After two market crashes in less than two decades and the current bull market looking to take a breather, investors are rightly worried about their hard-earned gains. By investing in companies with wide economic moats and a history of total returns to shareholders, investors can reduce the pain of the market cycle and plan for the long term. #-ad_banner-#Not only do I overweight my portfolio with these long-term investments, but I like to look at stocks that are poised benefit from huge secular changes over the decades to come — stocks benefiting from megatrends like the American energy revolution and… Read More

After two market crashes in less than two decades and the current bull market looking to take a breather, investors are rightly worried about their hard-earned gains. By investing in companies with wide economic moats and a history of total returns to shareholders, investors can reduce the pain of the market cycle and plan for the long term. #-ad_banner-#Not only do I overweight my portfolio with these long-term investments, but I like to look at stocks that are poised benefit from huge secular changes over the decades to come — stocks benefiting from megatrends like the American energy revolution and aging demographics. Combine shares of a company with a great long-term track record with one of these megatrends, and you’ve got something truly special. Rich Valuations In Health Care  U.S. census data show nearly 80 million Americans were born between 1946 and 1964 — the “baby boom” generation. More than 10,000 people reach the age of retirement every day in the United States, a pace that is expected through 2030.  The demand for health care could drive medical costs higher by 6.2% annually over the next decade, while general inflation and the economy may be stuck at annual rates… Read More

Unlike the 30-minute infomercials on at 2 a.m. touting the latest get-rich-quick schemes, real money in real estate is made by collecting rent and long-term gains. #-ad_banner-#And as far as real money goes, there are few assets that have made more people rich than real estate. Not only is property one of the most often cited sources of wealth creation, but a recent survey of U.S. millionaires by Morgan Stanley found the asset class to be the top pick in 2014 for alternative assets. A third of respondents reported plans to buy direct ownership this… Read More

Unlike the 30-minute infomercials on at 2 a.m. touting the latest get-rich-quick schemes, real money in real estate is made by collecting rent and long-term gains. #-ad_banner-#And as far as real money goes, there are few assets that have made more people rich than real estate. Not only is property one of the most often cited sources of wealth creation, but a recent survey of U.S. millionaires by Morgan Stanley found the asset class to be the top pick in 2014 for alternative assets. A third of respondents reported plans to buy direct ownership this year, and 23% expected to invest in real estate investment trusts (REITs).  Not only does real estate provide long-term returns through appreciation and cash yield through rents, but direct ownership also carries a tax advantage through deduction of depreciation. However, it often seems the best investments are reserved for the moneyed elites. Like access to private equity and hedge funds, you need pretty deep pockets to invest in real estate. Sure, you might be able to buy a duplex or two, but you will never be able to afford diversification across regions and property types without quite a few zeroes… Read More

As a long-term investor, I am always on the lookout for megatrends that will drive a sector or industry over the next 10 or 20 years. Few of these possible trends are as strong as the effect of a surging global population and a rising emerging-market middle class on food demand. #-ad_banner-#In fact, looking out over the next few decades, the trend is pretty frightening. I would actually be more than a little scared for the future if I didn’t know that one industry group, and one company in particular, has the capacity to save the world. Malthus: Correct —… Read More

As a long-term investor, I am always on the lookout for megatrends that will drive a sector or industry over the next 10 or 20 years. Few of these possible trends are as strong as the effect of a surging global population and a rising emerging-market middle class on food demand. #-ad_banner-#In fact, looking out over the next few decades, the trend is pretty frightening. I would actually be more than a little scared for the future if I didn’t know that one industry group, and one company in particular, has the capacity to save the world. Malthus: Correct — But 250 Years Off Target “The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race.” So wrote economist Thomas Malthus as he predicted a catastrophic famine in the near future on the lack of agriculture to feed the world’s growing masses. Unfortunately for Malthus, he wrote this in 1798 and is best remembered for being wrong. Turns out, he might have just been early. The United Nations projects that food production will need to double by 2050 or… Read More

Rising rates have investors spooked from buying real estate investment trusts (REITS), with $384 million of outflows in U.S. REIT funds in January alone. The fear is that higher rates will raise financing costs for highly leveraged real estate holdings, which will in turn limit distributions. #-ad_banner-#This may be true in theory, but investors are overlooking extremely strong catalysts for growth and historical returns that are hard to beat. The National Association of Real Estate Investment Trusts (NAREIT) monitors sector returns. Its index of equity REITs has outperformed the S&P 500, the Russell 2000 and the… Read More

