The U.S. government relies on trillions of dollars in tax revenue to finance its operations. A key Supreme Court decision recently helped preserve billions of dollars in tax revenue for the IRS and the U.S. Treasury.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the case, which involved a dispute by employees who had been laid off that the severance pay they received shouldn't be subject to FICA withholding taxes. Dan notes that the workers argued that their severance represented "supplemental unemployment benefits" that would have been exempt from Social Security and Medicare tax. But the Supreme Court disagreed, forcing those laid-off employees to pay withholding taxes. Even though paying FICA taxes means more wages in calculating Social Security benefits, other employers waiting in the wings to collect huge refunds if the Supreme Court had decided the other way would have cost billions.

It's taken a while, but patient fans of Microsoft are finally beginning to see some signs of life, both from a new product and services perspective, as well as its stock price. By no means are new CEO Satya Nadella and team done with Microsoft's transition to a leading mobile, cloud, and big data provider, but there are multiple signs that strides are being made.

Naturally, there are still those who aren't buying what Microsoft's selling. Though several analysts are finally recognizing Microsoft's advancements in key growth areas, a majority remain unconvinced. Too bad for them, and for the clients that heed their advice.

First, some good news
In what was widely hailed as a successful debut as Microsoft's new number one, Nadella made his first presentation a couple days ago, showing off Microsoft's new Office for iOS. In a world of bring-your-own-device to work, cross-platform apps have quickly become a necessity, not a nicety. And that's what makes Office for iOS such an intriguing move on Microsoft's part. If Nadella gleans much of the praise for an app that's most certainly been in the works longer than he's been CEO, so be it.

Nadella's first shot at the spotlight also served as a precursor of things to come, as much by what he didn't say as what he shared about Office for iOS and the future of Microsoft. Noticeably absent from Nadella's introduction was a Windows software demonstration. Microsoft isn't a PC company any longer, which Nadella made clear by forgoing the use of a PC during his presentation. Instead, Nadella focused on the importance of cross-platform apps to fuel future growth.

Now, more good news
Over half of the analysts covering Microsoft are stubbornly clinging to their respective versions of a "hold" rating, despite a nearly 41% jump in share price the past 12 months. This, however, should change, considering the average target price of the Microsoft-haters is $38.84 a share, nearly 3.8% below Friday's close. Other analysts are coming around, including a couple that recently raised Microsoft's price target to $44 a share.

Somewhat lost in the hoopla surrounding Nadella's first presentation as CEO and the Office for iOS introduction was news of what could be a game-changing cloud deal for Microsoft. Already growing by leaps and bounds -- cloud-related revenue more than doubled last quarter -- the deal Microsoft inked to bring cloud services to Chinese consumers could be absolutely huge. It's the first partnership of its kind involving an "outsider," and it's been a long time coming.

Some background
The process of bringing cloud services to Chinese consumers began about a year ago, when Microsoft certified over 100 techs of China data service provider 21Vianet. The partnership limited what Microsoft could offer Chinese business customers, but turned out to be an important first step to establish a more expanded relationship in the future. Thankfully, the future is now.

With the deal in place, 21Vianet can begin offering its business customers Microsoft's cloud platform Azure. With a domestic Azure customer base that includes over half the Fortune 500, China businesses that opt for Azure will find themselves among some pretty good cloud company.

Final Foolish thoughts
Opening the Office door to the millions of iOS users, and the incremental revenue that will come from the new app, certainly warrants all the press that Microsoft's received these past couple of days. Add to that a successful introduction of Microsoft's new CEO, and it's easy to see why its stock price is bumping up against its 52-week high of $40.99 a share.

If anything, analyst price targets for Microsoft in the mid $40 a share range are on the low end for mid and long-term investors. Yes, Microsoft stock is up 40.9% the past 12 months, which may be worrisome for value investors. But remember, its stock price had been depressed for so long, you could argue Microsoft's recent run has simply brought its stock back to ground zero. Microsoft remains a solid long-term alternative, especially when you consider the potential of bringing the cloud to China.

A couple of weeks ago, Energy XXI bought EPL Oil & Gas in an accretive deal that initially sent the stock down. The stock has recovered to pre-announcement levels, but the deal suggests a more premium pricing for the stock is due, instead of scraping along the bottom near three-year lows.

Energy XXI is a leading oil and natural gas production firm on the Gulf of Mexico shelf. The company has a history of growing via acquiring and exploiting the assets for increased production and reserves. The oil-heavy producer continues to expand reserves and significantly repurchase shares below net asset value, or NAV.

The stock appears to offer value to shareholders based on the market overlooking assets in the Gulf of Mexico. Freeport-McMoRan Copper & Gold bought struggling McMoRan Exploration last year due to huge perceived value and the potential for significant growth in production ignored by a market focusing on land shale plays.

Accretive EPL deal
Energy XXI has a history of buying large oilfield assets and improving the long-term results of the field. With the EPL deal, the company lists the numbers as immediately accretive to shareholders. The deal calls for EPL shareholders to receive roughly $39 per share. The aggregate consideration will be paid in roughly 65% cash and 35% in Energy XXI stock, equating to $1 billion in cash and approximately 23.4 million common shares.

EPL provides working interests in 37 producing fields, mainly concentrated within nine core operating areas. The company had year-end reserves of an estimated net proved and probable reserves of 106.3 million boe, 71% of which is oil. Proved reserves are estimated at 54.9 million barrels of oil and 139.2 Bcf of natural gas, or a total of 78.1 million boe.

Creating value  
Energy XXI estimates that it has acquired 146 million boe over the years and has converted those assets into 261 million boe (including production). In addition, the company forecasts the gross unrisked potential in core areas is equal to more than 2 billion boe. 

The below slide highlights the uplift from past purchases that Energy XXI expects to achieve with the EPL assets.

Source: EXXI investor presentation

The ability to buy assets on the cheap and increase reserves adds value to the PV-10. The proved reserve value equaled $6.1 billion at the end of 2013 with the market cap sitting around $1.8 billion. In fact, the PV-10 value has nearly doubled in the last two years, yet the stock price is down. The majority of the land producers sit at market valuations above the PV-10 values.

