Lately, thanks to financial television’s hunger for content, money managers are starting to behave a little bit like professional wrestlers trash talking outside of the ring. Ackman versus Icahn. Gross versus El-Arian. Imagine “Nature Boy” Ric Flair or Dusty “The American Dream” Rhodes  (Okay, I’m dating myself) with an MBA, running a couple hundred billion dollars. #-ad_banner-#Strangely, Warren “The Oracle of Omaha” Buffett has been dragged into the fray by Carl “The Raider” Icahn.  In a sideline interview at the annual Robin Hood Investor’s Conference, Ichan suggested that Buffett take a more active corporate governance role in some of Berkshire… Read More

Lately, thanks to financial television’s hunger for content, money managers are starting to behave a little bit like professional wrestlers trash talking outside of the ring. Ackman versus Icahn. Gross versus El-Arian. Imagine “Nature Boy” Ric Flair or Dusty “The American Dream” Rhodes  (Okay, I’m dating myself) with an MBA, running a couple hundred billion dollars. #-ad_banner-#Strangely, Warren “The Oracle of Omaha” Buffett has been dragged into the fray by Carl “The Raider” Icahn.  In a sideline interview at the annual Robin Hood Investor’s Conference, Ichan suggested that Buffett take a more active corporate governance role in some of Berkshire Hathaway, Inc.’s (NYSE: BRK-A)  higher profile holdings. There’s no denying that Ichan is one of the sharpest value investors in the game. And Buffett’s reputation is the stuff of American legend. But really, Carl? Buffett chants his core investment belief like a mantra: buy great companies with deep-moat franchises and good management, and leave them alone. The result makes money for shareholders — activism isn’t his style. Icahn’s style is activist. He’s also a deeper value kind of guy, buying the stock of a company that’s stumbled. If he buys enough stock, then he gets seats on the board and… Read More

I’ve been in this racket a while. Every year, I can almost set my watch to the late-September/early-October seasonal market volatility. As a portfolio manager, this predictability gives me an opportunity to re-evaluate my holdings and, if things are on sale, add stocks I’ve been considering at the prices I want to pay. Typically, investors move toward defensive stocks, such as utilities or consumer staples, in volatile times. It’s not a bad move, but often fear clouds your judgment. And if emotion is involved, then there’s a good chance you’ll pay too much. One… Read More

I’ve been in this racket a while. Every year, I can almost set my watch to the late-September/early-October seasonal market volatility. As a portfolio manager, this predictability gives me an opportunity to re-evaluate my holdings and, if things are on sale, add stocks I’ve been considering at the prices I want to pay. Typically, investors move toward defensive stocks, such as utilities or consumer staples, in volatile times. It’s not a bad move, but often fear clouds your judgment. And if emotion is involved, then there’s a good chance you’ll pay too much. One growing food company that I follow closely, B&G Foods, Inc. (NYSE: BGS), caught my eye during the recent downturn. The pullback created an opportunity to add a top-quality consumer staple stock at a value price. B&G is one of my favorite consumer staples stories. Historically, the company has been successful at acquiring tired brands from bigger-name food companies and breathing new life into them. Some of the company’s better-known brands include Ortega, Old London, Mrs. Dash, Cream of Wheat, Emeril seasonings and sauces, Trappey’s and Underwood. The company leveraged… Read More

The king is dead. Long live the king. That cheer seems appropriate in context to the recent commotion of Pimco’s fixed-income guru, Bill Gross, jumping ship for mutual fund competitor Janus Capital Group, Inc. (NYSE: JNS).  While Gross’ move may represent the end of an era in the mutual fund business, more importantly it represents what many pundits have been warning about for quite a while: the official end of the bull market in bonds. As I’ve mentioned in previous writings, I am the furthest thing from a chartist; however, this 25-year study of the yield on the 10-year U.S. Read More

The king is dead. Long live the king. That cheer seems appropriate in context to the recent commotion of Pimco’s fixed-income guru, Bill Gross, jumping ship for mutual fund competitor Janus Capital Group, Inc. (NYSE: JNS).  While Gross’ move may represent the end of an era in the mutual fund business, more importantly it represents what many pundits have been warning about for quite a while: the official end of the bull market in bonds. As I’ve mentioned in previous writings, I am the furthest thing from a chartist; however, this 25-year study of the yield on the 10-year U.S. Treasury really piqued my interest. Is the decades long bond rally over? Probably so. But don’t expect rates to rocket any time soon for many reasons. If this chart is any indication, then yields could be forming a double bottom, revisiting their record lows.  So, if rates are poised to go lower, would that imply that bond prices could trend higher? Would the bond market really have any gas left in the tank? I would have to say: No.  Gross’ exit isn’t the harbinger of the bond bull’s death, it’s a… Read More

There’s a classic episode of The Little Rascals where a very tiny Spanky finds a stash of money and proceeds to throw it out of the window to the gang below. #-ad_banner-#That visualization reminds me of the central banker’s tool known as quantitative easing, often referred to as just QE. This is when a nation’s central bank, in the United States’ case the Federal Reserve, contracts the supply of government bonds by buying them from banks, thus keeping interest rates low and, theoretically, giving the banks cash to lend in order to stimulate the economy. Does it… Read More

