As you may have noticed, the stock market has sent investors on quite a ride already this year. #-ad_banner-#The market lost nearly 7% in just a couple of weeks between mid-January and early February, sparking fears that a sharp correction was imminent. Those fears have turned out to be a bit premature, as the market has since nearly recouped those losses. Hype and perception often have a more powerful effect than reality on short-term stock price movement. It may seem counterintuitive, but that’s the typical pattern. Of course, many other factors can cause stock prices to drop. Macroeconomic fears affect… Read More

As you may have noticed, the stock market has sent investors on quite a ride already this year. #-ad_banner-#The market lost nearly 7% in just a couple of weeks between mid-January and early February, sparking fears that a sharp correction was imminent. Those fears have turned out to be a bit premature, as the market has since nearly recouped those losses. Hype and perception often have a more powerful effect than reality on short-term stock price movement. It may seem counterintuitive, but that’s the typical pattern. Of course, many other factors can cause stock prices to drop. Macroeconomic fears affect the broad market in a negative way, and individual stocks can get knocked down for dozens of reasons: missed earnings estimates, poor quarterly results, negative rumors, management shenanigans, even simple profit-taking. The good news is that savvy investors can profit from this inevitable negative stock market action in three primary ways. 1. Shorting Shares The most popular way to profit from a down market or stock is through shorting. This means you place a trade in anticipation of the price falling rather than appreciating. I know it sounds complicated, but it’s actually quite easy. The way it works is, your… Read More

We’ve come a long way from the era of conglomerates. Decades ago, management teams figured that if they can run one business well, they can run any business well. #-ad_banner-#As a result, they’d acquire a collection of unrelated businesses, convincing investors that exposure to a wide range of businesses would help smooth out the impacts of economic cycles. It was a silly notion, and as dubious investors began to apply a “conglomerate discount” to any companies that were too unwieldy to analyze, the long process of de-conglomerating began, These days, fewer conglomerates exist, but when one of them announces a… Read More

We’ve come a long way from the era of conglomerates. Decades ago, management teams figured that if they can run one business well, they can run any business well. #-ad_banner-#As a result, they’d acquire a collection of unrelated businesses, convincing investors that exposure to a wide range of businesses would help smooth out the impacts of economic cycles. It was a silly notion, and as dubious investors began to apply a “conglomerate discount” to any companies that were too unwieldy to analyze, the long process of de-conglomerating began, These days, fewer conglomerates exist, but when one of them announces a plan to sell or spin-off a large division, investors invariably cheer. Just this week, we saw the trend in action: News reports suggest that auto rental firm Hertz Global (NYSE: HTZ) will separate its equipment rental business, which is estimated to be worth around $4.5 billion. Shares rose more than 5% on the news. Frankly, investors have developed a Pavlovian response to spin-offs and asset sales, as they note the amazing returns such a move can generate. The Guggenheim Spin-Off ETF (NYSE: CSD) has risen a stunning 350% over the past five years while the S&P 500 has risen merely… Read More

Imagine buying AT&T (NYSE: T) for $25 a share, Cisco (Nasdaq: CSCO) at $16 or Microsoft (Nasdaq: MSFT) for $20. And imagine not only buying these or any stock at a much lower price — but actually being paid to do so. #-ad_banner-#Sound too good to be true? I know it seems like a dream, but sophisticated investors accomplish this on a regular basis. Here’s how… Limit Orders: You Set The Price The average investor accomplishes buying stocks lower than the current asking price by using a limit order. By specifying a chosen share price, your order isn’t filled… Read More

Imagine buying AT&T (NYSE: T) for $25 a share, Cisco (Nasdaq: CSCO) at $16 or Microsoft (Nasdaq: MSFT) for $20. And imagine not only buying these or any stock at a much lower price — but actually being paid to do so. #-ad_banner-#Sound too good to be true? I know it seems like a dream, but sophisticated investors accomplish this on a regular basis. Here’s how… Limit Orders: You Set The Price The average investor accomplishes buying stocks lower than the current asking price by using a limit order. By specifying a chosen share price, your order isn’t filled until the stock dips to your set price. If the stock never reaches your limit order price, then you get to keep your money. The downside is that it can take forever for the stock to dip to your price and you don’t get paid for waiting. Also, limit orders often cost slightly more commission than traditional market orders from most stock brokers. But this method actually pays you for the time you spend waiting for the price to dip. The best part? If the share price never hits your buying level, then you get to keep the money… Read More

It’s one of the most controversial stocks we cover…  And any time we mention it, you can be sure we’ll get a couple of angry emails from readers, questioning our morals or ethics.  While I understand the feelings behind those emails, to put it simply, our job at StreetAuthority is to give you the most timely and profitable investment advice available.  And we wouldn’t be doing our job if we neglected to tell you about it simply because of its “controversy.”  That’s why we’re always careful to point out that, while this stock may not be for everyone, there’s a… Read More

