Photo credit: Flickr/nestorgalina

"America has a long history of achieving the impossible. We defeated the British. We landed on the moon. We invented the Internet. And now we can add horizontal drilling to the list of American innovations that have changed the world forever."
-- Howard Hamm, CEO of Continental Resources

That quote comes from Hamm's Energy Independence Day letter, which appeared in Forbes last month. What's most interesting about the letter, which also noted that the U.S. is likely to overtake Saudi Arabia as the world's largest oil producer by 2017, is that Hamm isn't crediting hydraulic fracturing for the current American energy renaissance:

Some may say this new abundance in oil and gas is due to hydraulic fracturing. However, fracking technology has been consistently in use for more than 60 years. What is new is horizontal drilling.

He points out that in 2000, there were fewer than 50 horizontal drilling rigs in the U.S.m but today there are more than 1,200, which is why we've gone from talking about peak oil to now pondering American energy independence within a decade.

Clearly, horizontal drilling wouldn't be viable without being combined with hydraulic fracturing. However, when done in combination, the results are absolutely game-changing. Consider the following quotes from Pioneer Natural Resources CEO Scott Sheffield on the company's most recent quarterly conference call. In talking about a recent horizontally drilled well in the Permian Basin, he said: "What's interesting, in six months, it's reached 140,000 barrels of oil equivalent." What's truly mind-blowing is what he said next: "Our typical vertical well takes 30 to 35 years to produce a 140,000 on a vertical well. So we did that in six months." By simply shifting from a vertical well to one drilled horizontally, the company was able to pull forward three decades of oil and gas production.

The other thing to keep in mind here is that the company isn't just pulling production forward, but it's accessing oil and gas that would never have been recoverable before. That's because companies are able to significantly improve what are called estimated ultimate recoveries, or EURs. In fact, production is so good at its recent wells that the company, which had estimated it would ultimately be able to recover about 650,000 barrels of oil equivalent from its wells, is now, based on what it's seeing, estimating that it could pull out more than a million barrels in some cases from its wells.

In one final example the company gave on its conference call, it noted that in 10 months one of its Jo Mill wells produced an average of about 50,000 to 60,000 barrels already. That's truly staggering when considering that it was thought that a traditional vertical well in the Jo Mill would produce only 20,000 barrels in 40 years. It's pretty clear: Horizontal drilling changed everything.

Further, while horizontal drilling is revitalizing legacy oil and gas basins such as the Permian where Pioneer is using it, it's also putting new emerging basins such as the Bakken and Eagle Ford on the map. In fact, without horizontal drilling, the Bakken would not be economic to produce. However, with oil over $100 per barrel, a producer like Continental can earn a rate of return in excess of 60% even after spending more than $8 million to drill each well. Meanwhile, thanks to horizontal drilling, EOG Resources is one company enjoying rates of returns north of 100% in the Eagle Ford. In fact, EOG credits horizontal drilling with its holding some of the best horizontal oil assets in North America, which have delivered an average of 40% production growth each year this decade.

For far too long, hydraulic fracturing has been the focus of America's oil and gas boom. It's time to give some credit where credit is due, and it's pretty clear: Horizontal drilling is what's leading America's energy revolution.

With the SPDR S&P Biotech Index up 40% over the trailing-12-month period, it's evident that investment dollars are willingly flowing into the biotech sector. Keeping that in mind, let's have a look at some of the rulings, studies, and companies that made waves in the sector last week.

Yet again, this week was absolutely dominated by earnings-driven events. Given that we at the Fool have covered many of these stories already this week I want to instead focus on five non-earnings driven events that caught my attention.

As I prefer to always start you off with the good news, let's turn our attention to Celgene , which, on Friday, announced that the European Commission had approved its oral relapsed and refractory rare blood cancer drug pomalidomide in combination with dexamethasone. Celgene will be launching the drug in Europe under the trade name Imnovid, and it'll be used in cases where patients have tried at least two previous cancer therapies. In late-stage trials, Imnovid delivered progression-free survival of 15.7 weeks, which was a dramatic improvement over the placebo. Worldwide peak sales estimates for the drug are around $1 billion, so this is certainly a good start.

On Monday, small-cap biotechnology company Compugen gave investors something to cheer about when it announced a collaboration and licensing agreement with Bayer for two of its antibody-based immunotherapies. The deal could be worth as much as $540 million for Compugen and gives the company $10 million upfront, as well as the potential for $30 million more in milestone payments during preclinical trials. The two companies will co-develop these drugs, with Bayer getting worldwide rights upon commercialization (though Compugen would still receive a mid- to high-single-digit royalty). This is great news for Compugen, as it solves the problem of seeking out a partner later, helps reduce its clinical testing costs, and staves off the need to dilute shareholders with a secondary offering to raise cash. Shares added 44% this week.

But as you might imagine, not all news this week was good. Although Isis Pharmaceuticals' share price hardly moved, it delivered disappointing news on Monday that ISIS-CRPrx failed to demonstrate a statistically significant improvement in inflammation reduction as compared with the placebo in a mid-stage rheumatoid arthritis trial. Isis noted that its drug did cut the C-reactive protein by 67%, but it was done in by an exceptionally strong performance by the placebo. Isis will still be researching CRPrx for other indications. However, as I noted earlier this week, having 31 potential sources of revenue as well as 12 ongoing collaborations, I'd suggest Isis is in much better shape than investors realize.

The end of the week didn't bring good tidings for shareholders of Novo Nordisk , which, according to a report from BioCentury, received a second complete response letter (i.e., a rejection letter) from the FDA for its recombinant Factor VIII therapy to treat a form of hemophilia. According to the report, the rejection is based on unresolved issues at Novo Nordisk's manufacturing facility and merely adds to a series of struggles the company has had with regard to advancing its hemophilia-related pipeline. As you might expect, Novo Nordisk is working with the FDA to resolve this issue as quickly as possible. 

Finally, off in its own world this week is Onyx Pharmaceuticals , which purportedly has received a $130-per-share buyout offer, or $9.5 billion, from Amgen, as Reuters reported earlier this week. According to people familiar with the matter, Onyx is still exploring interest from other suitors, but it may be interested in accepting Amgen's offer, which is $10 a share higher than its original offer roughly six weeks ago. This news comes on the heels of Onyx's second-quarter results, which showed losses were halved to just $53 million and revenue more than doubled to $153 million. If Onyx accepts the deal at $130 per share, I'd suggest Amgen is still getting itself a decent bargain.

The Navy's F/A-18F Super Hornet strike fighter flew on a 50/50 blend of biofuel and conventional fuel. The stunt earned it the nickname "Green Hornet." Source: U.S. Navy.

Energy is an incredibly important necessity for Uncle Sam. Unfortunately, it also happens to be quite expensive. In 2011 the Department of Defense spent $20 billion on energy and consumed nearly 5 billion gallons of petroleum, according to Sharon Burke, assistant secretary of defense for operational energy plans and programs. Almost three-quarters of that consumption is tied up in the "training, moving, and sustaining military equipment and weapons."  

The armed forces are well aware of their dependence on a single source of energy -- petroleum -- for smooth operations, but with so much equipment relying on dinosaur sauce, it would be a logistical nightmare to retrofit every engine to run on alternative fuels. That is precisely why next-generation drop-in fuels are so important.

