At no other time in modern U.S. history has a new administration intervened so directly in the business environment. Whether you agree with President Trump’s policies or not, it’s difficult to ignore that the new administration is reshaping the American economy. Any time you get such a dramatic shift in policy and the business environment, there are bound to be industries that benefit. #-ad_banner-#Positioning in those industries before the good times begin could be one of the strongest investment themes over the next four years. President Trump reiterated his call for a $1 trillion infrastructure plan in his… Read More

At no other time in modern U.S. history has a new administration intervened so directly in the business environment. Whether you agree with President Trump’s policies or not, it’s difficult to ignore that the new administration is reshaping the American economy. Any time you get such a dramatic shift in policy and the business environment, there are bound to be industries that benefit. #-ad_banner-#Positioning in those industries before the good times begin could be one of the strongest investment themes over the next four years. President Trump reiterated his call for a $1 trillion infrastructure plan in his recent speech to Congress. He also reinforced his pledge to boost American manufacturing with a mandate that requires new energy pipelines to be made with domestically-produced U.S. steel. In that mandate, the President may have signaled one of the best investments of the year and made one group some of the top stocks of 2017. Steel Benefits From Increased Demand And Decreased Competition Not only could U.S. steel producers get a sales boost from pipeline projects already approved, but any major infrastructure improvement could mean a surge in non-residential and construction steel. Steel gets a further boost… Read More

Last week, I wrote about Buffett’s bet with the hedge fund industry (for more on that, go here). I also advised readers to check out Buffett’s letter to Berkshire Hathaway shareholders, which was released last weekend. I hope you took the time to follow my advice. Despite amassing a $76 billion fortune, Buffett remains as folksy and accessible as ever. He’s not perfect — but then again, he’s also rarely wrong. #-ad_banner-#A few years ago, the Wall Street Journal reported that Buffett made an absolutely stunning $10 billion on investments he made at the height of… Read More

Last week, I wrote about Buffett’s bet with the hedge fund industry (for more on that, go here). I also advised readers to check out Buffett’s letter to Berkshire Hathaway shareholders, which was released last weekend. I hope you took the time to follow my advice. Despite amassing a $76 billion fortune, Buffett remains as folksy and accessible as ever. He’s not perfect — but then again, he’s also rarely wrong. #-ad_banner-#A few years ago, the Wall Street Journal reported that Buffett made an absolutely stunning $10 billion on investments he made at the height of the financial crisis. True to form, Buffett sheepishly commented that any average investor could have done just as well. In fact, more recently, he has stated that it should be possible for any individual investor to beat his performance at Berkshire Hathaway going forward. Does this mean Buffett has lost a step? Hardly. It’s simply a matter of the law of large numbers coming into effect. To earn that $10 billion, Buffett had to invest $26 billion. That put his return at about 38%, or 6.7% a year over five years. Now let’s put that into context. Buffett made his… Read More

Powerball and the other assorted government sponsored lotteries are big business. During 2014,  players spent $70 billion on legal lotteries in America alone. Global lottery sales bring in about $300 billion each year. The urge for fast money is so strong that ticket sales on U.S. lottery games average $300 per adult in the 43 states hosting the games. Putting this number into perspective, it’s more money than U.S. citizens in all 50 states spent on movies, recorded music, sports tickets, books and even video games combined! #-ad_banner-#While many players participate in the lottery as a fun diversion, some view… Read More

Powerball and the other assorted government sponsored lotteries are big business. During 2014,  players spent $70 billion on legal lotteries in America alone. Global lottery sales bring in about $300 billion each year. The urge for fast money is so strong that ticket sales on U.S. lottery games average $300 per adult in the 43 states hosting the games. Putting this number into perspective, it’s more money than U.S. citizens in all 50 states spent on movies, recorded music, sports tickets, books and even video games combined! #-ad_banner-#While many players participate in the lottery as a fun diversion, some view it differently. A study published in 2004 revealed a sad truth. Cornell professors, Garrick Blalock, David R. Just, and Daniel H. Simon authored a study called “Hitting the Jackpot or Hitting the Skids.” The research discovered that local lottery ticket sales are higher in areas of low income. However, movie ticket sales decline with poverty levels. Bluntly stated, the lottery is viewed as a possible source of income by the destitute, despite the astronomical  odds against winning. Although the odds of winning the Powerball can be as low as 1 in 258 million, there is a way to significantly improve… Read More

During a bull market, you can just about set your watch to individual investors being fashionably late. Institutional money is always early to the party. They must be per their investment mandates. But individual retail investors are a completely different animal. Why do individual investors always get in late during a bull run? This chart of the S&P 500 going back to the turn of the century is the best explanation. Over the last 17 years, the index has endured two bear markets, where the average decline was 47%, and two significant corrections with average drawdowns of 16.5%. Read More

During a bull market, you can just about set your watch to individual investors being fashionably late. Institutional money is always early to the party. They must be per their investment mandates. But individual retail investors are a completely different animal. Why do individual investors always get in late during a bull run? This chart of the S&P 500 going back to the turn of the century is the best explanation. Over the last 17 years, the index has endured two bear markets, where the average decline was 47%, and two significant corrections with average drawdowns of 16.5%. This translates into a major market downturn every 4.25 years. That’s a lot of volatility, and volatility always frightens individual investors. But as everyone knows, when dealing with market forces the opposite side of fear is greed. Once individual investors see that the train has left the station, they usually chase it. One of the main vehicles used in the chase, of course, is the venerable mutual fund. #-ad_banner-#With this is mind, fund manager stocks are an excellent way to profit from tardy investors jumping into the market. As investors shovel money into the funds, increasing the managers’ assets under… Read More

