The United States has a big problem. It may seem like a nice problem to have, but it’s a serious problem nonetheless. Our country simply has too much natural gas on its hands. #-ad_banner-#Thanks to the shale gas revolution, tapping into productive new seams has become quite easy for the hundreds of public and private gas producers around the country. But as I remind readers of my newsletter, Scarcity & Real Wealth, just as scarcity creates wealth, abundance creates the opposite effect. Many firms are curtailing their natural gas production plans because prices are just too low, mothballing previously active… Read More

The United States has a big problem. It may seem like a nice problem to have, but it’s a serious problem nonetheless. Our country simply has too much natural gas on its hands. #-ad_banner-#Thanks to the shale gas revolution, tapping into productive new seams has become quite easy for the hundreds of public and private gas producers around the country. But as I remind readers of my newsletter, Scarcity & Real Wealth, just as scarcity creates wealth, abundance creates the opposite effect. Many firms are curtailing their natural gas production plans because prices are just too low, mothballing previously active drilling platforms. Of course, the greatest panacea to flagging prices is higher demand. Industry players are now drawing up plans to utilize natural gas in new ways. In addition to its already-strong presence in the power generation industry, natural gas is also becoming a key player in our nation’s export picture, and can even be found in more trucks that have been retro-fitted to use natural gas a fuel. Yet there’s another potentially huge source of demand that is just now coming into focus. It’s called gas-to-liquids (GTL), and by some estimates could generate so much demand for natural gas… Read More

Across the main thoroughfares of the Shinjuku neighborhood of Tokyo, trendy consumers are embracing Apple’s (Nasdaq: AAPL) latest iPhone. Just about every other trendy neighborhood in Japan, for that matter, is doing the same.  #-ad_banner-#According to the Japan Daily Press, Apple now controls more than one-third of the Japanese smartphone market. Apple has taken market share away from rivals such as Sharp and Fujitsu, though the U.S. juggernaut is causing especially pronounced pain for its most famous Japanese rival — Sony (NYSE: SNE).  For a company that was once synonymous with consumer technology innovation, a fourth-place… Read More

Across the main thoroughfares of the Shinjuku neighborhood of Tokyo, trendy consumers are embracing Apple’s (Nasdaq: AAPL) latest iPhone. Just about every other trendy neighborhood in Japan, for that matter, is doing the same.  #-ad_banner-#According to the Japan Daily Press, Apple now controls more than one-third of the Japanese smartphone market. Apple has taken market share away from rivals such as Sharp and Fujitsu, though the U.S. juggernaut is causing especially pronounced pain for its most famous Japanese rival — Sony (NYSE: SNE).  For a company that was once synonymous with consumer technology innovation, a fourth-place standing on its home turf is quite sobering. Adding insult to injury, Sony’s once-vaunted VAIO laptops no longer hold much cachet either. Sony’s losing streak has been underway for quite some time. Sales have shrunk every year since fiscal 2008, with revenue falling more than $20 billion since then to a recent $66.5 billion. SNE has dropped by more than two-thirds since 2007. In that time, shares of Apple have soared more than 500%. Yet as is often the case in Japan, such a dismal performance has not been met with much complaint or action by shareholder activists. Read More

Among the broader bull market of 2013, one sector enjoyed a boom so substantial that it increased investors’ holdings by $2.2 trillion. And I’d bet that most readers are already participating in this explosive trend. #-ad_banner-#I’m talking about the housing market — but unbelievably, many financial pundits and self-proclaimed gurus are warning of the coming dangers in this market while overlooking the facts.  While it’s easy to have your investment decision swayed by a well-expressed opinion, the only way to drill down into financial reality is to tune out the noise and study the actual numbers. In this… Read More

Among the broader bull market of 2013, one sector enjoyed a boom so substantial that it increased investors’ holdings by $2.2 trillion. And I’d bet that most readers are already participating in this explosive trend. #-ad_banner-#I’m talking about the housing market — but unbelievably, many financial pundits and self-proclaimed gurus are warning of the coming dangers in this market while overlooking the facts.  While it’s easy to have your investment decision swayed by a well-expressed opinion, the only way to drill down into financial reality is to tune out the noise and study the actual numbers. In this case, the numbers tell a far more bullish story than the fearmongers and perma-bears would have you believe. According to a recent study by research firm CoreLogic, nearly 4 million U.S. homes shifted from negative equity to positive last year. The Federal Reserve has reported that homeowners’ net equity holdings surged by $2.2 trillion between the third quarter of last year and the same period in 2012.  This tremendous increase in equity provides consumers confidence, which boosts spending across the board and lifts the entire economy. Additionally, greater access to more capital means more investment, further fueling the economic rebound. Read More

The covered call strategy has some tremendous benefits. It allows us to boost the amount of income we receive from our investment portfolio, while also helping to protect our investments from losses if stocks trade moderately lower. #-ad_banner-#However, the strategy has one primary drawback. If the underlying stock that we own moves dramatically higher, our gains are capped. This is because our covered call strategy leaves us obligated to sell our stock to another investor at a specified price (the strike price) should the stock close above this price when the calls expire. Generally, I’m happy… Read More

