells Women's Health in its January/February issue of her Revenge costar and real-life beau, 24. "And that, to me, is a symbol of a great guy – someone who doesn't care about all that [glamorous] stuff."

VanCamp first realized this special quality her man possessed when she was on a fishing trip with him and his dad in England.

"I was there in my baseball cap and these crappy fishing clothes," she explains. "And I remember thinking, this is when I feel 100 percent comfortable – in these dirty clothes with fish guts all over them. I know it sounds horrendous. I'm at my most confident when I'm in nature and I don't have to dress up."

Emily VanCamp

Courtesy Women's Health

When it comes to her relationship in general, she understands, "It's more about accepting each other as separate people," adding, "Laugh a lot and be really delicate with the other person’s heart, because sometimes you start to take each other for granted. Always remember that neither of you needs to be there. It's a choice every day to stay together."

But even a lady in love appreciates her alone time.

"I like to reflect," she says. "I need that sort of peace and quiet. It's something my friends and I laugh about: 'Oh, Emily’s having a night to herself.' It centers me."