Imagine you’ve located the perfect stock. Based on your research and intuition, the company will make a very positive impact on your long-term portfolio’s bottom line. The only question left is when to buy.  Although timing into the market isn’t as important for long holding periods as it is for short-term trading, investors with an eye on the long term can improve results by implementing the trade entry methods of… Read More

Imagine you’ve located the perfect stock. Based on your research and intuition, the company will make a very positive impact on your long-term portfolio’s bottom line. The only question left is when to buy.  Although timing into the market isn’t as important for long holding periods as it is for short-term trading, investors with an eye on the long term can improve results by implementing the trade entry methods of short-term active traders.#-ad_banner-# The difference is that instead of using minute to hour price timeframes for decision making, the long-term investor will use day or week price timeframes in an attempt to nail the perfect entry level. The perfect entry level is one from which the price barely pulls back, if at all, before taking off on the upside.  There are two schools of thought when it comes to purchasing a stock: momentum and pullback.  Momentum investing is when one waits for the share price to… Read More

Investing in turnaround stocks can be quite profitable if you follow one simple rule: Only focus on companies that have identified the source of their woes and have delineated clear and workable solutions to stabilize and rebuild operations. For struggling global construction firm McDermott International (NYSE: MDR), the path to a turnaround has been spelled out for investors. Now it’s time to execute on that plan.#-ad_banner-# A quick glance at McDermott’s business model suggests… Read More

Investing in turnaround stocks can be quite profitable if you follow one simple rule: Only focus on companies that have identified the source of their woes and have delineated clear and workable solutions to stabilize and rebuild operations. For struggling global construction firm McDermott International (NYSE: MDR), the path to a turnaround has been spelled out for investors. Now it’s time to execute on that plan.#-ad_banner-# A quick glance at McDermott’s business model suggests this company should be flourishing. It has deep expertise in the construction of massive offshore energy platforms. In recent years, major oil companies have waded deep into the Atlantic Ocean as they seek to replace the output of fast-depleting onshore oil fields. For example, the Lula oil field off the coast of Rio de Janerio might hold up to 8 billion barrels of oil and is currently being developed by Brazil’s Petrobras (NYSE: PBR). But McDermott has stumbled badly, thanks to a series of managerial missteps. Most notably, the company has been unable to complete contracts under budget, turning potentially… Read More

Six years ago, the markets could not get enough China. The iShares China Large Cap Fund (NYSE: FXI) quadrupled in just three years, and shares of PetroChina (NYSE: PTR) had surged 1,175% in the seven years before October 2007. Though most of the hard-landing crowd has been discounted, sentiment has clearly turned against the world’s second-largest economy. Shares of the largest China fund are down 12% over… Read More

Six years ago, the markets could not get enough China. The iShares China Large Cap Fund (NYSE: FXI) quadrupled in just three years, and shares of PetroChina (NYSE: PTR) had surged 1,175% in the seven years before October 2007. Though most of the hard-landing crowd has been discounted, sentiment has clearly turned against the world’s second-largest economy. Shares of the largest China fund are down 12% over the past four years and have underperformed the S&P 500 index by 77% over that period. But those focusing on the short-term economic weakness, a result of overcapacity and the government’s attempt to reposition economic drivers, are missing a very important figure that will drive real long-term growth. $8.1 trillion. That is the amount of investment needed over the next six years to meet urbanization needs in the country and to support more than 300… Read More

Sometimes the profound truths are the easiest to understand.  This is particularly true when it comes to investing. Many investors make the process much more difficult than it needs to be. At its core, investing is a simple process governed by a few irrefutable axioms.  Choosing investments based on what you already know is one of these simple yet profound truths. I first heard this rule articulated by Peter Lynch, the superstar manager of Fidelity’s Magellan Fund. Lynch wrote one of… Read More

Sometimes the profound truths are the easiest to understand.  This is particularly true when it comes to investing. Many investors make the process much more difficult than it needs to be. At its core, investing is a simple process governed by a few irrefutable axioms.  Choosing investments based on what you already know is one of these simple yet profound truths. I first heard this rule articulated by Peter Lynch, the superstar manager of Fidelity’s Magellan Fund. Lynch wrote one of the best books on the stock market, “One Up On Wall Street,” in which he stresses this simple investing rule.#-ad_banner-# Leading commodity trader Jim Rogers also repeats this mantra whenever he is asked what to invest in. I learned this several years ago when I interviewed Rogers while he was running on a treadmill — an interviewing first for me — in his home gym. When I asked if he cared to share any… Read More

We get a lot of emails here at StreetAuthority… and we read every single one of them. We don’t have time to respond to all of them, but we try. Recently we started getting a rather persistent email from a subscriber to my High-Yield Investing newsletter. Here’s what the subscriber wrote: “The newsletter is called ‘High-Yield Investing!’ Stocks with 4% yields do not constitute high yield. Maybe ‘Conservative-Yield’ would be a more appropriate title. I am deeply disappointed… High Yields… Read More

