Is the economy slowing? Last Thursday the Institute for Supply Management (ISM) reported that its manufacturing index dropped unexpectedly; on Friday, employment growth was lower than expected. The strong dollar, which hurts exports, was partly to blame. But some economists think these negative reports are but two of many factors that point toward economic recession: slowing growth in China and other emerging markets, the specter of rising interest rates, dim prospects for corporate earnings this fall, evidence that corporate profit margins are falling, and even the rising power of anti-spending Republicans in the U.S. House of Representatives. #-ad_banner-#Granted, some of… Read More

Is the economy slowing? Last Thursday the Institute for Supply Management (ISM) reported that its manufacturing index dropped unexpectedly; on Friday, employment growth was lower than expected. The strong dollar, which hurts exports, was partly to blame. But some economists think these negative reports are but two of many factors that point toward economic recession: slowing growth in China and other emerging markets, the specter of rising interest rates, dim prospects for corporate earnings this fall, evidence that corporate profit margins are falling, and even the rising power of anti-spending Republicans in the U.S. House of Representatives. #-ad_banner-#Granted, some of these factors are unlikely to impact the market at the same time — notably, if the economy slows, the Fed may delay its long-planned interest-rate increases. But perception matters, and if more signals flash “slowdown” in the coming weeks and months, it will have an impact on investor decisions. As legendary investor Benjamin Graham said, in the short run the stock market is a voting machine. And it pays to be prepared if the votes seem to be tilting away from growth. One way to cope with the risk of economic slowdown — or the perception thereof — is to… Read More

The sharp correction in stocks over the past few months has investors searching for value. But as investors cope with various global economic risks and stagnant earnings growth, upside opportunities will likely be limited. So, with the major indices below their 200-day moving averages, a key bearish indicator, I’m searching for stocks that are bucking the technical trend. These stocks are the ones most likely to deliver bullish profits — sometimes in a very short amount of time, given the high volatility in the market right now. For instance, my Profit Amplifier readers recently closed a trade… Read More

The sharp correction in stocks over the past few months has investors searching for value. But as investors cope with various global economic risks and stagnant earnings growth, upside opportunities will likely be limited. So, with the major indices below their 200-day moving averages, a key bearish indicator, I’m searching for stocks that are bucking the technical trend. These stocks are the ones most likely to deliver bullish profits — sometimes in a very short amount of time, given the high volatility in the market right now. For instance, my Profit Amplifier readers recently closed a trade in international footwear and apparel giant Foot Locker (NYSE: FL) for a 27% return in just four days. That’s right; we opened the trade on a Tuesday and closed it on a Friday. That works out to a stunning 2,481% annualized gain. There were two keys to our success with this trade that I’d like to share so you can potentially replicate them in your portfolio. First, as I mentioned, Foot Locker was seriously bucking the bearish trend of the broader market. At the time of my trade recommendation, the stock was up nearly 30% year to date while the… Read More

In June, as the third quarter got underway, consensus profits for companies in the S&P 500 were expected to show a modest 1% year-over-year dip. Three months later, analysts now think profits will slide nearly 5%, from year-earlier levels.  Of the companies that have announced guidance, 76 expect negative EPS growth for the third quarter according to FactSet Research. That compares to only 32 companies that have issued positive guidance for the three-month period so far.  The pain continues to build in the energy and materials sectors, but many other sectors are seeing downward earnings revisions as well. Fear of… Read More

In June, as the third quarter got underway, consensus profits for companies in the S&P 500 were expected to show a modest 1% year-over-year dip. Three months later, analysts now think profits will slide nearly 5%, from year-earlier levels.  Of the companies that have announced guidance, 76 expect negative EPS growth for the third quarter according to FactSet Research. That compares to only 32 companies that have issued positive guidance for the three-month period so far.  The pain continues to build in the energy and materials sectors, but many other sectors are seeing downward earnings revisions as well. Fear of higher interest rates and declining earnings growth led an 8.6% drop in the S&P 500 index, and a sharp spike in the VIX volatility index since mid-August. The trend is so bad that analysts are expecting earnings growth of just 0.6% in the fourth quarter. The revenue picture is equally challenging. Analysts think that third-quarter sales fell 3.3% against the same quarter last year. On a full-year basis, they are modeling for a 2.4% drop in sales. Unless revenue growth returns soon,  investors may start questioning whether corporate management teams can squeeze further earnings growth from continued cutbacks. The 12-month… Read More

