Westpac Banking Corporation (NSYE: WBK), Australia’s second largest bank, missed earnings on May 1, when it reported the biggest loan impairment charges in six years for the six months ending March 31. Profits clocked in at A$3.9 billion, lower than the expected A$4.025 billion. #-ad_banner-#This miss sent shares into the weeds, as low as $22.71 on Monday, down from $23.59 at Friday’s close. At the heart of the miss were corporate debt loans and lower commodity prices. This isn’t good news for Australia’s banking industry, and Westpac is the first big bank to report in the country, with other major… Read More

Westpac Banking Corporation (NSYE: WBK), Australia’s second largest bank, missed earnings on May 1, when it reported the biggest loan impairment charges in six years for the six months ending March 31. Profits clocked in at A$3.9 billion, lower than the expected A$4.025 billion. #-ad_banner-#This miss sent shares into the weeds, as low as $22.71 on Monday, down from $23.59 at Friday’s close. At the heart of the miss were corporate debt loans and lower commodity prices. This isn’t good news for Australia’s banking industry, and Westpac is the first big bank to report in the country, with other major institutions reporting later this week into next. And they’re all in the same boat. Many of these Australian banks made loans to the coal and steel industry. Both of these industries are struggling massively right now. The world is moving away from coal as a power source faster than ever before, and China’s slowing growth is slashing demand for iron ore and steel. These factors could mean Australian banking debt could climb to its highest level in eight years by 2018, according to Bloomberg: [Commonwealth Bank of Australia (OTC: CBAUF), Westpac Banking Corp., National Australia Bank Ltd. (OTC: NABZY)  and… Read More

Pension funds are in the news again… and the news isn’t very good. Many plans are underfunded, which means they don’t have enough money to pay the benefits they’ve promised. Among those many underfunded plans are funds managed by the city of Chicago, which were recently blocked… Read More

Monday’s consumer spending report was lower than expected, but it didn’t stop the market from continuing to snatch up shares of consumer discretionary stocks. That makes sense: employment gains are coming in strong; personal income is rising; and energy prices have yet to rally. It all adds up to a pretty picture for companies dependent on Americans spending on nonessential goods and services this year. I advised in February that consumer discretionary stocks were starting to rally, presaging a market rebound. That turned out to be true, and the stocks I recommended then — Mohawk Industries (NYSE: MHK) and Disney… Read More

Monday’s consumer spending report was lower than expected, but it didn’t stop the market from continuing to snatch up shares of consumer discretionary stocks. That makes sense: employment gains are coming in strong; personal income is rising; and energy prices have yet to rally. It all adds up to a pretty picture for companies dependent on Americans spending on nonessential goods and services this year. I advised in February that consumer discretionary stocks were starting to rally, presaging a market rebound. That turned out to be true, and the stocks I recommended then — Mohawk Industries (NYSE: MHK) and Disney (NYSE: DIS) — have both performed well since then. But some market observers think the more recent rally in consumer discretionary stocks is somehow a bad sign, indicating a market top. I disagree. While disappointing earnings could derail the market in the short run (and create bargains for high-quality companies’ shares), so far the earnings season has been better than expected. And investors’ continued faith in consumer discretionary shares is a solid indicator that the economy remains on the right track. #-ad_banner-#I wouldn’t add to your holdings in Mohawk and Disney at this point, although both are certainly worthy of… Read More

Like my dad, Anthony Ralys was from Massachusetts, joined the Army Air Corp during World War II and served on a B-24 bomber. Also like my dad, Ralys was a first-generation American. Ralys’ parents emigrated from Lithuania, while my dad’s parents emigrated from Armenia. #-ad_banner-#Recently, I learned they had something else in common: investing. After the war, Ralys returned home, married, and ran the local barbershop for 38 years. He died on June 16, 2014, at age 89. This month, it was discovered that Ralys left $1.4 million to his hometown library in Athol, Massachusetts. Everyone who knew him was… Read More

Like my dad, Anthony Ralys was from Massachusetts, joined the Army Air Corp during World War II and served on a B-24 bomber. Also like my dad, Ralys was a first-generation American. Ralys’ parents emigrated from Lithuania, while my dad’s parents emigrated from Armenia. #-ad_banner-#Recently, I learned they had something else in common: investing. After the war, Ralys returned home, married, and ran the local barbershop for 38 years. He died on June 16, 2014, at age 89. This month, it was discovered that Ralys left $1.4 million to his hometown library in Athol, Massachusetts. Everyone who knew him was stunned to learn he had an investment account — let alone one that was worth seven figures. According to a local newspaper, Anthony and his wife started investing in municipal bonds early on in their lives. It was unusual for people like my dad and Anthony Ralys to invest when they were young. According to a census conducted by the New York Stock Exchange in 1952, only about 4.2% of Americans owned stock. But even that small group was mostly made up of well-heeled individuals. The wealthiest 10% of families owned 83.2% of stocks (based on value) in the 1950s. Read More

