Wal-Mart (NYSE: WMT) shocked the investment community on Wednesday morning during its 22nd annual investor meeting. The company, not known for investor surprises, lit up online forums and made headlines by announcing that its bottom line could fall as much as 12% next year. Shares plummeted 10% by the end of the day, causing some to question whether the inevitable pressure from e-commerce competitor, Amazon (Nasdaq: AMZN), is finally getting to Wal-Mart. As for why the company expects to see a profit cut of 6-12% next year, its management blamed it on its spending programs.  Earlier this year, Wal-Mart raised… Read More

Wal-Mart (NYSE: WMT) shocked the investment community on Wednesday morning during its 22nd annual investor meeting. The company, not known for investor surprises, lit up online forums and made headlines by announcing that its bottom line could fall as much as 12% next year. Shares plummeted 10% by the end of the day, causing some to question whether the inevitable pressure from e-commerce competitor, Amazon (Nasdaq: AMZN), is finally getting to Wal-Mart. As for why the company expects to see a profit cut of 6-12% next year, its management blamed it on its spending programs.  Earlier this year, Wal-Mart raised its employees’ minimum wage to $9 per hour. Next year, that’ll go up to $10 per hour. Along with this wage increase, the company is also putting hundreds of millions of dollars into its ecommerce business.  These are not truly new ideas. Investors have already known that Wal-Mart was raising wages and spending more on ecommerce. Yet apparently, they didn’t think it would have these consequences. This fall has only added to Wal-Mart’s terrible year in the market.  Prior to this meeting, its stock was already down 22% on the year. Considering Wal-Mart was one of the only stocks to… Read More

Shares of utility companies have been hit hard this year thanks to worries of an interest rate hike and the drop in energy prices, a key component in what utilities can charge. Companies in the formerly hot renewable energy space have been hit even harder in recent months. There is fear that cheap fossil fuels will hurt sales of alternative fuels while the high cost of developing these assets will eat into cash flows. One of the leading utility and renewable energy companies recently announced a plan to return a massive amount of cash to shareholders and dramatically reshape the… Read More

Shares of utility companies have been hit hard this year thanks to worries of an interest rate hike and the drop in energy prices, a key component in what utilities can charge. Companies in the formerly hot renewable energy space have been hit even harder in recent months. There is fear that cheap fossil fuels will hurt sales of alternative fuels while the high cost of developing these assets will eat into cash flows. One of the leading utility and renewable energy companies recently announced a plan to return a massive amount of cash to shareholders and dramatically reshape the company. Investors got spooked and dumped shares, but I’m buying in with a strategy to put even more cash in my pocket. A Cash Machine In A Protected Market NRG Energy (NYSE: NRG) is the largest independent power producer in the United States. It generates over 50 gigawatts of power primarily through oil, coal, gas and nuclear power, which it sells wholesale and to about 3 million residential customers across the country. The company also owns considerable capacity in renewable energy including solar, wind and thermal. Before I tell you more, I want to give you a little background on the… Read More

Many people have written America off. They think our best days are over.  Conventional wisdom says that American industry is “over the hill.” Many observers today believe that U.S. firms simply can’t compete with the likes of the emerging Chinese and Brazilian markets. It’s certainly true that on a basic scale, those economies are growing faster. America’s 1.9% GDP growth last year doesn’t come close to China’s 7.7%. And from ballooning government debt to prolonged conflict overseas to scandalous behavior on Wall Street, it’s easy to think that these talking heads might be on to something. But nothing could be… Read More

Many people have written America off. They think our best days are over.  Conventional wisdom says that American industry is “over the hill.” Many observers today believe that U.S. firms simply can’t compete with the likes of the emerging Chinese and Brazilian markets. It’s certainly true that on a basic scale, those economies are growing faster. America’s 1.9% GDP growth last year doesn’t come close to China’s 7.7%. And from ballooning government debt to prolonged conflict overseas to scandalous behavior on Wall Street, it’s easy to think that these talking heads might be on to something. But nothing could be further from the truth.  Sure, America has its problems. There’s no denying that. But if you look a little deeper, you’ll find that there’s one area — perhaps the most important area — where America still firmly leads the globe. I’m talking about innovation. You see, a mounting pile of evidence suggests we’re entering an industrial renaissance that will once again jumpstart the U.S. economy and bring the nation back to the industrial giant it once was.  The U.S. Still Dominates Innovation Perhaps the greatest testament to the rebirth of the American economy is how innovation emerges in so… Read More

In the wake of reports pointing toward a slowing economy, this past week brought troubling signs that the United States may be facing a period of slight deflation — that is, on average, prices of goods and services are declining rather than rising. While deflation is far from a sure thing, it’s important to understand the impact it would have on our economy, and how it could affect your investments. First, let’s look at the indicators. On Wednesday, the Labor Department said the Producer Price Index (PPI) fell 0.5% in September, a bigger drop than the expected 0.2% decline. The… Read More

