It was as much a surprise to StreetAuthority’s co-founder as it was to us. As an experiment, he tried to build a personal portfolio of dividend paying stocks to see if he could get 30 dividend checks in a month. But he achieved far more than the joy of receiving dividends every day. And all he did was simply enroll his securities in an automatic reinvestment program through an online brokerage account.  And before long, our little experiment was beating the market. Of course we were familiar with the power of the compounding growth of dividend reinvestment. As you can… Read More

It was as much a surprise to StreetAuthority’s co-founder as it was to us. As an experiment, he tried to build a personal portfolio of dividend paying stocks to see if he could get 30 dividend checks in a month. But he achieved far more than the joy of receiving dividends every day. And all he did was simply enroll his securities in an automatic reinvestment program through an online brokerage account.  And before long, our little experiment was beating the market. Of course we were familiar with the power of the compounding growth of dividend reinvestment. As you can see from the chart below, if you invested $20,000 in securities paying a 7% yield, after 10 years your portfolio would be worth $39,343 with reinvested dividends. And if your holdings happened to boost their dividends by just 5% annually — something even giant blue chip AT&T (NYSE: T) has been able to beat — your portfolio would be sitting at $46,475. That’s an increase of 132.4%. And that’s assuming zero capital gains. That isn’t bad, especially when you consider the S&P 500 Index lost 26.5% in the ten-year period ended in 2009. But the income part of… Read More

The Trump trade has been delivering blackjacks to bullish players since the election. But if you’ve played the game, you know all too well that hitting blackjack after blackjack means the face cards and aces are disappearing with each hand, leaving players with continually lower chances for success. As I write this, the market has now risen for 22 weeks without a pullback, which is akin to players getting 22 blackjacks at a six-deck table with no shuffle. With only two more aces in the shoe, the chances of striking another big win decrease. After a massive string… Read More

The Trump trade has been delivering blackjacks to bullish players since the election. But if you’ve played the game, you know all too well that hitting blackjack after blackjack means the face cards and aces are disappearing with each hand, leaving players with continually lower chances for success. As I write this, the market has now risen for 22 weeks without a pullback, which is akin to players getting 22 blackjacks at a six-deck table with no shuffle. With only two more aces in the shoe, the chances of striking another big win decrease. After a massive string of wins, it’s sometimes a good idea to pull your bets off the table and await a reshuffle, especially if the dealer is holding an ace.  The market is the house in this metaphor, and its ace is a combination of overstretched valuations, economic inconsistencies, presidential risks and a technical warning signal in small caps. If these factors continue, it could mean a nasty loss for you and the other players. —Sponsored Link— U.S. Mint Reports Gold Coin Sales Collapsing In a strange twist, money is flooding out of physical gold into a different corner… Read More

His portfolio is built on the largest companies in America. Giants like Apple, Deere, and Walmart dominate his holdings. Thanks to his long-term oriented, value-seeking investment method, Warren Buffett’s wealth has catapulted from a mere $6,000 when he was 15 years old to an astounding $73 billion-plus today.  While Buffett’s concentration is on the largest of the large-caps, he has a love for the potential of small-caps, defined as companies with market capitalizations between$300 million to $2 billion.  A little while ago he told Fortune Magazine, “It’s one thing to own stock in a Coca-Cola or… Read More

His portfolio is built on the largest companies in America. Giants like Apple, Deere, and Walmart dominate his holdings. Thanks to his long-term oriented, value-seeking investment method, Warren Buffett’s wealth has catapulted from a mere $6,000 when he was 15 years old to an astounding $73 billion-plus today.  While Buffett’s concentration is on the largest of the large-caps, he has a love for the potential of small-caps, defined as companies with market capitalizations between$300 million to $2 billion.  A little while ago he told Fortune Magazine, “It’s one thing to own stock in a Coca-Cola or something, but when you are actually in the business of making determinations about opening stores and pricing decisions, you learn from it. We have made a lot more money out of See’s than shows from the earnings of See’s, just by the fact that it has educated me.”  How Buffett Picks His Winners It’s safe to say Warren’s consultation fee is among the most expensive of all time. People routinely spend a million plus dollars just to have an informal lunch with the guru. Astoundingly, the latest bid posted at $2.7 million for an hour… Read More

I’ve made a career in spotting trillion-dollar themes in the market, first as an equity analyst and more recently as a pre-IPO investor. Any analyst can create a cash flow model — it’s as simple as working through a company’s financial statements to scrutinize the true cash-generating power of the investment. Every broker, research firm and fund manager has a team of analysts with their noses buried in 10-Ks and other documents. But being ahead of the herd requires finding those market forces that will influence the direction of whole sectors, or even the entire market. It’s finding themes with… Read More