It’s one of the most controversial stocks we cover…  And any time we mention it, you can be sure we’ll get a couple of angry emails from readers, questioning our morals or ethics.  While I understand the feelings behind those emails, to put it simply, our job at StreetAuthority is to give you the most timely and profitable investment advice available.  And we wouldn’t be doing our job if we neglected to tell you about it simply because of its “controversy.”  That’s why we’re always careful to point out that, while this stock may not be for everyone, there’s a reason why we call it “the most shareholder-friendly company on Earth.”  It’s not hard to understand this when you look at the facts. In just six years, the company has raised its dividend 104% and bought back 438 million shares of stock. Its shares have also returned roughly 100% since 2008 — beating the market by nearly double. #-ad_banner-# The stock I’m referring to is Philip Morris International (NYSE: PM).  Now, before I go any further, let me state this again… I understand not everyone likes investing in cigarette manufacturers. And that’s fine.  But when you look at the ways… Read More

There’s an old investing maxim that you can never fool the same group of shareholders twice. Once burned, they simply ignore you. #-ad_banner-#The only way to beat that problem is to find an entirely new group of shareholders that may be unaware of your past history. More than two years ago, I cautioned that game seller Zynga (Nasdaq: ZNGA) looked to be a flash in the pan. Still, a few months after its IPO, hype and hope had pushed Zynga’s market value to above that of legendary toy maker Hasbro (NYSE: HAS). We knew that couldn’t last. Indeed, shares of Zynga,… Read More

There’s an old investing maxim that you can never fool the same group of shareholders twice. Once burned, they simply ignore you. #-ad_banner-#The only way to beat that problem is to find an entirely new group of shareholders that may be unaware of your past history. More than two years ago, I cautioned that game seller Zynga (Nasdaq: ZNGA) looked to be a flash in the pan. Still, a few months after its IPO, hype and hope had pushed Zynga’s market value to above that of legendary toy maker Hasbro (NYSE: HAS). We knew that couldn’t last. Indeed, shares of Zynga, which soared into the teens, eventually plunged below $3. The executives at Hasbro had nothing to worry about. Well, a new group of investors believe they have discovered a hot new growth stock. And they suggest Zynga is positioned to become a long-term presence in the online gaming world. History says otherwise. And this stock may soon start to move back toward its multi-year lows. Credit Where It’s Due To be sure, Zynga’s new CEO, Don Mattrick, has stabilized operations since he took the reins last summer. He’s radically cut costs, acknowledging that a game maker with… Read More

It would be great if investing was more science than art, but unfortunately the reverse is probably true. #-ad_banner-#In reality, stock price behavior often has more to do with to publicity, psychology, and hype than facts and figures. So sometimes investors are pretty much left to guess about what a stock, industry, or the market in general might do next. The guesswork is most nerve-racking when a stock or group of stocks is hyped so much their prices rapidly begin soaring to unexpected heights and seem like they’ll never stop rising. At that point, investors have a tough decision —… Read More

It would be great if investing was more science than art, but unfortunately the reverse is probably true. #-ad_banner-#In reality, stock price behavior often has more to do with to publicity, psychology, and hype than facts and figures. So sometimes investors are pretty much left to guess about what a stock, industry, or the market in general might do next. The guesswork is most nerve-racking when a stock or group of stocks is hyped so much their prices rapidly begin soaring to unexpected heights and seem like they’ll never stop rising. At that point, investors have a tough decision — sell and lock in their gains, or hold out for more profits. It’s a hard call to make. No investor wants to cash out only to find later they did so too soon and missed out some of the best growth their investment had to offer. But it’s the anticipation of this sort of remorse that keeps so many investors in the game too long, setting them up for massive losses when the hype fades and the market realizes the investment is ridiculously overpriced. I’m not just talking about the dot-com bust a decade and a half ago. Investors have… Read More

The Goodyear Tire & Rubber Co. (Nasdaq: GT) is one of the world’s leading tire companies. It is the #1 tire manufacturer in North America and Latin America, and operates 52 plants in 22 countries. It also has approximately 1,240 tire and auto service centers. #-ad_banner-#Shares have been in a steady uptrend for the past year, more than doubling in price. They now trade at six-year highs and well above their 50-day, 100-day and 200-day moving averages. The stock surged 11.5% on Feb. 13, after the company released strong quarterly results. Goodyear’s fourth-quarter profit was up 90% year over year… Read More

The Goodyear Tire & Rubber Co. (Nasdaq: GT) is one of the world’s leading tire companies. It is the #1 tire manufacturer in North America and Latin America, and operates 52 plants in 22 countries. It also has approximately 1,240 tire and auto service centers. #-ad_banner-#Shares have been in a steady uptrend for the past year, more than doubling in price. They now trade at six-year highs and well above their 50-day, 100-day and 200-day moving averages. The stock surged 11.5% on Feb. 13, after the company released strong quarterly results. Goodyear’s fourth-quarter profit was up 90% year over year to $0.74 a share (excluding special items), handily beating Wall Street’s estimate of $0.62 a share. Full-year 2013 earnings rose more than 200% to $2.28 per share, from $0.74 in 2012. The consensus estimate for this year’s earnings per share (EPS) is $2.96, and analysts expect $3.37 in 2015. GT is currently trading at about 8 times next year’s earnings, and analysts expect EPS to grow an average of 15.7% a year for the next five years. The price-to-earnings growth (PEG) ratio compares a stock’s price-to-earnings (P/E) ratio to its earnings growth rate, with a reading of 1 being considered… Read More

