Billionaires go to jail for it. Money managers have fled the country and faked suicides when it’s suggested. Hedge funds have paid billions in fines and been harassed by the Securities and Exchange Commission (SEC) on little more than a hint of its occurrence.  Flickr/DannyB ​Celebrity investor and high-tech titan Mark Cuban recently fought and secured a courtroom victory after being accused of violating insider trading laws. Most recently, celebrity investor and high-tech titan Mark Cuban fought and secured a courtroom victory when accused of violating this regulation. Famed entrepreneur and TV personality Martha… Read More

Billionaires go to jail for it. Money managers have fled the country and faked suicides when it’s suggested. Hedge funds have paid billions in fines and been harassed by the Securities and Exchange Commission (SEC) on little more than a hint of its occurrence.  Flickr/DannyB ​Celebrity investor and high-tech titan Mark Cuban recently fought and secured a courtroom victory after being accused of violating insider trading laws. Most recently, celebrity investor and high-tech titan Mark Cuban fought and secured a courtroom victory when accused of violating this regulation. Famed entrepreneur and TV personality Martha Stewart wasn’t as fortunate as Cuban — she spent time behind bars in 2004 for what amounted to be a relatively small amount of money. The strangest thing is, this action is considered a legitimate edge in the commodity markets. It’s only in the stock market where it’s considered a mortal sin. If you haven’t guessed, I am talking about insider trading.  Insider trading offers an unfair advantage to those with the information and capacity to profit from it. It is the desire to level the playing field that motivates the authorities to clamp down on insider trading. It truly… Read More

The Lone Ranger was a big fan of silver.  He named his horse after the shiny metal and fashioned bullets out of it. If werewolves ever threatened Wild West homesteaders, I’m sure the masked man and Tonto could’ve taken care of them. Lately, silver bulls probably feel like the Lone Ranger — with the emphasis on the “Lone.” With the recent correction in precious metals prices, silver has been pounded extra hard. Since its top in mid-2011, iShares Silver Trust (NYSE: SLV), which tracks the price of silver, has slid more than 50%. Compare that with… Read More

The Lone Ranger was a big fan of silver.  He named his horse after the shiny metal and fashioned bullets out of it. If werewolves ever threatened Wild West homesteaders, I’m sure the masked man and Tonto could’ve taken care of them. Lately, silver bulls probably feel like the Lone Ranger — with the emphasis on the “Lone.” With the recent correction in precious metals prices, silver has been pounded extra hard. Since its top in mid-2011, iShares Silver Trust (NYSE: SLV), which tracks the price of silver, has slid more than 50%. Compare that with the gold tracker iShares Gold Trust (NYSE: GLD), which has given back less than 30%. Why?  Secondary trades like silver are often afterthoughts for investors. When the price of the popular asset class seems to bid up, buyers will violently pile in to a cheaper alternative. The cheaper the investment, the higher it climbs. They are also punished more severely when things go south. But as always, the herd, in its infinite lack of wisdom, is missing a major point: Silver is useful outside of being a currency proxy. Recently, I discussed a short-term trading idea for GLD  based purely… Read More

A recent move by one of the world’s largest online retailers points to an increasing war that could change the way you and I shop for just about everything. And while I think the shift will be a good thing for consumers, the looming battles in this space could create vast amounts of wealth for investors who jump in early. First, let me give you a little background… At the end of September, eBay (Nasdaq: EBAY) bought Chicago-based payment processor Braintree for $800 million in cash and folded the company into its PayPal division. Braintree says it handles $12 billion… Read More

A recent move by one of the world’s largest online retailers points to an increasing war that could change the way you and I shop for just about everything. And while I think the shift will be a good thing for consumers, the looming battles in this space could create vast amounts of wealth for investors who jump in early. First, let me give you a little background… At the end of September, eBay (Nasdaq: EBAY) bought Chicago-based payment processor Braintree for $800 million in cash and folded the company into its PayPal division. Braintree says it handles $12 billion in transactions a year, and works with clients like OpenTable (restaurant reservations), Uber (arranging a driver) and Rovio (creator of the inane but ubiquitous Angry Birds franchise, a popular gaming app). It also owns Venmo, which lets individuals text payments to one another. The purchase is part of a string of recent deals: eBay also recently acquired a social shopping site, the recommendation site Hutch, and Red Laser, which scans bar codes. Taken together, it appears eBay is gearing up to go mobile and vie to be the king of e-commerce, a spot now held by Amazon.com. This fits right… Read More