A disruptive future
You may not be enthusiastic about the feasibility of industrial biotech, but many companies in the nascent industry are finally reaching commercial-scale production of products. The driving force in the disruptive future of the field is the ability of each technology platform to create products that touch multiple unrelated industries such as food, cosmetics, flavors and fragrances, chemicals, and fuels. Thus, it's unfair to associate any of the following companies solely with fuels. The Pentagon is certainly eyeing the potential, however.

Renewable-oils manufacturer Solazyme began supplying the U.S. Navy with Naval marine diesel and Naval jet fuel in 2010. In all, the company delivered nearly 1 million liters of fuel under various contracts between 2009 and 2012. The company took a lot of heat for the $15-per-gallon price tag for the contract -- nearly four times the price of conventional jet fuel at the time -- but critics seemed to have dismissed the fact that those selling prices included costs for new equipment and non-commercial scale inefficiencies.

The company will have 120,000 metric tons of renewable oil capacity as soon as the beginning of 2015, which will go a long way toward greening supply chains of the global chemical markets. Successful commercial performance should also turn heads at the Pentagon. Would it make sense for the DoD to subsidize a Solazyme biorefinery for the sole use of fuels?

Mountains to move
The amount of renewable fuels needed to make a sizable dent in Uncle Sam's fuel requirements is enormous. Consider that a Solazyme biorefinery with a capacity of 100,000 metric tons would be able to produce about 33 million gallons of jet fuel each year. I imagine a dedicated fuel facility -- if constructed -- would be much larger to improve the economics.

Nonetheless, skeptics would probably criticize low annual production figures, even though a built-for-purpose facility could have process scheduling and cost advantages. To put it bluntly, the Pentagon would need 153 such facilities and tens of billions of dollars to completely replace its fuel consumption with the technology. Rather than file the problem away in the "too hard" category, I suggest we get started today. What do we have to lose?

Surgically implanted bombs, the most serious threats the U.S. has seen in years, and Al-Qaeda "chatter" similar to what was seen right before 9/11 are just some of the threats U.S lawmakers say prompted increased security, and the closure of embassies across the Middle East, recently.

The U.S. State Department also issued a global travel warning, saying that terrorist organizations are aggressively focusing on kidnapping, torturing, and bombing Americans traveling abroad. Moreover, this all has the ability to affect America's shaky economy. But there are ways to prepare -- just in case.

Image: CIA, via Wikimedia Commons. 

The increase in terrorist activity
In the past few weeks, the U.S. closed 22 U.S. embassies across the Middle East and North Africa, because of "credible threats" that terrorist organizations are planning a massive attack. So far, U.S. intelligence agencies haven't stated where, or when, these attacks will take place, but they did say the threats appeared to originate in Yemen, indicating a high probability they're Al-Qaeda-related.

Further, the ranking Democrat on the House Intelligence Committee, Rep. Dutch Ruppersberger of Maryland, told ABC that Al-Qaeda's "operatives are in place" and that it'd be a "major attack." And Rep. Peter King, R-N.Y., the lead on the House Homeland Security subcommittee on counterterrorism and intelligence, told ABC that "Al Qaeda is in many ways stronger than it was before 9/11, because it's mutated and it spread and it can come at us from different directions."

What to prepare for
Luckily, lawmakers are taking these threats seriously. But, considering that on Sept. 10, 2001, the Dow Jones Industrial Average closed at 9,605.51, and on Sept. 17, the day the Dow reopened, it closed at 8,920.70, a 7.13% decrease -- and then it didn't recover for a month -- there are a few things investors should keep in mind. 

First ...
A terrorist attack, particularly a massive one, could have an emotional impact on the market. The Dow dropped 7.13% on Sept. 17, but it finished the week down 14.3% -- the largest single-week drop in U.S. history. This drop was probably exacerbated by the attack's occurrence at the heart of the U.S. financial system, though leading reports indicate that location wasn't solely responsible for this decline. In addition, while initial reports indicated that the Sept. 11 attacks slowed GDP, later Congressional Research service reports state that GDP slowed before Sept. 11, and was not a result of the terrorist attack. This finding indicates that the sudden decrease in the market was largely emotionally driven. Consequently, a short-term drop in the market is possible following a major attack.

Second ...
A surge in oil prices is probable. One of the reasons the U.S. closed embassies in the Middle East and North Africa is that these areas are likely spots for terrorist attacks; particularly the Arabian Peninsula. That directly affects the Organization of Petroleum Exporting Countries, or OPEC.

In 2012, petroleum net imports accounted for 40% of the total petroleum used in the United States. Of that amount, 55% was imported from OPEC, which includes Middle Eastern countries such as Iraq, Libya, and Saudi Arabia. In fact, in 2012, 18% of U.S. imported petroleum came from Saudi Arabia.

Further, in July, OPEC crude output hit a four-month low because of the conflict in Libya and Iraq and had a direct effect on July's gas prices. According to AAA, July gas prices rose $0.14 per gallon because of increased demand and unrest in the Middle East. Oil price increases are usually good for ETFs such as the United States Oil Fund , and PowerShares DB Oil Fund , but a rise in oil prices can also be detrimental to the economy.  

Recently, The World Bank Development Research Group Environment and Energy Team analyzed a wide body of research on oil prices' impact on the economy. They concluded that an increase in oil price negatively affects global GDP but is especially damaging to emerging and developing countries, such as China, because of their reliance on oil-intensive manufacturing industries. Consequently, a rise in oil prices, following an attack, could negatively affect the United States' slowly recovering economy -- and the global economy.

Third ...
As Secretary of State John Kerry said, "Deploying diplomats today is much cheaper than deploying troops tomorrow." The Middle East is a hotbed for terrorist activity, and one way America fosters diplomacy is through its embassies. Consequently, they make ideal targets for terrorist attacks. However, a physical assault on an embassy isn't the most effective way a terrorist group could attack the United States. And I think they know that.

In 2009, under the direction of Al-Qaeda, Umar Farouk Abdulmutallab, the "underwear bomber," tried to blow up a flight headed to Detroit. Following the failed attack, the U.S. deployed L-3 Communications Holdings' body scanners that had a three-year initial estimated cost of $3 billion (since reduced). 

Last September, the Izz ad-Din al-Qassam Cyber Fighters successfully targeted six banks, including Bank of America and JPMorgan Chase. This attack, along with others, spurred the U.S. to invest heavily in cybersecurity initiatives such as the Department of Defense Cyber Crime Center -- which partners with Lockheed Martin and its subcontractor CACI international . In fact, analysts expect that while defense budgets are cut, cybersecurity-related spending will  increase. 

Pre-9/11, the Congressional Budget Office stated: "Under current policies, total surpluses would accumulate to an estimated $2 trillion over the next five years and $5.6 trillion over the coming decade. Such large surpluses would be sufficient by 2006 to pay off all debt held by the public that will be available for redemption." Then 9/11 happened.  

America is a defense superpower, and Al-Qaeda doesn't stand a chance in a frontal attack. But through their past actions, they've cost the U.S. trillions. Fortunately, or not so fortunately depending on how you look at it, the U.S. has already invested heavily in counterterrorism measures, so a sharp increase in defense spending is unlikely. Still, an attack by Al-Qaeda on the U.S. is likely to spur defense spending -- even if we are in the middle of sequestration. Just look at what happened following North Korea's missile launch: Defense Secretary Chuck Hagel stated that the U.S. would be shifting "resources" to boost funding to Lockheed Martin's Aegis missile defense system, and beefing up missile defense -- to the tune of $1 billion.  

