I think Warren Buffett is the greatest equity investor the world has ever known. I’m not alone in my opinion. #-ad_banner-#His investing style is rooted in the value investing teachings of his mentor Benjamin Graham.  As Buffett would explain it, he just sits around and waits for fat pitches where a company is clearly worth a lot more than its stock price implies. When something is obviously mispriced (read: undervalued), Buffett buys — and he buys with conviction. It sounds simple, but it isn’t.   What Buffett fails to mention is that when something is obviously cheap… Read More

I think Warren Buffett is the greatest equity investor the world has ever known. I’m not alone in my opinion. #-ad_banner-#His investing style is rooted in the value investing teachings of his mentor Benjamin Graham.  As Buffett would explain it, he just sits around and waits for fat pitches where a company is clearly worth a lot more than its stock price implies. When something is obviously mispriced (read: undervalued), Buffett buys — and he buys with conviction. It sounds simple, but it isn’t.   What Buffett fails to mention is that when something is obviously cheap to him, it often looks cheap for good reason to the rest of us. In fact, Buffett’s most successful investments have often been stocks that the rest of us are afraid to buy. A perfect example: One of Buffett’s greatest investments was American Express (NYSE: AXP). In retrospect, his investment in this world-class company may look like a no-brainer. But at the time, it was a complicated and nerve-racking prospect.  In 1964, American Express shares dropped by 50% as the result of fears over potential liability the company had in relation to the infamous salad oil… Read More

What do Coca-Cola (NYSE: KO), Campbell’s Soup (NYSE: CPB) and Deere & Co. (NYSE: DE) all have in common? In short, they’ve all survived some of the biggest economic catastrophes the world has ever seen. While thousands of business have come and gone since the early 1900s, these companies have managed to prosper through more than a century of political and economic turbulence. So what’s allowed these companies to continually generate shareholder wealth despite two world wars, the Great Depression, and countless bear markets and recessions? It’s simple: They all belong to a select group of investments that we like… Read More

What do Coca-Cola (NYSE: KO), Campbell’s Soup (NYSE: CPB) and Deere & Co. (NYSE: DE) all have in common? In short, they’ve all survived some of the biggest economic catastrophes the world has ever seen. While thousands of business have come and gone since the early 1900s, these companies have managed to prosper through more than a century of political and economic turbulence. So what’s allowed these companies to continually generate shareholder wealth despite two world wars, the Great Depression, and countless bear markets and recessions? It’s simple: They all belong to a select group of investments that we like to call “Legacy Assets.” #-ad_banner-#For those of you aren’t familiar, “Legacy Assets” is a distinction my colleague David Forest has reserved for companies that have rewarded shareholders for generations. Not only do these companies often sport durable brand names and impenetrable economic moats, their strong competitive advantages have led them to consistently outperform the market for decades. But it’s not just the companies themselves that have stood the test of time. The products they make have remained virtually unchanged. In some cases, the same products have been generating wealth for more than 200 years. While tech companies like Apple and… Read More

Whether this industry’s products are in a mansion owned by the wealthiest 1% or a poverty-stricken housing project, it plays an unmistakable role in nearly every family.#-ad_banner-#​ These products have nothing to do with basic needs like food or shelter — they fall strictly into the “want” category. Yet this demand is so strong that this industry is an $84 billion global behemoth. Even the global economic downturn of 2007 to 2009 barely affected this industry’s sales. Those of you who have had children are probably familiar with this business — the toy industry, to be specific. I… Read More

Whether this industry’s products are in a mansion owned by the wealthiest 1% or a poverty-stricken housing project, it plays an unmistakable role in nearly every family.#-ad_banner-#​ These products have nothing to do with basic needs like food or shelter — they fall strictly into the “want” category. Yet this demand is so strong that this industry is an $84 billion global behemoth. Even the global economic downturn of 2007 to 2009 barely affected this industry’s sales. Those of you who have had children are probably familiar with this business — the toy industry, to be specific. I am amazed at how recession-resistant this industry is, and I think the world’s largest toy company is poised to be a great investment in 2014.   Mattel (NYSE: MAT) is a household name in the western world. Named for founders Harold “Matt” Matson and Elliot Handler, the company was born in a garage workshop in 1945. Mattel started out as a picture frame manufacturer but soon became a toy company after Matson and Handler found success selling dollhouse furniture built from scrap wood. Mattel’s first big break came when it acquired the rights to make products for the popular Mickey… Read More

