Many of you might remember Crocs (Nasdaq: CROX) as the growth stock darling that ran up several hundred percent before falling like a stone and nearly having its shares delisted. A bearish collapse like this can become seared in the mind of any trader, causing many to swear off the stock for good. To be sure, Crocs had some very serious problems that almost put the company out of business. Supply chain issues made it difficult for the company to keep shoes on retailers’ shelves, and… Read More

Many of you might remember Crocs (Nasdaq: CROX) as the growth stock darling that ran up several hundred percent before falling like a stone and nearly having its shares delisted. A bearish collapse like this can become seared in the mind of any trader, causing many to swear off the stock for good. To be sure, Crocs had some very serious problems that almost put the company out of business. Supply chain issues made it difficult for the company to keep shoes on retailers’ shelves, and this was during a period of high demand. Following its near extinction, shares rebounded from less than $1 in 2008 to a high above $32 in July 2011. Since that time, however, CROX has once again been pressured, falling more than 50%. #-ad_banner-#The stock has been largely challenged by management’s inability to build on its brand. Over the past year, operating margins have been cut by a third as management focused on expanding the company’s global footprint. Revenue growth has also been disappointing, with the most recent quarterly report showing a year-over-year sales decline of 2.4%. So why,… Read More

It’s a favorite investment among America’s wealthy. It also has nothing to do with stocks or bonds. Nor is it affected by the economy. #-ad_banner-#Once exclusively available to the richest Americans, this effective wealth-generating asset is now available to the rest of us. I’m not talking about hedge funds… accredited investment deals… or private offerings. But about another investment that has been known to shelter wealth more resiliently than any of these… a source of perpetual income that has supported the lavish lifestyles of wealthy Americans through good times and through bad. And it does this by growing faster than… Read More

It’s a favorite investment among America’s wealthy. It also has nothing to do with stocks or bonds. Nor is it affected by the economy. #-ad_banner-#Once exclusively available to the richest Americans, this effective wealth-generating asset is now available to the rest of us. I’m not talking about hedge funds… accredited investment deals… or private offerings. But about another investment that has been known to shelter wealth more resiliently than any of these… a source of perpetual income that has supported the lavish lifestyles of wealthy Americans through good times and through bad. And it does this by growing faster than the rise of inflation… an average 10% a year for the past 60 years. That’s enough to double your income every four years. That means every $1,000 invested in 2005 would have grown to $4,000 by 2013, and would possibly grow to $16,000 by 2021 if this investment continued compounding at its 60-year historical average growth rate. Projected Growth Using This Wealth-Generating Asset If you’ve read my previous essays on this investment before, you know that thanks to a law hidden deep inside the Cigar Excise Tax Extension Act, signed more than 50 years ago… Read More

Someone needs to take the microphone away from Google (Nasdaq: GOOG).#-ad_banner-# The company has been courting the press with its autonomous (aka driverless) car of the future, even though such a vehicle may never find mainstream demand from consumers. You would think that only Google has an eye on the road ahead. Yet behind the scenes, a handful of other companies are developing leading-edge technologies that surely will be in your car in the years to come. And far-sighted investors still have a chance to build positions in these firms before these technologies hit showrooms. From Outside To Inside… Read More

Someone needs to take the microphone away from Google (Nasdaq: GOOG).#-ad_banner-# The company has been courting the press with its autonomous (aka driverless) car of the future, even though such a vehicle may never find mainstream demand from consumers. You would think that only Google has an eye on the road ahead. Yet behind the scenes, a handful of other companies are developing leading-edge technologies that surely will be in your car in the years to come. And far-sighted investors still have a chance to build positions in these firms before these technologies hit showrooms. From Outside To Inside In recent years, consumers have seen a series of profound enhancements in terms of vehicle control. Sensors and cameras can help a car stay in its lane, signal when an adjacent car is in a blind spot, maintain a fixed distance from cars ahead through adaptive cruise control, and even place a car perfectly in a parking space. Look for the number of fatalities on U.S. roads to drop as more cars adopt these technologies. Yet it’s the car’s interior that represents the next frontier of technology. And it all comes from a niche known as telematics, which is the… Read More

Joel Jackson dreams of becoming the next Henry Ford. The British expatriate has moved to Kenya to launch Africa’s first local automaker. #-ad_banner-#Sure, Mercedes-Benz and others have built European-engineered cars in South Africa for decades, but no one has ever designed, built and sold a 100% African car.  Jackson’s Mobius Two, an $11,500 SUV, is aimed squarely at Africa’s burgeoning middle class, which would like to own cars but often must pay up to 75% in excise taxes to import a foreign vehicle. You can understand why this fledgling entrepreneur is so excited as he raises money to get his… Read More

