It’s been more than a decade since investors have felt this confident. The Wells Fargo/Gallup U.S. Investor and Retirement Optimism Index hit 96 at the end of the fourth quarter, its highest level since January of 2007. But this wave of confidence shouldn’t come as a surprise — U.S. stocks are on a roll. The S&P 500 delivered a total return of 13% in 2016. That was the eighth consecutive year that the S&P 500 has closed in the green, its second longest annual win streak ever. This impressive win streak has been great for returns and confidence. However, it… Read More

It’s been more than a decade since investors have felt this confident. The Wells Fargo/Gallup U.S. Investor and Retirement Optimism Index hit 96 at the end of the fourth quarter, its highest level since January of 2007. But this wave of confidence shouldn’t come as a surprise — U.S. stocks are on a roll. The S&P 500 delivered a total return of 13% in 2016. That was the eighth consecutive year that the S&P 500 has closed in the green, its second longest annual win streak ever. This impressive win streak has been great for returns and confidence. However, it has also created a problem. The S&P 500 is expensive. Its P/E ratio of 25 is the highest level since the financial crisis in 2009. Take a look below. This high P/E ratio is creating some uncertainty that is lurking below the high investor confidence reading. Not only can it be intimidating for investors to buy stocks trading at an all-time high, but this makes it difficult to find value stocks. #-ad_banner-#A recent study by Bank of America/Merrill Lynch highlights the strong performance history of value stocks. The study tracked the performance of value stocks and growth stocks… Read More

There are few things more exciting in stock investing than buyout rumors. Since the stock market runs on an anticipatory mechanism, just the talk of a buyout can light the bullish fire under the shares. The old “buy the rumor, sell the fact” mantra can be very right when it… Read More

In the fall of 2016, I warned readers of my premium advisory, Profit Amplifier, of continued weakness in China and the subsequent fallout in its fragile stock market. The Chinese market is ruled by twitchy individual investors. By late December, the iShares China Large-Cap ETF (NYSE: FXI) had fallen 12% to a key retracement level around $34. But the New Year has brought buyers back into the Asian markets and back to FXI. Shares have rallied nearly 8% from their recent lows, likely due to a massive short squeeze (which I will detail later). Yet despite… Read More

In the fall of 2016, I warned readers of my premium advisory, Profit Amplifier, of continued weakness in China and the subsequent fallout in its fragile stock market. The Chinese market is ruled by twitchy individual investors. By late December, the iShares China Large-Cap ETF (NYSE: FXI) had fallen 12% to a key retracement level around $34. But the New Year has brought buyers back into the Asian markets and back to FXI. Shares have rallied nearly 8% from their recent lows, likely due to a massive short squeeze (which I will detail later). Yet despite the apparent bullishness, there have been no fundamental improvements. In fact, I’m seeing quite the opposite. China is a conundrum because deception reigns supreme. This is a country where a major construction company that defaulted on its bonds has delayed releasing its earnings for more than two years. It would be like Enron “hiding” its balance sheet manipulation for 26 months while it continued to scam the public. —Recommended Link— Big Kahuna Profits In Energy Storage Tesla CEO Elon Musk is building a large battery farm in Hawaii to store energy from island sunshine. It’s just his latest move… Read More

When cell phones became popular in 1981, they were as big as bricks and felt twice as heavy. The only thing you could do with one was make a call — and sometimes not even that would work. #-ad_banner-#The second generation of phones allowed voice and data connections in 1992 while 3G and 4G brought advancements in speed and the ability to view videos. They’re not even called cell phones anymore. They’ve evolved into ‘smart phones’. With each evolutionary step, they ‘ve become more ubiquitous in our daily lives. Now, the next stage in mobile technology is upon us. And… Read More

When cell phones became popular in 1981, they were as big as bricks and felt twice as heavy. The only thing you could do with one was make a call — and sometimes not even that would work. #-ad_banner-#The second generation of phones allowed voice and data connections in 1992 while 3G and 4G brought advancements in speed and the ability to view videos. They’re not even called cell phones anymore. They’ve evolved into ‘smart phones’. With each evolutionary step, they ‘ve become more ubiquitous in our daily lives. Now, the next stage in mobile technology is upon us. And it might not be merely evolutionary but revolutionary. 5G technology could bring the capabilities for which consumers have been waiting for more than a decade. The speed available could allow consumers to take their computing completely mobile. The next wave in mobile tech could refresh the buying cycle, from manufacturers to carriers and consumers, and a few leaders are already positioning for an advantage. Internet Speeds Up To 200-Times Faster Could Create A Tectonic Shift 5G could finally mean the death of the desktop. Mobile is already over half of search and 5G could bring speeds comparable with desktop… Read More