A grim wrap
The Department of State believes that now to the end of August is when the terrorists plan to attack. But the good news is that for now, this is all still hypothetical -- and hopefully it remains that way. But if a "major attack" does occur, the best thing you can do as a Foolish investor is to look at what's happened in the past, and not panic. The market may go nuts, oil prices could increase, and it could have an overall impact on the economy, but I don't think it'll be long-lived. And as Fools invest for the long run, the best thing you can do is stock up while the market's low.

There's little doubt that the average investor would be better off buying passive exchange-traded funds than individual stocks. Studies have shown that most people trade stocks too frequently and, even more precariously, have an unfortunate knack for buying high and selling low.

At the same time, it's also clear that few investors would throw in the towel, so to speak, and admit this is true in their particular case. Are they lying? Not necessarily. Instead, they're just overconfident in their own abilities.

The origins of overconfidence
If you're a regular reader of The Motley Fool, then you've probably come across this idea before. In the middle of last month, my colleague Morgan Housel identified overconfidence as an investor's greatest enemy. "The average investor painfully lags an index fund [yet] thinks he's Warren Buffett," Morgan quipped.

There are multiple explanations for this belief. In the first case, the idea that past events seem orderly and predictable with the benefit of hindsight leads us to believe that future events can be confidently foretold as well. In the second case, overconfidence protects our egos from being bruised by the reality that many of us aren't, in fact, any good at picking stocks.

But scariest of all, most investors have no idea how they're doing in the first place. One analysis found that the average investor overestimates his or her returns by more than 11 percentage points per year. And an annual study by Franklin Templeton Investments has consistently found that, with the exception of 2012, more than half of the 1,000 investors surveyed each year didn't know whether the S&P 500 was up or down over the previous calendar year.

But while all of these explanations are insightful, there's at least one that's eluded recognition: laziness. As Daniel Kahneman discussed in Thinking, Fast and Slow: "[M]any people are overconfident, prone to place too much faith in their intuitions. They apparently find cognitive effort at least mildly unpleasant and avoid it as much as possible."

Laziness and stock-picking
Identifying stocks that will outperform the market is far from easy -- and this is assuming that it's even possible to do so in the first place. It takes conscious and consistent mental effort. And it's physically draining. "The evidence is persuasive," Kahneman writes, that "activities that impose high demands on [one's analytical thought process] require self-control, and the exertion of self-control is depleting and unpleasant."

The problem is that most people aren't professional investors. They have day jobs. They're doctors, lawyers, engineers, entrepreneurs, you name it. As a result, the demands of their professions consume their energy, leaving little for the strenuous type of security analysis recommended by the likes of Benjamin Graham.

It doesn't help, moreover, that most people are instinctively lazy. "[I]f there are several ways of achieving the same goal, people will eventually gravitate to the least demanding course of action," Kahneman observed. "Laziness is built deep into our nature."

But herein lies the catch. While most investors are either too drained or too lazy to perform proper stock analysis, very few are willing to admit it. To bridge the gap between these otherwise dissonant realities, in turn, they rely on artificially bolstered self-confidence.

According to the authors of Mistakes Were Made (but not by me), "people will bend over backward to reduce dissonance in a way that is favorable to them and their team. The specific ways vary, but our efforts at self-justification are all designed to serve our need to feel good about what we have done, what we believe, and who we are."

Investors' worst enemy: laziness
At the end of the day, there's nothing wrong with being a lazy investor. Life happens. You have plenty of other things to spend your energy on than calculating a specific company's free cash flow. Yet it's important to recognize this for what it is, and, critically, not to subconsciously compensate with overconfidence.

Plenty of investment products are specifically designed to reward lazy investors -- think passive exchange-traded funds such as the SPDR S&P 500 or its higher-yielding counterpart, the SPDR S&P Dividend . Alternatively, absent blind luck, few individual stocks will do the same.

Iron ore miner Rio Tinto is finding out how difficult it can be to negotiate from a position of weakness. As it tries to unload assets to shore up its financial position, buyers are trying to take advantage of its diminished position by low-balling offers. The miner's not so desperate yet that it will take any old offer that comes along, but it shows that when you're having a garage sale of anything that's not nailed down during a difficult industry period, you're not going to command top dollar.

Case in point is the failure thus far of Rio Tinto to find a buyer for its 59% stake in its Canadian iron ore assets. The operation is Canada's largest producer of iron ore, and despite having three bidders for the assets, all the offers made were apparently substantially below the already fire-sale price the miner was asking.

Not that you can blame them. There are a host of iron ore mines on the market for sale, a bunch of which aren't even Rio Tinto's. BHP Billiton , for example, is selling its Jimblebar mine in Australia to two Japanese companies, Brazil's MMX is mulling over whether to sell its project under construction in Rio de Janeiro state, Fortescue will be selling off assets in the September quarter after sharply reducing production targets, and the U.K.'s Stemcor is selling off Indian assets. So the market is flush with potential projects to buy.

Couple that with questions over how much demand there will be for steel with China's economy slowing -- albeit at a slower rate than was expected -- and buyers are right to be cautious about paying too much for something that could be worth a lot less tomorrow.

China is looking for its GDP to grow no less than 7.5% this year, which other industrialized nations would give their eye teeth for, but it represents a lower output than the 8% analysts were forecasting earlier this year and is well below the 10% or better growth it achieved over the past few years.

So where steelmakers such as ArcelorMittal may have been interested in some of Rio's assets, figuring out how to put them to productive use as the market for steel wanes would be no small hurdle to surmount. It also sold its own Canadian iron ore assets earlier this year for $1.1 billion.

Similarly Teck Resources was thought to be a potential buyer as it looked to gain leverage with steelmakers, but the miner scoffed at the suggestion, calling its involvement in any big asset purchases to be "grossly overblown."

In the end, Rio TInto had whittled the list down to three private-equity firms, and they were just eliminated because their bids were too low. That's another blow to the miner, which also just gave up on trying to sell its Pacific Aluminum asset and failed to find a buyer for its diamond mines earlier this summer.

I wouldn't count Rio Tinto out just yet, however. It has managed to sell sell almost $2 billion worth of non-core business so far this year, and though its shares are still 20% below their recent highs, they've also bounced some 20% off their recent lows, putting the stock just about where it was a year ago. That might not sound so encouraging, but with miners such as Vale down 18% and Teck down 7%, investors may feel somewhat encouraged by Rio's recovery.

Minerals and precious metals may have lost their luster at the moment, but the big declines they've suffered are only setting the stage for the next bull run. The Motley Fool's new free report "The Best Way to Play Gold Right Now" dissects the recent volatility and provides a guide for gold investing. Click here to read the full report today!

Does Walt Disney's failure to talk much about new additions to its Marvel movie slate at San Diego Comic-Con last month mean the studio is having trouble identifying new projects? Hardly, says Fool contributor Tim Beyers.

In a June appearance at Wizard World Comic Con in New York City, Stan Lee revealed that Marvel is working on a film starring the Black Panther. He also confirmed plans for a film starring Doctor Strange. Officially, Marvel's movie slate includes three untitled productions -- two for 2016 and another for May 2017. If Lee is right, and Tim sees no reason to doubt him, two of those properties are spoken for.