The covered call strategy has some tremendous benefits. It allows us to boost the amount of income we receive from our investment portfolio, while also helping to protect our investments from losses if stocks trade moderately lower. #-ad_banner-#However, the strategy has one primary drawback. If the underlying stock that we own moves dramatically higher, our gains are capped. This is because our covered call strategy leaves us obligated to sell our stock to another investor at a specified price (the strike price) should the stock close above this price when the calls expire. Generally, I’m happy to take this trade-off. I would much rather have a high-probability opportunity to make a solid 25% to 35% per year on my investments than a low-probability chance to make a much larger gain. After all, I consider myself to be a stable, systematic investor rather than a long-shot gambler. However, there are times when the long-term opportunity for an investment is just too good to completely pass up by selling covered calls. But does this mean that we need to give up the income opportunity available to us as covered call traders? Not necessarily… Creating Income While Still ‘Letting… Read More

As young tech companies try to establish themselves in the marketplace, they aren’t just looking to book a sale with a new client. They want that client for life.  #-ad_banner-#That’s because recurring revenues from an established customer base can greatly aid a company’s cash flow, even when it experiences a tough few quarters.  Case in point: Citrix Systems (Nasdaq: CTXS), which has hit a flat spot in terms of new customer wins but remains a solid cash cow, thanks to its lucrative installed base of repeat business. And the stock price, in relation to that cash flow, has become too… Read More

As young tech companies try to establish themselves in the marketplace, they aren’t just looking to book a sale with a new client. They want that client for life.  #-ad_banner-#That’s because recurring revenues from an established customer base can greatly aid a company’s cash flow, even when it experiences a tough few quarters.  Case in point: Citrix Systems (Nasdaq: CTXS), which has hit a flat spot in terms of new customer wins but remains a solid cash cow, thanks to its lucrative installed base of repeat business. And the stock price, in relation to that cash flow, has become too appealing to pass up.  Behind-The-Scenes Support Unless you work in an IT department, you might not be familiar with Citrix. The company sells desktop management software to more than 300,000 global clients. If you’ve ever worked on a corporate desktop that has no local hard drive and instead gets all of its instructions from a central server, than you have probably used Citrix’s software (which has been licensed by Microsoft (Nasdaq: MSFT) and others for roughly two decades). These days, such remote servers form the backbone of cloud computing.  Citrix hit the $1 billion sales mark in 2006, $2… Read More

Many investors thought it was a suicidal decision. Yahoo (Nasdaq: YHOO) should be investing domestically and in itself rather than in a speculative and relatively unknown Chinese Internet company.  Or so went the conventional wisdom back in 2005. As many successful companies have done, Yahoo bucked the conventional wisdom with its purchase of 24% of Alibaba. Since then, Alibaba has grown to be considered Yahoo’s most valuable asset. For example, Yahoo’s massive uptrend in 2013 can be attributed to Alibaba’s incredible growth.   While the exact date of the Alibaba IPO remains… Read More

Many investors thought it was a suicidal decision. Yahoo (Nasdaq: YHOO) should be investing domestically and in itself rather than in a speculative and relatively unknown Chinese Internet company.  Or so went the conventional wisdom back in 2005. As many successful companies have done, Yahoo bucked the conventional wisdom with its purchase of 24% of Alibaba. Since then, Alibaba has grown to be considered Yahoo’s most valuable asset. For example, Yahoo’s massive uptrend in 2013 can be attributed to Alibaba’s incredible growth.   While the exact date of the Alibaba IPO remains uncertain, the company has vowed it will happen in 2014. With a soaring valuation of $153 billion, up from $120 billion in October, Alibaba is slated to be the largest initial public offering ever. Serving China’s 618 million Web users, the company had sales of $160 billion in 2012, crushing the $86 billion posted by e-commerce giant Amazon.com (Nasdaq: AMZN).     The IPO will likely make Alibaba’s investors — which, in addition to Yahoo, include SoftBank (OTC: SFTBY) with 37% and Chairman Jack Ma and the company’s other founders with 10% — quite wealthy. Unfortunately, it will be difficult… Read More

If you’re a regular reader of StreetAuthority, you know I love getting — and reinvesting — dividend paychecks. Simply put, my goal is to earn a paycheck every day of the month by owning a basket of solid income securities — and then grow the size of those paychecks by harnessing the power of compounding through dividend reinvestment. So far, the results have been very rewarding. From an initial $200,000 investment, I’m earning more than $16,000 in dividends a year (or more than $1,300 a month) using this strategy. And that doesn’t even include a penny from the healthy capital… Read More

