Longtime readers know I’ve been bearish on China for a while now. Last summer, I warned that China’s currency was poised for a sharp devaluation. In February, I warned that the economic situation in that country was much, much worse than we were being led to believe. #-ad_banner-#In each instance, I offered up a simple way to profit from the turmoil, thanks to the power of options. This time around, I’ve got my eye on a specific company in China — one of its largest and most well-known, in fact. I’ve… Read More

Longtime readers know I’ve been bearish on China for a while now. Last summer, I warned that China’s currency was poised for a sharp devaluation. In February, I warned that the economic situation in that country was much, much worse than we were being led to believe. #-ad_banner-#In each instance, I offered up a simple way to profit from the turmoil, thanks to the power of options. This time around, I’ve got my eye on a specific company in China — one of its largest and most well-known, in fact. I’ve made money betting against it before, and now it’s time to do it again… For those who are unfamiliar with the situation in China, let me briefly explain. Key economic data issued by the government is unreliable at best. The government is desperately trying to create a consumer-driven economy, while simultaneously propping up its real estate sector, stock market and imports. You can read what I’ve written before about this situation (as well as in other media outlets), so I won’t get into the details in today’s essay. But suffice it… Read More

Recently, I was listening to a podcast interview with market guru Byron Wien of Blackstone. While the talk focused mainly on building wealth with large, concentrated bets, the winning combination of investing in technology and emerging markets caught my attention. #-ad_banner-#Technology changes worlds and history and, if you choose wisely, makes investors rich. The same can be said for macro market and demographic trends. The world changed as wireless telecom penetrated emerging and frontier markets. People who had never had a telephone due to lack of infrastructure in their communities were now connected. While wireless phone proliferation in these economies… Read More

Recently, I was listening to a podcast interview with market guru Byron Wien of Blackstone. While the talk focused mainly on building wealth with large, concentrated bets, the winning combination of investing in technology and emerging markets caught my attention. #-ad_banner-#Technology changes worlds and history and, if you choose wisely, makes investors rich. The same can be said for macro market and demographic trends. The world changed as wireless telecom penetrated emerging and frontier markets. People who had never had a telephone due to lack of infrastructure in their communities were now connected. While wireless phone proliferation in these economies has exploded over the last decade, there’s still room to grow. Now, as the same emerging societies give birth to a new middle class thanks to a globalized economy, banking is emerging as the next growth industry in developing markets. I’ve found a stock that covers both: Vodafone (Nasdaq: VOD). The leading provider of international wireless telecommunications, Vodafone’s footprint covers more than 20 countries across four continents. If you’re a Verizon (NYSE: VZ) subscriber, you used to do business with Vodafone. Up until 2014, Vodafone owned a 45% stake in Verizon. After selling back to Verizon, Vodafone walked away with… Read More

Shares of Valeant Pharmaceuticals (NYSE: VRX) plunged nearly 15% when the company finally reported its 1st quarter earnings on June 7  on a reduced 2016 outlook and a laundry list of other issues.  More than 100 million shares traded that day, five times the previous day’s volume, as investors rushed for the exit and short sellers danced a jig.  #-ad_banner-#But for those listening closely to the conference call, CEO Joseph Papa dropped a bombshell and tipped investors off to what could be one of the best positioned companies for the foreseeable future.  Most investors didn’t catch it because shares of… Read More

Shares of Valeant Pharmaceuticals (NYSE: VRX) plunged nearly 15% when the company finally reported its 1st quarter earnings on June 7  on a reduced 2016 outlook and a laundry list of other issues.  More than 100 million shares traded that day, five times the previous day’s volume, as investors rushed for the exit and short sellers danced a jig.  #-ad_banner-#But for those listening closely to the conference call, CEO Joseph Papa dropped a bombshell and tipped investors off to what could be one of the best positioned companies for the foreseeable future.  Most investors didn’t catch it because shares of this market leader closed just 0.6% higher on the day. This company is already a powerhouse in a growing industry and about to close a merger that will cement its place on top. Who Will Control Tomorrow’s Healthcare Valeant investors were stunned when the company reported that it was selling some drugs through its relationship with Walgreens Boots Alliance (Nasdaq: WBA) at a loss to its own costs. The advantage came to Walgreens on activity-based fees negotiated in the distribution contract, which are additional fees Walgreens receives on Valeant drugs depending on whether the purchase is paid in cash… Read More