Putting the Black Panther on the big screen has potential, Tim says in the following video. But it also carries risks. Unlike Iron Man, which benefited not only from Robert Downey Jr.'s star power but also the character's long and successful run in the comics, the Panther has a scattered publishing history and only brief appearances in other media -- notably, a 2010 cartoon airing on BET television in the United States and ABC3 in Australia.

Time Warner subsidiary DC Comics, too, is hedging its bets by developing TV and film projects for the Flash, a second-tier but still very well-known character with a history in other media. Black Panther is a third-tier Marvel property by comparison.

So why take the risk? Because Marvel and Disney need to develop more characters, and if done well, few are as likely to be as interesting as Black Panther, Tim argues. Stan seems to agree. Do you? Leave a comment to let us know what Marvel movie you're most looking forward to.

Microsoft is using its Scroogled.com domain to take jabs at Google again. Google's Gmail recently began serving ads in its revamped inbox feed, and Microsoft's letting Big G have it.

"Google spams your inbox with ads that look like real emails," Scroogled proclaims, complete with a video and slideshow that illustrate how Google is placing ads at the top of the new Promotions tab of the updated Gmail platform.

To be fair, it is a bit jarring. The ads are clearly identified at the top of the inbox -- set apart from the incoming email with its lightly colored background -- but it's something that will take some getting used to. Unlike the emails that can be checked off on the left and deleted, the ads get nixed on the right side of the feed. Instinctively clicking on the left will merely open up the ad. The sponsored spots also can't be labeled as spam, even though that's how many users may feel about the situation. 

Anyone wondering why Gmail was presorting incoming email earlier this summer -- and branding it as a feature -- now has every right to be cynical. Microsoft obviously would prefer that Gmail users get fed up with Google's platform and set up camp on its own Outlook.com.

This isn't the first time the software giant has aimed at the search leader through the Scroogled website. It was launched ahead of last year's holiday shopping season to point out how Google's shopping hub is populated with paid product listings. Scroogled turned its attention to Gmail earlier this year, pointing out that Google sells targeted ads based on email contents. Google has countered the allegations, but Microsoft's the one scoring the style points as Google haggles over substance.  

Yahoo! is the third of the major players in email, but you won't see Microsoft trying to bruise the folks who bleed purple. Yahoo! isn't following Google's monetization practices, but -- more importantly -- Microsoft and Yahoo! are search partners. Microsoft isn't going to do anything that will damage the relationship where Yahoo! outsources its paid search business through Microsoft. 

There also is more to gain by taking Google down a few pegs. Google isn't just the leader in search. Google's Android is the top dog in smartphones and tablets, where Microsoft's commanding a mere 4% share of the market. Getting consumers to turn on Google would be beneficial for Microsoft's well-being beyond free email.

Microsoft's been on the other end of an attack ad campaign, and it worked. The "I'm a Mac, I'm a PC" Apple ads killed Vista. The market accepts low blows when it's an underdog doing it, and that's what Microsoft is these days. No one flinched earlier this year when its Lumia ads made fun of Apple and Samsung smartphone owners. It also won't be a surprise the day Apple begins attacking Google the way it did Microsoft several years ago, even if "I'm an iOS, I'm an Android" doesn't have the same ring to it.

Microsoft will keep on swinging, and why not? It's the rare reward for being the underdog. 

Biotech's the biggest boom-or-bust business on the market, with regulatory approvals and clinical trial results routinely sending stocks hurtling up or down by significant amounts. The industry had a tough week as a whole, with the Nasdaq Biotechnology Index losing a gut-churning 2.7% over the past five days. But in an industry like this, there are always big gainers and big losers every week -- and this was no exception.

From second-quarter earnings success to a slumping outlook at one closely watched company, these stocks rewarded and plagued investors this week to the tune of double-digit gains and losses.

Dendreon takes a plunge
If you're looking for one biotech stock more responsible than any other for the NBI's fall this week, look no further than Dendreon . Dendreon's shares fell more than 26% this week, after the company announced that it expects little to no growth from cancer drug Provenge in 2014. Sales of the drug already are on the downswing, as Provenge's revenue declined by more than 8% for the second quarter -- part of a 13% drop in the drug's sales over 2013's first half.

Analysts were once high on Provenge's potential, with some expecting the drug to become a blockbuster product with billions of dollars of revenue. That hasn't panned out for Dendreon and its investors, particularly as all-oral prostate cancer therapies, such as Johnson & Johnson's Zytiga, have made Provenge's injectable therapy look inconvenient by comparison. Given that Zytiga's posted strong double-digit sales growth for the year's first half and is on pace to eclipse blockbuster status by the year's end, it's clear just which medications are getting ahead in this area.

Dendreon might still have appeal through getting its drug approved in Europe, but this stock's potential is fading fast.

It wasn't such a bad week for shareholders of Idenix Pharmaceuticals , however. Shares of the biotech grew 12% for the week after Idenix reported a smaller earnings-per-share net loss in the second quarter as compared with last year's Q2. The company lost $0.22 per share in earnings in the most recent quarter, compared with $0.23 a year ago.

It's hardly market-shaking news, but Idenix's real battle is ahead of it. The company's angling to become one of the early entrants into the all-oral hepatitis C market, a market that some analysts have predicted could exceed $20 billion in annual sales in the near future. It's a lucrative opportunity for investors, but Idenix has fallen behind the early leaders in the race, AbbVie and Gilead Sciences . Gilead's sofosbuvir has looked strong in early-stage clinical trials, and analysts have pegged peak sales estimates of the drug at up to nearly $4 billion. The potential's still there for this company to make some real noise in this growing market, but Idenix will have to act fast to catch up with its much larger rivals.

The week's big winner, however, was none other than NPS Pharmaceuticals . I've been high on this growing biotech firm before, but shares blasted off this week by 21%, part of a whopping 149% gain year-to-date.

NPS boosted its revenue by double-digit percentage growth in the most recent quarter, but all eyes are on Gattex, the company's recently approved short bowel syndrome, or SBS, therapy. SBS is a rare disease, so prescriptions of the drug are only slightly above a hundred -- but for an expensive drug like this, that's been enough to push early sales of Gattex to $4.8 million for the most recent quarter. It's strong progress for NPS, especially as the company expects to submit its next orphan drug, Natpara, for regulatory approval later in the year.

As of now, it's all systems go at this flourishing young biotech. For investors who got in early with NPS, the rewards have been astronomical.

No longer wanting to be the A-Rod of the cattle industry, meat processor Tyson Foods said beginning next month it will stop buying cattle that were fed the performance-enhancing drug Zilmax, which allows ranchers to feed their cows less but still puts on the pounds.

Unlike with the baseball doping scandal, however, Congress has not held hearings or been outraged -- outraged, I tell you! -- that ranchers have been drugging cattle before they're sent to market. Zilmax, which is produced by Merck's animal-health division, adds anywhere from 24 to 34 pounds to a cow just before it's slaughtered by causing bovine muscle fiber to expand by three microns. That might not sound like a lot, but when you're talking about millions of muscle fibers, it can boost a rancher's profit by $30 a head.

