Warren Buffett loves to invest in stable businesses with few competitors.  One of his recent favorites is DaVita HealthCare (NYSE: DVA), which operates a network of dialysis treatment centers in the United States catering to patients that have diabetes-induced kidney failure. Buffett’s Berkshire Hathaway (NYSE: BRK-B) has been a steady buyer for several years and now owns nearly 30 million shares, equating to a $1.8 billion stake. But DaVita has a big problem on its hands. Dialysis is expensive, and the two biggest payees for this procedure, Medicare and Medicaid, have been pushing DaVita and its rival Fresenius… Read More

Warren Buffett loves to invest in stable businesses with few competitors.  One of his recent favorites is DaVita HealthCare (NYSE: DVA), which operates a network of dialysis treatment centers in the United States catering to patients that have diabetes-induced kidney failure. Buffett’s Berkshire Hathaway (NYSE: BRK-B) has been a steady buyer for several years and now owns nearly 30 million shares, equating to a $1.8 billion stake. But DaVita has a big problem on its hands. Dialysis is expensive, and the two biggest payees for this procedure, Medicare and Medicaid, have been pushing DaVita and its rival Fresenius Medical Care (NYSE: FMS) to swallow painful reimbursement cuts. It’s not just the administration of dialysis that is costly. Many patients end up with side effects related to iron deficiency and red blood cell production, which costs billions more to remedy. And these costly treatments don’t even yield the desired medical outcomes.#-ad_banner-# Thankfully, one of the biggest providers of the drugs and chemicals used in dialysis has a solution to the problem. Little-known Rockwell Medical (Nasdaq: RMTI) has been testing an iron supplement that goes right into bone marrow. Patients on dialysis stop producing erythropoietin, a key ingredient in the… Read More

In one old western movie I saw as a kid, a young entrepreneur took a job driving a nitroglycerin wagon down a rocky road to a mine. He was willing to get paid well to do a job no one else wanted to do, so in time he grew rich and eventually bought the mine. Similarly, I like the stocks of companies that do the job no one else wants to do or go where no one else wants to go. The stocks are typically undervalued, but the companies make tons of money and reward their shareholders.  The… Read More

In one old western movie I saw as a kid, a young entrepreneur took a job driving a nitroglycerin wagon down a rocky road to a mine. He was willing to get paid well to do a job no one else wanted to do, so in time he grew rich and eventually bought the mine. Similarly, I like the stocks of companies that do the job no one else wants to do or go where no one else wants to go. The stocks are typically undervalued, but the companies make tons of money and reward their shareholders.  The French oil giant Total (NYSE: TOT) fits this profile perfectly. Formed in 2000 with the merger of TotalFina and Elf Aquitaine, Total operates in over 130 countries and boasts annual sales of more than $230 billion. Shares have gained nearly 20% this year, but the combination of Total’s fundamentals and macro-environmental conditions should send shares even higher in the near future. When I profile large, vertically integrated oil companies, I like to see what veteran investment strategist and energy analyst Bill O’Grady of Confluence Investment Management has to see. O’Grady contends… Read More

Outside of the revitalized energy patch, no corner of the U.S. economy is hotter than Silicon Valley.​ Google (Nasdaq: GOOG), the region’s bellwhether, has tacked on a 50% gain over the past 12 months, adding more than $100 billion its market value. #-ad_banner-# And moving far down the tech food chain, the hottest young tech companies are also creating great wealth for their employees and shareholders: Recent IPOs RocketFuel (Nasdaq: FUEL) and FireEye (Nasdaq: FEYE) have more than doubled since their IPOs last month. These companies are boosting sales at a really fast pace, but they’ve… Read More