The subject of female condoms might make some people blush, but the company responsible for manufacturing them has nothing to be embarrassed about.#-ad_banner-#​ In fact, the Female Health Co. (Nasdaq: FHCO) is doing a public service by making its FC2 condom available to women in 143 countries, especially where preventing unwanted pregnancy and protection against HIV are paramount. To many investors, FHCO is the epitome of a socially responsible investment. The FC2 isn’t as well-known as its male counterpart, so FHC has leaned on public agencies to help spread the word, allowing internal efforts to focus on production. Read More

The subject of female condoms might make some people blush, but the company responsible for manufacturing them has nothing to be embarrassed about.#-ad_banner-#​ In fact, the Female Health Co. (Nasdaq: FHCO) is doing a public service by making its FC2 condom available to women in 143 countries, especially where preventing unwanted pregnancy and protection against HIV are paramount. To many investors, FHCO is the epitome of a socially responsible investment. The FC2 isn’t as well-known as its male counterpart, so FHC has leaned on public agencies to help spread the word, allowing internal efforts to focus on production. Once FC2 gained the FDA’s approval in 2009, FHC was off and running, with ownership of patents worldwide. It first reached out to larger cities where HIV/AIDS infections and sexually transmitted diseases were most prevalent. FHC worked with health care providers and agencies to gain a foothold among the public. The company also zeroed in on colleges and universities where on-campus organizations benefited from grants to put together programs that helped make the FC2 a household name among young women. The reliance on public entities has allowed FHC to operate with no debt and high net profit margins — to… Read More

There are a number of strategies available to investors that use option contracts to generate attractive levels of income. Two strategies in particular that have become popular with individual investors are selling covered calls and selling puts. These strategies can be implemented through traditional brokerage accounts, as well as through qualified accounts such as IRAs. #-ad_banner-#Covered Calls: Investors purchase shares of stock and then sell call options against these shares. Selling the call options leaves the investor with an obligation to sell the shares of stock if the… Read More

There are a number of strategies available to investors that use option contracts to generate attractive levels of income. Two strategies in particular that have become popular with individual investors are selling covered calls and selling puts. These strategies can be implemented through traditional brokerage accounts, as well as through qualified accounts such as IRAs. #-ad_banner-#Covered Calls: Investors purchase shares of stock and then sell call options against these shares. Selling the call options leaves the investor with an obligation to sell the shares of stock if the price of the stock is above the strike price of the option when the option expires. Income is generated through the proceeds received from selling the call option contracts. Selling Puts: Investors sell unhedged or “naked” put option contracts on stocks that they expect to trade higher (or at least remain stable). Selling puts obligates the investor to buy shares of stock if the market price falls below the strike price when the option expires. Income is generated through the proceeds received from selling the put option contracts. One thing many investors… Read More

When it comes to picking investments, stock guys like me have it easy.#-ad_banner-# Let’s say we’re looking for a stock. Well, we like spaghetti. We know that other people like spaghetti. We know that the Whatsamattayou Pasta Co. is the largest manufacturer of dried pasta in the country. The company makes money, and the stock looks undervalued. We buy.  Bond guys have it much tougher. They have to be way better than stock guys at math and economics and reading the tea leaves. That’s why I really respect the work they do. No wonder the colorful political pundit… Read More

When it comes to picking investments, stock guys like me have it easy.#-ad_banner-# Let’s say we’re looking for a stock. Well, we like spaghetti. We know that other people like spaghetti. We know that the Whatsamattayou Pasta Co. is the largest manufacturer of dried pasta in the country. The company makes money, and the stock looks undervalued. We buy.  Bond guys have it much tougher. They have to be way better than stock guys at math and economics and reading the tea leaves. That’s why I really respect the work they do. No wonder the colorful political pundit James Carville once said he’d like to be reincarnated as the bond market — that way, he could “scare the hell out of everybody.”  So, when I decided to write about the bond market, I had to approach it from a stock guy’s perspective. As I’ve mentioned, I’m not a “wiggle reader,” as I like to call chartists. However, the charts on the 10-year Treasury yield have grabbed my attention big time: This one-year chart is pretty self-explanatory: Rates are trending lower. And there’s money to be made. Bond prices have an inverse relationship to bond yields: Prices… Read More

To apply a shopworn phrase to the bull market of 2013:  “A rising tide lifted all boats.” #-ad_banner-# Or at least many of them. Investors gravitated toward almost any company that was delivering decent quarterly results, making it ever harder to spot deep value. Companies that stumbled through a series of challenging quarters, however, stayed in investors’ doghouse. Yet as the world’s top investors will tell you, real profits are made in the unloved stocks, not the loved ones. That was clearly logic in place for Bill Gates and his investment firm: While most investors were shunning heavy equipment maker Caterpillar… Read More