We get a lot of emails here at StreetAuthority… and we read every single one of them. We don’t have time to respond to all of them, but we try. Recently we started getting a rather persistent email from a subscriber to my High-Yield Investing newsletter. Here’s what the subscriber wrote: “The newsletter is called ‘High-Yield Investing!’ Stocks with 4% yields do not constitute high yield. Maybe ‘Conservative-Yield’ would be a more appropriate title. I am deeply disappointed… High Yields [start] at 9% minimum.” — H.W. I appreciate the feedback from H.W., but the truth is, I think he may not be paying attention to what’s going in the market today. My short answer to H.W.: It’s not 1980 or 2009. But here is my long answer… I would love to be able to showcase high-quality, low-risk stocks and bonds with robust yields of 9% or better to my High-Yield Investing readers week in and week out. If I did, I would likely be writing to you… Read More

“One dollar for a cup of coffee — they are out of their minds!” my frugal, land-speculating grandfather said when we stopped at the local corner gas station on the way to visit one of his properties.#-ad_banner-# Having lived through the Great Depression, he was convinced that coffee shouldn’t cost more than a quarter a cup. A book could be filled with his assorted old-timer economic beliefs — such as the $5 union-rate haircut — but I’ll never forget his reaction to the $1 cup of coffee. I… Read More

“One dollar for a cup of coffee — they are out of their minds!” my frugal, land-speculating grandfather said when we stopped at the local corner gas station on the way to visit one of his properties.#-ad_banner-# Having lived through the Great Depression, he was convinced that coffee shouldn’t cost more than a quarter a cup. A book could be filled with his assorted old-timer economic beliefs — such as the $5 union-rate haircut — but I’ll never forget his reaction to the $1 cup of coffee. I wish he would have lived to see the rise of Starbucks (Nasdaq: SBUX) and its $6 cups of coffee. He would have certainly had a few choice words for people like myself who patronize the wildly popular high-end coffee emporium.  Not only did Starbucks change the way coffee is viewed, but the company has made its investors wealthy. Shares have tripled in value to around $75 over the past three years. This success has spawned a variety of copycat operations. Some of these are established companies that have… Read More

Fix your mind on a pair of percentages: 73% and 27%. These two figures hold the key to why the long-term appeal of stocks remains quite bright (even if many investors would welcome a pullback in the near… Read More

We generally stand by a simple rule at StreetAuthority: Find great companies and tune out the market noise. The nation’s top companies deliver shareholder value on a consistent basis, which puts… Read More

In some ways, Bill Ackman invests like he’s riding a bicycle. In the summer of 2012, Ackman joined fellow hedge fund manager Daniel Loeb and half-dozen other cyclists on a very long bike ride. Although Ackman, a fierce competitor, was admittedly out of shape for such a ride, he pulled out to lead the pack early, only to eventually fall well behind the others. One participant noted, “I’ve never had an experience where someone has gone from being so aggressive on a bike to being so hopelessly unable to even turn the pedals… (Ackman’s)… Read More

In some ways, Bill Ackman invests like he’s riding a bicycle. In the summer of 2012, Ackman joined fellow hedge fund manager Daniel Loeb and half-dozen other cyclists on a very long bike ride. Although Ackman, a fierce competitor, was admittedly out of shape for such a ride, he pulled out to lead the pack early, only to eventually fall well behind the others. One participant noted, “I’ve never had an experience where someone has gone from being so aggressive on a bike to being so hopelessly unable to even turn the pedals… (Ackman’s) mind wrote a check that his body couldn’t cash.”#-ad_banner-# Some activist investors like to start with a small position or take a “backseat” role, but Ackman starts out in high gear: He takes on management directly and generally looks for a board seat immediately. Ackman does all his research upfront — as seen from some of his multi-hundred-slide presentations — before taking a stake, and he has a goal in mind before even approaching management. He’s come a long way over the past decade, now that… Read More

A short-term head-and-shoulders pattern is starting to look like it could have long-term and ominous significance for the stock market. SPY Turned Back by a Gap In last week’s Market Outlook, I highlighted a head-and-shoulders top that had formed in SPDR S&P 500 (NYSE: SPY). The price target for that pattern had been achieved and SPY was moving toward resistance defined by a gap. The gap is… Read More

A short-term head-and-shoulders pattern is starting to look like it could have long-term and ominous significance for the stock market. SPY Turned Back by a Gap In last week’s Market Outlook, I highlighted a head-and-shoulders top that had formed in SPDR S&P 500 (NYSE: SPY). The price target for that pattern had been achieved and SPY was moving toward resistance defined by a gap. The gap is at the neckline of the head-and-shoulders, giving it additional significance. That chart has been updated to include the most recent price action. After meeting resistance, SPY fell and ended the week down 1.78%. Small-cap stocks fared worse with iShares Russell 2000 (NYSE: IWM) falling 2.7%. Small caps often lead the market at turning points. Both indexes are more than 4% below their all-time highs reached in the first week of August.#-ad_banner-# This is still a rather shallow pullback, but… Read More