While the FDA says the steroid-like drug is safe for human consumption and Merck says it's safe for the cows, too, there's a growing body of evidence suggesting that might be, well, bull. Meat packer Cargill says Zilmax lowers the quality of the beef, making the meat tough and tasteless, while the world's largest beef producer, JBS , says it causes problems with a cow's ability to walk.

Merck counters that the drugs used in Zilmax have been researched for 30 years and have been used globally for 17 years, and are also used in Canada and Mexico. It's allowed ranchers to get twice as much meat from the same head of cattle as they did in 1958. 

However, a number of countries in the European Union, as well as China and Russia, have banned their use, and it's suspected the growing opposition to Zilmax and the similar drug ractopamine may have more to do with wanting to increase exports than any real opposition to its use. Smithfield Foods , for example, stopped its use of ractopamine a week before its sale to a Chinese meat processor, and with both Tyson and Hormel Foods having said they're interested in expanding exports to the country as well, some analysts think it may just be a marketing ploy on Tyson's part.

Regardless of the rationale for the decisions being made, like the debate over genetically modified food, there is growing cognition by producers and consumers about what's being done to our food chain by corporate agriculture interests and the impact it's having on the health of animals, the health of our crops, and the health of those who eat them.

Even if it is a ploy by Tyson to gain export market share, as the beef processing leader with a 26% share of the market, it's raised the profile of the issue, and we may soon see more opposition to doping cattle. And that's something consumers and investors should have no beef with.

U.S. companies are interested in conquering foreign markets all the time, and you can profit from our increasingly global economy by easily investing in your own backyard. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how. Click here to get your free copy before it's gone.

In a weak week for the Dow, shares of America's second-biggest warship-builder, Huntington Ingalls , largely dodged the downturn. Indeed, Huntington Ingalls shares ended the week up 1.2%, despite investors' muted enthusiasm for Q2 earnings results Wednesday.

Want to know why? So do I -- so let's dig a little bit into the results. In Q2 2013, Huntington Ingalls saw:

• Sales sink 2% to $1.68 billion ...
• But operating profit margins expand by 70 basis points, to 6.9% ...
• While profits per diluted share grew 12% to hit $1.12 per share -- and would have hit $1.36 per share but for necessary pension fund contributions.

So far, this is all pretty good news. Now watch how it gets better: CEO Mike Petters says Huntington Ingalls has a long-term goal to "strengthen our backlog" and achieve a "9-plus percent operating margin" by 2015. The prospect of greater backlog leading to greater revenues, and of these revenues being compounded by 30% increase in operating profit margins (from today's 6.9% margin) has to grab investors' attention. But is it doable?

In a word, yes. In Q2, Huntington won some $5.3 billion in new work from the Pentagon -- more than three times (in dollar value) as many new projects as it billed for old projects now completed. Huntington landed contracts to build five new DDG-51 Arleigh Burke-class guided missile destroyers, and a new National Security Cutter -- the Munro (NSC-6) to boot. It also won a $745 million contract to decommission and disassemble the nuclear aircraft carrier USS Enterprise (CVN 65).

To put this in context, Huntington Ingalls won new contracts to guarantee nine months' worth of work, and won them all in a single quarter. Combine this accelerating rate of revenue growth with Petters' promise of fatter profit margins thereon, and you can see why analysts predict that Huntington Ingalls will be able to grow its profits at the rate of 21% annually over the next five years. (And to put that in context, 21% profits growth is more than three times faster than shipbuilding rivals Lockheed Martin or General Dynamics are expected to grow).

Despite its superior performance, Huntington Ingalls commands a forward P/E ratio of only 12.4 -- right in line with the 12 forward P/E at General Dynamics, and the 13 forward P/E at Lockheed Martin. If you ask me, though, I think superior performance deserves a superior P/E. I think Huntington Ingalls stock deserves to go higher.

Boeing operates as a major player in a multitrillion-dollar defense market in which the opportunities and responsibilities are absolutely massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. The Fool's premium research report on the company provides investors with the must-know issues surrounding Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

I struck a chord earlier this week, and it appears to be a B-flat.

I stated that General Motors' move to slash prices on its Chevy Volt on Monday by $5,000 -- hot on the heels of at least three other major manufacturers' decisions to make their own plug-in electric vehicles cheaper -- could make things more challenging for Tesla Motors .

That opinion was roundly dismissed. Readers let me have it, and here's just a sampling of their perspectives.

• "Why on earth would you compare a $70k car with a $30k car?"
• "It's like cross-shopping a Toyota Camry and a BMW 5-series."
• "A potential Telsa buyer has next to zero interest in the Leaf or the Volt or any EV from Ford, Honda, Fiat, etc. They are not buying the Model S because it is an EV. They are buying it because it is a fabulous sport sedan."

There was one comment in particular that caught my attention.

"Tesla is the iPhone and IPad of the EV space," writes njdave52. "Overpriced but cool, slick, and high-tech. Early adopters will always pay a premium."

That's an argument that got me thinking. Is Tesla the Apple of battery-powered cars?

Mobile technology means entirely different things to each company, naturally, but they're respected tastemakers with the leading premium product on the market.

Being compared to Apple was the utmost compliment until the stock peaked late last year. Cheaper Android smartphones and tablets started to flood the marketplace, shrinking Apple's share of both markets. Apple has had to sacrifice margins by putting out a cheaper iPad and keeping older iPhone models around at lower price points.

Right now, Tesla's doing just fine serving the early adopters. It's cranking out only 500 cars a week, and it isn't having a problem attracting orders at an even higher clip. However, just as Apple quickly exhausted the first wave of folks willing to pay $599 for the original iPhone, Tesla's going to have to decide whether it wants to be more than a niche player.

The market applauds that Tesla delivered 5,150 cars this past quarter -- or an average of 1,716 Model S sedans a month -- and it boos the 1,788 Chevy Volts that were sold last month.

That's not a fair comparison, of course. Tesla's cars generate far more revenue, and we know that it's now doing so profitably. However, a once popular argument for Apple bulls as Android began taking market share is that it was the one making the lion's share of the profits in this space. It's not a very commonly voiced rallying cry these days, as Apple's year-over-year profitability is declining.

Sure, the difference between an iPhone and a cheaper Android smartphone isn't as great as we would see if we were to test-drive a Camry alongside a BMW. However, that doesn't address the real meat of the price-cut matter. The reason the Volt is $5,000 less than it was a week ago -- and the Leaf is $6,400 cheaper than it was a year ago -- is that consumers aren't valuing the premium associated with electric vehicles the way carmakers were originally hoping.

If the Camry got a $5,000 price cut, a BMW 5 Series Gran Turismo wouldn't have to follow suit. However, if just about every leading gas-powered car shaved thousands off the sticker price because folks weren't buying cars with internal-combustion engines, do you really think the Bimmer would be immune here?

That's the problem. Range anxiety is real, and there still aren't enough drivers on the road who log enough miles to make the switch to electric solely as an economic decision. There are naturally plenty of other good reasons to go electric, but then we circle back to range anxiety.

I'll close with a concession. My wife drives a Volt. She loves it. She's had to go to the gas station just three times in 17 months. I am seriously considering a Tesla Model X as my next vehicle, and not just to let my wife know that I won't have to stop by the gas station at all.