There’s a classic episode of The Little Rascals where a very tiny Spanky finds a stash of money and proceeds to throw it out of the window to the gang below. #-ad_banner-#That visualization reminds me of the central banker’s tool known as quantitative easing, often referred to as just QE. This is when a nation’s central bank, in the United States’ case the Federal Reserve, contracts the supply of government bonds by buying them from banks, thus keeping interest rates low and, theoretically, giving the banks cash to lend in order to stimulate the economy. Does it work?  After four years, the U.S. economy has improved slightly. However, the jobs picture is still tenuous and while people feel better, they don’t feel great. Here’s what happened to the SPDR S&P 500 ETF (AMEX: SPY) when the Fed turned on the spigot. I’ve never been an advocate of trying to actually time the market. However, some times are better than others for putting money to work. So, even if you “missed” the panic bottom in 2008 and 2009 and didn’t come out of the foxhole for another year, you still doubled your money. You see, the… Read More

One of the first rules about owning stocks is not to get emotional — period.   However, when a large number of humans get together to trade stocks, that rule is almost always immediately thrown out of the window. Stocks are traded based on momentum rather than the true, underlying fundamentals of the business. This affects stocks in many different sectors: fervor over the latest technology, energy or commodity companies based on supply and demand, or biotech stocks that rise and fall according to a medical breakthrough.  Gun manufacturers are especially emotion-driven. Rarely have I ever heard a pundit or… Read More

One of the first rules about owning stocks is not to get emotional — period.   However, when a large number of humans get together to trade stocks, that rule is almost always immediately thrown out of the window. Stocks are traded based on momentum rather than the true, underlying fundamentals of the business. This affects stocks in many different sectors: fervor over the latest technology, energy or commodity companies based on supply and demand, or biotech stocks that rise and fall according to a medical breakthrough.  Gun manufacturers are especially emotion-driven. Rarely have I ever heard a pundit or analyst tout a gun stock based on fundamentals — at least not with genuine conviction.  Over the past decade stocks of gun makers have rocketed up, mainly due to fear of stricter government regulation. But what if you owned a gun manufacturer stock because it was just a great business? Sturm, Ruger and Co., Inc. (NYSE: RGR), popularly known as Ruger, is a classic example of an extremely healthy baby that’s been thrown out with the bathwater.  With a market cap of just over $900 million, Ruger has made a solid name for itself making high quality products that create… Read More

Einstein is rumored to have defined insanity as “doing the same thing over and over again and expecting different results.” It’s one of the most useful rules of thumb out there. It’s especially helpful in the money management business.  As the various indices hit record highs, it behooves prudent investors to remember Dr. Einstein’s definition. There is a cycle that investors get caught up in. When they make money, investors feel good. When a large group of people start to feel too good, market discipline gets a little loosey goosey, especially when it comes to stock valuations.  As stock price-to-earnings… Read More

Einstein is rumored to have defined insanity as “doing the same thing over and over again and expecting different results.” It’s one of the most useful rules of thumb out there. It’s especially helpful in the money management business.  As the various indices hit record highs, it behooves prudent investors to remember Dr. Einstein’s definition. There is a cycle that investors get caught up in. When they make money, investors feel good. When a large group of people start to feel too good, market discipline gets a little loosey goosey, especially when it comes to stock valuations.  As stock price-to-earnings (P/E) ratios start to expand, investors start to rationalize: “Well, it went from 18 to 22, that’s not really that much more.” And before you know it, investors have ventured deep into overvaluation territory.  I drew a chart looking at peak P/E ratios for the S&P 500 index going back to pre-crash levels in 2006-2007. Honestly, I was surprised and a little alarmed by what I found. The trailing P/E ratio for the S&P 500 has basically returned to the same level it was before the wheels started falling off of the market… Read More

If I ever truly need to find out what’s going on with mobile computing and telecom, I check my kids’ phones. Both bypassed Facebook altogether and went straight to Instagram. Their interest waned in Instagram about the time Facebook bought the firm for $1 billion. #-ad_banner-#​Now their attention has turned to Snapchat. This app company has yet to turn a profit but is valued by some experts, according to a Bloomberg report, at $10 billion or better. I’m sorry. That’s insane. I remember Pets.com. Read More

If I ever truly need to find out what’s going on with mobile computing and telecom, I check my kids’ phones. Both bypassed Facebook altogether and went straight to Instagram. Their interest waned in Instagram about the time Facebook bought the firm for $1 billion. #-ad_banner-#​Now their attention has turned to Snapchat. This app company has yet to turn a profit but is valued by some experts, according to a Bloomberg report, at $10 billion or better. I’m sorry. That’s insane. I remember Pets.com. Yes, the way these apps enable us to communicate is nothing short of the Jetsons. But when a company does not make money, it ostensibly adds zero value to its industry and the broader economy. However, many firms in the tech industry should be approached from a different perspective. While the market obsesses on high valuations for companies that have yet to go public, real value is derived from a solid operating history, earnings growth and generous dividend yields. The following is a list of companies that are well-positioned to withstand any potential tech… Read More

