Boom or bust. Those are the contrasting views investors seem to hold for clean energy provider SolarCity (NASDAQ: SCTY). The company — and its business model — have been fodder for both bull and bears.  Right now, it looks like the bears are holding sway, as shares of this controversial stock have plunged 40% in the past year. Yet, I believe the bulls will have the last laugh.  SolarCity installs and leases rooftop solar panels on residential homes, which accounts for about three-quarters of sales, and commercial structures. The rapid plunge in solar panel costs, coupled with low… Read More

Boom or bust. Those are the contrasting views investors seem to hold for clean energy provider SolarCity (NASDAQ: SCTY). The company — and its business model — have been fodder for both bull and bears.  Right now, it looks like the bears are holding sway, as shares of this controversial stock have plunged 40% in the past year. Yet, I believe the bulls will have the last laugh.  SolarCity installs and leases rooftop solar panels on residential homes, which accounts for about three-quarters of sales, and commercial structures. The rapid plunge in solar panel costs, coupled with low interest rates, has enabled the company to provide electric power for lower rates than most utilities charge. Sales have increased from $32 million in 2010 to $255 million last year, and they are expected to exceed $750 million next year. That rapid growth has led to industry market share approaching 40%. #-ad_banner-#​SolarCity broke ground on a Gigawatt factory in Buffalo, N.Y., in September. It is expected to be fully operational in 12-24 months, and the company plans to spend $5 billion over the first 10 years of the lease. The factory will produce leading-edge solar panels with electricity conversion rates… Read More

It seems like ancient history, but consumers were in an awfully good mood a decade ago. Back then, price pressures were relatively contained and unemployment levels were fairly low. Taken together, these two measures of consumer health created a powerful tailwind for spending on a wide range of goods and services. #-ad_banner-#Of course, the good times couldn’t last. The Great Recession of 2008 led to massive increases in the unemployment rate and consumers are still feeling the lingering psychological effects to this day. For example, consumers are now wary of taking on debt. Total household debt (mortgages, credit… Read More

It seems like ancient history, but consumers were in an awfully good mood a decade ago. Back then, price pressures were relatively contained and unemployment levels were fairly low. Taken together, these two measures of consumer health created a powerful tailwind for spending on a wide range of goods and services. #-ad_banner-#Of course, the good times couldn’t last. The Great Recession of 2008 led to massive increases in the unemployment rate and consumers are still feeling the lingering psychological effects to this day. For example, consumers are now wary of taking on debt. Total household debt (mortgages, credit card balances, car loans, etc.) has fallen by nearly $20 billion over the past five years, according to the Federal Reserve. With consumer balance sheets now in better shape, consumers are likely to respond to remarkable turnabout in what is known as the “misery Index.” This index combines the national inflation rate and the national unemployment rate. It was often cited back in the 1970s, when the index was synonymous with “stagflation.” These days, we should call the misery index the “relief index,” because it hasn’t been this low since the good old days of 2007. Read More

  After nine months of fruitless negotiations, the International Longshore and Warehouse Union and the Pacific Maritime Association agreed to a tentative agreement to re-open 29 West Coast ports.   The deal, which came three days after the arrival of Labor Secretary Thomas Perez, must still be ratified by both sides. It will be a huge relief for importers, with nearly half of all U.S. maritime trade and 70% of Asian imports offloading at the ports.   Economists may also be breathing a sigh of relief. A prior 10-day shutdown in 2002 cost the economy $1 billion per day, or… Read More

