I saw an interesting chart recently that I believe summarizes the current state of the stock market.  Essentially, it shows that U.S. stocks are extremely overvalued compared to the rest of the world.  Why does this matter? And, more importantly, how can we profit? Now, those are the key questions… But first, let’s use what we know as investors to unpack the information.  The chart below shows the cyclically adjusted price-to-earnings (CAPE) ratio for both U.S. and global stocks. It was developed by Nobel Prize-winning economist Dr. Robert Schiller.  —Recommended Link— “It’s like getting 26 paychecks advanced to you in… Read More

I saw an interesting chart recently that I believe summarizes the current state of the stock market.  Essentially, it shows that U.S. stocks are extremely overvalued compared to the rest of the world.  Why does this matter? And, more importantly, how can we profit? Now, those are the key questions… But first, let’s use what we know as investors to unpack the information.  The chart below shows the cyclically adjusted price-to-earnings (CAPE) ratio for both U.S. and global stocks. It was developed by Nobel Prize-winning economist Dr. Robert Schiller.  —Recommended Link— “It’s like getting 26 paychecks advanced to you in ONE LUMP SUM!” Executive Dividends are one of Wall Street’s best-kept secrets, paying out a small fortune in unannounced cash seemingly at random — and today, Nathan Slaughter shows you where to find them. Read more here. ​Source: Global Financial Data via MebFaber.com  Cyclical, in this case, means the indicator measures over 10 years, the amount of time Schiller believes covers an economic cycle. Ben Graham, the father of fundamental analysis (and Warren Buffett’s business school professor), explained the importance of accounting for the economic cycle when calculating earnings. Graham suggested averaging earnings over eight years to account for… Read More

Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for… Read More

Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for concern.  ​ I expected a breakout last week as traders reacted to earnings from Apple, Facebook, and Amazon. Instead of a defined breakout, the S&P 500 just drifted higher.  The index has now retraced more than half of the decline that came at the end of last year. That’s bullish. But we remain about 1.3% below the 200-day moving average (MA), shown as the solid blue line in the chart. This is a widely followed indicator, and I expect the test of the MA will be a topic of conversation on CNBC this week. A close above the MA is… Read More

One of the most important lessons I learned during my days in the Army was the KISS principle: Keep it simple, stupid. Outside of the military, one of the greatest minds of all time believed in the KISS philosophy, but Albert Einstein expressed the idea in more poetic terms: “Everything should be made as simple as possible, but not simpler.” —Recommended Link— A Hacker’s Guide To Stock Arbitrage… (And Getting Away With $37,000) (All you need is an online brokerage account and your laptop.)  Click here for all the details… I bring that same mindset to investment analysis. I… Read More

One of the most important lessons I learned during my days in the Army was the KISS principle: Keep it simple, stupid. Outside of the military, one of the greatest minds of all time believed in the KISS philosophy, but Albert Einstein expressed the idea in more poetic terms: “Everything should be made as simple as possible, but not simpler.” —Recommended Link— A Hacker’s Guide To Stock Arbitrage… (And Getting Away With $37,000) (All you need is an online brokerage account and your laptop.)  Click here for all the details… I bring that same mindset to investment analysis. I want every process to be as simple as possible, but not so simple that I’m leaving out anything important. While I have spent a great deal of time studying complex investment techniques, what I discovered is that the KISS principle applies in investment analysis as well as it did in the military. #-ad_banner-#For example, although I look at complex valuation models, the simple PEG ratio consistently identifies undervalued stocks. The PEG ratio compares the price-to-earnings (P/E) ratio to the growth rate of earnings per share (EPS). A stock is considered fairly valued when the PEG ratio is equal to 1,… Read More

Kinder Morgan (NYSE: KMI) is back. Publicly, the energy pipeline master limited partnership (MLP) issued guidance calling for distributable cash flow (DCF) of $4.6 billion in 2018 or $2.05 per share. Quietly, it has been telling stockholders that the numbers were tracking ahead of expectations.  Well, the official count is now in. The company indeed beat the mark, generating $4.73 billion in DCF or $2.12 per share. That’s within two cents of the record high of $2.14 set in 2015. So for all intents and purposes, it has made a full recovery. Yet back then, KMI shares commanded a price… Read More