However, after seeing Apple prove mortal last year, I'm seeing the same undertones of Tesla fervor where fans summarily dismiss weakness elsewhere as something that could be a contagion because the financials and the share price look great now.

As innovative as Apple and Tesla have been, no company operates in a vacuum. It's a lesson that Apple investors have painfully learned over the past year, and Tesla shareholders had better hope they're not too cool for school.

The Dow Jones Industrial Average posted a loss for the first time since the third week of June, as the index fell 232 points, or 1.48%, this past week. The blue-chip average now rests at 15,425 after hitting a new all-time high of 15,658 two weeks ago. Both the S&P 500 and the Nasdaq also posted losing numbers this week, down 1.06% and 0.79%, respectively. After getting an overwhelming amount of economic data two weeks ago, this week was comparatively slow, with only a few reports being released. But comments from a few Federal Reserve members on Tuesday made up for the lack of data and gave investors something to trade on this week.

Before we hit the Dow losers, let's look at this week's best-performing component. Shares of Alcoa gained 3.13% this past week, far outpacing the second-best performer, Microsoft, at 2.54%. Alcoa's good week probably resulted from Thursday's release of Customs data indicating that Chinese exports rose 5.1% while imports increased by 10.9% in July, compared with the same month a year ago. This data is a welcome sign for investors that the world's second largest economy may have turned the corner on years of declining economic growth. 

The big losers
IBM was the worst-performing Dow component this past week, losing 3.76% after being downgraded by analysts at Credit Suisse. Analyst Kulbinder Garcha cited a number of reasons for assigning a downgrade to "underperform," including weak demand in the IT consulting industry, the trend toward cloud storage and away from internal networking units, and problems with future organic growth.  

Shares of Intel lost 3.05% this past week, making it the third worst performing Dow component over the past five trading days. It may come as a surprise that Intel performed so poorly when Microsoft moved higher this past week, since both companies are heavily involved in the struggling PC business, but Microsoft has a number of different units and business operations outside the PC industry, while Intel isn't as diversified. And although Intel is moving into the mobile chip market, it will be some time before investors see any real revenue and profit coming from that line of its business.  

Finally, JPMorgan Chase lost 3.48% last week, after news broke that the bank may face new legal problems in the coming months. It's been reported that the Department of Justice is investigating the mortgage-backed-securities business of Bear Sterns, which JPMorgan purchased during the financial crisis. JPMorgan also has investigations pending for its own MBS unit and Washington Mutual's units, which JPMorgan picked up in the aftermath of the 2007-2008 market woes. These investigations could end up costing the bank a lot of money and put pressure on the stock price until they're all resolved.  

The other Dow losers this week:

(For more information on why shares of some other losers fell lower this past week, click on the following links.)

• American Express, down 0.25%
• AT&T, down 2.71%
• Bank of America, down 2.62%
• Boeing, down 2.38%
• Chevron, down 1.96%
• Cisco, down 0.53%
• DuPont, down 0.3%
• ExxonMobil, down 1.33%
• General Electric, down 1.82%
• Hewlett-Packard, down 0.85%

• 1.59%
• Merck, down 0.3%
• Pfizer, down 0.54%
• Coca-Cola, down 0.14%
• Travelers, down 2.26%
• , down 1.99%
• , down 1.85%
• Wal-Mart, down 2.34%
• , down 2.67%

Next year will be the year. Although the Patient Protection and Affordable Care Act, commonly known as Obamacare, was passed back in 2010, the most significant parts of the major health-reform legislation don't become effective until 2014. 

Just because major components don't kick into gear until then, though, doesn't mean you shouldn't understand as much as possible about Obamacare now.  Here are some important things you need to know.

If you're employed by a relatively large organization
The letter of the law states that employers with more than 50 full-time employees (defined as working at least 30 hours per week) must offer health insurance to all those employees in "months beginning after December 31, 2013" or pay a $2,000-per-employee fine. However, the Obama administration decided to interpret the law as giving it latitude to push back this deadline until Jan. 1, 2015. If you're employed but your employer doesn't offer health insurance, you'll have to wait a while longer.

That wait could really be a long one for some workers. That's because, in some cases, employers could find it more cost-effective to pay the fine instead of offer health insurance. Some organizations could also opt to use higher numbers of part-time staff to reduce their costs of compliance with Obamacare.

The threshold for qualifying for Medicaid will increase in states that choose to implement the Obamacare Medicaid expansion. Generally speaking, individuals or families with income up to 133% of the federal poverty line will qualify for Medicaid. However, some states will have more lenient thresholds.

Anyone who doesn't qualify for Medicaid and is not covered by group health insurance by Jan. 1 will be required to get insurance or pay a penalty. This penalty will be the greater of $95 or 1% of income in the first year. The penalty escalates to the greater of $695 or 2.5% of income by 2016.

To avoid the penalty (again, assuming you're not covered by Medicaid), you'll need to purchase insurance through an online health insurance exchange. Some of these exchanges will be operated by states and others by the federal government. The exchanges are scheduled to become available on Oct. 1 of this year. 

You could be eligible for federal tax credits to help you purchase insurance. The amount of the subsidy you're eligible for depends on your household income level. The less you make per year, the more financial assistance you get.

There's one other important thing to know if you're buying individual coverage: Insurance companies won't be able to charge higher rates because of gender or pre-existing medical conditions. That's good news for many, but it could increase the premiums for lots of Americans.

There are a couple of provisions that will apply for employed Americans beginning in 2014 regardless of employer size. If you're relatively new to your job, your insurance plan can't impose an eligibility waiting period more than 90 days. Also, your annual maximum deductible can't be higher than $2,000 for an individual or $4,000 for a family.

Some Americans will get hit with more taxes. Individuals making more than $200,000 per year and married couples who file jointly that make more than $250,000 annually must pay an extra 0.9% tax. If you use a flexible spending account for health care, the maximum amount of pre-tax contributions you can make is $2,500. Also, the deduction for qualifying medical expenses jumps from 7.5% to 10% of adjusted gross income.

Upcoming changes resulting from Obamacare are likely to help and hurt different industries. Many observers think the requirement that individuals obtain health insurance will help hospital chains. Hospital stocks have soared with the anticipated implementation of the individual mandate. Shares of Tenet Healthcare , for example, are up 137% in the past year.

However, research by Deloitte casts some doubt as to whether hospitals will really be helped much by higher numbers of insured patients. Even if Deloitte is right, though, hospitals with better pricing power could still do well. This is the driving factor behind Tenet's recent purchase of Vanguard Health Systems.

HCA Holdings might be the best choice when it comes to hospital stocks. It's the largest hospital chain in the nation. HCA shares haven't surged as much as most of its peers, and as a result, the stock appears to be more attractively valued than others right now. If Obamacare does help as much as some expect it to, HCA will benefit.

Turning to health-insurance companies, you might think the increased restrictions could hurt their profits. Think again. The companies will just increase premiums to make up for having to provide more benefits.

Obamacare's Medicaid expansion should particularly help several of the insurers. WellPoint looks to be in good shape to benefit after its acquisition last year of Amerigroup. The combined company serves 4.5 million Medicaid beneficiaries in 20 states. With a trailing price-to-earnings multiple below 10 and projected annual earnings growth over the next several years of 11.5%, WellPoint seems to be a good pick to profit from Obamacare.

