The stock market has been gyrating wildly in recent months, and the wild ride may be far from over. That’s great news for Chicago-based CBOE Holdings Inc. (Nasdaq: CBOE). This securities exchange operator is uniquely positioned to benefit from volatile markets. Shares of CBOE are getting lift from a key technical index: the VIX, which measures market volatility. As the chart below shows, shares have been moving higher in recent weeks, despite a pullback in the broader market. That’s solely due to volatility levels that have not been seen since the financial crisis. As the VIX appears poised to remain… Read More

The stock market has been gyrating wildly in recent months, and the wild ride may be far from over. That’s great news for Chicago-based CBOE Holdings Inc. (Nasdaq: CBOE). This securities exchange operator is uniquely positioned to benefit from volatile markets. Shares of CBOE are getting lift from a key technical index: the VIX, which measures market volatility. As the chart below shows, shares have been moving higher in recent weeks, despite a pullback in the broader market. That’s solely due to volatility levels that have not been seen since the financial crisis. As the VIX appears poised to remain at elevated levels, CBOE’s investors are looking at an attractive profit opportunity. The Case For Large Near-Term Gains As the owner of the well-known Chicago Board Options Exchange, CBOE provides the world’s largest market for options contracts on stocks, indexes and exchange-traded products. It directly owns the VIX, as well as the associated options and futures. Key proprietary products also include the highly popular S&P 500 option, the most actively traded index option in the United States. As volatility rises, demand for options soars because more investors use them to hedge losses, or speculate on specific indexes… Read More

In last week’s article issue, I detailed the first part of my two-part income strategy (if you missed that issue you can read it here). In simple terms, my strategy helps you collect extra payments from some of the best stocks on the market — in addition to dividends and capital gains. What’s more, the payments start arriving within a day or two of buying the stock… and are often much bigger than a dividend payment. My strategy, which involves selling covered calls, is one of the most basic options strategies around, making it easy for anyone to do. However, there… Read More

In last week’s article issue, I detailed the first part of my two-part income strategy (if you missed that issue you can read it here). In simple terms, my strategy helps you collect extra payments from some of the best stocks on the market — in addition to dividends and capital gains. What’s more, the payments start arriving within a day or two of buying the stock… and are often much bigger than a dividend payment. My strategy, which involves selling covered calls, is one of the most basic options strategies around, making it easy for anyone to do. However, there are certain times when this strategy works better than others. Likewise, there are certain stocks that are better to use this strategy with. That’s why I’ve developed a series of indicators that tell me when it’s time to pull the trigger on a particular company. For example, one of my special indicators lets me know if a stock is undervalued. I call it my “magic” number. It is much more useful for determining whether a stock is undervalued than popular valuation metrics like the price-to-earnings (P/E) ratio and price-to-sales (P/S) ratio. When the magic number is less than 1.0, it… Read More

It seems like nostalgia looking at Nokia (NYSE: NOK) with a favorable outlook. The company is currently known to domestic investors as an also-ran cell phone maker — I am one of the rare few who own a Nokia smartphone and happen to like it very much — even though it operates in network infrastructure and navigation software as well.  But there is more to the story than a false perception by the investing public.  The company has cleared most of its hurdles in its quest to buy rival Alcatel-Lucent (NYSE: ALU), and according to some analysts, that would create… Read More

It seems like nostalgia looking at Nokia (NYSE: NOK) with a favorable outlook. The company is currently known to domestic investors as an also-ran cell phone maker — I am one of the rare few who own a Nokia smartphone and happen to like it very much — even though it operates in network infrastructure and navigation software as well.  But there is more to the story than a false perception by the investing public.  The company has cleared most of its hurdles in its quest to buy rival Alcatel-Lucent (NYSE: ALU), and according to some analysts, that would create quite a competitive company overseas. From a technical perspective, NOK appears to be setting up for an upside move. While the long-term picture is still damaged, there is something intriguing in the short term that could provide a quick profit for traders.  Specifically, the stock has carved out a bullish flag pattern just below a short-term trendline. Said another way, NOK seems to be resting before making its breakout attempt. Any fears and problems brought to light by the merger announcement have had several months to work themselves out, and that shows up on the chart.  #-ad_banner-#… Read More

The stock market’s recent swoon has created buying opportunities in several sectors, including one sector all income investors should be watching: utility stocks. Because they are sensitive to movements in short-term interest rates, utility stocks have been subject to a double whammy: not only the correction in the overall U.S. market, but also the hardening consensus that the Federal Reserve Board will raise short-term rates in the coming months.  #-ad_banner-#Rising interest rates are Kryptonite to utility stocks because as regulated businesses, they tend to reward shareholders with above-average dividend yields — funded by reliable cash flow from customers — rather… Read More

The stock market’s recent swoon has created buying opportunities in several sectors, including one sector all income investors should be watching: utility stocks. Because they are sensitive to movements in short-term interest rates, utility stocks have been subject to a double whammy: not only the correction in the overall U.S. market, but also the hardening consensus that the Federal Reserve Board will raise short-term rates in the coming months.  #-ad_banner-#Rising interest rates are Kryptonite to utility stocks because as regulated businesses, they tend to reward shareholders with above-average dividend yields — funded by reliable cash flow from customers — rather than above-average capital gains. When interest rates rise, bonds and other fixed-income investments become more attractive relative to utility stocks. In addition, rising interest rates mean higher costs of capital for utilities, which need to make significant capital expenditures in their own infrastructure (e.g., new power plants). Fed Chair Janet Yellen has stated several times that interest rates are likely to rise this year — a stance she confirmed as recently as last week. Why, then, is this a good time to pick up shares of high-quality utilities? I see two reasons. Rate Fears Have Already Discounted These Stocks —… Read More

