NEW YORK ( TheStreet) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his RealMoney blog, anticipating which ETFs will be in play next.

Here are three of his blog posts from the past week:


An ETF With a Buffett Angle

Published 3/2/2011 2:41 p.m. EST

As is generally the case, investors and commentators are poring over the latest annual Buffett missive, trying to extract the intentions of one of the world's most successful investors. One of the more interesting results of this year's letter is a new list from Bloomberg Data of companies that are potential Buffett targets. Using the takeover requirements listed by Buffett, Bloomberg generated a list of firms that could potentially meet his investing criteria.

Looking over the list, which spans a wide range of firms, a few names and categories begin to stick out. One grouping of firms that meet the Buffett criteria include high-profile aerospace and defense names. The list includes General Dynamics ( GD), Lockheed Martin ( LMT), Raytheon ( RTN) and L-3 Communications ( LLL). While these names make up just a portion of the Bloomberg Buffett list, they all appear in the iShares Aerospace & Defense ETF ( ITA).

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I've been bullish on defense as international demand amps up, and Buffett's criteria vets these companies even further. Cornerstones of ITA listed above all fit the Buffett letter criteria, which includes:
  • market cap between $4 billion and $40 billion;
  • return on common equity >10%;
  • five-year net income growth in highest 50%; and
  • capital expenditures / total assets > 0.5.

While these defense firms may not ever be actual Buffett targets, their inclusion in a limited list of names that fit the investor's criteria certainly highlights common strengths.

Get Bullish on Sweden

Published 3/1/2011 2:33 p.m. EST

With many of the "BRIC" countries underperforming and uncertainty in the Middle East keeping investors close to home, it's time to look in a different direction and consider a European play. Today, investors learned that Sweden's gross domestic product surged in the final quarter of 2010, rising the most since statisticians first began recording the country's GDP.

According to Statistics Sweden, economic output in Sweden grew 7.3% in the three months ended Dec. 31 compared with the same period in 2009, beating economists' estimates of 6.9%. This type of expansion and outperformance makes the iShares MSCI Sweden ETF ( EWD) an attractive option for investors looking to diversify international portfolios.

EWD is a large, liquid ETF that tracks 34 of Sweden's top firms. Holdings potentially familiar to the American investor include Ericsson, Volvo and Atlas Copco. While the underlying portfolio is weighted heavily toward industrials and financials, consumer discretionary firms also make up a notable chunk of underlying holdings.

The release of Sweden's economic statistics should help boost EWD in the next couple of sessions. Investors looking to make a longer-term investment should remember to keep currency concerns in mind.

Silver Miners Strike Gold

Published 2/28/2011 2:40 p.m. EST

If gold was the metal of 2010, silver may claim that title for 2011. Silver is cruising ahead while gold appears to be getting tripped up. The iShares Silver Trust ( SLV) has tacked on nearly 114 tons of the metal in February, but investors shouldn't limit themselves to just physically-backed silver funds. Those looking for a potent angle on the soaring price of silver should check out the Global X Silver Miners ETF ( SIL), a relatively new fund that investors have already taken a shine to.

Launched in April 2010, SIL had benefited both from the rising price of silver as well as increased demand for commodities ETFs as a whole. With an average daily trading volume of more than 700,000 shares, SIL offers liquid exposure to a solid mix of 25 silver miners ranging from small firms to large-cap industry leaders. SIL's top five components are Silver Wheaton ( SLW), Fresnillo, Industrias Penoles, Pan American Silver ( PAAS) and Hecla Mining ( HL).

Why miners? In the short term, equity-backed commodity ETFs such as SIL can offer leveraged-like returns to the price of physical commodities. Though funds like SIL and the Market Vectors Gold Miners ETF ( GDX) don't rely on derivatives to supply returns, the fixed costs and future potential of underlying firms often help to make equity-backed offerings even more reactive to price movement (of the commodity itself) than physically-backed funds. This works both ways, meaning that SIL is likely to advance faster than SLV in a bull market and decline more abruptly or lag SLV in a bear market.

The global economic recovery has made the equity-backed angle on commodities quite attractive, and silver isn't showing signs of easing up. While SIL has lagged SLV so far this year, increasing demand for silver and a bullish global economy could unlock the potential of SIL's underlying holdings.

At the time of publication, Dion Money Management held no positions in the stocks mentioned.

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