Kinder Morgan (NYSE: KMI) is back. Publicly, the energy pipeline master limited partnership (MLP) issued guidance calling for distributable cash flow (DCF) of $4.6 billion in 2018 or $2.05 per share. Quietly, it has been telling stockholders that the numbers were tracking ahead of expectations.  Well, the official count is now in. The company indeed beat the mark, generating $4.73 billion in DCF or $2.12 per share. That’s within two cents of the record high of $2.14 set in 2015. So for all intents and purposes, it has made a full recovery. Yet back then, KMI shares commanded a price north of $40. Today, they are still well below $20. That’s difficult to reconcile. Clearly, many investors haven’t forgiven Kinder Morgan for its forced dividend cut in late 2015 as the bottom fell out of the oil market and many midstream partnerships suffered a liquidity crunch. But those days are long gone — distributions were hiked 60% last year, and management is aiming for a 25% encore both this year and next. If you prefer to look at standard earnings rather than cash flow, Kinder Morgan reported net income of $1.481 billion ($0.66 per share) in 2018, versus $27 million… Read More

Over at Fast-Track Millionaire, our mandate requires us to stay abreast of the most recent scientific achievements.  And how could it be any other way? Most game-changing companies change the game by either finding real-life applications for modern scientific or technological discoveries or using those discoveries to modernize or disrupt entire businesses or industries.  We’ve had good success with these types of investments so far — but they don’t come close to the kind of potential I’m seeing in one field in particular…  I’m talking about the up-and-coming field of personalized medicine. —Recommended Link— Congratulations On 10 Years Of Profits… Read More

Over at Fast-Track Millionaire, our mandate requires us to stay abreast of the most recent scientific achievements.  And how could it be any other way? Most game-changing companies change the game by either finding real-life applications for modern scientific or technological discoveries or using those discoveries to modernize or disrupt entire businesses or industries.  We’ve had good success with these types of investments so far — but they don’t come close to the kind of potential I’m seeing in one field in particular…  I’m talking about the up-and-coming field of personalized medicine. —Recommended Link— Congratulations On 10 Years Of Profits We’ve unleashed it again — our annual Game-Changing Predictions report, filled cover-to-cover with a dozen potentially life-changing picks for 2019. And to mark this 10th anniversary edition, we’re doing something a little different… In addition to the full write up on each prediction (complete with the tickers), the first 250 readers to claim their copy will get instant access to 2 additional “bonus picks” that are positioned to bring home double… even triple-digit gains in 2019. If the thought of an extra $1,543… $2,184… even $4,200 each month in cash sounds good to you, click here now to see if… Read More

It’s one of the few holdings in my Daily Paycheck portfolio that has lost ground in 2019… But there’s a good reason. On January 3, Bristol Myers Squibb (NYSE: BMY) unveiled plans to buy Celgene (Nasdaq: CELG) in a blockbuster $74 billion transaction.  Acquirers typically fall when these mega-deals are announced, while shares of the target bolt higher. True to form, BMY slid 14% on the news, while CELG jumped 25%.  Despite the drop, my subscribers and I are still in the black on this one. But is this a good deal? And is BMY worth owning today?  First, let’s… Read More

It’s one of the few holdings in my Daily Paycheck portfolio that has lost ground in 2019… But there’s a good reason. On January 3, Bristol Myers Squibb (NYSE: BMY) unveiled plans to buy Celgene (Nasdaq: CELG) in a blockbuster $74 billion transaction.  Acquirers typically fall when these mega-deals are announced, while shares of the target bolt higher. True to form, BMY slid 14% on the news, while CELG jumped 25%.  Despite the drop, my subscribers and I are still in the black on this one. But is this a good deal? And is BMY worth owning today?  First, let’s get some of the specifics out of the way. Bristol Myers is offering one share of BMY and $50 cash for each share of CELG. There is also the possibility of additional cash remuneration for Celgene investors later down the line (known as a contingent value right, or CVR) if three drugs in the firm’s pipeline eventually gain regulatory approval.  Based on BMY’s share price at the time of the announcement, the bid (excluding CVRs) works out to a little more than $102 per share. That’s a healthy premium of 53% above where CELG closed the day before the announcement. … Read More