“It’s a terrible time to invest.” “Stocks are way overextended.” “The global economy is slowing. The probability of making money is low.” It might sound like I’m talking about current market conditions. But this was actually what one of my trader buddies said to me in January 2011 when I told him I was launching a wealth management firm. He wasn’t alone.  It seemed like everyone thought my idea was foolish and it was a terrible time to lead a group of investors into stocks. That bearish sentiment was apparent in the American Association of Individual Investors (AAII) Sentiment Survey… Read More

“It’s a terrible time to invest.” “Stocks are way overextended.” “The global economy is slowing. The probability of making money is low.” It might sound like I’m talking about current market conditions. But this was actually what one of my trader buddies said to me in January 2011 when I told him I was launching a wealth management firm. He wasn’t alone.  It seemed like everyone thought my idea was foolish and it was a terrible time to lead a group of investors into stocks. That bearish sentiment was apparent in the American Association of Individual Investors (AAII) Sentiment Survey at the time. In early 2011, bearish sentiment spiked to 34%, which was above the long-term average of 30%.  But they were all wrong. Since then, the S&P 500 has proceeded to deliver one of the best returns in history, climbing more than 55% in less than five years.  Investors who were buying in the face of pessimism have scored huge gains, but investors who sat on the sidelines and hoarded cash missed out on a narrow window to buy low. That conversation with my buddy back in early 2011 reminds me of the current market environment. The headlines are… Read More

This stock is on the wrong end of a fading trend. In 2010, customers couldn’t buy enough of this company’s then-chic watches, jewelry, belts and sunglasses. Today, sales are declining worldwide.  Fossil Group (Nasdaq: FOSL) — a name that wasn’t meant to be ironic but may prove to be. In the rapidly changing world of fashion, the worst thing a brand can be is antiquated. This isn’t just a subjective interpretation of fashion trends either; the numbers and the stock chart all support the argument that Fossil is in trouble. All Signs Point Down For Fossil Let’s… Read More

This stock is on the wrong end of a fading trend. In 2010, customers couldn’t buy enough of this company’s then-chic watches, jewelry, belts and sunglasses. Today, sales are declining worldwide.  Fossil Group (Nasdaq: FOSL) — a name that wasn’t meant to be ironic but may prove to be. In the rapidly changing world of fashion, the worst thing a brand can be is antiquated. This isn’t just a subjective interpretation of fashion trends either; the numbers and the stock chart all support the argument that Fossil is in trouble. All Signs Point Down For Fossil Let’s start with a few fundamental reasons to be concerned over Fossil’s business. #-ad_banner-# Fossil’s most recent quarterly results were weighed down by negative currency exchange rates. In mid-August, Fossil reported second-quarter revenue dropped 4% year over year to $740 million — below analyst estimates for revenue of $750 million.  Things don’t look to be getting better. Nearly half of Fossil’s revenues come from Europe and Asia. Economic slowdowns there, coupled with a rising U.S. dollar, could reduce the amount it earns. Anticipating this, management lowered its full-year earnings per share (EPS) guidance to $4.80 to $5.60, down from… Read More

Most major U.S. indices closed higher last week, reversing the previous week’s negative close as choppy price activity continues. However, the market is hardly out of the woods just yet. The market-leading Russell 2000 closed lower last week while most major indices are still negative for the year. Read More

Today I want to tell you about an investing strategy that defies logic. It shouldn’t work based on everything we’ve learned about the stock market. Yet it does. In fact, for more than half a century, investors and traders have used this strategy to produce unparalleled results. And no, for those of you who may be wondering, this strategy doesn’t involve options, derivatives or any other obscure financial product. What’s more, what I’m about to show you can be used as part of any general investing strategy — regardless of whether you’re focusing on income, growth, blue chips, small caps… Read More

Today I want to tell you about an investing strategy that defies logic. It shouldn’t work based on everything we’ve learned about the stock market. Yet it does. In fact, for more than half a century, investors and traders have used this strategy to produce unparalleled results. And no, for those of you who may be wondering, this strategy doesn’t involve options, derivatives or any other obscure financial product. What’s more, what I’m about to show you can be used as part of any general investing strategy — regardless of whether you’re focusing on income, growth, blue chips, small caps or even commodities. Specifically, I’m talking about relative-strength investing. Relative strength investing is simply a type of momentum investing. It involves buying the best-performing stocks (relative to the market) and holding them until their momentum changes course. To most investors, especially those considered value investors, this strategy probably sounds ridiculous. After all, most people have heard the phrase “buy low, sell high.” Since relative strength investors buy stocks that are already outperforming today, many view this style of investing as counterintuitive. But that’s a mistake… and it’s one many people make whenever they approach a stock pick. That’s because most… Read More

