If there is a single trait that all game-changing stocks, regardless of their size or industry, share, it would be their outsized growth potential. This comes with the territory. An innovative company can benefit from being a disruptor by grabbing market share from established competition, contributing to the creation of new markets or accelerating the development of existing ones. In every case, if it’s successful, its innovative nature translates into faster-than-average growth. As the company in question grows its profits, its stock price responds in kind, appreciating faster than its peers. An accelerated growth means accelerated share-price appreciation, all else… Read More

If there is a single trait that all game-changing stocks, regardless of their size or industry, share, it would be their outsized growth potential. This comes with the territory. An innovative company can benefit from being a disruptor by grabbing market share from established competition, contributing to the creation of new markets or accelerating the development of existing ones. In every case, if it’s successful, its innovative nature translates into faster-than-average growth. As the company in question grows its profits, its stock price responds in kind, appreciating faster than its peers. An accelerated growth means accelerated share-price appreciation, all else equal. This growth potential can be especially rewarding in the world of small-cap stocks. While the risks are higher — a smaller company can grow faster but it can also falter easier as it often lacks the kind of resources needed to break through competition barriers — the rewards can be significant. This is why over at Game-Changing Stocks, we continue to emphasize growth companies. And this is why the stock screen I want to share with you today is about growth as well. The Screen: Small-Cap Growth Stocks I searched for companies with market capitalization of $1 billion… Read More

I recently finished remaking one of the rooms at my house into a personal office. After rearranging and unpacking boxes, I found myself thumbing through an old copy of “Beating the Street,” by Peter Lynch. It had been a while since I’ve read it, and I can faithfully report that most of what Lynch writes about still holds up in today’s market. I’m sure you’re familiar with Lynch, but his track record bears repeating. While at the helm of the Magellan Fund at Fidelity, Lynch delivered a 29.2% average annual return from 1977 to 1990. Probably the greatest mutual fund… Read More

I recently finished remaking one of the rooms at my house into a personal office. After rearranging and unpacking boxes, I found myself thumbing through an old copy of “Beating the Street,” by Peter Lynch. It had been a while since I’ve read it, and I can faithfully report that most of what Lynch writes about still holds up in today’s market. I’m sure you’re familiar with Lynch, but his track record bears repeating. While at the helm of the Magellan Fund at Fidelity, Lynch delivered a 29.2% average annual return from 1977 to 1990. Probably the greatest mutual fund manager of all time, we have Lynch to thank for popular investing phrases like “invest in what you know,” “10-bagger” (a stock that gains 1,000%), “GARP” (growth at a reasonable price), and more. But what you might not know about Lynch is the story behind his exit from the Magellan Fund… —Recommended Link— The Single Best Group of Stocks to Buy NOW Since 1926, one collection of stocks has accounted for HALF of the S&P’s return — through every market environment imaginable. If you don’t have these picks in your own portfolio, you could be missing out on the… Read More

We’re barely a month into 2019, but the 2020 election season is already in full swing.  Personally, I don’t have any opinion on the candidates who have thrown their hat into the ring (other than that I’m not sure we need politicians running for president almost two years before the election, but that seems to be the current system).  Over the next two years, many political commentaries will focus on whether we can afford the programs candidates propose. Some will argue that deficits are already too high and adding trillions in spending will push them even higher.  Once upon a… Read More

We’re barely a month into 2019, but the 2020 election season is already in full swing.  Personally, I don’t have any opinion on the candidates who have thrown their hat into the ring (other than that I’m not sure we need politicians running for president almost two years before the election, but that seems to be the current system).  Over the next two years, many political commentaries will focus on whether we can afford the programs candidates propose. Some will argue that deficits are already too high and adding trillions in spending will push them even higher.  Once upon a time, governments were expected to balance their budgets, but then economist John Maynard Keynes realized that governments could stimulate growth by running deficits when the economy contracted. Keynes also suggested running a surplus to offset the deficits when the economy was expanding, but politicians seem to have forgotten about that part of his work. If they followed that advice, deficits would rise and fall, and, in the long run, the government’s budget would be balanced (in theory).  That theory illustrates the concept of mean reversion, where a value fluctuates above and below its average. Mean reversion has also been applied… Read More

Have you heard? The U.S. Postal Service (USPS) just raised the price of a Forever stamp to $0.55 from $0.50. This is the sharpest percentage increase (10%) since 1991 — and the biggest hike on record in nominal terms. As a young financial advisor in the late 1990s, I would always stress the impact of inflation when meeting with prospective clients, modeling it into any retirement funding projections. And the best way to drive home the point was to show how stamp prices had increased steadily over the years. In fact, they are directly tethered to inflation rates. Back… Read More

Have you heard? The U.S. Postal Service (USPS) just raised the price of a Forever stamp to $0.55 from $0.50. This is the sharpest percentage increase (10%) since 1991 — and the biggest hike on record in nominal terms. As a young financial advisor in the late 1990s, I would always stress the impact of inflation when meeting with prospective clients, modeling it into any retirement funding projections. And the best way to drive home the point was to show how stamp prices had increased steadily over the years. In fact, they are directly tethered to inflation rates. Back then, stamps had doubled in price from $0.15 to $0.32 over the prior two decades. Twenty years later, and they’ve continued to march all the way to $0.55. How long do you think it will be before they hit $0.60, or $1.00?  An acquaintance of mine had the foresight back in 2007 to “invest” $1,000 in Forever Stamps, purchasing 2,439 at a fixed price of $0.41 each. It really wasn’t that different from speculating in commodities by using futures contracts. She didn’t do too bad. The value of those 2,439 stamps has now risen to $1,341, an increase of 34.1%. Read More

It may be frigid across much of the country, but corporate earnings growth remains quite steamy. As of February 1, 230 members of the S&P 500 (46%) had posted fourth-quarter results. That means we’re about halfway through the reporting season. And thus far, nearly three-out-of-four companies beat expectations. The torrid 20%-plus growth rate we’ve seen the past several quarters is finally beginning to moderate (that pace is unsustainable for long). Still, if you blend the actual results with the latest estimates from the other 270 companies that are due to report soon, S&P earnings are on track to increase 12.4%. Read More

It may be frigid across much of the country, but corporate earnings growth remains quite steamy. As of February 1, 230 members of the S&P 500 (46%) had posted fourth-quarter results. That means we’re about halfway through the reporting season. And thus far, nearly three-out-of-four companies beat expectations. The torrid 20%-plus growth rate we’ve seen the past several quarters is finally beginning to moderate (that pace is unsustainable for long). Still, if you blend the actual results with the latest estimates from the other 270 companies that are due to report soon, S&P earnings are on track to increase 12.4%. That would mark the fifth consecutive quarter of healthy double-digit profit growth. A week earlier, the same methodology pointed toward a growth rate of 10.9%. That means we’ve had some big upside surprises in recent days — mostly in the energy sector. On average, the energy sector is beating consensus earnings expectations by 23%, versus 3.5% for the S&P 500. In fact, this group is single-handedly propping up growth rates for the entire market. As you can see from the chart below, it has been a disappointing quarter for utilities, whose earnings have slipped 5.2% from a year ago. Tech… Read More