The recent price wars initiated by T-Mobile (NYSE: TMUS) are causing all kinds of headaches for the wireless service providers. These firms had enjoyed a stable and profitable pricing environment in recent years, but are now being forced to slash their own prices to keep customers from defecting. AT&T (NYSE: T) is among the casualties, as I recently noted, and its shares have lagged the S&P 500 by more than 30% over the past year. #-ad_banner-#This is not how things were supposed to turn out. AT&T and its peers spent tens of billions of dollars constructing national networks with an… Read More

The recent price wars initiated by T-Mobile (NYSE: TMUS) are causing all kinds of headaches for the wireless service providers. These firms had enjoyed a stable and profitable pricing environment in recent years, but are now being forced to slash their own prices to keep customers from defecting. AT&T (NYSE: T) is among the casualties, as I recently noted, and its shares have lagged the S&P 500 by more than 30% over the past year. #-ad_banner-#This is not how things were supposed to turn out. AT&T and its peers spent tens of billions of dollars constructing national networks with an eye toward charging monthly service fees that would always rise a bit every year. The nation’s cable companies have deployed a similar business model, making heavy investments in broadband access, and at the moment, are reaping a huge windfall as they charge $30 to $50 for various levels of Internet access. Yet like the wireless carriers, these cable/broadband firms may also soon get a rude wake-up call. And it’s coming from the skies. Over the past decade, satellite TV providers such as DirecTV (NYSE: DTV) had hoped to undercut their terrestrial rivals by offering broadband service from orbiting satellites. Though… Read More

All major U.S. stock indices closed lower for the week of March 10, basically giving back all of the previous week’s gains. The market was led lower last week by the blue-chip Dow industrials, which lost 2.4%, leaving the Nasdaq and Russell 2000 as the only two major indices that are still in positive territory for 2014, up 1.7% and 1.5%, respectively, year to date.#-ad_banner-# U.S. stocks were particularly weak on Thursday, with the S&P 500 suffering its worst day since early February on rising tensions between Ukraine and Russia and concerns about a slowdown in China. Regarding the latter,… Read More

All major U.S. stock indices closed lower for the week of March 10, basically giving back all of the previous week’s gains. The market was led lower last week by the blue-chip Dow industrials, which lost 2.4%, leaving the Nasdaq and Russell 2000 as the only two major indices that are still in positive territory for 2014, up 1.7% and 1.5%, respectively, year to date.#-ad_banner-# U.S. stocks were particularly weak on Thursday, with the S&P 500 suffering its worst day since early February on rising tensions between Ukraine and Russia and concerns about a slowdown in China. Regarding the latter, I am expecting at least an additional 2.2% decline in China’s Hang Seng Index to 21,000. Dow Theory Non-Confirmation Persists In last week’s Market Outlook, I said, “The deeper that we go into 2014 without a confirming new high in the Dow, the more problematic it can eventually become from a Dow Theory standpoint.” As you can see in our first chart, the new 2014 closing high in the Dow transports set on March 7 of 7,592 versus the Jan. 23 high of 7,570 still has not been corroborated by a new high in the Dow industrials — and… Read More

Recently, we told you a story about a select group of traders who have effectively “stolen” thousands of dollars from Wall Street. By performing these “heists,” as we call them, these traders have scored annual gains of 78.8%… 125.6%… and some are even earning returns (regularly, mind you) as high as 212.2%. The best part about these “heists” is that you can do them yourself. You don’t need a million-dollar brokerage account or access to a high-powered financial adviser. All you need is an open mind and the willingness to try a new investing strategy. For example, one of our… Read More

Recently, we told you a story about a select group of traders who have effectively “stolen” thousands of dollars from Wall Street. By performing these “heists,” as we call them, these traders have scored annual gains of 78.8%… 125.6%… and some are even earning returns (regularly, mind you) as high as 212.2%. The best part about these “heists” is that you can do them yourself. You don’t need a million-dollar brokerage account or access to a high-powered financial adviser. All you need is an open mind and the willingness to try a new investing strategy. For example, one of our subscribers, Texas hospital worker Duane S., told us how he used these “heists” to earn $2,000 from the market last month: “This was my first time, and it was easy!” Or how about the story of 1st Sgt. Rory D., who has been able to “steal” $10,000 through these “heists” since he started doing them a few years ago. As Rory said: “I had no problems learning [this strategy]. I have made over $10,000 so far.” But before I go any further, I want to clarify that when I say “steal,” I’m not implying these traders did anything wrong. The… Read More