The major U.S. stock indices gave back the previous week’s gains and then some last week, due in part to tepid March new home sales and weaker-than-expected Q1 GDP. They were led lower by the tech-heavy Nasdaq 100, which lost 3% and ended April down 5.5% for the year.   Meanwhile, the benchmark S&P 500 has already fallen 2.2% since peaking on April 20, about a week after my Market Outlook entitled “In The Week Ahead: Start Protecting Your Portfolio Now” discussed the likelihood of a bearish reversal. From a sector standpoint, last week’s market decline was led by technology… Read More

The major U.S. stock indices gave back the previous week’s gains and then some last week, due in part to tepid March new home sales and weaker-than-expected Q1 GDP. They were led lower by the tech-heavy Nasdaq 100, which lost 3% and ended April down 5.5% for the year.   Meanwhile, the benchmark S&P 500 has already fallen 2.2% since peaking on April 20, about a week after my Market Outlook entitled “In The Week Ahead: Start Protecting Your Portfolio Now” discussed the likelihood of a bearish reversal. From a sector standpoint, last week’s market decline was led by technology (-3%) and health care (-2.9%). Energy and defensive utilities and consumer staples were the only sectors to finish the week in positive territory. #-ad_banner-# In last week’s Market Outlook, I pointed out that energy saw the biggest positive percentage change in sector bet-related investor assets over the past one-week and three-month periods, according to Asbury Research’s own ETF asset flows-based metric. Not surprisingly, crude oil prices have also been showing some strength lately, which I will talk about in more detail later in… Read More

Utility stocks performed relatively well in the early weeks of 2016. As classic “widow and orphan” investments, these safe havens attracted money from investors spooked by the overall market selloff. But in April utilities lagged the market, perhaps because of concerns that the Fed will again raise short-term interest rates. Rising rates tend to hurt utility stocks because it makes their above-average dividend yields less compelling versus bond yields.   Income investors should take note of this pause in utilities’ bull run and look to pick up shares of the best utilities at attractive prices. It’s unlikely that… Read More

Utility stocks performed relatively well in the early weeks of 2016. As classic “widow and orphan” investments, these safe havens attracted money from investors spooked by the overall market selloff. But in April utilities lagged the market, perhaps because of concerns that the Fed will again raise short-term interest rates. Rising rates tend to hurt utility stocks because it makes their above-average dividend yields less compelling versus bond yields.   Income investors should take note of this pause in utilities’ bull run and look to pick up shares of the best utilities at attractive prices. It’s unlikely that the Fed will hike short-term rates more than once in the coming months, given the uncertain global economic outlook and the upcoming presidential election (the Fed historically has been loath to influence elections in a campaign’s final months). #-ad_banner-#Utilities remain one of the best sources of investment income among U.S. stocks. As regulated providers of essential products and services — often as the monopoly provider in a certain area — utilities are virtually guaranteed a steady stream of cash from their customers. But the regulations also mean some utilities are restricted from investing in high-growth businesses. So rather than enticing… Read More

The Dow Jones Industrial Average traded above 18,000 last week. The S&P 500, meanwhile, is up more than 200% since the financial crisis. Both broad indices are trading above their historical valuations. Many experts believe the upside in markets is limited at this point. So what’s left to buy that you can reasonably call “cheap”? Where is there still room to run? #-ad_banner-#There’s a simple answer: commodities and natural resource stocks. In yesterday’s StreetAuthority article, we featured the first part of an exclusive interview between myself and commodities expert Dave Forest,… Read More

The Dow Jones Industrial Average traded above 18,000 last week. The S&P 500, meanwhile, is up more than 200% since the financial crisis. Both broad indices are trading above their historical valuations. Many experts believe the upside in markets is limited at this point. So what’s left to buy that you can reasonably call “cheap”? Where is there still room to run? #-ad_banner-#There’s a simple answer: commodities and natural resource stocks. In yesterday’s StreetAuthority article, we featured the first part of an exclusive interview between myself and commodities expert Dave Forest, who serves as Chief Investment Strategist of Scarcity & Real Wealth, StreetAuthority’s premium advisory devoted to the best resource investments the world has to offer. In the first part of our interview, Dave talked about his background in geology, shared some anecdotes on his world travels, and talked about why now may be the time for investors to dip their toe into commodities. Here is the second part of our interview, which goes into more detail with his thoughts on the commodities markets… Brad: After a down year in 2015, the… Read More

