Wall Street can be a strange place. People often imagine “the Street” as a Mecca of stock analysis and investment decisions where the best and brightest economic minds pour over all available data — zeroing on any high-potential opportunities pitched their way. Most outsiders assume the money-making drive overwhelms all else — that these seasoned investors would never let trivial things like anger or jealousy stop them from jumping on a great stock and riding it to a huge gain. But, in fact, this happens all the time. Even the most brilliant and professional investors sometimes give great companies the… Read More

Wall Street can be a strange place. People often imagine “the Street” as a Mecca of stock analysis and investment decisions where the best and brightest economic minds pour over all available data — zeroing on any high-potential opportunities pitched their way. Most outsiders assume the money-making drive overwhelms all else — that these seasoned investors would never let trivial things like anger or jealousy stop them from jumping on a great stock and riding it to a huge gain. But, in fact, this happens all the time. Even the most brilliant and professional investors sometimes give great companies the cold shoulder for reasons that have nothing to do with corporate or economic fundamentals. #-ad_banner-#Let me tell you a story about how it happened to me. A few years ago I helped found a prospective gold project in South America. My partners and I identified an excellent mining development site — it eventually became one of the top 3% of projects in the world in terms of gold ounces held. After securing a purchase agreement on the project, we set to work structuring a corporation to develop it, hiring staff and getting drilling rigs on the property. Then we found… Read More

Thanks to the highly successful Marshall Plan, which helped many broken European economies get back on their feet after World War II, the U.S. managed to create a massive new market for its exports. Over the next generation, almost every major U.S. firm opened a string of sales offices on the Continent, and for some firms those offices went on to deliver a solid portion of annual sales. #-ad_banner-#But it’s been quite a while since Europe delivered real growth to U.S. firms. Instead, they’ve come to bank on Asia for sales expansion, especially in China and… Read More

Thanks to the highly successful Marshall Plan, which helped many broken European economies get back on their feet after World War II, the U.S. managed to create a massive new market for its exports. Over the next generation, almost every major U.S. firm opened a string of sales offices on the Continent, and for some firms those offices went on to deliver a solid portion of annual sales. #-ad_banner-#But it’s been quite a while since Europe delivered real growth to U.S. firms. Instead, they’ve come to bank on Asia for sales expansion, especially in China and Japan, which collectively account for more than $14 trillion in annual GDP. That’s as much as the seven next largest economies in the world — combined. (That is, except for the U.S., which generates more than $16 trillion in annual GDP.) These days, China and Japan are causing U.S. executives all kinds of headaches. Each country has a unique and growing set of problems. A few bad breaks could lead to serious headaches for regional sales offices. China Back in January, I noted that rising wages and a shaky banking sector were threatening to end China’s impressive string of… Read More

The luxury goods category is a great market to be in. The likes of Michael Kors (NYSE: KORS), Tiffany & Co. (NYSE: TIF) and Movado Group (NYSE: MOV) have shown what a great play it can be for investors. All three have outperformed the S&P 500 over the past two months. However, for many investors, the focus is on finding the next great luxury brand for their portfolios — ideally, a company that enjoys high brand recognition and fits into the “affordable luxury” category. This is especially true as the demand for luxury goods continues to be strong from emerging… Read More

The luxury goods category is a great market to be in. The likes of Michael Kors (NYSE: KORS), Tiffany & Co. (NYSE: TIF) and Movado Group (NYSE: MOV) have shown what a great play it can be for investors. All three have outperformed the S&P 500 over the past two months. However, for many investors, the focus is on finding the next great luxury brand for their portfolios — ideally, a company that enjoys high brand recognition and fits into the “affordable luxury” category. This is especially true as the demand for luxury goods continues to be strong from emerging markets like China. There’s one company that should be on every investor’s radar: Tumi Holdings (NYSE: TUMI), a maker of luxury travel bags. Shares have been rangebound over the past year and a half, but there could be a breakout above old highs within the next few months. #-ad_banner-#Sales Gains From New Products, Online Tumi just launched its Alpha 2 collection of luggage and travel accessories. To help promote the collection, the company is launching an interactive “digital concierge” marketing campaign to help its customers find the right Tumi product. Later this year, Tumi plans to debut… Read More

Prices for agriculture commodities such as corn, wheat and soy have been climbing sharply over the past several weeks. The chart of PowerShares DB Agriculture (NYSE: DBA) helps illustrate the magnitude of this price spike. #-ad_banner-#There are a number of factors conspiring to send agriculture prices higher. A continued drought in California after one of the warmest winters on record there sets the stage for a potential rise as it is becoming more difficult for farmers to irrigate crops. Meanwhile, geopolitical risk could be playing a factor as well, as Ukraine represents a meaningful portion of the world’s… Read More