In the wake of reports pointing toward a slowing economy, this past week brought troubling signs that the United States may be facing a period of slight deflation — that is, on average, prices of goods and services are declining rather than rising. While deflation is far from a sure thing, it’s important to understand the impact it would have on our economy, and how it could affect your investments. First, let’s look at the indicators. On Wednesday, the Labor Department said the Producer Price Index (PPI) fell 0.5% in September, a bigger drop than the expected 0.2% decline. The PPI measures wholesale prices that are part of businesses’ supply chains and have an indirect impact on consumer prices. Much of the reason for the PPI decline was energy prices. We’ve seen a continuation of the bear market in oil and natural gas — leading gasoline prices to their lowest levels in nine years. Retail prices show signs of falling, too. As part of its disappointing sales and earnings guidance on Wednesday, Wal-Mart (NYSE: WMT) suggested it would cut prices during the holiday season to attract shoppers. Irish-based Primark, known for rock-bottom prices on apparel, has entered the U.S. market… Read More

Last week I sat down with StreetAuthority’s income expert Michael Vodicka to talk about his free “safe money” seminar and how he collects income from stocks no matter what is going on with the market.  We shared this interview in full in StreetAuthority Insider — an exclusive publication for members of one of our premium services. Judging from the phone calls and emails we’ve received, many of them were absolutely thrilled by Mike’s informative and thought-provoking discussion. For those of you who do not have “Insider” status as one of our premium subscribers, I’d like to do something a little… Read More

Last week I sat down with StreetAuthority’s income expert Michael Vodicka to talk about his free “safe money” seminar and how he collects income from stocks no matter what is going on with the market.  We shared this interview in full in StreetAuthority Insider — an exclusive publication for members of one of our premium services. Judging from the phone calls and emails we’ve received, many of them were absolutely thrilled by Mike’s informative and thought-provoking discussion. For those of you who do not have “Insider” status as one of our premium subscribers, I’d like to do something a little different and share an edited, excerpted version of the interview.  Insider: Before we get to the details of your strategy, let’s start off by first telling readers a little bit about you… Mike: Sure. I like to call myself a “reformed day trader.” By that I mean I started my career as a day trader at a multibillion-dollar trading firm.  I saw lots of day traders taking huge risks and making big gambles on market-moving news with their money. They would win big one day, only to lose it all the next. I learned a valuable lesson: trading is no quick… Read More

With the stock market’s rebound from its September lows fueled by some of its previously worst performers, it does not make sense to chase any sector to the downside. However, identifying badly beaten stocks that are about to crack could set you up for fast profits in the near future. Health care, the former market leader, has fallen on hard times since the summer. Unlike the broader market, it set a lower low in September. It then lagged as most sectors rallied in early October following a weaker-than-expected September jobs report that suggested the Federal Reserve would not raise interest… Read More

With the stock market’s rebound from its September lows fueled by some of its previously worst performers, it does not make sense to chase any sector to the downside. However, identifying badly beaten stocks that are about to crack could set you up for fast profits in the near future. Health care, the former market leader, has fallen on hard times since the summer. Unlike the broader market, it set a lower low in September. It then lagged as most sectors rallied in early October following a weaker-than-expected September jobs report that suggested the Federal Reserve would not raise interest rates this year. Within that sector, diagnostic, imaging and surgical supplies maker Hologic (Nasdaq: HOLX) is a prime example of a stock about to crack. When it does, shares could quickly plunge more than 15%. At first glance, the short-term chart seems disjointed, although support at roughly $37 is visible. Momentum indicators are unremarkable, but relative performance versus the broader market is weak, as would be expected in a stock that is still trading near its summertime lows. In contrast, the S&P 500 is about 7% above its lows. It is the long-term chart below that tells the… Read More

Today we look at the idea of harnessing the sun’s power to generate electricity. It seems like a no-brainer, but some of the best minds in the world have burnt through billions of dollars trying to get the technology right — without a smashing success that heralds the arrival of the solar age. The watchword for this technology is still “someday.” So solar has its share of skeptics.  That’s healthy. Investors should be perpetual skeptics, questioning everything, all the time, taking everything with a grain of salt and never investing in anything they don’t completely understand. I’m always amazed at… Read More

Today we look at the idea of harnessing the sun’s power to generate electricity. It seems like a no-brainer, but some of the best minds in the world have burnt through billions of dollars trying to get the technology right — without a smashing success that heralds the arrival of the solar age. The watchword for this technology is still “someday.” So solar has its share of skeptics.  That’s healthy. Investors should be perpetual skeptics, questioning everything, all the time, taking everything with a grain of salt and never investing in anything they don’t completely understand. I’m always amazed at people who tell me they’ve bought stock in Company X or Y and then admit to knowing nothing about what the company does. Solar skepticism is also logical, at least to a point. I will be the first to concede that by any number of measures, solar has failed to take off as a meaningful source of the world’s power portfolio. Its economics have sometimes proven difficult at best.  But today, solar power represents the fastest-growing portion of the energy industry, in the United States and around the world. So I’m wondering, is this a good time to make solar… Read More