As 2017 rushes forward, I’m seeing confirmation of my market outlook from the beginning of this year. In the past week, it’s become clear that Warren Buffett now agrees with my assessment of airline stocks. I’ll admit I was nervous as I dove into the sector… Read More

This is BIG… For the first time since 1933, the SEC is now allowing regular people like you and me to invest in brand-new explosive-growth companies BEFORE THEY GO PUBLIC. Imagine getting in on the next Facebook for 33 cents a share or the next Apple at 78 cents. Each… Read More

American companies are on a shopping spree for foreign companies. Four of the largest acquisitions of overseas companies in history were announced within the last five months. Qualcomm (Nasdaq: QCOM) announced its $47.7 billion acquisition of NXP Semiconductors (Nasdaq: NXPI) in October just a month before Praxair (NYSE: PX) offered $44.8 billion for Linde. #-ad_banner-#Kraft Heinz (Nasdaq: KHC) agreed to withdraw its $143 billion acquisition offer of U.K.-based Unilever (NYSE: UL) earlier this month but it set the stage for American interest in foreign companies. The takeover would have been the third-largest in history and the… Read More

American companies are on a shopping spree for foreign companies. Four of the largest acquisitions of overseas companies in history were announced within the last five months. Qualcomm (Nasdaq: QCOM) announced its $47.7 billion acquisition of NXP Semiconductors (Nasdaq: NXPI) in October just a month before Praxair (NYSE: PX) offered $44.8 billion for Linde. #-ad_banner-#Kraft Heinz (Nasdaq: KHC) agreed to withdraw its $143 billion acquisition offer of U.K.-based Unilever (NYSE: UL) earlier this month but it set the stage for American interest in foreign companies. The takeover would have been the third-largest in history and the largest ever purchase of a foreign firm by a U.S. company. These aren’t random buyouts for isolated reasons. U.S. firms are looking at strategic advantages and some strong macro-level factors are driving the buying spree across multiple sectors. These larger forces could lead to more announcements soon, driving headlines and prices for foreign companies. The Big Picture Driving The Buyout Search Abroad While the three examples above are from completely different industries, there are bigger forces making foreign acquisitions a smart move for U.S. firms. A strong dollar, available cash, business confidence, and the potential for tax reform that… Read More

If you’re like me, then you have probably entered your investments into a portfolio tracking service for easy monitoring. Instead of manually typing individual ticker symbols day after day for stock quotes, you can enter them once. After that, it just takes a click of the mouse to instantly see how all of your holdings are performing on one screen. It’s a real time saver. And many financial sites like Morningstar and Yahoo Finance offer this service for free. #-ad_banner-#Before long, you’ll notice that on up days when most stocks are in the green, some holdings always seem to ride… Read More

If you’re like me, then you have probably entered your investments into a portfolio tracking service for easy monitoring. Instead of manually typing individual ticker symbols day after day for stock quotes, you can enter them once. After that, it just takes a click of the mouse to instantly see how all of your holdings are performing on one screen. It’s a real time saver. And many financial sites like Morningstar and Yahoo Finance offer this service for free. #-ad_banner-#Before long, you’ll notice that on up days when most stocks are in the green, some holdings always seem to ride a little bit higher than others. If most stocks in the group are up 1% to 2%, these outliers might gain 3%. The opposite is true on down days. When most stocks are in the red by 1% to 2%, these typically get hit harder and might drop 3%. I’m not talking about an isolated good (or bad) day triggered by company-specific news, but simply the stock’s general sensitivity to market fluctuations over a period of months or years. There is a way to measure this sensitivity. It’s called beta, and it measures the degree to which a security rises… Read More

What an incredible time to be a stock market investor. Prices have been surging higher over the past few months, with the popular benchmark Dow Jones Industrial Average breaking the 20,000 barrier for the first time in its history. Driven by the new Presidential administration’s anti-regulatory, pro-infrastructure spending, and tax-slashing… Read More

In 1980, economist Julian Simon had had enough. For the past decade-plus, he had watched Stanford biologist Paul Ehrlich make all sorts of grim predictions about the human race. For example, in 1968, Ehrlich predicted that 20% of the world’s population would starve to death by 1985. Later, he predicted that England would not exist as a country by the year 2000. This kind of thinking has its roots in the theories of Thomas Malthus. (Not that you asked, but I think Malthusianism has had far too much influence in both academia and the larger public for far too long. Read More

In 1980, economist Julian Simon had had enough. For the past decade-plus, he had watched Stanford biologist Paul Ehrlich make all sorts of grim predictions about the human race. For example, in 1968, Ehrlich predicted that 20% of the world’s population would starve to death by 1985. Later, he predicted that England would not exist as a country by the year 2000. This kind of thinking has its roots in the theories of Thomas Malthus. (Not that you asked, but I think Malthusianism has had far too much influence in both academia and the larger public for far too long. It’s one of those theories that has a nasty habit of influencing some of history’s absolute worst ideas.) #-ad_banner-#Despite all of the hand-wringing and pearl-clutching, nothing seemed to ever come of these prognostications. So Simon thought it was time to make a little wager with Ehrlich… If the predicted world population explosion transpired, leading to the vast depletion of natural resources, then the prices of commodities would naturally skyrocket. So Simon challenged Ehrlich to buy $1,000 in any mix of commodities he chose. Then, after a 10-year period, if prices were higher, Simon would pay the difference. If prices were… Read More