A rising tide lifts all boats.It’s one of the great sayings about the impact of a bull market. But what this pearl of wisdom fails to convey is how different groups of stocks respond to that movement in different ways.  #-ad_banner-#​ That has once again been on display in the strong market of 2013. The S&P 500 Index is up 19% on the year, but the iShares Core Small Cap ETF (NYSE: IJR) has gained an outsize 28%. With the market going “risk-on” this year, small-cap stocks and growth stocks have logged a strong performance. Those big gains… Read More

A rising tide lifts all boats.It’s one of the great sayings about the impact of a bull market. But what this pearl of wisdom fails to convey is how different groups of stocks respond to that movement in different ways.  #-ad_banner-#​ That has once again been on display in the strong market of 2013. The S&P 500 Index is up 19% on the year, but the iShares Core Small Cap ETF (NYSE: IJR) has gained an outsize 28%. With the market going “risk-on” this year, small-cap stocks and growth stocks have logged a strong performance. Those big gains shouldn’t come as a surprise to investors who have been following small caps for the past dozen years. While the S&P 500 is up just 23% since 2001, small caps have returned an eye-popping 235%. Take a look at the amazing divergence in the chart below. There’s no question that small caps are risky and can be very volatile. Inevitably, some will declare bankruptcy and go out of business. But in the long run, these smaller companies have tremendous upside that most blue-chip stocks have long outgrown. But just because small caps have been surging and offer the… Read More

The finance department at Charles Schwab (Nasdaq: SCHW) has a very large problem. The firm has been so successful at attracting clients over the past half-decade that the cash Schwab holds for its clients has swelled nearly 190% from 2008, to a recent $86 billion. But in this era of low interest rates, the firm hasn’t been able to fully capitalize on that success.#-ad_banner-# Schwab’s net interest margin (which is the difference between the rate it pays to clients in their cash accounts and Schwab’s own interest income on those assets held)… Read More

The finance department at Charles Schwab (Nasdaq: SCHW) has a very large problem. The firm has been so successful at attracting clients over the past half-decade that the cash Schwab holds for its clients has swelled nearly 190% from 2008, to a recent $86 billion. But in this era of low interest rates, the firm hasn’t been able to fully capitalize on that success.#-ad_banner-# Schwab’s net interest margin (which is the difference between the rate it pays to clients in their cash accounts and Schwab’s own interest income on those assets held) has been squeezed to almost nothing. Yet good new lies ahead. As interest rates start to rise, so will Schwab’s net interest margins. It happens every cycle, and investors are only just beginning to warm up the profit boom yet to come. Shares of Schwab have already begun to move up in anticipation of this trend, moving back into the mid-$20s, right where they stood back in 2007. But investors shouldn’t think they’ve missed the boat. Schwab’s base of clients has more than doubled since 2007 (leading to assets under management that now exceeds $2 trillion). So as interest rates… Read More

When is the best time to focus on a particular industry? When it’s deeply out of favor. Every industry hits the occasional rough patch, which typically leads investors to focus their attention elsewhere. Yet when the rough patch ends, and the skies start to brighten, you have a chance to dig into the group before the crowd returns. That’s precisely the set up in place for a group of companies known as upstream MLPs. These master limited partnerships focus on mature energy fields. These firms don’t focus on the early stage of energy exploration, and instead buy mature oil and… Read More

When is the best time to focus on a particular industry? When it’s deeply out of favor. Every industry hits the occasional rough patch, which typically leads investors to focus their attention elsewhere. Yet when the rough patch ends, and the skies start to brighten, you have a chance to dig into the group before the crowd returns. That’s precisely the set up in place for a group of companies known as upstream MLPs. These master limited partnerships focus on mature energy fields. These firms don’t focus on the early stage of energy exploration, and instead buy mature oil and gas fields that other firms have chosen to sell.  It’s an industry known for a lot of deals, as the key players boost sales and replace existing assets that eventually start to post declining output. Nearly $2.5 billion in transactions were completed in 2010, rising to $5.8 billion in 2012, according to Credit Suisse. And investors were expecting even higher amounts of deal-making in 2013 — until Linn Energy (Nasdaq: LINE) spoiled the party.#-ad_banner-# One of the industry’s most acquisitive firms, Linn has tended to utilize aggressive accounting measures to justify the economics of its deals to investors. That caught… Read More