Energy XXI sees the stock as being so undervalued that it repurchased 9.4 million shares at levels above the current stock price. With an estimated NAV that deducts debt near $55, the company estimates that the share repurchases added $3.60 to NAV.

Bottom line
The history of making attractive acquisitions makes the recent move by Energy XXI appealing, especially considering the accretive nature of the deal and the weak stock action. Even more interesting is that EPL had rallied in the last couple of years and Energy XXI still made the deal work, suggesting that it offers extreme value trading at near three-year lows. With the continued high price of oil, a value creating company shouldn't be trading at these levels.

Do you pay your children an allowance? If you do, you're not alone. According to a Harris Interactive poll released earlier this year, approximately 60% of parents with children ages 4 to 17 dole out cash on a weekly basis.

Source: flickr/401(k)2013.

It may seem ludicrous to pay a 4-year-old a weekly allowance, but depending on where that money actually ends up, it could be the best thing any parent can do for a child. Today we're taking a closer look at the Harris poll and considering the real power of a child's allowance.

Poll stats
Harris Interactive polled 2,311 adults on all things allowance-related last December. Though there were trends that emerged along gender and regional lines, the biggest dollar-amount discrepancies in the responses were generational. Echo boomers (known as millennials in some circles) and Generation X respondents were closely aligned when it came to appropriate amounts for a weekly allowance -- baby boomers less so. Take a look:

Source: Harris Interactive 

Oh, to be the child of a Gen-Xer! These parents think children aged 14 to 17 should earn a weekly allowance of $18.80 a week! Interestingly, the poll also revealed that 86% of respondents believe a child should have to earn his or her allowance, and that it should only be paid if the child works for it.

Most importantly, however, is that 90% of respondents thought that an allowance was a good way to teach children about money. In theory, that is absolutely correct. It's hard to understand the power of a dollar if you've never earned one. And while one might argue that a 4-year-old is incapable of understanding this at all, a child of 7 or 8 is not. Financial literacy is a major problem in this country -- in most countries -- and if handing out an allowance can help change that, then by all means we should pay up.

But how many of us truly recognize the power of a weekly allowance? Consider those dollar figures from the poll. Let's take the midpoint allowance figure for each age range -- $5.10, $10.10, and $18.00 -- and encourage our child, Little Susie, to put every penny of it into an index fund. Assuming that Susie gets grounded for two weeks each year and doesn't earn an allowance during that time, she will contribute 50 weeks of savings to her nest egg every year. It will compound annually at the S&P 500's historical compound annual growth rate -- with dividends reinvested and adjusted for inflation -- of about 6.8%.

Source: Author's calculations.

On the eve of her 18th birthday, Susie will have grown her hard-earned allowance into $10,145. if she had simply left her allowance in her piggy bank, she'd only have $7,240. 

But maybe Susie isn't sold on a mere $10,145, so her parents sit her down and show her what it could turn into if she leaves it in the index fund:

Source: Author's calculations.

Provided the fund returns the 6.8% historical figures, even if Little Susie stops contributing any money to her savings, she'll have turned 14 years of allowance into more than $290,000 by the time she reaches retirement. It's not enough to retire on, but it is enough to make a point about the value of saving. 

Will Susie head to college and pursue a degree in economics or finance? Maybe not, but she will definitely understand the power of compound interest, something that will have an incredible impact on her for the rest of her life; say, when she gets her first credit card, pays off her student loans, decides how much to contribute to her 401(k), buys a house, and so on. This is the real power of a weekly allowance. The ability to confer financial literacy, which may be the greatest investment we make.

A Tesla Motors stock sell-off continued this week, with the stock falling 7% -- down 13% for the month of March. The stock closed on Friday at $212.37. Notably, the decline follows a 12-month gain of about 500%. The week's decline for the electric automotive manufacturer likely stemmed from two reports from analysts during the week who voiced concern about Tesla's valuation.

Tesla Model S. Photo by Levi Sim, used with permission

But there was good news during the week, too. The stock rebounded slightly on Friday when the National Highway Traffic Safety Administration closed its investigation into Tesla's battery fires and Tesla CEO Elon Musk took to Medium describing a new armor on the bottom of the battery packs.

Valuation matters
Tesla's business is firing on all cylinders. But price matters. With such a robust outlook for Tesla priced into the stock, investors have good reason to be concerned with valuation.

Two analysts are also concerned.

UBS analyst Colin Langan initiated coverage on Tesla stock this week with a neutral rating and a $230 price target. "[I]nvestors should appreciate that the downside this early in its life is material," he warned (via Forbes). While he acknowledged Tesla's disruptive business model looks poised for success, a rosy future is already priced in, he explains. And worst-case scenarios should be considered, too he advised. "The failure of a current or future product could quickly unravel all the progress."

Deutsche Bank analyst Rod Lache, echoed his sentiment. Even acknowledging that reaching 500,000 vehicles per year by 2020 isn't particularly lofty, a wildly bullish valuation forces him to rate the stock a neutral with a $220 price target.

It may, indeed, be wise for investors wait for a larger pullback before they buy into Tesla stock.

The world's safest car just got safer
The most exciting Tesla news from the week came Thursday night when Musk announced in a blog post that Tesla is now adding titanium underbody shields and aluminum deflector plates to the underbody of the Model S as part of a new three-layered system to protect the battery pack.

The Tesla Model S battery pack is on the floor of the vehicle. Image source: Tesla Motors.

The move was served as a driver for NHTSA to end its investigation into three battery fires that resulted from high-speed accidents. Though NHTSA was likely going to call off the investigation anyway since it said it found "no defect trend," the underbody carriage update was a smart move by Tesla.

"Tesla's revision of vehicle ride height and addition of increased underbody protection should reduce both the frequency of underbody strikes and the resultant fire risk," NHTSA said.

NHTSA has five-star safety rating for Tesla's Model S in every category.