I’ve made a career in spotting trillion-dollar themes in the market, first as an equity analyst and more recently as a pre-IPO investor. Any analyst can create a cash flow model — it’s as simple as working through a company’s financial statements to scrutinize the true cash-generating power of the investment. Every broker, research firm and fund manager has a team of analysts with their noses buried in 10-Ks and other documents. But being ahead of the herd requires finding those market forces that will influence the direction of whole sectors, or even the entire market. It’s finding themes with the force of trillions behind them that create triple-digit return strategies. I’ve used what is likely the most pervasive theme driving today’s markets to find stocks with huge support. I then looked for upside price catalysts on these stocks to identify three names that could be the biggest outperformers of the year. Are ETFs Taking Over The Market? Hedge Fund investors and Mutual Fund clients are dropping expensive portfolio managers in favor of passively-managed exchange-traded funds (or ETFs). Global ETF inflows reached a record of $375 billion in 2016, an increase of 7.8% over the previous year. U.S.-listed ETF… Read More

Small-cap stocks have been a reliable way for investors to outperform the S&P 500 for a long time. In the last 17 years the iShares Core S&P Small Cap (NYSE: IJR) has gained 335%. That’s more than a 300% premium to the 74% return of the SPDR S&P 500 ETF (NYSE: SPY) over the same period. This huge discrepancy is shown below. However, over the last three years this performance gap has evaporated. With investors fearful of another big stock market crash and huge waves of retirees piling into dividend stocks in search of yield, small-caps have temporarily… Read More

Small-cap stocks have been a reliable way for investors to outperform the S&P 500 for a long time. In the last 17 years the iShares Core S&P Small Cap (NYSE: IJR) has gained 335%. That’s more than a 300% premium to the 74% return of the SPDR S&P 500 ETF (NYSE: SPY) over the same period. This huge discrepancy is shown below. However, over the last three years this performance gap has evaporated. With investors fearful of another big stock market crash and huge waves of retirees piling into dividend stocks in search of yield, small-caps have temporarily fallen out of favor. As you can see in the chart below, small caps have only fared slightly better than the S&P 500 over the last three years. Take a look below. In the short run, this has been frustrating for small cap investors. They took the risk of higher volatility without the reward of outsized returns. However, it has also created a rare value opportunity. Right now there are an abnormal number of small cap stocks that are trading with historically low valuations while still offering huge growth potential. I put together a screen of… Read More

You’ve no doubt heard of the company that’s bringing electric vehicles to the masses. Founded in 2003 and based in Palo Alto, California, the company was co-founded by entrepreneur Elon Musk — founder of Space-X and co-founder of PayPal, SolarCity and Zip2. Of course, I’m talking about Tesla (Nasdaq: TSLA). The company sells solar panels and solar roofs for energy generation, plus batteries for stationary storage for residential and commercial properties — and, of course, Tesla makes electric vehicles. With the Tesla Roadster debuting in 2008, the S in 2012 and the X in 2015, the company is working on… Read More

You’ve no doubt heard of the company that’s bringing electric vehicles to the masses. Founded in 2003 and based in Palo Alto, California, the company was co-founded by entrepreneur Elon Musk — founder of Space-X and co-founder of PayPal, SolarCity and Zip2. Of course, I’m talking about Tesla (Nasdaq: TSLA). The company sells solar panels and solar roofs for energy generation, plus batteries for stationary storage for residential and commercial properties — and, of course, Tesla makes electric vehicles. With the Tesla Roadster debuting in 2008, the S in 2012 and the X in 2015, the company is working on the Model 3, a vehicle developed for the masses with a starting price of about $35,000, compared with the base price of $68,000 for the Model S. Tesla is one of the most controversial stocks in the market. Bring it up and you’ll hear arguments from both sides: there are loyal admirers of Tesla and Musk, and there are those that haven’t yet been sold on either. Tesla fans argue that it’s the vehicle of the future and you’re paying for earnings that are quite possibly still five-to-10 years out. Many will argue that it’s following in similar footsteps as… Read More

Bill Miller is back on a winning streak. Once a hero of Wall Street with an enviable record of 15 straight years of beating the S&P 500, he suffered the same fate as everyday investors during the financial crisis, and has since failed to return to his former level of success.  But today, Bill Miller’s stock picks are earning back their stellar reputation for market outperformance.  A Truly Exceptional Track Record Most funds have difficulty just beating the S&P 500 in any given year. To do so for multiple years in a row is even more impressive. So it’s… Read More

Bill Miller is back on a winning streak. Once a hero of Wall Street with an enviable record of 15 straight years of beating the S&P 500, he suffered the same fate as everyday investors during the financial crisis, and has since failed to return to his former level of success.  But today, Bill Miller’s stock picks are earning back their stellar reputation for market outperformance.  A Truly Exceptional Track Record Most funds have difficulty just beating the S&P 500 in any given year. To do so for multiple years in a row is even more impressive. So it’s crazy to think that Bill Miller beat the index for 15 years straight while working at Legg Mason. These returns are simply unparalleled in the mutual fund world. His track record even outperformed Fidelity’s legendary Peter Lynch.  However, his well-tested value investing strategy of buying stocks at a discount was no match for the crashing stock market. Convinced his holdings would bounce back, Mr. Miller kept averaging into positions and the market kept proving him wrong.  From 2007 to 2011, his Legg Mason Opportunity Fund plunged over 50% as large bets on troubled financial stocks failed to turn a profit. Read More