Call it “The Mystery of the Secret Payout.” When I was young, Frank and Joe Hardy — the Hardy Boys — were my heroes. There was no shortage of bad guys in Bayport on Barmet Bay. That’s where the fictional teenage brothers and amateur detectives cracked cases involving all manner of miscreant behavior, from murder to auto theft to the ever-popular diamond smuggling.#-ad_banner-# Their adventures had titles such as “The Sinister Signpost,” “The Secret of Skull Mountain” and “The Crisscross Shadow.” What all-American adolescent reader could resist? The original Hardy Boys mystery stories consisted of 58 books published… Read More

Call it “The Mystery of the Secret Payout.” When I was young, Frank and Joe Hardy — the Hardy Boys — were my heroes. There was no shortage of bad guys in Bayport on Barmet Bay. That’s where the fictional teenage brothers and amateur detectives cracked cases involving all manner of miscreant behavior, from murder to auto theft to the ever-popular diamond smuggling.#-ad_banner-# Their adventures had titles such as “The Sinister Signpost,” “The Secret of Skull Mountain” and “The Crisscross Shadow.” What all-American adolescent reader could resist? The original Hardy Boys mystery stories consisted of 58 books published between 1927 and 1979. I lived vicariously through many of them. These days, I still like a good detective story — John Sandford’s “Prey” series featuring Minneapolis cop Lucas Davenport is my favorite. But when it comes to dividend sleuthing, The Daily Paycheck’s Amy Calistri is hard to top. Consider a recent installment of Amy’s, “These Above-Average Yields are Hiding in Plain Sight.” StreetAuthority researcher Austin Hatley introduced you to the topic earlier this month, but it’s a tale worth retelling. Remember the Baker Street Irregulars? They were the band of urchins upon whom Sherlock Holmes relied for tips. “Holmes… Read More

For the past two months if you asked most investors what they feared most, they would have said the economic impact caused by political infighting. And why wouldn’t they? During a government shutdown, small businesses can’t apply for loans to expand. Clinical drug trials are put on hold. New oil and gas drilling permits don’t get approved. And both consumers and companies are reluctant to spend in periods of economic uncertainty.#-ad_banner-# Before Congress arrived at a last-minute deal, the impact of Washington’s dysfunction concerned me. But as an investor, it didn’t scare me out of the market. Maybe… Read More

For the past two months if you asked most investors what they feared most, they would have said the economic impact caused by political infighting. And why wouldn’t they? During a government shutdown, small businesses can’t apply for loans to expand. Clinical drug trials are put on hold. New oil and gas drilling permits don’t get approved. And both consumers and companies are reluctant to spend in periods of economic uncertainty.#-ad_banner-# Before Congress arrived at a last-minute deal, the impact of Washington’s dysfunction concerned me. But as an investor, it didn’t scare me out of the market. Maybe it’s because I’ve been investing for more than 30 years now. I’ve had money in the market through almost every conceivable economic and financial scenario — historically high and low interest rates, higher and lower tax rates, recessions and overheated economies. What I’ve learned is that there are always ways to minimize losses and maximize gains when conditions change. But there is one thing that does scare me: People aren’t investing for their retirement. The annual Wells Fargo Retirement Survey of middle class Americans almost always makes me nervous. Here are some highlights from the 2012 survey… — 30% of… Read More

The death of cash has been fueling a gold rush for payment processors. Industry leaders Visa (NYSE: V), MasterCard (NYSE: MA) and Heartland Payment Systems (NYSE: HPY) have all posted market-beating gains of at least 29% this year. But while these well-known blue chips have been surging, one of their lesser-known industry peers has been struggling. After losing market share and reporting a disappointing quarter early in the year, shares are down 50% in the past 18 months.  VeriFone Systems (NYSE: PAY) is a global leader… Read More

The death of cash has been fueling a gold rush for payment processors. Industry leaders Visa (NYSE: V), MasterCard (NYSE: MA) and Heartland Payment Systems (NYSE: HPY) have all posted market-beating gains of at least 29% this year. But while these well-known blue chips have been surging, one of their lesser-known industry peers has been struggling. After losing market share and reporting a disappointing quarter early in the year, shares are down 50% in the past 18 months.  VeriFone Systems (NYSE: PAY) is a global leader in the electronic payments industry, making point-of-sale (POS) machines that consumers use to swipe credit and debit cards. Its clients include some of the biggest and most successful retailers in the world, including Costco (Nasdaq: COST), Lowe’s (Nasdaq: LOWE) and McDonald’s (NYSE: MCD).#-ad_banner-# But despite that market-leading position, VeriFone has struggled in the past year and a half. And that’s exactly why it’s a great time to check out the payment systems leader and recent industry laggard: Shares and sentiment are low, but the seeds of a turnaround are beginning to sprout. One of the biggest factors weighing on VeriFone’s… Read More