The investor takeaway
While Tesla shareholders should have incremental confidence in Tesla's risk profile with a safer battery pack that will help prevent recalls, investors should heed analysts' concerns about valuation. Don't expect to buy this disruptive company at these levels without taking on meaningful downside risk.

Source: Wikimedia Commons.

Have you ever tried reading the entire U.S. tax code? I hope not -- it's close to 74,000 pages long. While simplifying the document to a few pages is impossible, there is something I can offer to make your tax season go easier: a list of important dates to remember when it comes to filing taxes in 2014.

Of course, everyone knows that April 15 is the big day to have your taxes -- and potential payments -- turned in to the IRS. But that date is important for more than just turning your taxes in. There are lots of other benefits you can take advantage of, and lots of other dates to keep in mind. To find out what five dates loom largest, check out the following slideshow.

Sources:  Pebble Technology, Doc Watson, via Wikimedia Commons.

Let's just say it's but one checkbox ticked off in a long list of boxes needing checks.

The Ontario government said it's signed an agreement with Matawa First Nations laying out a framework for developing the province's northern mineral resources. Although a minimal achievement, it's an important one because a lack of cohesion among all the parties involved was key to Cliffs Natural Resources indefinitely suspending work on its $3.3 billion Ring of Fire chromite project last year.

McFaulds Lake, Ontario, Canada. Source: Cliffs Natural Resources.

The Ring of Fire is a vast but remote region in northern Canada in the James Bay lowlands, currently only accessible via a two-hour flight from Thunder Bay, the nearest major city. Current estimates suggest it holds the largest deposit of chromite ever found in North America, as well as significant production quantities of nickel, copper, and platinum, worth some $60 billion. The region has been called "Canada's next oilsands."

For Cliffs, its Black Thor deposit represents the first particularly rich opportunity and a key means to diversify itself. Over the 30-year life of the planned open pit mine, it expects to produce 1,500 tonnes of ferrochrome per day once it swings into full production. Ferrochrome is an alloy of chromium and iron and is key to the production of steel, particularly stainless steel.

Chromite would be a welcome diversion. Cliffs' iron ore and metallurgical coal operations are under severe pressure as sales volumes collapsed for the former and pricing tumbled for the latter leading to a 3% decline in revenues last year. In the fourth quarter it offset some of the decline by a 10% increase in global seaborne iron ore pricing, but that business is the subject of increasingly acrimonious battle with activist investor Casablanca Capital that wants Cliffs to spin off the international assets and divest its chromite and nickel projects in order to better focus on its domestic iron ore business. 

More than three quarters of the world's chromite is produced in South Africa, India, and Kazakhstan, with another 12% coming from Brazil, Finland, Russia, Zimbabwe, and Turkey. Canada stands to become a major player in the industry with the Ring of Fire development, and Cliffs, which already sells ore to the steel industry believes it would have another value add for it.

But the road to realizing the opportunity has not been smooth, not least of which is because there are no roads to the Ring of Fire region. A lack of infrastructure and infighting among the biggest players about how best to achieve it has ground progress to a halt. Which is why the provincial ministry signing an agreement with the chiefs of the Matawa Tribal Council is only a small though necessary step. 

Without consensus on any of these issues, with many of the parties still at loggerheads, and with the provincial government keeping under wraps exactly what it is they agreed to with the First Nations, the development of the chromite region is really no closer to reality than it was last when Ontario said it hired Deloitte to act as a neutral third-party sounding board.

These are all necessary steps and only by checking them off will they be accomplished, but each announcement is simply another part of the slog through the morass. And if Casablanca Capital gains control of Cliffs Natural Resources' board it will demand the chromite project be sold. Investors, therefore, shouldn't get their hopes up that all the boxes will be checked off for Cliffs anytime soon. 

It seems that every year  AMD makes a pretty large fuss about a next-generation mobile product, but year after year these products don't materialize in many shipping designs. Some argue that the same argument could be applied to larger PC chip rival Intel , but there are numerous quality Windows-based tablets shipping with Intel silicon, even if Intel's Bay Trail on Android continues to be MIA. So a simple question that AMD investors should try to answer is: Where are all of the AMD tablets?

A trip to AMD's website: Trying to buy an AMD tablet
To see what kind of progress AMD has made in securing tablet designs, a trip to AMD's website is in order. Clicking on the "where to buy" button on AMD's tablet page reveals some interesting results. Of the 10 tablets available in total, the breakdown by chip is as follows:

• AMD Dual-Core A4 Series: four tablets.
• AMD Dual-Core Z-Series APU: three tablets.
• AMD Quad-Core A6-Series: three tablets.

Of the four dual-core A4 based devices, three were 11.6-inch designs and one was a 13.3-inch detachable Windows 8 PC. Not a single one was a "tablet" in the sense of a traditional 10.1-inch or 9.7-inch design. Of the quad-core A6 based devices, all three were 13.3-inch designs from Hewlett-Packard. And naturally, the older Z-series APU based designs weren't anything to write home about, particularly as reviews panned both the performance and battery lives of products based on this chip (since the chip was unsuitable for thin and light tablets).

Compare that with Intel
Since AMD's chips are only targeted toward Windows right now, its only real competitor in the Windows tablet chip space is Intel, so a comparison is appropriate. Today there are a number of tablets with Bay Trail, Intel's latest 22-nanometer tablet-oriented chip, from many vendors, including:

• ASUS.
• Acer.
• Fujitsu.
• Dell.
• Sharp.
• Lenovo.
• Toshiba.
• Ramos.

These designs come in both 10.1-inch and 8-inch flavors, and these tablets have gotten pretty solid reviews for their performance and battery life. Of course, there are varying degrees of quality across the vendors (and Windows tablets aren't anywhere near as big of a market as Android and iOS tablets are), and you'll probably notice that these are relatively small names in the tablet market, but the breadth and quality of the offerings looks markedly higher than those powered by AMD.

Will Mullins do the trick?
When the Z-60 came out, it was "wait for Temash". Now that Temash is out, about, and garnering very little design win traction, AMD has been talking up its successor SoC for tablets code-named Mullins. Mullins apparently features an updated CPU core (probably with more aggressive Turbo) and at the system-on-a-chip level manages to bring power down.