  After nine months of fruitless negotiations, the International Longshore and Warehouse Union and the Pacific Maritime Association agreed to a tentative agreement to re-open 29 West Coast ports.   The deal, which came three days after the arrival of Labor Secretary Thomas Perez, must still be ratified by both sides. It will be a huge relief for importers, with nearly half of all U.S. maritime trade and 70% of Asian imports offloading at the ports.   Economists may also be breathing a sigh of relief. A prior 10-day shutdown in 2002 cost the economy $1 billion per day, or nearly 4% of the nation’s output over the period.   Yet it’s too soon to celebrate the news: Clearing out the backlog of shipments will take several months, which likely portends weak results for many firms in the first and second quarters.     Not Soon Enough Even when the ports have been cleared of delayed freight and operations return to normal, serious problems will remain. The increase in super-sized freighters has overwhelmed dock workers and bottlenecks for rail and truck transportation are becoming a persistent theme.   That issue played a direct role in the contract… Read More

Most people know the name Wayne Gretzky. #-ad_banner-#For years he was nearly universally regarded as the best hockey player in the world. Yet his astounding success had very little to do with superior athletic abilities. “A good hockey player skates to where the puck is,” Gretzky would say. “A great hockey player skates to where the puck is going.” Although investing doesn’t require the same physical prowess as hockey, this same principle is key to identifying stocks at the cusp of a big upward move. You see, the… Read More

Most people know the name Wayne Gretzky. #-ad_banner-#For years he was nearly universally regarded as the best hockey player in the world. Yet his astounding success had very little to do with superior athletic abilities. “A good hockey player skates to where the puck is,” Gretzky would say. “A great hockey player skates to where the puck is going.” Although investing doesn’t require the same physical prowess as hockey, this same principle is key to identifying stocks at the cusp of a big upward move. You see, the key lies in spotting big picture themes that are likely to unfold, and then understanding the likely winners or losers based on these long-established relationships in the global market. Let’s be clear: I’m not talking about localized events that could be gone tomorrow, but big-picture developments that could take months or years to play out. For example, when the world began recognizing the potential of fracking and horizontal drilling to optimize the extraction of natural resources from shale rock formations, it was obvious that well-positioned oil and gas producers would benefit. But, those who… Read More

But I’ve been very successful in this low-interest-rate environment. I’ve closed 85 straight winning trades in my Income Trader newsletter since its inception in February 2013. And I’m not talking about single-digit gains either. The average trade has provided an annualized return of 53%. #-ad_banner-#Before I get into how I was able to do this, I want to look at the risks income investors face today. I’m sure most traders are aware that when the Fed eventually raises rates, fixed-income investments like bonds will drop in value. But I’m not sure many… Read More

But I’ve been very successful in this low-interest-rate environment. I’ve closed 85 straight winning trades in my Income Trader newsletter since its inception in February 2013. And I’m not talking about single-digit gains either. The average trade has provided an annualized return of 53%. #-ad_banner-#Before I get into how I was able to do this, I want to look at the risks income investors face today. I’m sure most traders are aware that when the Fed eventually raises rates, fixed-income investments like bonds will drop in value. But I’m not sure many understand how much money they will actually lose on their investments. Many analysts expect the Fed to begin raising short-term rates sometime this year. By next summer, the market is predicting they could reach 1%, according to the rate implied by Fed funds futures.  A 1% increase doesn’t sound like much, but this small move could result in very large losses. Investors earning 2.4% in long-term Treasuries could see 17.6% of their principal disappear by next summer. That’s more than seven years’ worth of interest payments at the current yield.  I believe some income investors are taking on more risk… Read More

  Acquisitions can be a sure-fire way to supercharge growth. But when a major buyout attempt falls through, prospects for rapid expansion may suddenly look slim.   #-ad_banner-#At first glance, that may characterize the outlook for discount merchandiser Dollar General Corp. (NYSE: DG).   On further inspection, this retailer has ample room for organic growth. DG hoped to acquire rival Family Dollar Stores, Inc. (NYSE: FDO), but was outbid by Dollar Tree, Inc. (NASDAQ: DLTR). With the competitive landscape now altered, Dollar General now has further incentive to accelerate its growth plans.   Dollar Tree will be a pretty even… Read More