Joel Jackson dreams of becoming the next Henry Ford. The British expatriate has moved to Kenya to launch Africa’s first local automaker. #-ad_banner-#Sure, Mercedes-Benz and others have built European-engineered cars in South Africa for decades, but no one has ever designed, built and sold a 100% African car.  Jackson’s Mobius Two, an $11,500 SUV, is aimed squarely at Africa’s burgeoning middle class, which would like to own cars but often must pay up to 75% in excise taxes to import a foreign vehicle. You can understand why this fledgling entrepreneur is so excited as he raises money to get his business off the ground. As a recent article in The Economist noted, the International Monetary Fund “predicts that four of the world’s six fastest-growing economies in 2014 will be in sub-Saharan Africa. And for the first time in living memory, inflation will dip below the GDP growth rate.” Nigeria, which is expected to pass South Africa as the region’s largest economy this year, is expected to grow 7.4%, according to the IMF.  ‘Hopeless’ No Longer The Economist has made a major about-face when it comes to Africa. Back in 2000, its writers called Africa “hopeless,”… Read More

Chipotle Mexican Grill (NYSE: CMG), the famed operator of quick-service Mexican restaurants, soared to a new high on Friday after reporting fourth-quarter results.  #-ad_banner-#Earnings of $2.53 a share were up 30% year over year, matching analysts’ estimates. And the company handsomely beat on the top line, reporting a 21% year-over-year revenue increase to $844.1 million. During the conference call that followed the earnings announcement, the company discussed that an increase in prices on its menu is likely later in 2014, a direct results of higher costs for crucial inputs like beef and… Read More

Chipotle Mexican Grill (NYSE: CMG), the famed operator of quick-service Mexican restaurants, soared to a new high on Friday after reporting fourth-quarter results.  #-ad_banner-#Earnings of $2.53 a share were up 30% year over year, matching analysts’ estimates. And the company handsomely beat on the top line, reporting a 21% year-over-year revenue increase to $844.1 million. During the conference call that followed the earnings announcement, the company discussed that an increase in prices on its menu is likely later in 2014, a direct results of higher costs for crucial inputs like beef and avocados. This is something that investors have also heard from other restaurant companies in recent weeks, and thus likely came as less of a surprise. On the back of better-than-expected sales guidance for 2014, analysts were quick to boost their sales targets. Morgan Stanley, for example, raised its full-year same-store sales growth forecast from 5.8% to 6.9%. Currently, Chipotle has more than 1,500 restaurants worldwide and is planning on opening up to 195 new restaurants this year. Like many companies, Chipotle also spoke favorably to the idea of increasing its stock buyback program, which speaks to the company’s confidence in… Read More

The stock markets of 2013 and 2014 now share one thing in common: They’ve each had a 5% pullback. #-ad_banner-#It happened just once last year (in late May and June after investors sensed that the Federal Reserve would start to taper) and already has happened in 2014, just 35 days into the trading year. How unusual was the market action last year? It was only the fifth year in the past 50 with one or fewer pullbacks of 5%, according to Bespoke Investment Research. In other words, such pullbacks should be expected several times a year. As I noted last… Read More

The stock markets of 2013 and 2014 now share one thing in common: They’ve each had a 5% pullback. #-ad_banner-#It happened just once last year (in late May and June after investors sensed that the Federal Reserve would start to taper) and already has happened in 2014, just 35 days into the trading year. How unusual was the market action last year? It was only the fifth year in the past 50 with one or fewer pullbacks of 5%, according to Bespoke Investment Research. In other words, such pullbacks should be expected several times a year. As I noted last week, there aren’t especially good reasons for the current round of market weakness, so the damage may stay contained at current levels. (Unless margin selling kicks in, which is my biggest worry right now, as it induces a vicious cycle of further selling.) Still, the market pullback has created a chance to scour for fresh openings. And one of my favorite research moves is to identify stocks with heavy insider buying that have now fallen below levels where insiders bought in. These stocks of course can fall further (given that insiders are notoriously bad market timers), but the recent insider… Read More

The United States is in the middle of one of the greatest oil booms of all time. This is especially true in the states of North Dakota and Montana, home to the Bakken formation.#-ad_banner-#​ New drilling techniques are allowing companies to extract previously unreachable oil from this formation. The result is that the U.S. is on track to become the world’s largest oil producer by 2015, surpassing Russia and Saudi Arabia. Of course, producing more oil and importing less is a positive for the U.S. economy. One of the companies at the forefront of this… Read More

The United States is in the middle of one of the greatest oil booms of all time. This is especially true in the states of North Dakota and Montana, home to the Bakken formation.#-ad_banner-#​ New drilling techniques are allowing companies to extract previously unreachable oil from this formation. The result is that the U.S. is on track to become the world’s largest oil producer by 2015, surpassing Russia and Saudi Arabia. Of course, producing more oil and importing less is a positive for the U.S. economy. One of the companies at the forefront of this renaissance is Hess Corp. (NYSE: HES), the second-largest producer in the Bakken formation. With 640,000 acres in the Bakken, Hess produced more than 71,000 barrels of oil equivalent (BOE) a day from the region in the third quarter.  While those figures are impressive, they account for only 23% of Hess’ total third-quarter production of 310,000 BOE. In addition to the Bakken, Hess also has production operations in the Gulf of Mexico, the North Sea, Southeast Asia and Equatorial Guinea.  In the past year, Hess has been selling non-core assets. Last year, Hess sold $7.8 billion in non-core assets. Just last… Read More

