In doing a GARP screen the other day, I was surprised by the top five picks it turned up. But before I reveal their names, you might be wondering, “What the heck is GARP?”#-ad_banner-# If you’ve never heard of GARP, it has nothing to do with the John Irving novel “The World According to Garp.” GARP’s roots go back to a 1949 book, “The Intelligent Investor,” by Benjamin Graham, which has the distinction of being called “the best book on investing ever written” by… Read More

In doing a GARP screen the other day, I was surprised by the top five picks it turned up. But before I reveal their names, you might be wondering, “What the heck is GARP?”#-ad_banner-# If you’ve never heard of GARP, it has nothing to do with the John Irving novel “The World According to Garp.” GARP’s roots go back to a 1949 book, “The Intelligent Investor,” by Benjamin Graham, which has the distinction of being called “the best book on investing ever written” by Warren Buffett. Known as the father of security analysis and value investing, Graham believed investors should consider both future growth (measured through fundamentals) and present price of a stock to identify value. I set my GARP screen to evaluate companies based on dividend growth rate, trailing price-to-earnings (P/E) and price-to-book (P/B) ratios, earnings per share (EPS) growth,… Read More

Everyone is always looking for a quick and easy way to wealth. This desire is what drives the multi-billion-dollar worldwide gambling industry. Investment trends and fads are no different.  Investors tend to move as a herd in and out of the latest get-rich-quick scheme. One of the most popular trends is the search for high-yielding stocks.#-ad_banner-# This trend is driven by low bond and cash rates, risk fears… Read More

Everyone is always looking for a quick and easy way to wealth. This desire is what drives the multi-billion-dollar worldwide gambling industry. Investment trends and fads are no different.  Investors tend to move as a herd in and out of the latest get-rich-quick scheme. One of the most popular trends is the search for high-yielding stocks.#-ad_banner-# This trend is driven by low bond and cash rates, risk fears stemming from the financial crash and recession, and the aging population seeking steady income from their investments. When managed wisely, yield investing is a proven method to help build wealth and generate income.  The worst way to participate in this lucrative trend is to simply chase the highest-yielding stocks. In the yield-investing world, bigger is not always better. In fact, ultra-high-yielding stocks are often flashing danger signals —… Read More

Lackluster retail results have inspired recent headlines such as “Tepid U.S. Retail Sales Raising Doubts About Economy” and “Consumer Caution Hits Sales at U.S. Retailers.”#-ad_banner-# The latest wave of quarterly financial… Read More

U.S. companies are sitting on a total of more than $1 trillion in cash, but many are being rather stingy with their dividend payouts while they wait to see how the… Read More

The business of retailing is quite simple. You have a large base of fixed costs tied up in real estate, inventory and personnel, and you aim for a base of… Read More

The leveraged buyout was one of the great financial inventions of the 1980s. Buying companies with little money down and stuffing them with debt before exiting with a massive… Read More

When the employees of Florida-based Fairholme Capital came into work on Jan. 11, 2010, they were greeted with great news. Rating firm Morningstar had just selected Fairholme’s Bruce Berkowitz as the “Domestic-Stock Fund Manager of the Decade.” That’s quite an accolade, considering the heady competition. Morningstar chose him because “his aptitude for picking stocks sets him apart from his peers, and Fairholme’s portfolio is filled with attractively priced firms that generate high… Read More

When the employees of Florida-based Fairholme Capital came into work on Jan. 11, 2010, they were greeted with great news. Rating firm Morningstar had just selected Fairholme’s Bruce Berkowitz as the “Domestic-Stock Fund Manager of the Decade.” That’s quite an accolade, considering the heady competition. Morningstar chose him because “his aptitude for picking stocks sets him apart from his peers, and Fairholme’s portfolio is filled with attractively priced firms that generate high free cash flow.” In the just-completed decade — a decade in which the S&P 500 delivered slightly negative returns — Berkowitz’s Fairholme generated a 10-year annualized total return of 13%. The accolades are still pouring in. GuruFocus.com anointed Berkowitz as its “Investing Guru of the Year 2012.” These days, Berkowitz is still seeking out stocks with solid value and cash flow characteristics. According to recent filings, Berkowitz is loading up on shares of four insurers that are the epitome of… Read More

Stocks are definitely overbought. Overbought markets occur when prices move up sharply, and based on current charts, prices appear to be too high.#-ad_banner-# This situation actually occurs fairly often. Traders might be tempted to enter a short trade expecting the gains to be at least partially reversed. But that idea has led to large losses for many traders over the years. Prices might be irrational, but as traders, we need to remember that the fact that behavior is irrational is irrelevant. Read More

Stocks are definitely overbought. Overbought markets occur when prices move up sharply, and based on current charts, prices appear to be too high.#-ad_banner-# This situation actually occurs fairly often. Traders might be tempted to enter a short trade expecting the gains to be at least partially reversed. But that idea has led to large losses for many traders over the years. Prices might be irrational, but as traders, we need to remember that the fact that behavior is irrational is irrelevant. Economist John Maynard Keynes supposedly said, “Markets can remain irrational longer than you can remain solvent.” Traders use momentum indicators like the stochastics to decide when prices are overbought. The monthly chart of SPDR Dow Jones Industrial Average (NYSE: DIA) is shown below, and we can see that stochastics has been overbought for more than a year. Based on the stochastics indicator, we can see that… Read More

You probably already know that hedge funds have been dominating the financial news headlines recently. I wish I could say the coverage of these unique investment vehicles has been positive, but the media has focused on the few bad actors in the hedge fund business and the sector’s overall lackluster returns. While there are bad apples in every business and solid due diligence should weed most of them out, it’s the lack of overall returns (or “… Read More

You probably already know that hedge funds have been dominating the financial news headlines recently. I wish I could say the coverage of these unique investment vehicles has been positive, but the media has focused on the few bad actors in the hedge fund business and the sector’s overall lackluster returns. While there are bad apples in every business and solid due diligence should weed most of them out, it’s the lack of overall returns (or “alpha,” as market-beating returns are called in the business) that has most investors concerned.  A few funds have bucked the trend, delivering market-busting returns year after year. But they are usually difficult to gain access to, have high minimum investments and charge outrageous fees.#-ad_banner-# There are ways for average investors to follow the lead of these successful hedge funds without directly investing. Obviously, this isn’t an exact replication, but enough clues can be gleaned to… Read More