I have to be very careful admitting this to my granola-crunching friends in Austin, but I genuinely love Monsanto (NYSE: MON). I always have. I know these hippie environmentalists have issues with the agriculture giant, but regardless of whatever Beardo the Weirdo thinks, I can tell you from my stewardship of a few acres of farm ground that Monsanto products are top notch. We don’t only grow crops, we raise cattle, and that means our water quality is something I keep a close watch on. It’s good — I test it myself four times a year, which… Read More

I have to be very careful admitting this to my granola-crunching friends in Austin, but I genuinely love Monsanto (NYSE: MON). I always have. I know these hippie environmentalists have issues with the agriculture giant, but regardless of whatever Beardo the Weirdo thinks, I can tell you from my stewardship of a few acres of farm ground that Monsanto products are top notch. We don’t only grow crops, we raise cattle, and that means our water quality is something I keep a close watch on. It’s good — I test it myself four times a year, which we’ve done since the 1960s. We’ve never been cleaner. #-ad_banner-# I’ve personally planted millions of Monsanto’s patented Genuity soybean seeds. You don’t realize how big a section of ground is until you start planting it in 30-foot wide rows… I’ve also sprayed the young plants with Monsanto’s RoundUp (which doesn’t kill them but obliterates weeds) and then personally watched the meter on the combine register in the stratosphere as I harvested them. It’s a dusty operation each fall, as the soybeans are cut only an inch or so off the ground. But it’s also a… Read More

Last year, Federal Reserve Board officials spent weeks telegraphing their first increase in short-term interest rates in years. When it finally happened in December no one was surprised. That’s how it should be.  The Fed’s job is to manage the nation’s money supply, in part by setting short-term interest rates, with a goal of balancing economic stimulus with inflation risk. If money supply is too loose, inflation can result; if it’s too tight, one might see a recession. But any interest rate change can be disruptive, altering business plans at companies around the world. So the Fed moves best when… Read More

Last year, Federal Reserve Board officials spent weeks telegraphing their first increase in short-term interest rates in years. When it finally happened in December no one was surprised. That’s how it should be.  The Fed’s job is to manage the nation’s money supply, in part by setting short-term interest rates, with a goal of balancing economic stimulus with inflation risk. If money supply is too loose, inflation can result; if it’s too tight, one might see a recession. But any interest rate change can be disruptive, altering business plans at companies around the world. So the Fed moves best when it’s deliberate and transparent, discussing moves for weeks or months before they happen. No surprises. #-ad_banner-#Last week’s decision not to change interest rate policy was no surprise, though a rate hike had been telegraphed and expected just a few weeks ago. The unexpectedly weak May employment report forced the Fed’s hand; the risk of recession if interest rates rise is too high. While not shocking, the Fed’s non-hike has significant consequences for stocks for the rest of the year. Here’s why: the only other opportunities to raise rates will be at one of the three remaining Fed Board meetings, in… Read More

Well, it finally happened. I’ve been watching oil prices flirt with the $50 mark for some time. On June 7, benchmark West Texas Intermediate (WTI) futures finally pierced through that key psychological level and settled at $50.36 per barrel. That’s the first time oil prices closed above $50 in almost a year. Prices have since retreated slightly since then to around $48, but it’s still a monster comeback. It was only a few months ago that prices were languishing at $26 per barrel. #-ad_banner-#Crude oil dominated the headlines when prices were on the way… Read More

Well, it finally happened. I’ve been watching oil prices flirt with the $50 mark for some time. On June 7, benchmark West Texas Intermediate (WTI) futures finally pierced through that key psychological level and settled at $50.36 per barrel. That’s the first time oil prices closed above $50 in almost a year. Prices have since retreated slightly since then to around $48, but it’s still a monster comeback. It was only a few months ago that prices were languishing at $26 per barrel. #-ad_banner-#Crude oil dominated the headlines when prices were on the way down. But now that the pendulum has turned, the financial media has gone strangely quiet. That’s fine with me. It might allow more time to put additional money to work in this sector while asset prices are still depressed. Could this rally falter and prices retreat again? Sure. We can’t rule out that possibility. But because the upward surge has been driven by improved fundamentals — not speculators — I don’t think we’ll retest the lows again in this cycle. North American oil producers have been dialing back their exploration and production budgets for… Read More