One company that just might emerge as one of the biggest winners from Obamacare is eHealth . The health insurance website operator scored a major victory last week with a contract that allows it to sell insurance plans participating in Obamacare exchanges. If millions of Americans purchase health insurance as intended, eHealth will profit significantly.

Do all of the coming Obamacare changes seem as clear as mud to you? Don't worry -- you're not alone. In fact, an April survey conducted by the Kaiser Family Foundation found that 40% of Americans didn't even know that Obamacare was still a law. At least you're now more knowledgeable than nearly half of your fellow citizens.

Burger flipper McDonald's reported that July same-store sales rose 1.6% in the U.S., with a 0.7% increase globally, keeping the stock near the $100 mark, a tight range it has traveled in for the past few months. The question weighing on investors' minds right now is whether it can shed or at least mask its image as a fast-food joint while maintaining its place for value-conscious diners.

There's little question the fast-casual market popularized and dominated by Panera Bread and Chipotle Mexican Grill  is the sweet spot of dining these days. Panera sales have grown at a 14% compounded annual growth rate over the past five years, with operating profits jumping 27% annually, while Chipotle's done even better, expanding revenues 20% over the same time period and growing earnings at a 30% clip.

Those kinds of numbers are leading other fast-food concepts to reimagine their restaurants and go upscale. Yum! Brands , for example, cleaned house by upgrading its Taco Bell chain by bringing in celebrity chef Lorena Garcia to spice up its menu. It's also installing lounges and most recently retired the iconic Colonel Sanders from its KFC chicken chain while emphasizing a new menu that features flatbread sandwiches, fresh salads, and a more relaxed atmosphere.

The sit back-and-relax atmosphere follows the path Wendy's took last year to jump on the fast-casual coattails when both it and Burger King installed the lounge-style seating that's common at Panera. 

McDonald's hasn't jumped in with both feet like that just yet. There's a knife's edge it has to walk to maintain the value proposition for its customers, but it has also begun offering new menu items such as chicken wraps and egg whites for its sandwiches. Still, the dollar menu remains a prominent fixture of its marketing, but in difficult economic times, it will continue to pressure the chain's margins.

At nearly $100 a share, the stock is trading at 3.5 times sales, which is a steep premium to Yum! at 2.5 times, Panera at 2.2, and Sonic at 1.6. Chipotle, on the other hand, goes off at more than four times sales, making it perhaps another overvalued stock even if it's where diners want to pull up their chairs at the moment.

McDonald's finds itself in the position of deciding whether to be fish or fowl. Walking with a foot in both camps will probably meet with the same sort of failures the chain had when it attempted to go healthy in the past (McLean Deluxe, anyone?). Right now, it probably got as much of a boost from reintroducing the Monopoly game as anything else, because Europe is weak, as is the Asia/Pacific region, the Middle East, and Africa.

With even management predicting the rest of the year to remain challenging, as much as I like an investment in McDonald's for the long term, I think we'll be able to get a better price for it sooner rather than later, and I'd wait for that opportunity before buying in.

With fast-food joints looking to gain marketplace muscle here at home, others are seeking a global position to profit from our increasingly interconnected economy. The Motley Fool's free report "3 American Companies Set to Dominate the World" shows you how can flip this opportunity for your benefit. Click here to get your free copy before it's gone.

In the following video, the Fool's Austin Smith chats with Craig Jelinek, Costco's new CEO. Jelinek joined the company as a warehouse manager in 1984 and quickly rose to become a regional manager. After moving through various executive posts over the years, he became president and COO in 2010, and he took over from longtime CEO Jim Sinegal in January 2012.

Jelinek explains Costco's approach to thriving in a marketplace filled with online competitors such as Amazon.com, as well as bricks-and-mortar retailers such as Target and Whole Foods Market.

Austin Smith: When I think about your company, I think of things like high renewal rate, great customer service, low prices -- but then I also think about Amazon the very same way. I'm a happy Costco member and an Amazon Prime member.

You guys both have phenomenally low prices, you're both notoriously very customer-focused, keep Wall Street at arm's length, and focus on the products and service first.

How do you guys see Amazon? Are they a threat? Are they a complementary retailer? How do you think about them in the landscape today? Because they seem to be the retailer that has the most closely espoused your virtues of low prices and customers first.

Craig Jelinek: Well, if you look at anybody that sells anything, they're a threat. Anybody in business that sells merchandise is a threat. What we have to continue to do, we think we offer two avenues.

We have our core brick-and-mortars where you can come in and shop particularly, and buy a lot of fresh foods, a lot of wine, health and beauty aids, things like that. Then we've got the non-food assortment. In fact, if you want to buy online, you have the ability to also shop with us online, in terms of buying TVs and general merchandise.

We still think, day in and day out, we bring the best value in the marketplace, and you've got two options. You also have an easy option if you want to bring the merchandise back. You can bring what you bought online and you can bring it into the warehouses to return.

We think we can compete well with Amazon. There's always going to be, in my view, two forms of retail -- brick-and-mortars, and online. But I think it's always going to be very difficult -- although people test it -- I think buying and distributing food and sundries and fresh foods in the marketplace, overall, is going to be difficult to do, and very expensive.

Smith: Looking at your positioning, then, the retail landscape is obviously changing dramatically -- a lot of things being done online.

Do you view a bricks-and-mortar competitor like Wal-Mart, or an online-based competitor like Amazon, as maybe a bigger concern or a bigger threat to Costco's model?

Jelinek: I think, like I said before, they're both threats, as is Target a threat, as is Whole Foods a threat.

The key is being the low-cost provider. That's going to be the key for anybody winning the battle long-term. It's whoever can bring value and bring the best quality of merchandise to the marketplace at the best price. I think that's really the key.

Smith: What do you think is the most misunderstood thing about Costco today, that you just keep hearing and you're like, "Oh, that's not the case"? Is there a common misunderstanding about your business that you see?

Jelinek: I don't think there's really a misunderstanding. We're always ... you used the word, "They're a discounter." Well, when you say that we are a discounter, we bring quality merchandise to the marketplace at a very good price.

We have department store-type items that we bring to the marketplace. It's not like it's inexpensive or cheap merchandise. I think, over time, that has taken care of itself. The people know that we have quality merchandise at a very good price. They're not seconds; they're not closeouts. It's quality merchandise that you can buy at most department stores or high-end stores, at a very good price.

If you look at our jewelry, if you look at our watches, if you look at our sporting goods, if you look at our television sets, it's all quality, name-brand merchandise. If you look at our private-label merchandise, our Kirkland Signature, that's equal to or better than national brands, at a better price.

On Wednesday evening, Tesla released its second-quarter 2013 earnings -- sending the stock soaring 14% in the next day's trading. Investors were probably pleased with the company's $0.20 EPS, using non-GAAP reporting. Net income increased to $26 million for the second quarter -- up 70% from previous quarter. On a GAAP basis, quarterly revenue increased to $405 million -- up from just $27 million year over year.

Tesla Alpha Model S. Source: Tesla.

Tesla's positive Q2 results were in contrast to some analysts' expectations of a $0.17-per-share loss. Bloomberg noted that even without including Tesla's $0.15 profit per share related to its leasing program, the company still beat analyst estimates. But it's important to mention that the company's zero-emissions vehicle, or ZEV, credits fell from $68 million in the first quarter of this year to $51 million in Q2. While the drop was expected, it makes Tesla's ambitious car-sales figures all the more pressing.

