The year 2004 was one of the most exciting times of my life. The future looked bright. That was the year I beat out hundreds of candidates to enter an exclusive bond-trading program for a multi-billion-dollar brokerage firm. #-ad_banner-#I was going to dig deeper than ever into the market. I was going to be around market junkies all day. And most importantly, I was going to become a trading hotshot and make a few million bucks before I turned 30. Three years later, two of those things had come true, and… Read More

The year 2004 was one of the most exciting times of my life. The future looked bright. That was the year I beat out hundreds of candidates to enter an exclusive bond-trading program for a multi-billion-dollar brokerage firm. #-ad_banner-#I was going to dig deeper than ever into the market. I was going to be around market junkies all day. And most importantly, I was going to become a trading hotshot and make a few million bucks before I turned 30. Three years later, two of those things had come true, and one had not… After spending years fully entrenched in the markets and learning from the sharpest minds in the business, I learned a valuable lesson: trading is no quick path to riches. The cumulative effect of making a few hundred trades a day for years left me emotionally and financially spent. I found myself at a crossroads. I had loved the market ever since joining the stock market club in sixth grade. I wasn’t ready to walk away from it completely, but it was clear that my relationship with the market needed to evolve. Read More

#-ad_banner-#Most value investing articles share one clear theme: Any company firing on all cylinders won’t trade for single -digit price-to-earnings ratios. Low valuations are typically applied to companies that have a deep set of problems.   Whether it is a company-specific, industry-specific or economy-specific problem, a key impediment is in the way. The challenge is identifying great companies that are experiencing near-term difficulties, but have a defined path to improve financial results. Patient investors who can achieve that are often rewarded with capital gains and dividend raises. Chevron Corp. (NYSE: CVX) is a perfect example of… Read More

#-ad_banner-#Most value investing articles share one clear theme: Any company firing on all cylinders won’t trade for single -digit price-to-earnings ratios. Low valuations are typically applied to companies that have a deep set of problems.   Whether it is a company-specific, industry-specific or economy-specific problem, a key impediment is in the way. The challenge is identifying great companies that are experiencing near-term difficulties, but have a defined path to improve financial results. Patient investors who can achieve that are often rewarded with capital gains and dividend raises. Chevron Corp. (NYSE: CVX) is a perfect example of a great company facing industry specific problems. In the first quarter of 2014, the average price of a barrel of oil Chevron sold was more than $98 per barrel, but in Q1 of 2015, the average price of a barrel of oil was down to just over $48. Chevron is extremely sensitive to the price of oil. The company estimated that from quarter to quarter, operating cash flow can rise or fall between $325 million-to-$350 million for every dollar change in the price of crude oil. Naturally, Chevron saw its share price fall alongside the price of oil. Read More

“I think this company is going to make a killing…” My brother, an acute businessman and owner of a construction firm, recently told me he was thinking of putting a few grand into a small, relatively unknown company. It trades over-the-counter and sells workout powders, like whey protein. #-ad_banner-#His comment wasn’t a comment at all, though. It was a veiled question: should I proceed with the investment? He was looking for validation. I was familiar with the company and its products. My brother and I even knew one of the founders. Read More

“I think this company is going to make a killing…” My brother, an acute businessman and owner of a construction firm, recently told me he was thinking of putting a few grand into a small, relatively unknown company. It trades over-the-counter and sells workout powders, like whey protein. #-ad_banner-#His comment wasn’t a comment at all, though. It was a veiled question: should I proceed with the investment? He was looking for validation. I was familiar with the company and its products. My brother and I even knew one of the founders. But it didn’t take me long to prove that this was a bad investment. I asked my brother, “Would you go into business with this guy on a housing project?” “Absolutely not,” he said, almost immediately. “The guy was sued by the Food and Drug Administration in his previous endeavor, and he isn’t someone that I would want to partner with… ever.” It’s a funny thing. My brother understands real estate, construction — business, in general. But throw him a ticker symbol, and his judgment is clouded. Instantly,… Read More