When market bubbles form, they usually start for a reason. The tech boom was fueled by revolutionary opportunities with the internet, and the housing bubble achieved liftoff from historically low interest rates and relaxed loan standards. The problem is that investors quickly lose sight of reality and the enthusiasm for a sector becomes its own driver to more gains. Valuations are taken to the extreme and the market uses every excuse it can find to explain why fundamentals don’t matter. #-ad_banner-#Eventually, something happens to weigh on the exuberance and investors have to reevaluate the real value of the investment… sending… Read More

When market bubbles form, they usually start for a reason. The tech boom was fueled by revolutionary opportunities with the internet, and the housing bubble achieved liftoff from historically low interest rates and relaxed loan standards. The problem is that investors quickly lose sight of reality and the enthusiasm for a sector becomes its own driver to more gains. Valuations are taken to the extreme and the market uses every excuse it can find to explain why fundamentals don’t matter. #-ad_banner-#Eventually, something happens to weigh on the exuberance and investors have to reevaluate the real value of the investment… sending share prices tumbling back to fundamentals and historic averages. One such bubble has been forming since stocks started to recover in 2009 and may be about to burst. In fact, this bubble has reached a point only seen twice in the last century… and both times turned out to be buying opportunities. Safety Stocks May Not Be So Safe Investors normally rush to low volatility and defensive stocks during market crashes, taking cover from uncertainty in other themes. The 30-year trend in lower interest rates, combined with historic monetary easing after the financial crisis, has brought a shift in… Read More

      There was the time in the jungle of Colombia where I turned around from examining a rock outcrop only to find a squadron of men in camouflage emerged from the trees, pointing machine guns at my team. There were two possibilities. They could have been army soldiers on regular patrol, checking to see what we were doing in this out-of-the-way area, in which case, things would be fine. But in this particular spot it was equally possible these were rebel troops of the FARC or ELN guerrilla movements — both of… Read More

      There was the time in the jungle of Colombia where I turned around from examining a rock outcrop only to find a squadron of men in camouflage emerged from the trees, pointing machine guns at my team. There were two possibilities. They could have been army soldiers on regular patrol, checking to see what we were doing in this out-of-the-way area, in which case, things would be fine. But in this particular spot it was equally possible these were rebel troops of the FARC or ELN guerrilla movements — both of which are known for kidnapping and holding prisoners in the jungles for months, years, or even decades. As they waved for us to come forward, we had a tense moment of decision — go peacefully into what might be a trap or make a run for it up the hillside? The terrain was against us, so we chose to approach. Hearts in our mouths, we neared the group of men — who then identified themselves as army. It was one of the greatest rushes of relief I’ve ever felt. They gave us a lecture… Read More

Every now and then, someone comes along who changes the way we see the world and how we live in it. Some of these people give us hope when we need it most, others offer guidance through difficult times, and some create new technologies that affect our daily lives. From the great mathematician Euclid to visionary philosopher Socrates and even the modern technologist Steve Jobs, our world is molded by these people’s ability to influence, inspire and steer the masses for good.  We often don’t see their genius until after they’ve passed on. Fortunately, there’s a modern, living… Read More

Every now and then, someone comes along who changes the way we see the world and how we live in it. Some of these people give us hope when we need it most, others offer guidance through difficult times, and some create new technologies that affect our daily lives. From the great mathematician Euclid to visionary philosopher Socrates and even the modern technologist Steve Jobs, our world is molded by these people’s ability to influence, inspire and steer the masses for good.  We often don’t see their genius until after they’ve passed on. Fortunately, there’s a modern, living maestro whose name is synonymous with success around the world. He’s already been dubbed the “Oracle of Omaha” for his skill at interpreting the economy and social trends to inform his investing choices. His talents have made him the third-wealthiest man in America, and his words soothe even the most fragile investor’s mind. #-ad_banner-# Warren Buffett may be 85 years old, but he is sharp as a tack and has built a $360 billion empire around his company, Berkshire Hathaway (NYSE: BRK-B). This… Read More