I want to let you in on a secret… Wall Street doesn’t make most of its money from the stock market. While trading equities constitutes a large part of “big banking,” if you were to add the value of all the stocks in the world it would only come out to $36.6 trillion. Don’t get me wrong, that’s a big number. It’s also one reason brokerage commissions have been the bread and butter of Wall Street firms since the New York Stock Exchange was founded in 1817. But the truth is there’s a much bigger market out there. This market,… Read More

I want to let you in on a secret… Wall Street doesn’t make most of its money from the stock market. While trading equities constitutes a large part of “big banking,” if you were to add the value of all the stocks in the world it would only come out to $36.6 trillion. Don’t get me wrong, that’s a big number. It’s also one reason brokerage commissions have been the bread and butter of Wall Street firms since the New York Stock Exchange was founded in 1817. But the truth is there’s a much bigger market out there. This market, which is valued at over $790 trillion, has grown exponentially since the Securities and Exchange Commission deregulated it in the 1990s. #-ad_banner-#Unlike most stocks and bonds, which tend to be “boring” and relatively stable, the securities in this market allow investors to make bets on the outcome of certain asset prices. For instance, right now traders are betting $56,880 that the price of Apple (Nasdaq: AAPL) will be over $610 on March 22 — 21% above its recent price of $506. Investors in this market are also betting over $874,000 that Google (Nasdaq: GOOG) will be trading at $1,300 —… Read More

Even after a horrendous January and amid the bear market talk dominating the financial news, I remain bullish on the stock market. I will even so far as to say that one interest rate-sensitive sector that thrived in 2013 will continue its winning ways into next year.#-ad_banner-#​ There is no question that January was a difficult month for the stock market. A combination of the Federal Reserve starting to dial back on its massive bond-buying program, emerging-market fears and even the end of Ben Bernanke’s term as Fed chairman fueled investor anxiety. In addition, interest rates started a… Read More

Even after a horrendous January and amid the bear market talk dominating the financial news, I remain bullish on the stock market. I will even so far as to say that one interest rate-sensitive sector that thrived in 2013 will continue its winning ways into next year.#-ad_banner-#​ There is no question that January was a difficult month for the stock market. A combination of the Federal Reserve starting to dial back on its massive bond-buying program, emerging-market fears and even the end of Ben Bernanke’s term as Fed chairman fueled investor anxiety. In addition, interest rates started a slow climb higher, prompting an overreaction on the sell side.  Uncertainty is stocks’ #1 enemy. Seeing as some of the past month’s uncertainty has been realized, I think the overall downward price trend will soon stabilize, forcing stocks back into their long-term upward drift.  But rather than speculate about the future, let’s look at what actually occurred in the first month of 2014, with the Dow Jones Industrial Average as a guide.  After hitting an all-time high near 16,600 at the end of December, the Dow dropped to just under 15,700 by Jan. 31. Yet it’s crucial to remember the… Read More

Five years after the economy spiraled into recession, U.S. consumers are in a very different place.#-ad_banner-# Chastened by the hangover from their borrowing binges of 2006 and 2007, they’ve spent the subsequent years paying off bills, and building up equity in their homes. The Federal Reserve notes that consumers’ debt-to income ratio, which peaked at 122% five years ago, is now back below 100%. Yet even as consumers are now more capable of spending money, they still don’t want to. Wal-Mart (NYSE: WMT) is just the latest retailer to tell investors that sales trends are lousy. Read More

Five years after the economy spiraled into recession, U.S. consumers are in a very different place.#-ad_banner-# Chastened by the hangover from their borrowing binges of 2006 and 2007, they’ve spent the subsequent years paying off bills, and building up equity in their homes. The Federal Reserve notes that consumers’ debt-to income ratio, which peaked at 122% five years ago, is now back below 100%. Yet even as consumers are now more capable of spending money, they still don’t want to. Wal-Mart (NYSE: WMT) is just the latest retailer to tell investors that sales trends are lousy. Spending by lower-income Americans is really anemic, judging by comments from Wal-Mart and others. Dozens of other retailers already told us of the tough spending environment, which has triggered an investor exodus from the sector over the past three months. The Biggest Laggards In A Lagging Sector* *This table only includes retailers in the S&P 400, 500 and 600.  Beyond these three-month laggards, many other retailers are trading far from their 52-week highs, so this table doesn’t fully reflect the sector’s woes. For investors looking to enhance exposure to this out-of-favor, group, there are two… Read More