This may be as a result of removing some of the I/Os that are PC-use only (similar to what Intel did with Bay Trail-T versus Bay Trail-M) as well as some architectural optimizations and enhancements. Only time will tell whether Mullins can finally find its way in competitive Windows-based tablets, but by then AMD will be contending with Intel's next-generation Cherry Trail. 

Foolish bottom line
While AMD has talked a big game, particularly around tablets, it simply has yet to deliver the goods in terms of the right product (AMD's current tablet offerings are missing several key IP blocks for tablets such as a dedicated image signal processor) at the right time in the right designs. And even if AMD sorts its product story out, the right chip is only just the beginning in this highly competitive, cutthroat industry. It is a necessary, but insufficient, condition to long-term business success.

The S&P 500 and the narrower Dow Jones Industrial Average  were up 0.84% and 0.87%, respectively, as of 10:15 a.m. EDT. Despite some volatility, stocks have not strayed far from where they began the year -- Friday's closing price for the S&P 500 was good for only a half-percent gain year to date.

In this morning's headlines, the world's most valuable company, Apple , is dragging Google into the courtroom as part of its long-running legal battle against rival mobile device manufacturer Samsung.

The allegation at hand is patent infringement. Samsung and Apple are the dominant smartphone manufacturers: According to one estimate by Asymco, the companies devoured nearly nine-tenths of smartphone industry profits over the past six years; another estimate from broker Raymond James has them taking home all of the profit in the fourth quarter of 2013. Meanwhile, Google's Android was installed on roughly four of five smartphones last year -- making it the world's most popular operating system by a wide margin.

While the first trial pitting Apple against Samsung in 2012 focused on hardware design, Apple is now accusing its rival of infringing on five of its software patents. Samsung counters that it licensed four of five of these patents as part of its licensing agreement with Google for Android and that Google was already developing the technology before Apple applied for its patents. The functionality covered by the five patents are: detecting data in a message and converting it to a link, background syncing of data, universal search as used in Apple's Siri digital assistant, spelling autocorrect, and "slide to unlock." Samsung claims that all but the last one are native Android features.

In the first trial, a jury ruled for Apple and Samsung was ordered to pay $929 million (naturally, it's appealing that verdict). In this case, Apple is asking for damages in the amount of $33 to $40 per phone that infringed on the five patents since 2011, a pool of devices it says numbers in the tens of millions.

This case makes for good headlines, but I think it's mainly a distraction for investors. Courtroom battles move at a glacial pace compared to the battles that really matter -- those taking place every day in the marketplace. For example, the smartphones at issue in Apple's latest suit are Samsung's Galaxy S3 and Nexus; Samsung's Galaxy S5 will be available globally from next month.

Despite controversy on a few fronts, Paramount's Noah managed to over-perform and battle its way to a strong opening weekend. Fellow new release Sabotage couldn't break the top five and gave lead Arnold Schwarzenegger his third consecutive flop.

(Credit: Paramount)

Paramount (a subsidiary of Viacom )

Noah

Finish: 1st place / Est. budget: $130 million / 3-day estimated total: $45 million

The analysis

Estimated to make around $35 million, Paramount's Noah will likely end the weekend with anywhere between $41 million and $46 million with most estimates putting it on the higher side. The extra influx is being credited to the same religious audiences that supported Son of God earlier this month. That group was expected to sit this out, as Noah is inspired by the Biblical story of Noah and not fully true to the sacred text. It looks like some of those viewers were curious about Darren Aronofsky's take on the tale and saw the film. That's a triumph for Paramount -- that type of audience rarely comes to religious-themed films unless they're by-the-book versions.

The future

Paramount couldn't have afforded for Noah to sink; that would have been the studio's fourth straight bomb this year. The film is also performing well overseas and this weekend expanded into close to 20 additional markets. Altogether that will help offset the film's massive $100+ million budget.

Noah's opening also means the studio can breathe (a little) easier as it awaits its next release in June ... and it's a big one. Next up is the rebooted Transformers franchise with Mark Wahlberg (thankfully) taking over as the star. The studio will then release its second reboot of the summer with the new Teenage Mutant Ninja Turtles film in August, before handing the reins to a pair of sequels (Paranormal Activity 5, Hot Tub Time Machine 2) and the ever-talented Christopher Nolan (Interstellar). The rest of the year looks good for Paramount as executives hope to turn a corner.

Lionsgate

Divergent

Finish: 2nd place / Est. budget: $80 million / 3-day estimated total: $26.5 million/ Est. total: $95.9 million

The analysis

The young adult genre got a nice boost last week from Divergent, which while falling from the top spot this week did command another $26 million over the last few days. That's a 52% slip, which isn't as steep as it sounds for a movie of this level. In total Divergent moves up to around $95 million and will cross the $100 million mark sometimes this week. It's worth mentioning the franchise was launched on a $80 million production budget so Lionsgate/Summit are now seeing profits. This franchise appears to be off and running.

The future

Summit parent company Lionsgate has a busy April with two films slated, including Kevin Costner's anticipated NFL draft drama Draft Day and horror film The Quiet Ones featuring former Mad Men star Jared Harris. Neither film is expected to break the bank, but neither looks to have been made for a ton of money either. If both break even it would be a win. Both also have the potential to surprise -- Costner knows how to do sports films well, and while horror films have had a rough 2014, you never know when audiences may be up for a good scare.

Open Road (a joint venture of  AMC  and Regal Cinemas )

Sabotage

Finish: 7th place / Est. budget: $35 million / 3-day estimated total: $5.2 million

The analysis

Realistically this was expected. Arnold Schwarzenegger's film career has taken a major hit and this marks a hat trick of the wrong variety for the one-time big-action drawer. Sabotage joins The Last Stand and Escape Plan as movies greenlit mostly on Schwarzenegger's name that failed to live up to expectations. However, Schwarzenegger could still turn it around as three of his next projects are sequels to established films including The Expendables and The Terminator.