Back in December, I wrote about why the major cruise lines are compelling investment candidates right now. One of our loyal readers, Jim C., wrote in to point out that anyone who owns at least 100 shares of Carnival Cruise Lines (NYSE: CCL) is entitled to a unique fringe benefit — up to $250 in complimentary onboard spending credits per cruise.  This isn’t one of those promotional offers you see advertised to the general public. It’s a special perk reserved strictly for Carnival shareholders. Put another way, this $250 offer is equivalent to $2.50 per share for an investor who holds 100 shares. Read More

Back in December, I wrote about why the major cruise lines are compelling investment candidates right now. One of our loyal readers, Jim C., wrote in to point out that anyone who owns at least 100 shares of Carnival Cruise Lines (NYSE: CCL) is entitled to a unique fringe benefit — up to $250 in complimentary onboard spending credits per cruise.  This isn’t one of those promotional offers you see advertised to the general public. It’s a special perk reserved strictly for Carnival shareholders. Put another way, this $250 offer is equivalent to $2.50 per share for an investor who holds 100 shares. That represents a bonus payout of 5.1% on the $48 stock — on top of the 4.3% dividend yield. Double that if you happen to book two cruises. After Jim wrote in to us, my staff and I got to talking… And after doing a little research, it turns out a whole host of companies offers little-known “perks” like this. So I thought it would be fun to take a break from our regular format and focus on four companies that offer special shareholder benefits.  Of course, these enticements alone aren’t necessarily reasons to invest. But since these are all… Read More

It’s only been a little over three months since marijuana became legal in Canada, but the country’s government statistics agency has already added a relevant report to its monthly data set. Statistics Canada, the national statistical office, now reports revenues generated by cannabis as part of its standard monthly retail sales report. And thanks to that addition, we learned on Jan. 23 that Canadians bought $41 million (U.S. dollars) of marijuana from retail stores in November, the first full month since the legalization became a fact of life. If anything, this number is an understatement of the true market size… Read More

It’s only been a little over three months since marijuana became legal in Canada, but the country’s government statistics agency has already added a relevant report to its monthly data set. Statistics Canada, the national statistical office, now reports revenues generated by cannabis as part of its standard monthly retail sales report. And thanks to that addition, we learned on Jan. 23 that Canadians bought $41 million (U.S. dollars) of marijuana from retail stores in November, the first full month since the legalization became a fact of life. If anything, this number is an understatement of the true market size for legal pot in Canada. Retail stores are still opening; Ontario, the country’s largest state, still hasn’t opened any retail stores (in this state, sales are still limited to online orders). Further, the demand was so strong that a number of stores ran out of product. Canopy Growth: Best In The Business In the three months since I first added Canada’s Canopy Growth Corp. (NYSE: CGC) to the our Fast-Track Millionaire portfolio, the stock has handily outperformed its closest peer, Tilray (Nasdaq: TLRY). While TILR has lost nearly 30% of its value over these three months, CGC has appreciated by more… Read More

As investors, one of our first tasks when evaluating a prospective new portfolio candidate is to ascertain where the company’s sales are headed. There are plenty of other considerations, of course. But first, we need to make some educated assumptions about how many widgets will be going out the door.  Fortunately, we have plenty of tools at our disposal.  We can track inventory turnover rates and tune into conference calls discussing new product development. Sometimes analysts go a step further and conduct channel checks, a fancy way of saying they talk to the company’s suppliers to find out if they… Read More

As investors, one of our first tasks when evaluating a prospective new portfolio candidate is to ascertain where the company’s sales are headed. There are plenty of other considerations, of course. But first, we need to make some educated assumptions about how many widgets will be going out the door.  Fortunately, we have plenty of tools at our disposal.  We can track inventory turnover rates and tune into conference calls discussing new product development. Sometimes analysts go a step further and conduct channel checks, a fancy way of saying they talk to the company’s suppliers to find out if they are ordering more (or fewer) raw materials and components. They might also query customers to see how fast certain products are moving. By collecting information from the supply chain and distribution channels, it’s possible to gain valuable insights on volume and pricing trends.  #-ad_banner-#There’s nothing wrong with any of that.  But sometimes, the most obvious solution is right in front of us. When companies are struggling, they often reduce their workforce. Conversely, when business is picking up, they expand and bring in new employees to meet the increased workload. So, you can gauge demand just by examining hiring trends —… Read More