Outside of the revitalized energy patch, no corner of the U.S. economy is hotter than Silicon Valley.​ Google (Nasdaq: GOOG), the region’s bellwhether, has tacked on a 50% gain over the past 12 months, adding more than $100 billion its market value. #-ad_banner-# And moving far down the tech food chain, the hottest young tech companies are also creating great wealth for their employees and shareholders: Recent IPOs RocketFuel (Nasdaq: FUEL) and FireEye (Nasdaq: FEYE) have more than doubled since their IPOs last month. These companies are boosting sales at a really fast pace, but they’ve also quickly become richly valued. For instance, FireEye is valued at $4.7 billion but is expected to have just $230 million in sales in 2014. On the other end of the tech investing spectrum are some deep value plays. But in cases like IBM (NYSE: IBM), growth will be so limited that they are really more like value traps. Simply put, in the world of tech, you can have growth or value, but not both.  But a few companies stand out for a reasonable measure of both growth and value. Each company is in the midst of… Read More

The “Bond King” has issued a dire warning for income investors. If he’s right, it could affect how much money people earn from dividend and interest payments for the next two decades.  The “Bond King” is Bill Gross, one of the biggest names on Wall Street. Not only is he co-founder of Pacific Investment Management Co. (PIMCO), one of the largest investment firms in the world, but as money manager of the PIMCO Total Return Fund, he’s directly responsible for over $270 billion in assets.  So what is the “Bond King” predicting?  In short, Gross thinks interest rates could stay… Read More

The “Bond King” has issued a dire warning for income investors. If he’s right, it could affect how much money people earn from dividend and interest payments for the next two decades.  The “Bond King” is Bill Gross, one of the biggest names on Wall Street. Not only is he co-founder of Pacific Investment Management Co. (PIMCO), one of the largest investment firms in the world, but as money manager of the PIMCO Total Return Fund, he’s directly responsible for over $270 billion in assets.  So what is the “Bond King” predicting?  In short, Gross thinks interest rates could stay low — ridiculously low — for a long, long time. According to his analysis, interest rates could stay as low as 1% until sometime around 2035.  #-ad_banner-#The reason for the perennial low-rate environment, as Gross explains, is the government’s desire to create a “beautiful deleveraging” — which is financial lingo for saying the U.S. wants to lower its dependency on debt without sacrificing the health of the overall economy.  As Gross explains in his most recent Investment Outlook letter:  “If the Fed’s objective is to grow normally again, then there is likely no more beautiful or… Read More

Allow me to let you in on a closely guarded secret among professional money managers. While they all talk a big game and make it appear that by investing with them you are close to being guaranteed market-beating returns, the truth of the matter is far different.#-ad_banner-# In fact, in the aggregate, the majority even fail to beat the market. Add in the fees, costs and expenses of investing with the professionals, and it seems like a losing proposition. I know this sounds sacrilegious, but the numbers speak for themselves. According to the finance blog Zero Hedge, nearly 90% of… Read More

Allow me to let you in on a closely guarded secret among professional money managers. While they all talk a big game and make it appear that by investing with them you are close to being guaranteed market-beating returns, the truth of the matter is far different.#-ad_banner-# In fact, in the aggregate, the majority even fail to beat the market. Add in the fees, costs and expenses of investing with the professionals, and it seems like a losing proposition. I know this sounds sacrilegious, but the numbers speak for themselves. According to the finance blog Zero Hedge, nearly 90% of all hedge funds, 65% of large-cap core funds, 80% of large-cap value funds and 65% of small-cap mutual funds underperformed the market in 2012.  These facts raise the question: Why do investors continue to pour money into professionally managed funds when the majority fail to deliver even market-beating returns?  Well, the answer is that a few funds deliver outsize returns year after year. This outperformance by the minority keeps the attraction high for the professional money management business. Investors scramble to find the next hot manager and funds on an ongoing basis, which keeps the cash flowing into the pockets… Read More

Goldilocks is famous for being very particular about her porridge. It couldn’t be too hot or too cold. It had to be just right. #-ad_banner-# That reminds me of mid-cap stocks: Not too big, but not too small — just the right mix of growth and stability. Unlike small caps, mid-caps are multi-billion-dollar companies and sometimes even market leaders. That provides these companies with a nice touch of stability that small caps with values dipping below $1 billion usually don’t offer. But unlike global mega-caps such as Exxon Mobil (NYSE: XOM) and Microsoft (Nasdaq: MSFT) worth hundreds of billions and… Read More