As an analyst who spends every day looking at numbers, I have a tendency to try and quantify everything. We humans, as a species, tend to do this all the time. For the most part, it serves us well. But it can also sometimes be a trap, diminishing the value… Read More

“Where are the customers’ yachts?” It was a question the tour guide didn’t expect. He was taking a group of tourists through the financial district in lower Manhattan from the area now known as Battery Park. #-ad_banner-#Eventually docks appeared around the park. And because of its proximity to Wall Street, it became a favored location for Wall Street bankers and brokers to dock their very expensive yachts. So it was on this day that the tour guide was extolling the virtues of Wall Street moneymen. He told his audience that the yachts were the rewards for creating enormous wealth for… Read More

“Where are the customers’ yachts?” It was a question the tour guide didn’t expect. He was taking a group of tourists through the financial district in lower Manhattan from the area now known as Battery Park. #-ad_banner-#Eventually docks appeared around the park. And because of its proximity to Wall Street, it became a favored location for Wall Street bankers and brokers to dock their very expensive yachts. So it was on this day that the tour guide was extolling the virtues of Wall Street moneymen. He told his audience that the yachts were the rewards for creating enormous wealth for their customers. To which one lone voice asked, “Where are the customers’ yachts?” Selling Is More Lucrative Than Buying Now, I don’t know if this story is true. It was described in a book about Wall Street written in 1940 by Fred Schwed. The name of the book is “Where Are the Customers’ Yachts?” It’s a lighthearted look about a serious subject that every investor should read. But despite its humorous undertone, the message is dead on. There is far more money in providing financial advice to investors than there is in receiving financial advice from Wall Street experts. Read More

Since last June, I’ve sold nine portfolio holdings in my premium income newsletter, High-Yield Investing. All nine were for positive gains, between 2.1% and 74.1%. But I didn’t sell any of these stocks because I expected them to decline. Rather, most had lived up to their short-term potential and the time had come to cash out gains and look elsewhere for candidates with stronger upside. But there are investors who do actively bet against certain stocks by selling them short. In the simplest terms, this involves borrowing the shares and immediately selling them. A few weeks or months later, the… Read More

Since last June, I’ve sold nine portfolio holdings in my premium income newsletter, High-Yield Investing. All nine were for positive gains, between 2.1% and 74.1%. But I didn’t sell any of these stocks because I expected them to decline. Rather, most had lived up to their short-term potential and the time had come to cash out gains and look elsewhere for candidates with stronger upside. But there are investors who do actively bet against certain stocks by selling them short. In the simplest terms, this involves borrowing the shares and immediately selling them. A few weeks or months later, the shares are repurchased (ideally at a lower price) and returned to the original owner, with the trader keeping the difference. It’s “buy low and sell high” in reverse order. It’s a risky strategy. If you buy a stock at $10, the most you can lose is $10. And that’s only if it winds up completely worthless. But if you sell short at $10, the stock can rise to $20, or $30, or more. The more it rises, the more you lose. So in theory, the potential risk is unlimited (although in practice traders take steps to cap their losses). That’s… Read More

The S&P 500 isn’t just in record territory on the chart. It’s also on one of its best annual winning streaks ever. #-ad_banner-#2016 was the eighth consecutive year that the S&P 500 finished in the green. That is the second-longest annual win streak ever, even including its 1982 to 1989 run. The S&P 500’s best annual winning streak stands at nine years, stretching from 1991 to 1999. 2017 is the year the S&P 500 has a chance to tie this impressive streak. There’s no question U.S. stocks will have their work cut out for them this year. U.S. and global… Read More

The S&P 500 isn’t just in record territory on the chart. It’s also on one of its best annual winning streaks ever. #-ad_banner-#2016 was the eighth consecutive year that the S&P 500 finished in the green. That is the second-longest annual win streak ever, even including its 1982 to 1989 run. The S&P 500’s best annual winning streak stands at nine years, stretching from 1991 to 1999. 2017 is the year the S&P 500 has a chance to tie this impressive streak. There’s no question U.S. stocks will have their work cut out for them this year. U.S. and global economic growth remain stubbornly slow. The S&P 500’s average P/E ratio is at a multi-year high. And higher bond yields are attracting more attention from investors. Despite the usual bevy of challenges, I believe the S&P 500 is up to the challenge. There are three reasons the leading U.S. index is set to close the year at another all-time high. The S&P 500 Will Return To Earnings Growth In 2017 The S&P 500 has been trapped in a nasty earnings recession for most of the last six quarters. That streak was finally broken in the third quarter when earnings… Read More

Being extremely wealthy can be lonely. Most of us can only imagine what it is like to no longer be concerned about money or possessions. To be able to do nearly everything you have ever imagined, with the world truly being a playground of opportunity and adventure. If you want… Read More