Prices for agriculture commodities such as corn, wheat and soy have been climbing sharply over the past several weeks. The chart of PowerShares DB Agriculture (NYSE: DBA) helps illustrate the magnitude of this price spike. #-ad_banner-#There are a number of factors conspiring to send agriculture prices higher. A continued drought in California after one of the warmest winters on record there sets the stage for a potential rise as it is becoming more difficult for farmers to irrigate crops. Meanwhile, geopolitical risk could be playing a factor as well, as Ukraine represents a meaningful portion of the world’s wheat production. Higher agriculture prices have a tendency to juice fertilizer prices. While challenging weather conditions and increased risk remain, I expect global demand for fertilizer to be robust as farmers use it to boost yields. Shares of Potash Corp. of Saskatchewan (NYSE: POT) look particularly attractive, not only because of the rising demand for fertilizer, but also because of political events that could result in a much better pricing environment for potash fertilizer. Leading up to last July, there was an established cartel agreement between Russian Uralkali, the world’s largest potash producer, and Belaruskali, a producer in Belarus. A… Read More

Exactly 20 years ago, a trio of Hollywood moguls (Spielberg, Katzenberg and Geffen) realized that by combining their considerable resources and Rolodexes, they could create the world’s most powerful movie studio. This studio would in effect become the “new Disney,” thanks to a strong emphasis on computer-driven animation. #-ad_banner-#Two decades later, Dreamworks Animation SKG (NYSE: DWA) has failed to fulfill its promise. Ironically, an obscure Canadian entertainment company has stolen Dreamworks’ thunder with a savvy strategy that is now reaping huge rewards. Back in 2007, many thought Dreamworks was hitting its stride. After all, it takes more than a decade… Read More

Exactly 20 years ago, a trio of Hollywood moguls (Spielberg, Katzenberg and Geffen) realized that by combining their considerable resources and Rolodexes, they could create the world’s most powerful movie studio. This studio would in effect become the “new Disney,” thanks to a strong emphasis on computer-driven animation. #-ad_banner-#Two decades later, Dreamworks Animation SKG (NYSE: DWA) has failed to fulfill its promise. Ironically, an obscure Canadian entertainment company has stolen Dreamworks’ thunder with a savvy strategy that is now reaping huge rewards. Back in 2007, many thought Dreamworks was hitting its stride. After all, it takes more than a decade to build a new movie studio from the ground up. That year, sales had nearly doubled, to $767 million; earnings before interest, taxes, depreciation and amortization (EBITDA) reached nearly $300 million — and the future looked bright. Instead of spreading its cash flow among many projects to help lower the risk that any one project might turn out badly, Dreamworks stood by its plan to release five films every two years. There have been some notable blockbusters in that slate, including the Shrek franchise, but also a lot of duds. And the duds are becoming more frequent. The just-released “Mr. Read More

People love lists and rankings. Everything from school districts and neighborhoods to athletes and musicians get ranked on lists. Sometimes these lists are based on real accomplishments, like the medal rankings at the Olympics. Other lists are based on public sentiment and often have nothing to do with objective rankings. For example, consider Fortune magazine’s annual ranking of the world’s most admired companies, based on a survey of 3,950 respondents. Fortune’s Top 10 Most Admired Companies #-ad_banner-#It’s hardly a scientific way to discover the world’s best companies — but regardless of its flaws,… Read More

People love lists and rankings. Everything from school districts and neighborhoods to athletes and musicians get ranked on lists. Sometimes these lists are based on real accomplishments, like the medal rankings at the Olympics. Other lists are based on public sentiment and often have nothing to do with objective rankings. For example, consider Fortune magazine’s annual ranking of the world’s most admired companies, based on a survey of 3,950 respondents. Fortune’s Top 10 Most Admired Companies #-ad_banner-#It’s hardly a scientific way to discover the world’s best companies — but regardless of its flaws, the list is an excellent starting point for discover rewarding investment opportunities for the coming year. My favorite investment target from this year’s top 50 list is Microsoft (Nasdaq: MSFT). Coming in at #24 on Fortune’s list, the software giant is best known for its Windows operating system, which remains the most used operating system on Earth. However, competition from Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL) has shifted the investor spotlight away from Microsoft. This has created an opportunity for investment. Boasting a market cap of $327.8 billion, revenue of $83.4 billion with quarterly growth of 14.3% year over… Read More