If you fancy yourself a momentum investor, you’re likely intimately familiar with the concept of relative strength (RS) — arguably one of the most important technical investing tools and one that has withstood the test of time.  At its core, relative strength investing involves buying the best-performing stocks relative to the market and holding them until their momentum changes course. In 1967, Robert Levy published the first scholarly paper on the subject, which was called “Relative Strength as a Criterion for Investment Selection.” The groundbreaking work showed stocks that had outperformed over the past six months… Read More

If you fancy yourself a momentum investor, you’re likely intimately familiar with the concept of relative strength (RS) — arguably one of the most important technical investing tools and one that has withstood the test of time.  At its core, relative strength investing involves buying the best-performing stocks relative to the market and holding them until their momentum changes course. In 1967, Robert Levy published the first scholarly paper on the subject, which was called “Relative Strength as a Criterion for Investment Selection.” The groundbreaking work showed stocks that had outperformed over the past six months tended to do well in the following six months, while stocks that underperformed also tended to continue to do so. Put another way, he showed that strong price trends tend to persist. #-ad_banner-# Even before that, though, the legendary Jesse Livermore — one of the world’s greatest traders from the early 20th century — was following the same concept to make money. According to the classic investment book “Reminiscences of a Stock Operator,” which is based on his life, Livermore believed, “Prices are never too high to begin buying or too low to begin selling.” My own trading system, the… Read More

#-ad_banner-#Just because you ignore something doesn’t mean it will go away. At least that’s the view of the American Society of Civil Engineers. They’ve been repeatedly sounding the alarms regarding our nation’s rapidly-crumbling infrastructure, and their calls to action only grow louder. In their most recent quadrennial report card these engineers handed out a grade of D+, and estimate it would take $3.6 trillion to get our schools, roads, ports, highways and railroads up to snuff. Though Washington remains in denial about this huge problem, it will inevitably require hundreds of billions… Read More

#-ad_banner-#Just because you ignore something doesn’t mean it will go away. At least that’s the view of the American Society of Civil Engineers. They’ve been repeatedly sounding the alarms regarding our nation’s rapidly-crumbling infrastructure, and their calls to action only grow louder. In their most recent quadrennial report card these engineers handed out a grade of D+, and estimate it would take $3.6 trillion to get our schools, roads, ports, highways and railroads up to snuff. Though Washington remains in denial about this huge problem, it will inevitably require hundreds of billions of dollars just to keep our infrastructure report card from getting any worse. In 2012, I looked at the companies that are best-positioned for this challenge. A year later, I took a look at the best infrastructure-focused exchange-traded funds (ETFs) for investors to consider. Yet since my last look at this theme, a new investment reality has taken root. While the United States will eventually start investing in infrastructure, some countries aren’t deferring this badly-needed investment. They’re spending a lot of money on infrastructure right now. China has been an ongoing… Read More

Over the next few decades, the world’s population will be older on average than it’s ever been before. Brazil’s senior population is expected to grow to 30% of the total population in 2030 from just 10% in 2014. A quarter of Europe’s population will be above 65 by 2030, and Japan’s 65-plus population will climb to 38% in 2055. #-ad_banner-#In 15 years, China will have an estimated 340 million people over the age of 60. That’s nearly four times larger than the United States’ projected 92 million senior citizens. People all… Read More

Over the next few decades, the world’s population will be older on average than it’s ever been before. Brazil’s senior population is expected to grow to 30% of the total population in 2030 from just 10% in 2014. A quarter of Europe’s population will be above 65 by 2030, and Japan’s 65-plus population will climb to 38% in 2055. #-ad_banner-#In 15 years, China will have an estimated 340 million people over the age of 60. That’s nearly four times larger than the United States’ projected 92 million senior citizens. People all over the world are living longer than they did 50 years ago, and the growing global senior population is driving a steady wave of demand for drugs and medicine. Pharmaceutical industry research firm EvaluatePharma recently projected global pharma sales at $1.107 trillion in 2020, up from $750 billion in 2014. The best-selling drugs will treat chronic illnesses and diseases more prevalent in the elderly such as cancer, cardiovascular disease, dementia and Alzheimer’s. U.S. drug companies, like Pfizer (NYSE: PFE), will benefit from this trend, but I expect foreign-based companies to benefit… Read More