The future

Nothing offsets a surprise hit more than a costly miss and Open Road started the year off so well. The studio's animated 3D caper The Nut Job became a solid hit in January and now stands as the studio's most profitable film of all time. Sabotage wasn't expected to be a big success, but executives must have expected it to make more than it did this weekend. It's not that the gritty actioner had a huge budget, but $35 million may as well be $100 million when your movie draws around $5 million in its opening frame.

Next up for Open Road is the sequel to surprise hit A Haunted House, which will look to have the same success as the original comedy did last year. Given that nobody thought House had a shot to be profitable in the first place, all bets are off on the follow-up.

A combination of both the domestic economic recovery and the oil-by-rail boom has been a shot in the arm for rail companies during the past year or so. This surging demand shows no sign of letting up just yet, which is great news for the three main railcar leasing and manufacturing companies: American Railcar Industries , Trinity Industries , and The Greenbrier Companies . 

Surging traffic
According to data from the Association of American Railroads, during the third week of March, total combined U.S. weekly rail traffic was 545,366 carloads and intermodal units, up 7% compared with the same week last year. However, the number of crude oil cartloads moved by rail showed an even more impressive increase. The AAR reported that 108,590 carloads of crude were shipped during the fourth quarter of 2013, bringing total crude movements for the year to 407,642 carloads; this was a 74% increase over the 233,819 carloads transported during 2012. That said, during 2013 crude oil only accounted for 1.4% of total cartloads.

With the volume of railroad traffic within the U.S. continuing to grow, it is likely that the railcar leasing market will have another strong year as new cars are brought online to meet demand.

Smaller is better
American Railcar Industries is one of my personal favorite railcar companies. It is also the smallest company in terms of market capitalization discussed here.

American Railcar manufactures railcars of multiple styles, which is in itself a lucrative business as rail traffic rises. However, the company is also building its own railcar leasing division, and profits are already flowing in. American Railcar reported a strong 21% rise in adjusted earnings before interest, tax, amortization, and depreciation for full-year 2013; this was thanks to a combination of two factors. Firstly, the company managed to improve the gross margin by 10%, from 20.8% to 23.8%. Secondly, it also reported a 140% jump in railcar leasing revenue.

Now, railcar leasing is an extremely lucrative business to be in and American Railcar is reaping the benefits from moving into this market. For example, the company's gross margin from leasing was 58% during 2013, while the gross margin from manufacturing was only 22%. Railcars tend to be leased on contracts lasting several years, which locks in cash flow. The company is continuing to expand its fleet as well, with 2,330 railcars for lease in its manufacturing backlog. American Railcar's backlog also includes 8,560 railcars for other customers, most of which are tanker cars that are required to keep up with the oil-by-rail boom. After a 36% jump in earnings during 2013, American Railcar's future looks bright with analyst forecasting a 13% jump in earnings this year.

A more diversified play
Like American Railcar, Trinity Industries is in the business of railcar manufacturing and leasing. The company is also involved in barge manufacturing, construction services, and more. It's even a major wind-tower maker.

Over the past four years, Trinity has really benefited from the economic recovery in the United States. This is set to continue as rail traffic keeps expanding. Trinity Industries' revenue has averaged annual growth of 33% during the past four years, while earnings growth has averaged 115% per annum. Further, Trinity is actually a key part of the U.S. domestic rail infrastructure as the company is a market leader, essential to any rail recovery. During 2013, Trinity shipped 24,335 railcars, representing 46% of industry shipments during the year. The company also received orders for 32,240 railcars, representing 49% of the industry total during the year. At year end, the company's backlog for rail cars orders represented 55% of total industry backlog, worth around $5 billion.

Safety concerns
The oil-by-rail boom, although lucrative for some, has led to a number of fatal accidents, and many are now calling for tougher regulations to be brought in. according to The Greenbrier Companies CEO William Furman, around 80,000 tanker cars don't meet current safety standards and need to be replaced or retrofitted. This massive overhaul is going to be a boon for tanker manufacturers like Greenbrier, American Railcar, and Trinity.

Greenbrier is rising to this upcoming challenge, and in the words of Furman the company is "well positioned to respond" to shippers' retrofitting or new build needs. The company has announced that that it will design a new generation "Tank Car of the Future" for rail transport of hazardous freight, including flammable crude oil and ethanol, that can better withstand the additional demands associated with operating unit trains.

In North America, Greenbrier can build tank cars at a rate of 4,000 cars per year. It is increasing its capacity in light of higher demand for tank cars related to the energy renaissance in America. As of Nov. 30, 2013, 47% of Greenbrier's backlog consisted of tank cars .

Bottom line
Overall, Greenbrier, Trinity, and American Railcar all look well placed to ride the U.S. rail resurgence. However, Trinity, with its diversified operations and near 50% share of the U.S. railcar manufacturing capacity, looks to be in the best position to benefit in the long term.

The past few days have been momentous for the U.S. airline industry. American Airlines and US Airways have just reached another key milestone in their merger integration, as US Airways exited the Star Alliance on Sunday and joined American in the Oneworld alliance on Monday.

Additionally, on Saturday, Delta Air Lines and Virgin Atlantic began flying a new coordinated schedule as part of their transatlantic joint venture. This allows them to compete more effectively for high-yielding business traffic between the U.S. and London's Heathrow Airport.

American Airlines is well-positioned to regain corporate travel share. Source: American Airlines.

The impact of these two moves will be felt gradually over the next year or two. Together, they will change the balance of power between Delta, American, and United Continental in the U.S. airline industry. The most likely result is that Delta and American will gain ground with lucrative business travelers at United's expense.

US Airways switches sides
For several years -- ever since Continental Airlines joined Star Alliance and then merged with United Airlines -- US Airways has been overshadowed within Star by its larger partner. When US Airways began pursuing a merger with American Airlines two years ago, it was clear that US Airways would move to American's Oneworld alliance in such a scenario.