Goldilocks is famous for being very particular about her porridge. It couldn’t be too hot or too cold. It had to be just right. #-ad_banner-# That reminds me of mid-cap stocks: Not too big, but not too small — just the right mix of growth and stability. Unlike small caps, mid-caps are multi-billion-dollar companies and sometimes even market leaders. That provides these companies with a nice touch of stability that small caps with values dipping below $1 billion usually don’t offer. But unlike global mega-caps such as Exxon Mobil (NYSE: XOM) and Microsoft (Nasdaq: MSFT) worth hundreds of billions and long past peak growth, mid-caps valued between $2 billion and $10 billion still have the ability to grow many times over in the long run. These unique qualities have made mid-caps popular with investors looking for a balance between growth and stability. They have also produced market-crushing gains. In the past 12 years, the iShares Core S&P Mid-Cap ETF (NYSE: IJH) is up 223% against the S&P 500 Index’s 62% return. Take a look at the big gain below. But if you missed out on those gains, don’t worry. The third-quarter earnings season has revealed a… Read More

Over the long term, value stocks tend to be winners. There are a number of ways to define value.  My preferred approach is to use the PEG ratio, which compares the price-to-earnings (P/E) ratio with the earnings growth rate. A PEG ratio of 1 indicates the P/E ratio is equal to the earnings growth rate and the stock is fairly valued. Value stocks have PEG ratios less than 1. Value investors generally need patience to succeed. It can take time for the stock to deliver gains for a variety of reasons, but within a few years, value investing usually delivers… Read More

Over the long term, value stocks tend to be winners. There are a number of ways to define value.  My preferred approach is to use the PEG ratio, which compares the price-to-earnings (P/E) ratio with the earnings growth rate. A PEG ratio of 1 indicates the P/E ratio is equal to the earnings growth rate and the stock is fairly valued. Value stocks have PEG ratios less than 1. Value investors generally need patience to succeed. It can take time for the stock to deliver gains for a variety of reasons, but within a few years, value investing usually delivers results. Options are usually thought of as short-term trading tools, but there are some options that expire in years rather than weeks or months. These options are called LEAPS, which stands for Long-Term Equity Anticipation Securities. Currently, there are now LEAPS available that will expire in January 2015 and January 2016. Although they are long-term investments, LEAPS are the same as traditional options in every other way. Buying LEAPS allows you to participate in market gains with limited risk. A call option gives the buyer the right to buy 100 shares of stock at a predetermined… Read More

I love taking road trips. My friends think I’m crazy to prefer driving over flying, but I truly do. I like exploring little-known attractions and towns off the beaten path.  One of my favorite things about taking road trips is the wide variety of fast-food choices across… Read More

Andy Obermueller wasn’t this excited about an investment since Apple (Nasdaq: AAPL) plunked down $350 million in cash for one of his picks. The company Apple bought was AuthenTec, a developer of fingerprint sensor technology. Ten months earlier, Andy reasoned that fingerprint security was just the sort of feature that Tier 1 customers are going to demand in their phones and other mobile devices to keep their credit card accounts and other sensitive information safe.#-ad_banner-# That was in September 2011, when the Chief Strategist for Game-Changing Stocks went on to… Read More

Andy Obermueller wasn’t this excited about an investment since Apple (Nasdaq: AAPL) plunked down $350 million in cash for one of his picks. The company Apple bought was AuthenTec, a developer of fingerprint sensor technology. Ten months earlier, Andy reasoned that fingerprint security was just the sort of feature that Tier 1 customers are going to demand in their phones and other mobile devices to keep their credit card accounts and other sensitive information safe.#-ad_banner-# That was in September 2011, when the Chief Strategist for Game-Changing Stocks went on to call AuthenTec “an immediate portfolio add for aggressive tech investors looking for strong upside on the cheap.” Less than a year later, AuthenTec shares closed 227.6% higher than Andy’s initial recommendation. Fast-forward 15 months. The iPhone 5s has a fingerprint scanner. And Andy has another game-changing idea. A big one. “What I am talking about is a piece of information that literally makes my jaw drop. That makes my heart race. I’m talking about information that scares you. The sort of thing you read and think, ‘I sure hope someone who knows something is working on this.” That’s what Andy… Read More