Over the past week, global markets reacted sharply to the terrible news that a British lawmaker was murdered for her view that the U.K. should remain in the European Union. It’s believed this will push undecided voters to choose to remain. #-ad_banner-#As fears of a Brexit wreaking havoc on the markets subsided, oversold stocks, European currencies and even domestic interest rates rallied quickly. But this week, when it seemed even more traders jumped on board with the rally, basic materials stocks appeared to fail. While steel, paper and chemicals stocks… Read More

Over the past week, global markets reacted sharply to the terrible news that a British lawmaker was murdered for her view that the U.K. should remain in the European Union. It’s believed this will push undecided voters to choose to remain. #-ad_banner-#As fears of a Brexit wreaking havoc on the markets subsided, oversold stocks, European currencies and even domestic interest rates rallied quickly. But this week, when it seemed even more traders jumped on board with the rally, basic materials stocks appeared to fail. While steel, paper and chemicals stocks did gain, they closed near their lows of the day Monday. And those that held on better fell on Tuesday as the broader market gained. This tells us something is amiss in the group — no matter what happens with the Brexit vote. After all, basic materials are on the bottom of the economic food chain, as they supply the inputs to many other industries. One stock that fared particularly poorly was chemicals maker Olin Corp. (NYSE: OLN). The company manufactures products such as caustic soda, bleach, vinyl and sporting ammunition. On the chart, we can see Monday’s bearish outside-day… Read More

Bill Gross warned investors earlier this month to get ready for an ‘entirely different’ market, and likened the global bond market to a supernova with dire consequences. Global bond yields are at the lowest in recorded history, with more than $10 trillion in bonds priced at negative rates, meaning investors are paying for the right to hold the bonds. Central bank policy doesn’t seem to be supporting economic growth, and many investors are wondering if more modest stock returns might be the norm going forward.  #-ad_banner-#Banks and insurance companies can make do with returns low returns on U.S. government and… Read More

Bill Gross warned investors earlier this month to get ready for an ‘entirely different’ market, and likened the global bond market to a supernova with dire consequences. Global bond yields are at the lowest in recorded history, with more than $10 trillion in bonds priced at negative rates, meaning investors are paying for the right to hold the bonds. Central bank policy doesn’t seem to be supporting economic growth, and many investors are wondering if more modest stock returns might be the norm going forward.  #-ad_banner-#Banks and insurance companies can make do with returns low returns on U.S. government and corporate bonds. For most others, though, that’s not going to cut it. Plunging bond rates have pushed investors into traditional ‘safety’ stocks like utilities and consumer staples in a search for yield. The stampede of investor money has driven prices in these sectors to alarming heights, and may make these safety stocks riskier than investors realize. If weak earnings start to unravel the perception of positive total returns the ensuing investor exodus could cause the whole group to unravel. Two sectors offer a better yield opportunity with cheaper valuations, as well as historical evidence pointing to returns over the next… Read More

I recently spent Memorial Day in Las Vegas on the tail-end of a road trip through Nevada and Utah. And while I didn’t win big in Sin City, I’m happy to report that I did well enough to pay for a nice dinner that night with a little bit left to spare. (Hey, if Vegas doesn’t get you one way, they get you another.) #-ad_banner-# As I was caught up in the action, I was reminded of how similar gambling and investing. It’s often the things we focus on least that are the biggest markers of success in… Read More

I recently spent Memorial Day in Las Vegas on the tail-end of a road trip through Nevada and Utah. And while I didn’t win big in Sin City, I’m happy to report that I did well enough to pay for a nice dinner that night with a little bit left to spare. (Hey, if Vegas doesn’t get you one way, they get you another.) #-ad_banner-# As I was caught up in the action, I was reminded of how similar gambling and investing. It’s often the things we focus on least that are the biggest markers of success in either endeavor. Think about it… Just like in poker, for example, long-term success in investing is more about not losing than winning. Avoiding losing investments is perhaps even more important than finding big winners. And knowing when to sell is just as important as knowing what to buy. My colleague Jimmy Butts recently touched on this idea in a recent issue of his premium newsletter, Maximum Profit:         “Ask Warren Buffett what it takes to be a successful investor and he’ll likely tell you this: “Rule No. Read More