Are you aware of the Elsa and Anna phenomenon? The executives at Mattel, Inc. (Nasdaq: MAT) are. They’ve watched their once-popular Barbie doll lose appeal as young girls switch allegiances to the new dolls based on the popular children’s movie, “Frozen.” Barbie’s steady demise was one of the factors behind the January 2015 resignation of CEO Bryan Stockton. He took the reins of the company in November 2011, and though shares initially rose in the first few years of his tenure, they subsequently went into freefall.  After such a sharp drop, shares of Mattel are inarguably cheap. They… Read More

Are you aware of the Elsa and Anna phenomenon? The executives at Mattel, Inc. (Nasdaq: MAT) are. They’ve watched their once-popular Barbie doll lose appeal as young girls switch allegiances to the new dolls based on the popular children’s movie, “Frozen.” Barbie’s steady demise was one of the factors behind the January 2015 resignation of CEO Bryan Stockton. He took the reins of the company in November 2011, and though shares initially rose in the first few years of his tenure, they subsequently went into freefall.  After such a sharp drop, shares of Mattel are inarguably cheap. They sport a 7.6% dividend yield (more on that later), and trade for just 1.2 times trailing sales, compared to a 2.1 multiple for rival Hasbro (Nasdaq: HAS). Hasbro now has a greater market value than Mattel for the first time in more than 20 years.  Low valuations don’t make a stock inherently appealing, unless they are accompanied by a good turnaround plan. And that is just what new CEO Chris Sinclair has offered up to investors. Since becoming CEO of the company earlier this year (losing the “interim” tag in April), Sinclair has taken a close look at every aspect… Read More

Smoking and drinking are clearly bad for your health. Yet, the companies that make those products, known as “sin stocks,” have proven they can overcome any economic downturn, restrictive legislation and even mainstream criticism. So what’s that tell you about human nature? We like what’s bad for us. Take the huge tobacco tax hike that went into effect in 2009. The federal per-pack tax on cigarettes went from 39 cents to $1.01. And that’s just federal. In states like New York, additional excise taxes means that it now costs smokers around $11 for a pack of cigarettes. #-ad_banner-#​That’s… Read More

Smoking and drinking are clearly bad for your health. Yet, the companies that make those products, known as “sin stocks,” have proven they can overcome any economic downturn, restrictive legislation and even mainstream criticism. So what’s that tell you about human nature? We like what’s bad for us. Take the huge tobacco tax hike that went into effect in 2009. The federal per-pack tax on cigarettes went from 39 cents to $1.01. And that’s just federal. In states like New York, additional excise taxes means that it now costs smokers around $11 for a pack of cigarettes. #-ad_banner-#​That’s not even touching on the fact that you can’t smoke anywhere anymore. Most states have made it hard to smoke in public places. In many, you can’t even light up in a bar. Yet, people still smoke. That’s not to say tobacco companies aren’t hurting. In 2014, nine billion fewer cigarettes were sold in the United States than the prior year. Still, that’s only a 3.3% reduction in volume. And smokeless tobacco, including dip, actually increased in total volume. Of course, the United States is only a small portion of global smoking consumption. Today, approximately 1.3 billion people around the… Read More

The truth will make you sick. Technically it’s public knowledge, but I can tell you — it’s Congress’ dirty little secret. Congress is rich. Unbelievably rich. And until just recently, insider trading laws didn’t apply to Congress. I don’t know which is worse: The fact that insider trading was legal for some of our nation’s wealthiest politicians… or that Congress refused to do anything about it for decades. That was, the legislation languished until 60 Minutes — one of the most-respected investigative journalism programs on television — dedicated a segment to the issue. Among their findings: Nancy Pelosi (D-CA) and… Read More

The truth will make you sick. Technically it’s public knowledge, but I can tell you — it’s Congress’ dirty little secret. Congress is rich. Unbelievably rich. And until just recently, insider trading laws didn’t apply to Congress. I don’t know which is worse: The fact that insider trading was legal for some of our nation’s wealthiest politicians… or that Congress refused to do anything about it for decades. That was, the legislation languished until 60 Minutes — one of the most-respected investigative journalism programs on television — dedicated a segment to the issue. Among their findings: Nancy Pelosi (D-CA) and her husband have participated in multiple exclusive IPOs — including that of Visa. According to one report, Pelosi purchased 5,000 shares of Visa at the IPO price of $44. Just a couple of days later, when the stock was trading to the investing public, it traded at $64 per share.  John Boehner (R-OH) bought shares of healthcare companies days before the “public option” was pulled from the recent Obamacare legislation. The removal of the public option proved to be a boon for private health insurers, making a significant sum for the Congressman’s investments. The report from 60 Minutes led to… Read More