US Airways' move from Star Alliance into Oneworld is important because it means that frequent fliers in US Airways hub markets like Philadelphia, Charlotte, and Phoenix will now rely on Oneworld airlines for travel outside of the American/US Airways network.

For example, a US Airways frequent flier traveling from Charlotte to Shanghai would previously have been likely to fly to Chicago -- or perhaps San Francisco -- and connect to a United flight to Shanghai. (US Airways does not fly to any destinations in Asia.) Today, this customer would still probably fly to Chicago, but instead connect to an American Airlines flight to Shanghai there.

United Airlines will no longer be the top choice for US Airways frequent fliers traveling to Asia.

The loss of US Airways connecting traffic certainly won't be devastating to United's transpacific business. United enjoys a substantial lead over Delta and American in terms of flight options between the U.S. and Asia (and particularly to China). However, it will definitely hurt at the margin, while simultaneously giving American Airlines a boost in Asia -- where it currently lags United and Delta.

Delta and Virgin Atlantic step up their game
The implementation of Delta and Virgin Atlantic's first joint schedule is being upstaged by the US Airways exit from Star Alliance, but it is still very important. By combining its schedule with that of Virgin Atlantic, Delta Air Lines now has nine daily flights between the New York area and London, up from just three daily flights previously.

That still lags Oneworld's 17 daily roundtrips between New York and London on American Airlines and British Airways, but it's at least competitive. Delta also leapfrogged United (which offers five daily flights from Newark to London) when the joint venture was implemented.

Delta Air Lines and Virgin Atlantic just began flying a coordinated schedule between the U.S. and London.

As of this week, Delta and Virgin Atlantic will offer departures every half hour from New York's JFK Airport to London Heathrow during the early evening peak, and then every hour until 10:30 p.m. The two carriers have also retimed flights to some other cities in order to provide more of a spread throughout the day. Lastly, Delta is moving its JFK, Boston, and Seattle flights to Virgin Atlantic's base in Terminal 3 at Heathrow to ease connections.

American bolstered its position in New York by merging with US Airways, which formerly had a large focus city operation at LaGuardia Airport, and still operates shuttle services to Boston and Washington, D.C. that are popular with business travelers. Delta's joint venture with Virgin Atlantic is a good counter. It strengthens Delta's position on the New York-London route, which is the cornerstone of American's value proposition for New York-area business travelers.

The new order
The American-US Airways merger -- and US Airways' move from Star Alliance to Oneworld -- and Delta's new coordinated transatlantic schedule with Virgin Atlantic are shaking up the U.S. airline industry. These moves strengthen the competitive positioning of American and Delta, respectively.

Meanwhile, some of United Airlines' key competitive advantages are being chipped away. It is still the leading airline from the U.S. to Asia, but most of the volume from US Airways frequent fliers will shift to American and fellow Oneworld carriers Japan Airlines and Cathay Pacific. Furthermore, Delta and American have both dramatically improved their service in New York to compete with United's Newark hub.

So far, United's main competitive response has been to continue broadening its international network with new city pairs and additional frequencies. In the next few years, we will see whether that's enough to overcome the splashier moves being made by Delta and American.

Taco Bell has started a breakfast war.

If there was any question as to what company the Yum Brands'  chain has targeted, those questions were answered when Taco Bell began running ads in support of its new breakfast offerings. The commercials feature numerous men, all of whom happened to be named "Ronald McDonald," extolling the virtues of the Mexican chain's morning menu.

McDoanld's  has a 25% market share of the $50 billion fast food breakfast market, according to market researcher Technomic. The company plans to aggressively defend its turf against Taco Bell. McDonald's is offering a free cup of coffee for two weeks starting on March 31, and the chain has made noise about increasing the hours it serves breakfast.

"We know that breakfast on the weekend cut off at 10:30 doesn't go very well," Jeff Stratton, the chain's U.S. head told CNN Money. He said the company is "just beginning" to reconsider how to best serve up the meal.

McDonald's generally stop serving breakfast at 10:30 a.m., while the new Taco Bell breakfast is being offered until 11 a.m.

Taco Bell's breakfast menu

Source: author's photo.

The drink choices are unconventional as well. Though coffee appears on some of the signs and orange juice is available, Sierra Mist and other soft drinks appear alongside the breakfast items on some of the chain's signage.

How is Taco Bell breakfast doing?
In a less-than-scientific study, I spent Sunday morning from about 8:45 a.m. until 9:45 a.m. embedded in a Taco Bell with my 10-year-old son. We visited one of the chain's locations on a busy turnpike in Central Connecticut within sight of a Starbucks , less than a mile from a thriving McDonald's, and with at least three Dunkin' Donuts stores within a two-mile radius.

We drove by the other chains on our way to Taco Bell and on our way out. McDonald's had a full parking lot and its dual drive-through windows were busy. The Dunkin' Donuts closest to Taco Bell had a backed-up drive-through and a full (albeit very small) parking lot. Starbucks, which we could monitor from our Taco Bell window, did a steady drive-up business and appeared moderately but not excessively busy.

The Taco Bell was essentially empty, however, and saw fewer than 10 customers during the hour we were there. The chain had signs outside touting breakfast (as well as significant window signage) but customers -- at least during this hour on the first weekend of the Taco Bell breakfast -- were not coming.

Source: author's photo. 

The Taco Bell breakfast experience
If my hour-long visit is indicative of the Taco Bell breakfast experience in general, the chain has some glitches to work out. The staff in my particular store was eager and friendly, but seemed poorly trained on the new menu. They could describe the products, but were unsure how the various combination deals worked -- especially when a few of the scant group of customers we saw wanted to make substitutions.

Our order -- which consisted of a sausage A.M. Crunchwrap and a four-piece Cinnabon Delights  -- somehow resulted in us getting (and paying for) two orders of six of the mini treats. (This may have been my ordering mistake, but I specified wanting four pieces.) My son was delighted, as he was quite enamored with the little pastries.

The Crunchwrap was less pleasant, as the sausage and hash brown were skimpy -- seemingly thinner than what McDonald's serves -- and the cheese sauce was unpleasant and not even vaguely reminiscent of cheese.

