“Talk to me when it’s timely.” That’s a response I often heard when pitching my best sell-side ideas to my firm’s hedge fund money manager clients. Most fund managers want to hear about a stock idea only when it is on the cusp of a big upward move. Lacking such imminent catalysts, a stock can languish for an extended period. Yet value-oriented fund managers take a completely different view. They love to find stocks that offer deep intrinsic value, and they are willing to be patient and wait for an unloved stock to morph into a loved one. #-ad_banner-#And right… Read More

“Talk to me when it’s timely.” That’s a response I often heard when pitching my best sell-side ideas to my firm’s hedge fund money manager clients. Most fund managers want to hear about a stock idea only when it is on the cusp of a big upward move. Lacking such imminent catalysts, a stock can languish for an extended period. Yet value-oriented fund managers take a completely different view. They love to find stocks that offer deep intrinsic value, and they are willing to be patient and wait for an unloved stock to morph into a loved one. #-ad_banner-#And right now, perhaps no other blue chip is so unloved — and holds such deep value — as General Motors (NYSE: GM). By a whole host of metrics, shares of this auto maker are a stunning bargain. And for investors that have a 1-2 year time horizon, robust gains can be had. Equally important: shares offer such deep value right now, that they are very likely to stand their ground if the market tumbles further. Recent Setbacks Have Hurt GM’s Share Price General Motors has recently been beset by a series of setbacks, some of them self-inflicted. For example, in… Read More

Investors are worried… rightfully so. The Federal Reserve meets this week to decide whether or not they should raise interest rates. No matter who you talk to, everyone has a guess as to what they will decide. But how that decision will actually affect stocks is less clear. Personally, I don’t believe any decision will send the U.S. markets into another 2008-2009 scenario. However, as the saying goes: “Plan for the worst. Hope for the best.” #-ad_banner-#By studying which companies fared the best during the Great Recession, we can get an idea of which ones are best equipped to carry… Read More

Investors are worried… rightfully so. The Federal Reserve meets this week to decide whether or not they should raise interest rates. No matter who you talk to, everyone has a guess as to what they will decide. But how that decision will actually affect stocks is less clear. Personally, I don’t believe any decision will send the U.S. markets into another 2008-2009 scenario. However, as the saying goes: “Plan for the worst. Hope for the best.” #-ad_banner-#By studying which companies fared the best during the Great Recession, we can get an idea of which ones are best equipped to carry us through any future turmoil. Specifically, I’m looking for the companies that maintained or even grew their dividends through the 2008 and 2009 downturn — one of the greatest indicators of a company’s fiscal health and management confidence. How To Avoid The Mt. Everest Of Dividend Cuts Companies rely on their shareholders for a number of reasons. But the most important reason why a company needs investors to own and hold its stock is so that it can go to the equity market (issue new shares) when it needs to raise capital. And the quickest way for a company… Read More

For the past few weeks, I’ve been telling my readers about an elite group of high-yielding stocks. I call them my “High-Yield Hall of Fame.” That’s because they are hands-down among the best performing, most reliable and most shareholder-friendly companies on the planet. And owning even a few of these stocks can help turn your income stream into a river of cash. Take a look for yourself, and you’ll see what I mean. These eight little-known income payers haven’t just outperformed the market over the past decade… they’ve absolutely annihilated it. Read More

For the past few weeks, I’ve been telling my readers about an elite group of high-yielding stocks. I call them my “High-Yield Hall of Fame.” That’s because they are hands-down among the best performing, most reliable and most shareholder-friendly companies on the planet. And owning even a few of these stocks can help turn your income stream into a river of cash. Take a look for yourself, and you’ll see what I mean. These eight little-known income payers haven’t just outperformed the market over the past decade… they’ve absolutely annihilated it.   Now with a track record like this, you’d think more investors would know about these elite stocks. Yet I’m willing to bet nine out of 10 investors haven’t heard about them. Why? Well, they aren’t the traditional “boring” dividend payers most people think of — after all, you can only get so far by following the herd with stocks like McDonald’s or Wal-Mart. But the “smart money” has known about these stocks for years. I’m talking about billionaire investors like Jim Simons, legendary investment firms like Vanguard and Goldman Sachs… Read More

This week, investors all over the world are waiting to hear if the Federal Reserve will vote to increase interest rates… The mere anticipation of rising rates has been unnerving investors over the past few months. Many investors are selling pre-emptively because the conventional wisdom says higher rates are bad for stocks. But there’s an exception to every rule. Indeed, several areas of the financial sector would love substantially higher interest rates, including the insurance industry. #-ad_banner-#That’s because insurers invest policy premiums mainly in bonds and other rate-sensitive fixed-income securities. They are able to profit from the spread between portfolio… Read More