Interest rates are at record lows across the globe. In the U.S., the S&P 500 offers a dividend yield of around 2%, barely enough to keep up with record low levels of inflation. Fixed-income securities are even worse. The iShares 10-20 Year Treasury Bond (NYSE: TLH) is yielding under 2%, close to an all-time low. CDs and savings accounts offer virtually no return. In this environment, investors are desperate for strategies that will help them generate consistent and reliable income. Most investors are content to stick with dividend-paying blue-chip stocks in defensive industries. This makes sense. Stocks like Verizon (NYSE:… Read More

Interest rates are at record lows across the globe. In the U.S., the S&P 500 offers a dividend yield of around 2%, barely enough to keep up with record low levels of inflation. Fixed-income securities are even worse. The iShares 10-20 Year Treasury Bond (NYSE: TLH) is yielding under 2%, close to an all-time low. CDs and savings accounts offer virtually no return. In this environment, investors are desperate for strategies that will help them generate consistent and reliable income. Most investors are content to stick with dividend-paying blue-chip stocks in defensive industries. This makes sense. Stocks like Verizon (NYSE: VZ) are not particularly sensitive to economic cycles. Even if the economy falls into a recession, very few people will cancel or change their mobile service. That’s why Verizon was just one of a few S&P 500 companies able to grow its dividend through the financial crisis in 2008 and 2009. Its current 5% yield ranks as one of the best dividends in the S&P 500 — well above the index’s average yield of 2%. I also consider Verizon to be one of the safest dividends in the S&P 500. But what if I told you there was a chance… Read More

The “King of Beers,” AB InBev (NYSE: BUD) has had some problems of late. To solve them, the $178 billion maker of Budweiser and Corona is doing what any large company does in that situation. It’s trying to buy a better company and steal their growth. #-ad_banner-#You may recall the enormous $52 billion merger between Anheuser-Busch and InBev back in 2008. Some investors — and beer drinkers — never truly forgave the maker of Bud for relocating overseas. Yet, I don’t think that’s what’s causing the company’s operating mess today. AB InBev suffers from the simple problem of too few… Read More

The “King of Beers,” AB InBev (NYSE: BUD) has had some problems of late. To solve them, the $178 billion maker of Budweiser and Corona is doing what any large company does in that situation. It’s trying to buy a better company and steal their growth. #-ad_banner-#You may recall the enormous $52 billion merger between Anheuser-Busch and InBev back in 2008. Some investors — and beer drinkers — never truly forgave the maker of Bud for relocating overseas. Yet, I don’t think that’s what’s causing the company’s operating mess today. AB InBev suffers from the simple problem of too few drinkers. For the first time in 30 years, beer volume is set to decrease globally this year.  To make matters worse, the major beer makers like InBev have been forced to compete with an explosion of craft beer and smaller breweries like Dogfish Head and New Belgium.  The volume of craft beer sold in the United States has more than tripled over the last decade: Meanwhile, brands like Bud, Miller and Coors have been weak. Volume for these brands are falling at about 1.7% annually.      Still, the real problem for InBev and its ilk… Read More

Emotion is the bane of traders. It causes us to act rashly instead of rationally, and typically at times when it’s most costly.  It has been shown that investors are most bullish at or near tops and most bearish at or near capitulation bottoms. Just look at the mania right before the dot-com bubble burst or the despair during early 2009 following the credit crisis meltdown. In both instances, the trend was turning as emotions peaked. There’s only one way I know of to remove emotions from investing: following a rules-based system built on a measurable, repeatable process.  And the… Read More

Emotion is the bane of traders. It causes us to act rashly instead of rationally, and typically at times when it’s most costly.  It has been shown that investors are most bullish at or near tops and most bearish at or near capitulation bottoms. Just look at the mania right before the dot-com bubble burst or the despair during early 2009 following the credit crisis meltdown. In both instances, the trend was turning as emotions peaked. There’s only one way I know of to remove emotions from investing: following a rules-based system built on a measurable, repeatable process.  And the system I follow in my premium newsletter, Alpha Trader, has worked very well for me and my readers.  We’ve detailed numerous times how our proprietary indicator, the Alpha Score, goes about selecting stocks poised to make huge runs based on a relative strength (RS) score above 70 and a fundamental trigger. (For more on how the Alpha Score works, you can read this article.)  But today, I want to talk about how our rules-based system helps ensure success once we are in a position. At that point, there are two critical components: … Read More