As a player for the famed Brooklyn Dodgers, Eddie Stanky earned his stripes as a baseball great. His manager, Leo Durocher, summed him up this way: “He can’t hit, he can’t run, he can’t field. He’s no nice guy…all the little SOB can do is win.”  Stocks can be the same way. They can be in lackluster sectors. They can have terrible headwinds. But the companies keep delivering year after year. One of my favorite Stanky-like stocks is food giant ConAgra Foods, Inc. (NYSE: CAG). I’ve held this stock through the years in portfolios and it’s time to look at it again. Outside of… Read More

As a player for the famed Brooklyn Dodgers, Eddie Stanky earned his stripes as a baseball great. His manager, Leo Durocher, summed him up this way: “He can’t hit, he can’t run, he can’t field. He’s no nice guy…all the little SOB can do is win.”  Stocks can be the same way. They can be in lackluster sectors. They can have terrible headwinds. But the companies keep delivering year after year. One of my favorite Stanky-like stocks is food giant ConAgra Foods, Inc. (NYSE: CAG). I’ve held this stock through the years in portfolios and it’s time to look at it again. Outside of a decent run up in 2013, shares are basically flat. However, based on some of ConAgra’s average five year metrics, investors have an opportunity to buy a quality name at an extremely reasonable price. Five Year Trend   Growth Revenue Growth 8% EPS (Earnings per Share) Growth 6% Dividend Growth 6% Source: Morningstar Are they gargantuan, triple-digit growth? No. But considering ConAgra’s five year average net margin is less than 5%, revenue growth is a consistent 8%, plus healthy dividend increases, this stock is very attractive. The strength ConAgra brings to the table is the power of its brand portfolio. … Read More

To quote the late gonzo journalist Hunter S. Thompson: “When the going gets weird, the weird turn pro.”  I would characterize the current state of the market as weird — so, following the Good Doctor’s advice, it’s definitely time to turn pro and capitalize on that weirdness. Fortunately, I’ve found just the stock for the job. If you’re familiar with my work for StreetAuthority, then you know about my penchant for asset management stocks. I favor these stocks for the predictability of their fee-based revenue streams and because… Read More

To quote the late gonzo journalist Hunter S. Thompson: “When the going gets weird, the weird turn pro.”  I would characterize the current state of the market as weird — so, following the Good Doctor’s advice, it’s definitely time to turn pro and capitalize on that weirdness. Fortunately, I’ve found just the stock for the job. If you’re familiar with my work for StreetAuthority, then you know about my penchant for asset management stocks. I favor these stocks for the predictability of their fee-based revenue streams and because they’re often undervalued by the market.  Oaktree Capital Group (NYSE: OAK) complements those criteria with an extra attribute that makes the stock even more attractive — its focus on alternative investment strategies. #-ad_banner-#​Now, “alternative investments” is an extremely broad category that encompasses everything from simple shorting strategies to complex hedging and everything in between.  Oaktree deals primarily with six particular asset classes: distressed debt, corporate debt, control investing, convertible securities, real estate, and traditional listed equities. If you don’t know what one or more of… Read More

Summer TV is pretty boring, with the exception of the Discovery Channel’s (Nasdaq: DISCA) Shark Week. Choosing between stale reruns or weak summer pilots that didn’t make the cut, it’s no wonder everyone goes on vacation. #-ad_banner-#Recently, hedge fund manager Bill Ackman ‘s seemingly quixotic charge on Herbalife (NYSE: HLF) and the noisy response from the likes of Carl Icahn  and other pundits sounds and feels like a rerun.  So while the hedge fund guys make noise and the market stumbles around trying to digest the events in Israel and Ukraine, investors… Read More

Summer TV is pretty boring, with the exception of the Discovery Channel’s (Nasdaq: DISCA) Shark Week. Choosing between stale reruns or weak summer pilots that didn’t make the cut, it’s no wonder everyone goes on vacation. #-ad_banner-#Recently, hedge fund manager Bill Ackman ‘s seemingly quixotic charge on Herbalife (NYSE: HLF) and the noisy response from the likes of Carl Icahn  and other pundits sounds and feels like a rerun.  So while the hedge fund guys make noise and the market stumbles around trying to digest the events in Israel and Ukraine, investors are probably wise to tune out the noise and focus on finding reasonably priced stocks with strong global franchises and growth strategies.  I’ve found three well-known stocks that fit these criteria perfectly. 1. Vodafone Group (NYSE: VOD ) Flush with cash after selling its giant stake in Verizon (NYSE: VZ), Vodafone continues to be one of my favorite plays in both the telco and frontier market spaces.  Its strongest franchises are in Germany, Italy, Spain, the U.K. and India, where it holds one of the top two positions in each market. The company’s strategy is focused on increasing its share in its… Read More