If you’re a regular reader of StreetAuthority, you know I love getting — and reinvesting — dividend paychecks. Simply put, my goal is to earn a paycheck every day of the month by owning a basket of solid income securities — and then grow the size of those paychecks by harnessing the power of compounding through dividend reinvestment. So far, the results have been very rewarding. From an initial $200,000 investment, I’m earning more than $16,000 in dividends a year (or more than $1,300 a month) using this strategy. And that doesn’t even include a penny from the healthy capital gains I’ve made from most of my holdings. But as I said, you may have already heard this before. My goal today is to show you how to get the most out of your income investments using a simple yet effective three-part strategy. #-ad_banner-#I call it the Dividend Trifecta, and it’s the cornerstone of my advisory, The Daily Paycheck. The great thing about the Dividend Trifecta is that it’s fully customizable to your own needs. You can use it to multiply your wealth over time, preserve capital — even bring in a second income to fund your retirement. Here’s how… Read More

There are often two phases in the trajectory of a hot stock. The first phase is when growth prospects are pushing shares higher. The second phase comes when momentum investors take over and keep pushing shares higher still, even if the financial statements are flashing warning signs. That second phase can end quite badly when momentum investors head for the exits. That encapsulates the rapid rise and sudden plunge for 3D Systems (NYSE: DDD), which after a meteoric rise in recent years, has stumbled badly in 2014 and is now below its 100-day moving average. #-ad_banner-#​… Read More

There are often two phases in the trajectory of a hot stock. The first phase is when growth prospects are pushing shares higher. The second phase comes when momentum investors take over and keep pushing shares higher still, even if the financial statements are flashing warning signs. That second phase can end quite badly when momentum investors head for the exits. That encapsulates the rapid rise and sudden plunge for 3D Systems (NYSE: DDD), which after a meteoric rise in recent years, has stumbled badly in 2014 and is now below its 100-day moving average. #-ad_banner-#​After nearly reaching the $100 mark in early January, shares began to lose altitude in ensuing weeks and plunged sharply last week after the company reported disappointing fourth-quarter results.  Investors should not have been caught off-guard. As I noted back in September, the company’s repeated capital raises in prior years were frittered away on questionable acquisitions, and 3D Systems’ accounts receivables and cash-flow metrics were also flashing red.  Shares moved much higher after I raised those concerns — as momentum investors took hold of the stock — and now they are almost back down to levels seen back in… Read More

Because of the big losses they suffered during the recession, many investors remain wary of stocks — especially European ones.  #-ad_banner-#After all, Europe’s most recent debt crisis is probably fresher in people’s minds since it peaked more recently — in 2012, compared with 2008 and 2009 for the U.S. What’s more, European stocks have badly lagged the U.S. market for years. So why even consider them? Because they’re set to deliver attractive returns going forward. One major sign of this was the eurozone’s official emergence from recession last summer, when GDP estimates indicated Europe’s economy collectively expanded 0.2%… Read More

Because of the big losses they suffered during the recession, many investors remain wary of stocks — especially European ones.  #-ad_banner-#After all, Europe’s most recent debt crisis is probably fresher in people’s minds since it peaked more recently — in 2012, compared with 2008 and 2009 for the U.S. What’s more, European stocks have badly lagged the U.S. market for years. So why even consider them? Because they’re set to deliver attractive returns going forward. One major sign of this was the eurozone’s official emergence from recession last summer, when GDP estimates indicated Europe’s economy collectively expanded 0.2% in the second quarter of 2013. It has managed to maintain a similar pace of growth since then. There have been other signs of progress, too, like rising retail sales, rebounding factory orders, and falling bond yields in the weakest areas such as Italy and Spain. Importantly, the labor market appears to be stabilizing (though overall unemployment is still quite high near 12%). There’s also more optimism in one particularly well-informed group — business executives — as measured by the European Commission’s Economic Sentiment Indicator. As of Jan. 31, it stood at 100.9 — up more than 10% since last… Read More

When setting up a covered call trade, it is important to estimate ahead of time what that trade is likely to return. Not only will this allow you to evaluate the expected return on your current trade, but it will also give you a benchmark for comparing this trade with other opportunities that may be on your radar. I have set up a simple spreadsheet that allows me to input the necessary data to determine what a covered call setup will return if the position is called away at expiration. The sheet also tells… Read More

When setting up a covered call trade, it is important to estimate ahead of time what that trade is likely to return. Not only will this allow you to evaluate the expected return on your current trade, but it will also give you a benchmark for comparing this trade with other opportunities that may be on your radar. I have set up a simple spreadsheet that allows me to input the necessary data to determine what a covered call setup will return if the position is called away at expiration. The sheet also tells me the amount of risk that the covered call protects me against should the stock trade lower. Below is a screen shot of the spreadsheet, which can be easily replicated in Microsoft Excel. The blue cells represent numbers that are entered manually, and the white cells represent data calculated by the formulas. #-ad_banner-#The first three cells are fairly clear. For a covered call setup, we will enter the market price of the stock, the strike price of the call option that we are selling, and the premium (or price) of the option. So, for the example above, we… Read More