Rising rates have investors spooked from buying real estate investment trusts (REITS), with $384 million of outflows in U.S. REIT funds in January alone. The fear is that higher rates will raise financing costs for highly leveraged real estate holdings, which will in turn limit distributions. #-ad_banner-#This may be true in theory, but investors are overlooking extremely strong catalysts for growth and historical returns that are hard to beat. The National Association of Real Estate Investment Trusts (NAREIT) monitors sector returns. Its index of equity REITs has outperformed the S&P 500, the Russell 2000 and the Barclays Aggregate Bond indices over the 10-, 20- and 30-year periods. Over the 40 years to 2010, the NAREIT index has provided annualized income returns of 8.3% and an annualized price return of 5.5%. On that backdrop of strong historical returns, there is one segment of the real estate market that has never really been accessible to retail investors like you and me. Unless you are an accredited investor (or your last name is Trump), you most likely haven’t been able to build a portfolio of single-family rental houses. Private equity and other institutional investors have been pouring money into… Read More

One of my favorite stocks for the next Internet boom has recently come under a short-attack. Investors are betting an impressive $4 billion that the stock price will tumble, while more than 11.8 million shares of this company are borrowed and sold short. #-ad_banner-#But this isn’t one of your fly-by-night tech companies with no earnings. This $54 billion behemoth made almost $2.9 billion in earnings last year, and I think a bubble is forming that could send shares higher. It’s one of the most hated stocks on a shorted basis and I’m buying more. Bubbles Can Form On The Short-Side… Read More

One of my favorite stocks for the next Internet boom has recently come under a short-attack. Investors are betting an impressive $4 billion that the stock price will tumble, while more than 11.8 million shares of this company are borrowed and sold short. #-ad_banner-#But this isn’t one of your fly-by-night tech companies with no earnings. This $54 billion behemoth made almost $2.9 billion in earnings last year, and I think a bubble is forming that could send shares higher. It’s one of the most hated stocks on a shorted basis and I’m buying more. Bubbles Can Form On The Short-Side As Well High short interest in a company is usually reserved for small startups or financial train wrecks, companies that post little in the way of profits and trade at exaggerated price multiples. Risks are high in these stocks and investors on both the short- and long-side are looking at big moves if their theses plays out. But short attacks can hit other companies as well and sometimes the selling can build on its own momentum. Increased short selling can drive the share price down, which seemingly validates the reason to be short. Others jump on the bandwagon because… Read More

Oil production in the United States increased rapidly from the turn of the 20th century until 1970. It had a lot to do with making the country the richest on Earth. But production decreased just as steadily between 1970 and 2009. #-ad_banner-#Well, fortune is once again smiling on the U.S., and it seems America might have another chance at energy independence. The International Energy Agency (IEA) predicts the U.S. will become the world’s top oil producer by next year. While America’s new energy future is one of my favorite themes, I am not yet ready to… Read More

Oil production in the United States increased rapidly from the turn of the 20th century until 1970. It had a lot to do with making the country the richest on Earth. But production decreased just as steadily between 1970 and 2009. #-ad_banner-#Well, fortune is once again smiling on the U.S., and it seems America might have another chance at energy independence. The International Energy Agency (IEA) predicts the U.S. will become the world’s top oil producer by next year. While America’s new energy future is one of my favorite themes, I am not yet ready to bet on oil prices. The price of a barrel of crude was less than $30 for nearly two decades before prices surged in 2003. Easing tensions with big producers like Iran, combined with surging global production, could mean lower prices and trouble for some upstream companies like Exxon Mobil (NYSE: XOM).  That is why I am looking at one segment in particular that benefits from the volume of energy used, rather than prices.  Master limited partnerships (MLPs) are companies set up to manage energy infrastructure assets like pipelines, terminals and storage. These companies pay no taxes but pass their depreciation… Read More

Shares of T-Mobile US (NYSE: TMUS) popped almost 9% last month on news that Sprint (NYSE: S) would seek a buyout of the wireless carrier. Coming less than a year after Japanese giant Softbank (OTC: SFTBF) acquired Sprint, the move heats up the battle for telecom supremacy.#-ad_banner-#​ Investors are cheering on both sides of the potential deal, but they may be in for a rude awakening when the Federal Communications Commission (FCC) weighs in.  Four has always been a magic number for telecom carriers. The idea is that if the industry consolidated… Read More

Shares of T-Mobile US (NYSE: TMUS) popped almost 9% last month on news that Sprint (NYSE: S) would seek a buyout of the wireless carrier. Coming less than a year after Japanese giant Softbank (OTC: SFTBF) acquired Sprint, the move heats up the battle for telecom supremacy.#-ad_banner-#​ Investors are cheering on both sides of the potential deal, but they may be in for a rude awakening when the Federal Communications Commission (FCC) weighs in.  Four has always been a magic number for telecom carriers. The idea is that if the industry consolidated to fewer than four carriers, an oligopoly would form and prices would go up. That’s part of the reason regulators jumped in when AT&T (NYSE: T) tried to buy T-Mobile in 2011. While a Sprint/T-Mobile combination would still be smaller than either AT&T or Verizon (NYSE: VZ), it would still put considerable pricing power in the hands of just three companies. I alerted investors in October to T-Mobile’s great turnaround story and the success in its Uncarrier program. TMUS is up more than 25% since that article — but the valuation looks stretched, especially if regulators put the kibosh on an… Read More