It also took about 10 minutes to get our food, which seemed odd given that there were no other customers and the Cinnabon treats at most had to be warmed up -- they certainly are not baked fresh.

Can Taco Bell become a breakfast player?
Taco Bell is attempting to offer a morning alternative to McDonald's and the other fast food purveyors. The products are interesting -- different but recognizable. The quality may not be great, but this is a company that has had great success without making high-quality ingredients part of its pitch to customers.

If Taco Bell is going to become a breakfast player -- assuming that the store I went to is typical -- the staff needs better training. In general, the pace of filling orders needs to be much faster and the employees must know what they are selling and how the various combination deals work.

Taco Bell should also consider amping up its morning beverage selection. This is a chain that markets itself to the energy drink generation, but there was no sign of the Mountain Dew and orange juice beverage the company tested in 2012. The store wasn't even selling Mountain Dew A.M., which is available nationwide, or any other morning-appropriate energy drink (though a full array of soda was offered, including Mountain Dew). The only coffee choice was basic coffee, which places it behind not only Starbucks but McDonald's and Dunkin' Donuts.

If Taco Bell wants customers to run for the breakfast border instead of heading to the Golden Arches it needs to do better, improve service, and tweak its product line.

When you think of the biggest oil-producing regions in the United States, the usual suspects come to mind. These might include the deep-water Gulf of Mexico, or onshore plays like the Permian Basin in the southern part of the country. While these are absolutely major oil-producing areas, one that often gets forgotten is the Bakken oil field in the northwestern United States.

The Bakken region stretches across North Dakota and Montana. It's one of the top oil-producing fields in America, which is even more impressive since production didn't begin until only recently. That's because, while the field was first discovered more than 60 years ago, the oil was extremely hard to reach. Fortunately, thanks to revolutionary drilling techniques, production is finally in full swing.

That's resulted in a tidal wave of oil and gas production, and EOG Resources , Kodiak Oil & Gas , and ConocoPhillips are staking their claims in the Bakken field.

Bakken production full steam ahead
EOG Resources depends on the United States, which very much includes Bakken oil. Approximately, 94% of EOG's 2.1 billion barrels of oil equivalent reserves are located in the United States. Crude oil is a huge component of EOG's portfolio, and its crude oil production soared 40% last year. Going forward, management expects this superb growth to continue, as the company projects 27% crude oil production growth this year, because it's going to drill as many as 80 new wells in 2014.

The vast majority of Kodiak's operations are focused on the Bakken field, more specifically in the Williston Basin in Western North Dakota and Eastern Montana. Most of its $775 million in 2013 capital expenditure plans were allocated to its Williston Basin oil and gas operations. This paid off, since Kodiak's oil and gas sales more than doubled last year to $904 million. Sales volumes clocked in at 10.6 million barrels of oil equivalents, and oil represented 95% of the company's revenue last year.

One more oil major getting in on the Bakken action
It's not just smaller players that are getting rich from Bakken Oil. ConocoPhillips, which is the biggest independent exploration and production in the United States, saw strong growth in its Lower 48 operating segment last year. This was due in no small part to Bakken oil.

In all, Conoco increased oil and gas production by 7% in its Lower 48 portfolio last year. This looks fairly modest on the surface, but when you look deeper, its oil production was impressive. Conoco's oil production rose 24% last year, and production in the Bakken field itself soared 60%. More specifically, production hit 30,000 barrels per day in the Bakken in 2013.

Going forward, Conoco plans to keep growth going. Management believes there's potential to take production up to 50,000 to 60,000 barrels per day over the next few years. In addition, the company continues to add reserve replacement in the Bakken, which will only strengthen its portfolio down the road.

Banking on the Bakken
Oil majors large and small are cashing in on all the Bakken field has to offer. Discovered decades ago, Bakken oil is only now hitting the scene since production was nearly impossible for so many years. Thanks to new drilling techniques, oil companies such as EOG Resources, Kodiak Oil & Gas, and ConocoPhillips are finally able to reach the ocean of gas sitting under the ground in North Dakota and Montana.

Each company has devoted huge amounts of financial resources to acquiring acreage in the region and drilling new wells. It's already paying off in the form of soaring production and rising revenue, which is set to continue, thanks to the tantalizing production growth over the next several years.

These oil producers need the pipelines these companies provide

"We are often a really poorly understood company," Paul Raines, GameStop's CEO told CNBC on Friday. Raines is right -- if investors understood GameStop, they wouldn't have bid up shares of the retailer nearly 9% on Friday.

GameStop is a company with a fundamentally broken business model, one whose prospects should continue to deteriorate in the coming quarters. As its chief suppliers -- Sony and Microsoft -- turn into competitors, and GameStop sees more competition from traditional retailers like Wal-Mart , GameStop's business is poised to shrink significantly.

The following three quotes are taken from GameStop's recent earnings call. Collectively, they highlight the myriad challenges GameStop is facing.

GameStop's CEO on increased competition:

Consumers have low top of mind awareness of buy-sell-trade and new competitors will drive greater overall awareness of the category, which has always been very good for our business.

With more than 6,400 stores, it's difficult to find a town or even strip mall in the U.S. that lacks a GameStop. Anyone who has ever shopped at the chain will know that its associates push pre-owned software aggressively, and that it often runs specials on pre-owned products with brightly colored banners adorning the store's windows. GameStop has 27 million members of its PowerUp Rewards program -- a frequent shopper program that, for a $15 annual fee, offers discounts on games and accessories.

In other words, I think it's absolutely ludicrous to suggest that consumers (particularly gamers) are not aware of GameStop's used-games business model. Raines didn't refer to Wal-Mart specifically here, but he seemed to be heavily implying it. Wal-Mart's entrance into the used games space is, as I've already noted, a major challenge to GameStop. Management didn't confirm it, but GameSpot reported last week that GameStops in the vicinity of a Wal-Mart were offering extra trade-in credit -- certainly not a sign that GameStop is welcoming the increased competition.