A week ago, I warned that an event was taking place that could spark the biggest correction since 2008. That day, the S&P 500 plunged 1.7% and the VIX shot up 22%. While traders panicked, I closed two trades for annualized returns of 1,205% and 2,111%. Since then, however, the market has rebounded strongly as investors’ fears about Greece and China were temporarily assuaged. So, do I think we’re out of the woods? Not even close. Now I know some of you may be thinking things are getting better. Stocks… Read More

A week ago, I warned that an event was taking place that could spark the biggest correction since 2008. That day, the S&P 500 plunged 1.7% and the VIX shot up 22%. While traders panicked, I closed two trades for annualized returns of 1,205% and 2,111%. Since then, however, the market has rebounded strongly as investors’ fears about Greece and China were temporarily assuaged. So, do I think we’re out of the woods? Not even close. Now I know some of you may be thinking things are getting better. Stocks are trading at all-time highs, the housing market seems to be recovering and unemployment is going down. Unfortunately, when you look closer at the numbers, you get a different story. When I made my July 8 prediction calling for the most significant pullback of this decade, I pointed to four major red flags. While this secular bull market may still have some good years ahead of it, numerous warning signs foretell a correction in the near term.  #-ad_banner-# Today, I want to discuss one of the red flags I’m seeing in detail. Margin… Read More

There is a growing fear among investors, both at home and abroad, that a long-overdue market correction is round the corner. The current bull market is approximately 76 months old, far longer than the historical average duration of 48 months. The Greek debt crisis has created uncertainty for the future of the European Union, at times causing ripples through the global markets. And over the last month, the Chinese markets have been reeling after nearly $4 trillion of value was lost. All the while, the U.S. Federal Reserve is still toying with the idea of raising interest rates sometime this… Read More

There is a growing fear among investors, both at home and abroad, that a long-overdue market correction is round the corner. The current bull market is approximately 76 months old, far longer than the historical average duration of 48 months. The Greek debt crisis has created uncertainty for the future of the European Union, at times causing ripples through the global markets. And over the last month, the Chinese markets have been reeling after nearly $4 trillion of value was lost. All the while, the U.S. Federal Reserve is still toying with the idea of raising interest rates sometime this year. The result: an uneasy feeling about the market’s near-term future. In uncertain times like today, investors should focus on high-quality stocks that have historically shown resilience no matter the market conditions. That being said, it is also time for investors to take a long-term view of their investments and keep in mind that a correction is a buying opportunity, not a time to panic. First, let’s examine how macro trends could affect the investment playing field and what this means for investment opportunities. Currency Tailwinds If and when the economy shows signs of sustained strength, the Fed will… Read More

I have to admit it: McDonald’s (NYSE: MCD) is not one of my favorite fast-food restaurants. As I age, I am increasingly concerned about the effect diet has my health, so I try to eat lots of fruits and vegetables and avoid foods high in salt and fat. True, you can find some relatively healthy options at McDonalds if you choose wisely. However, if you indulge regularly in high-fat, sodium-rich hamburgers and fries, it can lead to an increased risk for Type 2 diabetes and heart disease, among other things.  My beef with the chain goes beyond its food, though. Read More

I have to admit it: McDonald’s (NYSE: MCD) is not one of my favorite fast-food restaurants. As I age, I am increasingly concerned about the effect diet has my health, so I try to eat lots of fruits and vegetables and avoid foods high in salt and fat. True, you can find some relatively healthy options at McDonalds if you choose wisely. However, if you indulge regularly in high-fat, sodium-rich hamburgers and fries, it can lead to an increased risk for Type 2 diabetes and heart disease, among other things.  My beef with the chain goes beyond its food, though. The company also uses way too much packaging from my point of view — a sin it shares with many of its fast-food brethren. For anyone with a sensitive environmental conscience, what gets dumped into the trash can at the end of a McDonald’s meal causes added distress. My complaint with McDonald’s stock goes beyond my dislike for the restaurant. With the broader market reeling from the effects of the Greek debt crisis and the massive sell-off in Chinese stocks, I believe McDonald’s may be on the brink of a major correction. As a result, it is setting itself up… Read More