This week, investors all over the world are waiting to hear if the Federal Reserve will vote to increase interest rates… The mere anticipation of rising rates has been unnerving investors over the past few months. Many investors are selling pre-emptively because the conventional wisdom says higher rates are bad for stocks. But there’s an exception to every rule. Indeed, several areas of the financial sector would love substantially higher interest rates, including the insurance industry. #-ad_banner-#That’s because insurers invest policy premiums mainly in bonds and other rate-sensitive fixed-income securities. They are able to profit from the spread between portfolio returns and insurance policy claims payments. The spread, or net interest margin, widens when interest rates climb and shrinks when rates decline. Before the financial crisis, insurers typically generated roughly 3% net interest margins, but thanks to more than six years of rate-squelching easy monetary policy, net interest margins have since plummeted to around 1%. The result: a progressively tighter squeeze on overall profit growth for insurers. However, with many insurers are now trading at low earnings multiples — often for less than book value. In general, cash flow is strong, dividends are rising and balance sheets are solid. So… Read More

For five years, investors wondered if China’s growth story was dead and its market would ever rise again. Then late last year, investors began rushing back in, sending the Shanghai Composite zooming higher. The index surged nearly non-stop until June of this year, when it looked like the… Read More

In 2014, Forbes ranked Sergey Brin as the 18th-richest person in the world. The Google co-founder is worth an estimated $29.7 billion. In 1979, Brin’s family left the Soviet Union because of religious persecution and immigrated to the United States. Soon, he would attend Stanford University, meet Larry Page, begin working on search engine algorithms… and the rest is history. Today, in the dawn of the 21st century, it’s worth asking: will the United States be the destination for the next Sergey Brin?  #-ad_banner-#This is important. Politically stable countries have a history of attracting the best talent and the most… Read More

In 2014, Forbes ranked Sergey Brin as the 18th-richest person in the world. The Google co-founder is worth an estimated $29.7 billion. In 1979, Brin’s family left the Soviet Union because of religious persecution and immigrated to the United States. Soon, he would attend Stanford University, meet Larry Page, begin working on search engine algorithms… and the rest is history. Today, in the dawn of the 21st century, it’s worth asking: will the United States be the destination for the next Sergey Brin?  #-ad_banner-#This is important. Politically stable countries have a history of attracting the best talent and the most capital. It’s the difference between countries that lead the pack — and those that are seemingly always struggling to keep up. And for investors, politically stable countries have a demonstrated history of beating the market. The Fund for Peace is a federally-funded research institution dedicated to assessing global political risk. In 2005, it began publishing “The Fragile State Index.” The index uses 12 social, political and economic factors to rank 178 countries based on political stability. According to its 2014 update, Austria, Australia, the United Kingdom, Canada and Ireland are just a few of the countries that rank ahead of… Read More

All major U.S. indices finished in positive territory last week, led by the tech-heavy Nasdaq 100, which gained 3.3%. This continued the market’s recent pattern of alternating positive and negative weekly closes while digesting the late-August collapse. This sideways “digestion” is likely to become the springboard for another leg lower within the market’s current decline — its first real correction in years — or the accumulation phase for its next intermediate-term advance. #-ad_banner-# Technology and health care led last week as all sectors of the S&P 500 posted gains except for utilities, which lost 0.7%.  This… Read More

All major U.S. indices finished in positive territory last week, led by the tech-heavy Nasdaq 100, which gained 3.3%. This continued the market’s recent pattern of alternating positive and negative weekly closes while digesting the late-August collapse. This sideways “digestion” is likely to become the springboard for another leg lower within the market’s current decline — its first real correction in years — or the accumulation phase for its next intermediate-term advance. #-ad_banner-# Technology and health care led last week as all sectors of the S&P 500 posted gains except for utilities, which lost 0.7%.  This continued utilities’ sharp turnaround. Between July 23 and Aug. 24, the sector outperformed the S&P 500 by roughly 13 percentage points. It then quickly gave back roughly half of those gains, in part triggered by the recent recovery in the yield of the 10-year Treasury note from a test of 2%.  Yet Another Sign Of An Emerging Market Bottom In last week’s Market Outlook, I pointed out the current extreme in negative investor sentiment. This is a contrary indicator and similar extremes have historically coincided with or led important market bottoms.  The chart below displays another contrarian sign… Read More