I’ll be honest… the key to earning a lasting (and growing) stream of income isn’t rocket science. I’d venture that you already know about this trick. But it’s my experience that while most investors know how to create lasting dividend income, few actually follow through to make it a reality.  There is a well-known way that you can stretch your investment — even if it starts as a single share — to where it can eventually more than provide for any needs you might have. Unfortunately, it’s my experience that not too many investors take advantage. The Secret to Lasting… Read More

I’ll be honest… the key to earning a lasting (and growing) stream of income isn’t rocket science. I’d venture that you already know about this trick. But it’s my experience that while most investors know how to create lasting dividend income, few actually follow through to make it a reality.  There is a well-known way that you can stretch your investment — even if it starts as a single share — to where it can eventually more than provide for any needs you might have. Unfortunately, it’s my experience that not too many investors take advantage. The Secret to Lasting Income So how can you make your investment — no matter how small initially — turn into something that you can actually afford to live on? Simple: Reinvest its dividends. I know. It’s not groundbreaking. But are you actually doing it? Unless you absolutely need the cash now, reinvesting is invaluable. Dividends are one of the most powerful wealth-building tools in an investor’s arsenal because of the phenomenon of compounding. By reinvesting your dividend checks (instead of cashing them), you can buy more shares, which lead to even larger dividend checks. These larger checks can then be used to… Read More

No matter if the day’s headlines are about the Federal Reserve, China, the Presidential debates — I don’t care what it is — chances are, 95% of the time it’s just market noise. It’s important for investors to spend the majority of their efforts looking for market opportunities. I’m not saying this “noise” should be completely ignored, but for most investors it means this should be filtered through a lens that’s focused simply on buying shares of fantastic companies at reasonable prices. #-ad_banner-#This has been on my mind recently during the volatility we’ve experienced during the past few weeks, and… Read More

No matter if the day’s headlines are about the Federal Reserve, China, the Presidential debates — I don’t care what it is — chances are, 95% of the time it’s just market noise. It’s important for investors to spend the majority of their efforts looking for market opportunities. I’m not saying this “noise” should be completely ignored, but for most investors it means this should be filtered through a lens that’s focused simply on buying shares of fantastic companies at reasonable prices. #-ad_banner-#This has been on my mind recently during the volatility we’ve experienced during the past few weeks, and it’s drawn my attention to a sector we don’t often talk about here at StreetAuthority.  On August 4, media entertainment giant Disney (NYSE: DIS) reported quarterly earnings. In its conference call, management said that cable subscriptions to its ESPN network would fall about 1% in 2016. For some reason, this seemed to shock investors, although this was not new news. The so-called “cord-cutting” movement — that is, consumers who choose to drop their cable services in favor of cheaper streaming alternatives like Netflix and Hulu — has been a known factor for some time. Nevertheless, shares of Disney took a dive,… Read More

Like many other Americans, I had my share of student loans, and was fortunate enough to consolidate them at a 2.75% rate back in 2003. So at first I didn’t understand why there was so much concern surrounding student loan debt today.  But after I saw the reality of today’s student loan debt — the building mountain of debt and the relatively high interest rates — I see the enormity of the problem.  #-ad_banner-#In fact, there are some fairly uncanny similarities between the student loan issue and the 2007/2008 housing bubble that sent our economy into the worst financial crisis… Read More

Like many other Americans, I had my share of student loans, and was fortunate enough to consolidate them at a 2.75% rate back in 2003. So at first I didn’t understand why there was so much concern surrounding student loan debt today.  But after I saw the reality of today’s student loan debt — the building mountain of debt and the relatively high interest rates — I see the enormity of the problem.  #-ad_banner-#In fact, there are some fairly uncanny similarities between the student loan issue and the 2007/2008 housing bubble that sent our economy into the worst financial crisis in recent memory.  Could student loans be the next crisis for the markets? Is there anywhere an investor could hide when it happens? The impact on the economy and investments may be profound. Let’s explore further.  Are Student Loans A Bubble? Student loan debt approached nearly $1.3 trillion in the second quarter this year, having grown at a compound annual rate of 11% since 2006. That total is double the amount of credit card loans held by commercial banks (see the chart, below). It costs an average of $26,828 for tuition at a four-year public university with the average… Read More

All major U.S. indices finished in the red last week, led by the market-leading Nasdaq 100 and Russell 2000, which more than relinquished their modest gains of a week earlier. Last week’s decline resulted in all major indices falling back into negative territory for 2015. All sectors of the S&P 500 closed lower last week with the exception of financials, consumer staples and utilities. The latter two are defensive and thus expected to outperform during a down week. #-ad_banner-# Interestingly, Asbury Research’s asset flow-based metric showed the biggest outflow of sector bet-related assets during the past… Read More

All major U.S. indices finished in the red last week, led by the market-leading Nasdaq 100 and Russell 2000, which more than relinquished their modest gains of a week earlier. Last week’s decline resulted in all major indices falling back into negative territory for 2015. All sectors of the S&P 500 closed lower last week with the exception of financials, consumer staples and utilities. The latter two are defensive and thus expected to outperform during a down week. #-ad_banner-# Interestingly, Asbury Research’s asset flow-based metric showed the biggest outflow of sector bet-related assets during the past one-week and one-month periods came from former 2015 highflier health care. While it is still among the strongest sectors of the S&P 500 year to date, it now looks vulnerable to more weakness during the fourth quarter.  Market Must Break Resistance to Confirm a Bottom In last week’s Market Outlook, I pointed out an important overhead resistance level at 641 in the market-leading PHLX Semiconductor (SOX) index. I said a sustained rise above it would be necessary to help confirm a broader market bottom was in place. The SOX closed last week 7.5% below this level at 593.  The… Read More