To apply a shopworn phrase to the bull market of 2013:  “A rising tide lifted all boats.” #-ad_banner-# Or at least many of them. Investors gravitated toward almost any company that was delivering decent quarterly results, making it ever harder to spot deep value. Companies that stumbled through a series of challenging quarters, however, stayed in investors’ doghouse. Yet as the world’s top investors will tell you, real profits are made in the unloved stocks, not the loved ones. That was clearly logic in place for Bill Gates and his investment firm: While most investors were shunning heavy equipment maker Caterpillar (NYSE: CAT), Gates and his team were loading up. Though Gates likely sees many virtues for Caterpillar, it’s the company’s financial firepower that may have held the greatest appeal. As I noted back in September, “Caterpillar’s cash flow is so robust that its dividend was hiked at a double-digit pace in 2012 and again in 2013, even as the company is in the midst of a $7.5 billion share buyback program.” Fast-forward to January, and Gates is looking wiser than most. Caterpillar just topped earnings per share (EPS) forecasts by more than 20%, leading to fresh surge in the stock. Read More

I’ve told you before about the enormous number of high-yielding stocks abroad. If you remember, my research team and I found only 25 profitable U.S. companies were paying yields of more than 12%… compared to 93 overseas. Although the numbers fluctuate daily, that means roughly 79% of the world’s highest yields are found outside of U.S. markets. To me, the amount of high-yield international dividend-payers out there is one of the market’s biggest secrets. But there’s another big potential benefit to investing in international companies that most investors fail to consider. #-ad_banner-#This simple move could make investors extra gains of… Read More

I’ve told you before about the enormous number of high-yielding stocks abroad. If you remember, my research team and I found only 25 profitable U.S. companies were paying yields of more than 12%… compared to 93 overseas. Although the numbers fluctuate daily, that means roughly 79% of the world’s highest yields are found outside of U.S. markets. To me, the amount of high-yield international dividend-payers out there is one of the market’s biggest secrets. But there’s another big potential benefit to investing in international companies that most investors fail to consider. #-ad_banner-#This simple move could make investors extra gains of 10% or more — even in a single year. It doesn’t require any extra effort… in fact, it happens automatically when you invest in international companies. Here’s how it works… Say five years ago you took the trip of a lifetime to Australia. Back then, $1.00 Australian was worth roughly $0.65 U.S. dollars. That means a hotel room priced at $100 Australian dollars only cost about $65 U.S. dollars thanks to a favorable exchange rate. But today, the Australian dollar has increased while the U.S. dollar has plummeted in value. Just $1.00 Australian is now worth $0.91 U.S. dollars. Read More

This $103 billion aircraft manufacturer is about to experience some turbulence.#-ad_banner-# It might just be a rogue cloud or a bigger storm brewing, but there’s no telling how investors will react to the latest string of disconcerting news for this company. A couple of items might even be enough to overshadow the fact that Boeing just beat analysts’ estimates for the fifth consecutive quarter. Yes, it could get that bumpy for Boeing (NYSE: BA). BA was pummeled this week after the company announced lower-than-expected forecasts for 2014 — but no signals of a continuation of record-breaking jet orders. You can’t… Read More

This $103 billion aircraft manufacturer is about to experience some turbulence.#-ad_banner-# It might just be a rogue cloud or a bigger storm brewing, but there’s no telling how investors will react to the latest string of disconcerting news for this company. A couple of items might even be enough to overshadow the fact that Boeing just beat analysts’ estimates for the fifth consecutive quarter. Yes, it could get that bumpy for Boeing (NYSE: BA). BA was pummeled this week after the company announced lower-than-expected forecasts for 2014 — but no signals of a continuation of record-breaking jet orders. You can’t say the same for Boeing’s archrival, France-based Airbus (PAR: AIR), which is making headway in Southeast Asia. Vietnamese carrier VietJetAir is about to order 62 Airbus aircraft for a reported $9 billion, with more orders to come.  Now is a great time to invest in Vietnam, considering it’s expected to become the third-fastest-growing market in the world. Boeing has estimated of the 33,000 commercial aircraft it expects will be required in the next two decades, the U.S. will account for just 20%, with the bulk coming from emerging markets like Vietnam. About Boeing’s aircraft: Lately, its Dreamliner 787 has gotten… Read More