It’s one of the most important concepts in income investing — yet it doesn’t get addressed nearly enough. Today, I want to change that. Because once you understand the power of this concept, it may change the way you think about dividends forever.  Calculating a security’s current yield isn’t hard. You take its total annual dividend payments, divide that by its current price and multiply by 100. Simple enough, right? Let’s take a look at one of the long-time holdings in my premium newsletter, The Daily Paycheck, to see this in action. Magellan Midstream Partners (NYSE: MMP) is a master… Read More

It’s one of the most important concepts in income investing — yet it doesn’t get addressed nearly enough. Today, I want to change that. Because once you understand the power of this concept, it may change the way you think about dividends forever.  Calculating a security’s current yield isn’t hard. You take its total annual dividend payments, divide that by its current price and multiply by 100. Simple enough, right? Let’s take a look at one of the long-time holdings in my premium newsletter, The Daily Paycheck, to see this in action. Magellan Midstream Partners (NYSE: MMP) is a master limited partnership (MLP) that currently pays a quarterly dividend of $0.74 per unit. Today, gas prices are 42% cheaper on average than they were a year ago. That means Americans are on pace to spend $100 billion less at the pump in 2015. #-ad_banner-#Now let’s do the math… MMP’s Annual Dividend: 4 X $0.74 = $2.96 MMP’s Current Price: $69.68 MMP’s Current Yield: ($2.96/$69.68) = 4.2% Now, I picked MMP as an example for a reason. It perfectly illustrates the point I want to make in today’s essay. You see, some income investors turn their noses up at yields below… Read More

You don’t amass a net worth of $20 billion by accident. You do so by continually spotting investment opportunities where others fear to tread. And you also need the courage to rattle a few cages when necessary. That’s been the winning formula for Carl Icahn, who is still reaping major investment victories at the age of 79. To be sure, following in Icahn’s path is not easy. That’s because he tends to focus on investment opportunities that don’t hold much obvious appeal. For example, in recent quarters, Icahn’s firm has amassed a large stake in beleaguered energy driller Chesapeake Energy… Read More

You don’t amass a net worth of $20 billion by accident. You do so by continually spotting investment opportunities where others fear to tread. And you also need the courage to rattle a few cages when necessary. That’s been the winning formula for Carl Icahn, who is still reaping major investment victories at the age of 79. To be sure, following in Icahn’s path is not easy. That’s because he tends to focus on investment opportunities that don’t hold much obvious appeal. For example, in recent quarters, Icahn’s firm has amassed a large stake in beleaguered energy driller Chesapeake Energy (NYSE: CHK), even as most investors are shunning oil and gas stocks these days. And while most investors are avoiding commodity stocks in general these days as they note the deep distress in the industrial metals sector, Icahn recently disclosed an 88 million share stake in Freeport-McMoran (NYSE: FCX), which has seen its share price fall from the 52-week high of $35 to a recent $11. A Well-Timed Buy The timing of Icahn’s disclosure of an 8.5% stake in this struggling copper and oil producer was spot on. On August 27, the company threw in the towel on its… Read More

Our best investment ideas can sometimes come from paying attention to what some of the leading investors in the world are buying and selling. And when Warren Buffett himself is buying, it’s worth seeing if the stock has a place in your own portfolio. What stock has everyone’s favorite guru turned his attention to this time? Phillips 66 (NYSE: PSX). #-ad_banner-#This week, Berkshire Hathaway (NYSE: BRK-B) revealed that it now owns over 10% of Phillips 66. The company has been accumulating shares of PSX since the second quarter of this year. So is Buffett’s latest move a good buy for… Read More

Our best investment ideas can sometimes come from paying attention to what some of the leading investors in the world are buying and selling. And when Warren Buffett himself is buying, it’s worth seeing if the stock has a place in your own portfolio. What stock has everyone’s favorite guru turned his attention to this time? Phillips 66 (NYSE: PSX). #-ad_banner-#This week, Berkshire Hathaway (NYSE: BRK-B) revealed that it now owns over 10% of Phillips 66. The company has been accumulating shares of PSX since the second quarter of this year. So is Buffett’s latest move a good buy for the rest of us? Phillips 66 is a legacy of the old Conoco Phillips energy company. In 2012, the company split into two with one half becoming Conoco (NYSE: COP), the “upstream” company which conducts exploration and drilling of oil. Phillips 66 became the mid and downstream company. Phillips 66 doesn’t engage in exploration and production of oil and gas, but it transports and refines oil and gas and produces a variety of chemicals and lubricants. Since the beginning of the year, the stock price of Phillips 66 has completely disconnected with the rest of the energy sector and rallied… Read More