Mark Twain understood the mind of an investor.  The world-renowned author once proclaimed: “A dollar picked up in the road is more satisfaction to us than the 99 which we had to work for, and the money won in the stock market snuggles into our hearts in the same way.”  Twain acknowledged the rush that can accompany earning money without any labor. He understood that the human brain is not wired for clear thinking in regard to money. That’s because the area of the brain that responds to financial reward is the same part that lights up from cocaine.  This… Read More

Mark Twain understood the mind of an investor.  The world-renowned author once proclaimed: “A dollar picked up in the road is more satisfaction to us than the 99 which we had to work for, and the money won in the stock market snuggles into our hearts in the same way.”  Twain acknowledged the rush that can accompany earning money without any labor. He understood that the human brain is not wired for clear thinking in regard to money. That’s because the area of the brain that responds to financial reward is the same part that lights up from cocaine.  This presents a major problem.  Investors become insatiable, searching high and low for the next “big winners.” What they’re really interested in is a get-rich-quick scheme.  That’s a terrific way to lose money — and quickly. #-ad_banner-# However, if you are a regular reader of my Game-Changing Stocks newsletter, then you know that I have been making the habit of finding stocks with the most “big winner” potential into a science for a while.  Take electric car maker Tesla (Nasdaq: TSLA) for example.  On Dec. 20, 2010, I first profiled and recommended the company to my readers. Since then, it has… Read More

Last summer, I wrote about an odd disconnect between rising oil prices and a strong U.S. dollar. Since then, that disconnect has dissipated. The dollar has appreciated about 6% to 7%, and inversely, the price of West Texas Intermediate crude (WTI) has fallen at about the same rate. Two of my recommendations, Valero (NYSE: VLO) and Phillips 66 (NYSE: PSX), have gone up an average of 32%. The third recommendation was integrated Brazilian oil producer Petroleo Brasilero (NYSE: PBR),aka Petrobras. Since then, the stock has fallen 26%. Do I still like it? More than ever. Another BRIC Faces… Read More

Last summer, I wrote about an odd disconnect between rising oil prices and a strong U.S. dollar. Since then, that disconnect has dissipated. The dollar has appreciated about 6% to 7%, and inversely, the price of West Texas Intermediate crude (WTI) has fallen at about the same rate. Two of my recommendations, Valero (NYSE: VLO) and Phillips 66 (NYSE: PSX), have gone up an average of 32%. The third recommendation was integrated Brazilian oil producer Petroleo Brasilero (NYSE: PBR),aka Petrobras. Since then, the stock has fallen 26%. Do I still like it? More than ever. Another BRIC Faces Adversity Not long ago, Brazil and its fellow BRIC nations were the world’s fastest-growing emerging-market economies. Now? Not so much. Each country has its own challenges. Brazil, in particular, is facing unemployment, a weak currency, inflation, and pockets of social unrest. The currency weakness is one factor affecting Petrobras’ stock price. Others include below-forecast oil production and low domestic fuel prices. But the low stock price doesn’t tell the whole story. Petrobras is one of the world’s largest oil and gas companies in all aspects of exploration, production, refining, transportation and marketing (thus the moniker “vertically integrated” oil company). Read More

The real estate investment trust (REIT) is one of more misunderstood asset classes. #-ad_banner-#There’s an undue amount of confusion with these companies — but they may be some of the simplest types of stocks out there. A REIT is a company that owns a portfolio of real estate properties that generate income from rentals and capital appreciation when the property is sold. A REIT must pass on 90% or more of its profits on to investors because of its unique tax structure, making them a staple in any dividend-oriented portfolio. Investors have shied away from anything remotely attached to mortgages… Read More

The real estate investment trust (REIT) is one of more misunderstood asset classes. #-ad_banner-#There’s an undue amount of confusion with these companies — but they may be some of the simplest types of stocks out there. A REIT is a company that owns a portfolio of real estate properties that generate income from rentals and capital appreciation when the property is sold. A REIT must pass on 90% or more of its profits on to investors because of its unique tax structure, making them a staple in any dividend-oriented portfolio. Investors have shied away from anything remotely attached to mortgages since the 2008 financial crisis. This can be clearly seen by looking at the Vanguard REIT Index ETF (NYSE: VNQ). In the past two years, this exchange-traded fund rose just 15% compared with the S&P 500’s climb of about 38%. Adding to the issue is the Federal Reserve’s taper of its quantitative easing program and expected rise in interest rates, which is adding more skepticism to the sector. REITs have been a “hated” sector for years, but the trend should start to reverse. Interest rates may be rising, but they are still at historic lows, and… Read More