  Acquisitions can be a sure-fire way to supercharge growth. But when a major buyout attempt falls through, prospects for rapid expansion may suddenly look slim.   #-ad_banner-#At first glance, that may characterize the outlook for discount merchandiser Dollar General Corp. (NYSE: DG).   On further inspection, this retailer has ample room for organic growth. DG hoped to acquire rival Family Dollar Stores, Inc. (NYSE: FDO), but was outbid by Dollar Tree, Inc. (NASDAQ: DLTR). With the competitive landscape now altered, Dollar General now has further incentive to accelerate its growth plans.   Dollar Tree will be a pretty even match for Dollar General once the Family Dollar acquisition closes next month. At that point, Dollar Tree will have as many as 12,700 locations and annual revenue of about $18 billion, compared with a pro forma 11,700 stores and $18.5 billion in sales for Dollar General. This includes the roughly 300-to-500 stores Dollar Tree will have to divest to appease antitrust regulators.   But even without Family Dollar in the fold, Dollar General could eventually boost its store count by 14,000, more than doubling its current footprint. This expansion goal is feasible because smaller stores (the kind Dollar General typically… Read More

The nation’s leading hedge fund managers tend to target mid-to-large-sized companies. An investment in small caps often requires too much trading finesse, and too little returns, to be worthwhile. Yet it’s always intriguing to spot that rare moment when big game hunters go after small targets. #-ad_banner-#Oftentimes, these smaller companies offer the kind of compelling combination of growth and value that even the top fund managers can’t ignore. Here’s a look at three small companies that the nation’s top guru investors have bought into. Chicago Bridge & Iron Co. NV (NYSE: CBI) This infrastructure builder sported a mid-cap valuation… Read More

The nation’s leading hedge fund managers tend to target mid-to-large-sized companies. An investment in small caps often requires too much trading finesse, and too little returns, to be worthwhile. Yet it’s always intriguing to spot that rare moment when big game hunters go after small targets. #-ad_banner-#Oftentimes, these smaller companies offer the kind of compelling combination of growth and value that even the top fund managers can’t ignore. Here’s a look at three small companies that the nation’s top guru investors have bought into. Chicago Bridge & Iron Co. NV (NYSE: CBI) This infrastructure builder sported a mid-cap valuation roughly a year ago, exceeding $10 billion. A subsequent sell-off, which has cut the market value by more than half, threatens to send CBI into the small-cap camp. The dramatic plunge in shares has caught the eye of activist investor David Einhorn. The fund manager’s firm, Greenlight Capital, bought $150 million of CBI stock in the fourth quarter of 2014, though a 15% drop from his $49.25 buy-in price means that stake is now worth a bit less. Notably, seven other gurus also established new positions in CBI during the most recent quarter, as tracked by gurufocus.com. Warren Buffett’s Berkshire… Read More

I recently returned from a week of travels along the Caribbean coast of Colombia. #-ad_banner-#The sights were unbelievable… but the sounds were even more impeccable. You see, the region loves its music, particularly a type of music known locally as Vallenato (pronounced “ba-ji-an-ato”). From dawn until dusk you could hear the music being played from somewhere off in the distance. And though I enjoyed it all, as some of the locals informed me, the old singers are really the best because “they took the time to craft great songs.” You’ll probably… Read More

I recently returned from a week of travels along the Caribbean coast of Colombia. #-ad_banner-#The sights were unbelievable… but the sounds were even more impeccable. You see, the region loves its music, particularly a type of music known locally as Vallenato (pronounced “ba-ji-an-ato”). From dawn until dusk you could hear the music being played from somewhere off in the distance. And though I enjoyed it all, as some of the locals informed me, the old singers are really the best because “they took the time to craft great songs.” You’ll probably laugh when I tell you this, but this type of logic is exactly what has helped me succeed in the markets for years. It’s all about studying something so deeply that you really get to the bottom of what it’s all about. Because beating the market really just comes down to having discipline. Let me show you what I mean… Skimming the markets occasionally can help you find some decent investments. But if you really take the time to study and look carefully at all the options, there are some excellent opportunities that others… Read More