The company has a goal of delivering 21,000 vehicles by the end of 2013, and so far it's on track to hit that figure. This quarter, Tesla increased vehicle production by 25% -- manufacturing 500 vehicles a week, up from 400 per week last quarter. This helped Tesla sell a record number of 5,150 Model S vehicles in the second quarter, which was ahead of its 4,500-vehicle estimate. The increase in vehicle production is the at the core of Tesla's survival, so investors should be pleased to see it ramping up.

According to a letter to shareholders, Tesla's on track to achieve 25% gross margins in Q4 2013, excluding the ZEV credits. In its latest earnings call, Tesla CEO Elon Musk said: "We're about 12 points away from getting to the 25% gross margin target without ZEV credits. And if you look at, say, Q1 to Q2, we increased eight points. So obviously on average, between Q3 and Q4, we need to do six points per quarter." The company achieved 22% total non-GAAP gross margins -- up from 17% in the previous quarter.

Tesla says it has about $746 million in cash and cash equivalents and expects to significantly increase its R&D expenses in the next quarter. Much of the expenses will come from development of the right-hand-drive Model S and the forthcoming Model X. "From a product standpoint, the Model X is our primary focus, obviously at this point, Musk said on the call. "For the most part, our researchers are spending a lot of time personally on the Model X and trying to get the details right."

Though spending is expected to increase, the company said it will be "non-GAAP profitable and generate positive cash flow from operations every quarter this year excluding any benefit from ZEV credits." Tesla seems like it's on the right track, but some investors are still concerned that the reduction in ZEV credits will significantly hurt the company over the next two quarters.

That's why investors need to keep a sharp eye on Tesla's vehicle production rates. The company needs to produce -- and sell -- more vehicles to make up for the ramping down of vehicle credits. Investors could be handsomely rewarded if the company meets its sale figures for 2013 -- but investors would be wise to consider Tesla's high valuation. Receiving multiple awards, racking up a 99 rating from Consumer Reports, and posting a profit two quarters in a row have certainly helped push Tesla's stock price up, but the company is still at the beginning of a very long road, and the luxury electriccar market is anything but proven at this point.

Network TV is in trouble, and Viggle isn't likely to help, says Fool contributor Tim Beyers in the following video.

For those who haven't heard of it, Viggle is a smartphone app that rewards those who watch live network TV. Checking in consists of the software sampling the audio of what you're watching and then matching the findings to your network TV schedule. (Viggle asks for details about your local cable or satellite provider when you sign up.)

In tests, Tim found the service would sometimes work with shows downloaded via iTunes, but Viggle didn't allow him to check into programs streamed via Netflix . Hardly surprising given the design of the software.

In the end, Viggle is a digital bribe meant to dissuade users from downloading or streaming a favored program at a time and place of their choosing. Don't expect it to work, Tim says. GetGlue is a better social alternative for those who've left the world of appointment TV behind.

That population is growing, fast. Apple now supports 800,000 daily TV downloads and 350,000 movie downloads. Netflix has well over 30 million subscribers worldwide. Viggle isn't enough for these device-wielding viewers, who Tim says want TV on their terms.

Do you agree? Are you watching more or less network TV these days? Leave a comment to let us know what you think of the landscape and which media stock you like most right now.

Our analysts have their own opinion, of course. You can find out everything they like right now in The Motley Fool's new free report "Who Will Own the Future of Television?" which details the risks and opportunities of investing in TV. Click here to read the full report!

Microsoft probably thought that the Xbox One would be a slam dunk. Its Xbox 360 has been the top-selling console in this country, every single month, for more than two years. Even last year's debut of Nintendo's Wii U didn't get in the way of that winning streak. The Japanese gaming giant's dual-screen system got off to a slow start during the critical holiday shopping season, and it's just about toast after clearing just 160,000 units worldwide in Nintendo's latest quarter.

Before June, it was also easy to prematurely call November's Xbox One rollout the winner over Sony's PS4, but that's changed now that Sony priced its system $100 cheaper. More importantly, Microsoft lost the confidence of a lot of diehard gamers for the restrictive nature of the Xbox One, even if Mr. Softy has backtracked on some of the more controversial features.

However, Microsoft may be battling more than just dwindling industry sales and a re-energized PlayStation platform when the Xbox One becomes available in three months. Game Informer hears that Amazon.com will throw its hat into the ring with a console of its own in time for this year's holiday shopping showdown between Microsoft and Sony.

Now, this won't be a standalone console with a proprietary format. This is part of the long-rumored set-top box that Amazon is reportedly working on to take on Roku, Apple TV, and other video and audio streaming devices. However, apparently this set-top box will also be the gateway to gaming.

The recent rollouts of Ouya and NVIDIA's ambitious Shield are carving out a market for Android gaming systems.

Microsoft, Sony, and Nintendo might be laughing off the Android challenge for now. Diehard gamers won't trade in their Halo 4 or The Last of Us experiences for Candy Crush Saga or Temple Run. The $100 Ouya platform is too obscure, and even after a pre-release price cut, the NVIDIA Shield is still too expensive for a handheld. However, let's not dismiss the Android challenge entirely, especially given Amazon's cutthroat ways.

The depth of Android games continues to improve. We can't ignore the value proposition of a free or nearly free Android game when pitted against the $60 console titles. Disposable income isn't unlimited, and a lot of teens and young adults have hefty smartphone bills to pay that didn't exist when the last generation of consoles came out several years ago. There's a reason physical software sales have been on a downward spiral for four years, and it's not the myth that gamers are holding out for new hardware.

Then we get to the power of Amazon. The main appeal of Amazon's set-top box won't be games. It won't even be streaming media, browsing the Web, or whatever features will be available. No, the real problem for everybody else is that Amazon is crazy like a fox when it comes to aggressively pricing its hardware. Amazon has been practically giving away Kindle e-readers and tablets because it gets consumers locked into their ecosystems. It drums up subscriptions to Amazon Prime, through which millions of shoppers pay $79 a year for free shipping and a growing catalog of digital media to consume at no additional cost.

At least one analyst -- Webush Securities analyst Michael Pachter -- opined earlier this year that the online retailer could give away a year of Amazon Prime to help move the set-top platform that may very well cost less than $100. Amazon is just that brazen when it comes to winning market share.

Android games may never catch up to the depth of console releases, but just as "good enough" computing on tablets and smartphones have stalled the PC industry, why can't "good enough" gaming do the same to consoles?

Someone who's zapping away at candy pieces or playing digital Scrabble -- and then using that same platform to stream music and watch video -- isn't going to have as much time to play traditional video games as someone still smitten by the more expensive yet expansive console-gaming experience.

It will eat into the market. How can it not? Amazon's a pretty voracious eater when it gets hungry.

Midsummer is considered prime beach season, but investors know that, more importantly, it's second-quarter earnings season.

With that in mind, this episode of The Motley Fool's Market Checkup is dedicated to heavy hitters in the pharmaceutical industry. Watch and find out how the second-quarter results of four Big Pharma stocks stack up, and what challenges and opportunities lie ahead for them.

In this video, health-care analysts David Williamson and Max Macaluso drill down on Eli Lilly's recent results, detailing everything investors need to know, including whether the company's strong performance can continue into the future.