As we’ve written before here at StreetAuthority, when gold was discovered in the American West over a century and a half ago, many of the people who ultimately got rich were the ones who sold tools and goods to the miners. (Think Levi Strauss, who made his fortune not from gold but from the blue jeans he supplied to prospectors.)#-ad_banner-#​ These days, a different type of commodities rush is here — U.S. natural gas production. Prices across the globe are up to four times higher for natural gas compared with… Read More

As we’ve written before here at StreetAuthority, when gold was discovered in the American West over a century and a half ago, many of the people who ultimately got rich were the ones who sold tools and goods to the miners. (Think Levi Strauss, who made his fortune not from gold but from the blue jeans he supplied to prospectors.)#-ad_banner-#​ These days, a different type of commodities rush is here — U.S. natural gas production. Prices across the globe are up to four times higher for natural gas compared with domestic prices, and that disparity is primed to fuel an export boom over the next several years. While the explorers and producers might do well, it will again be the companies that sell transportation and equipment that make the big money — with much less risk. Explorers Are Already Positioning Despite the still historically low prices in natural gas, explorers are buying up fields and positioning for the boom. Atlas Resource Partners (NYSE: ARP) completed its $733 million acquisition of natural gas assets in the Arkoma Basin of Oklahoma from EP Energy earlier this year. Last year, total global… Read More

In early 1997, the world was in awe of the record growth of Southeast Asia’s “tiger economies” as markets opened and foreign investors rushed to fund new ventures. However, by January 1998, stock markets across the region had lost as much as 70% of their value, and the crisis had spread to the rest of the emerging world. Even behemoth Russia wasn’t immune, defaulting on its debt that same year. Such massive and rapid growth relied on a constant influx of dollars to fund deficits and pay higher amounts of foreign debt. At the first sign of economic cracks, foreign… Read More

In early 1997, the world was in awe of the record growth of Southeast Asia’s “tiger economies” as markets opened and foreign investors rushed to fund new ventures. However, by January 1998, stock markets across the region had lost as much as 70% of their value, and the crisis had spread to the rest of the emerging world. Even behemoth Russia wasn’t immune, defaulting on its debt that same year. Such massive and rapid growth relied on a constant influx of dollars to fund deficits and pay higher amounts of foreign debt. At the first sign of economic cracks, foreign investors withdrew their accounts, leading to a plunge in currencies and leaving the region’s governments unable to pay debt denominated in now more expensive dollars. Now it seems another emerging market has not learned much from that episode — and may be doomed to repeat it soon. A Financial Crisis With A Latin Flair Latin America escaped the most recent crisis in 2008, with the region managing 4.5% growth in 2010. The iShares Latin America 40 (NYSE: ILF) jumped 120% in the two years after the March 2009 lows, outperforming the S&P 500 Index by 40%. Housing prices have… Read More

When I wrote early this year about the coming Internet boom, my purpose was to highlight dot-com 2.0 stocks and companies that would benefit from an increase in domain names and advertising.#-ad_banner-# I recommended four names: Verisign (Nasdaq: VRSN), Google (Nasdaq: GOOG), Marchex (Nasdaq: MCHX) and ValueClick (Nasdaq: VCLK) as companies ready to ring the cash register. Since that article was published in January, all but ValueClick have easily beaten the market, with 40% to 50% gains in Google and Verisign and a whopping 120% gain by Marchex. But there is another facet of the Internet boom coming — and… Read More

When I wrote early this year about the coming Internet boom, my purpose was to highlight dot-com 2.0 stocks and companies that would benefit from an increase in domain names and advertising.#-ad_banner-# I recommended four names: Verisign (Nasdaq: VRSN), Google (Nasdaq: GOOG), Marchex (Nasdaq: MCHX) and ValueClick (Nasdaq: VCLK) as companies ready to ring the cash register. Since that article was published in January, all but ValueClick have easily beaten the market, with 40% to 50% gains in Google and Verisign and a whopping 120% gain by Marchex. But there is another facet of the Internet boom coming — and no one is talking about it. When it happens, I think it will be one of those things that people look back on and ask: “In hindsight, it was so obvious. Why did I not invest?” This next big wave is something that is already affecting the way people use the Internet and bringing about massive changes in the software and hardware space. It plays on the same emotions that made YouTube and Facebook (Nasdaq: FB) household names. We Are Social Animals As humans, we feel compelled to share ourselves with friends, family and, well, the world. Read More