GameStop can't compete in the cloud

GameStop has made the business decision to shutdown Spawn labs based on the lack of demand from customers to adapt this type of streaming game service at a strong enough level to build the sustainable business.

Almost exactly three years ago, GameStop acquired Spawn Labs, a video game streaming start-up. At the time, GameStop bragged that it had big plans for Spawn Labs, and would work to develop a cloud-based streaming game service. Then the launch window (summer of 2013) came and went, with GameStop's management remaining mum.

I speculated that GameStop, as a relatively small retailer, would have a difficult time competing with technology giants like Sony, who also plan to enter the space. Indeed, that appears to be the case -- yesterday, GameStop officially announced that it has shuttered Spawn Labs.

While GameStop's management cites a "lack of demand," I find that hard to believe -- and I'm not alone. Guy de Beer, the CEO of Playcast, a European-based cloud-gaming service, told VentureBeat there is a great demand for cloud gaming, so much in fact, that he plans to bring his company to the U.S. in the near future.

Cloud-based gaming stands as a major threat to GameStop, as it would cannibalize (or even eliminate) the sale of video game hardware and software. More menacing than Playcast, however, is Sony's forthcoming PlayStation Now service. Expected to launch this summer, subscribers to Sony's service will be able to stream games to their PlayStation 4 directly over the Internet -- giving them little reason to head over to their nearest GameStop.

GameStop thinks the pre-owned business is coming back

The thing you got to think about is, we know historically the pre-owned business will have very strong growth in the first two to three years of a console cycle. There is going to be a lot of demand from the value people.

GameStop's management believes this new console generation is just like any other, that, based on historical trends, sales of used video game software should tick up in the coming months. But they won't -- this time really is different.

Although Microsoft scaled back its digital ambitions for the Xbox One, the console heavily encourages gamers to purchase their games digitally. Right from the Xbox One's dashboard, gamers can head over to Microsoft's online store and buy a full digital copy of any game ever released for Microsoft's platform. It may take an hour or two to download, but gamers can begin playing almost immediately -- saving themselves a trip to the store. Microsoft has even begun to offer digitally only discounts on select titles, a practice GameStop has been forced to respond to. Sony's PlayStation 4 functions exactly the same.

The long-term effects of gamers buying digitally will be disastrous for GameStop. Even if the number of games sold digitally remains in the minority, the effects will multiply over time -- first by eliminating the sale of new game software, and then again by preventing GameStop from reselling used games (digital copies can't be traded in). GameStop's management seems to be aware of this -- citing supply constraints, GameStop said it will work with publishers to procure older titles no longer in circulation. Unfortunately for shareholders, these games will offer lower margins.

GameStop is the classic value trap
At these levels, GameStop is yielding a healthy 3.50%. But in this case, investors shouldn't reach for yield -- the company's core business model is facing competition from nearly all sides. GameStop has new initiatives in the pipeline (like Simply Mac), but it's prior ventures, including GameStop Kids and now Spawn Labs, were complete failures. With games going digital, and Wal-Mart moving in, GameStop is a dangerous company to own.

In times of falling gold prices, gold producers can sustain their cash flow levels by battling costs and increasing production levels. However, this is not the case for Alamos Gold . The company expects to produce between 150,000 and 170,000 ounces of gold in 2014, lower than the 190,000 ounces of gold achieved in 2013. What's more, Alamos Gold expects a rise in its all-in sustaining costs to $950-$1,000 per ounce. As a result, Alamos Gold's shares are under pressure and have already lost 25% this year. Will this trend continue?

Negative trends at the sole operating mine
Alamos Gold has just one operating mine, Mulatos, in Mexico. Production at this mine has been falling since 2012, when the mine produced 200,000 ounces of gold. At the same time, costs have been rising. All-in sustaining costs at the mine were $681 per ounce in 2012, while they were $772 in 2013. As stated above, the costs will significantly rise this year.

Still, the level of costs is substantially below current gold prices, which gives the company room to breathe. Costs are a crucial factor to consider as gold prices remain under pressure and could easily drift toward the $1,200 mark, putting big pressure on high-cost producers like IAMGOLD . IAMGOLD targets 2014 all-in sustaining costs in the range between $1,150 and $1,250 per ounce. IAMGOLD's performance greatly depends on whether the company will be able to hit the low end of its cost guidance. Otherwise, its shares will experience more downside.

Uncertainty in Turkey
As production at Mulatos is declining, Alamos Gold has to start production at its development projects as soon as possible. Two of the company's projects in Turkey, Kirazli and Agi Dagi, are already in the permitting stage. Kirazli is expected to produce 99,000 ounces of gold annually when it starts commercial production, while Agi Dagi is expected to produce 143,000 ounces of gold annually.

These mines will greatly increase Alamos Gold's production levels. The problem is the company experiences difficulties on the permitting stage. The company states that the recent political instability in Turkey has increased the uncertainty around when the permits will be obtained. Alamos Gold expects that hearing about Kirazli project permit will take place within five months from now. If the permit is obtained, Kirazli will be ready for first gold production in 18 months. This means that the company couldn't count on cash flow contribution from the project for at least two years.

Time to go shopping?
Alamos Gold finished the fourth quarter with $410 million of cash on the balance sheet, so the company can afford to purchase a producing mine. Silver Standard Resources has recently been in the similar situation, with the sole producing mine and excessive cash on the balance sheet. Silver Standard Resources decided to diversify into gold and agreed to buy Marigold mine from Goldcorp and Barrick Gold.

However, Marigold was a high-cost mine when it was operated by Goldcorp. Whether Silver Standard Resources will be able to push costs down remains a question. The key takeaway from Silver Standard Resources' story is that it is difficult to buy a low-cost producing mine, because such mines are rarely on sale.

Bottom line
Alamos Gold faces several tough years ahead. As costs are rising and production is falling, the company's cash flows will come under pressure. The uncertainty regarding project permits in Turkey adds to the pressure. However, the company has a very strong balance sheet with lots of cash and no debt. The amount of cash cushion is more than enough to take Alamos Gold through the years of decreased cash flow.