When the chorus of investment commentary gets so strong in one direction, I start to question the collective wisdom of the market. I’m a believer in general market efficiency, that most news is recognized in prices. #-ad_banner-#But occasionally, herd mentality sets in and the market outlook clearly needs to be reevaluated. It’s in this ability to step back and question the herd’s stampede in one direction that investors can find huge opportunities. It was obvious when pundits argued that valuations didn’t matter during the tech bubble. It was obvious in 2007 when subprime defaults exploded and mortgage lenders started going… Read More

When the chorus of investment commentary gets so strong in one direction, I start to question the collective wisdom of the market. I’m a believer in general market efficiency, that most news is recognized in prices. #-ad_banner-#But occasionally, herd mentality sets in and the market outlook clearly needs to be reevaluated. It’s in this ability to step back and question the herd’s stampede in one direction that investors can find huge opportunities. It was obvious when pundits argued that valuations didn’t matter during the tech bubble. It was obvious in 2007 when subprime defaults exploded and mortgage lenders started going bankrupt, even as analysts still predicted higher prices. That same collective wisdom is starting to skew to one side again, despite strong evidence to the contrary. Traders and analysts alike are nearly unanimous in a trend that could unravel and become one of the biggest surprises of 2017. The Market’s Love Affair With The U.S. Dollar The greenback made a run at fresh highs in late 2016 and closed the year out strong on the prospect for faster U.S. economic growth and rate hikes. Net long positions by traders in the U.S. dollar reached $25.4 billion on January 3… Read More

“Where are the customers’ yachts?” It was a question the tour guide didn’t expect. He was taking a group of tourists through the financial district in lower Manhattan from the area now known as Battery Park. #-ad_banner-#Eventually docks appeared around the park. And because of its proximity to Wall Street, it became a favored location for Wall Street bankers and brokers to dock their very expensive yachts. So it was on this day that the tour guide was extolling the virtues of Wall Street moneymen. He told his audience that the yachts were the rewards for creating enormous wealth for… Read More

“Where are the customers’ yachts?” It was a question the tour guide didn’t expect. He was taking a group of tourists through the financial district in lower Manhattan from the area now known as Battery Park. #-ad_banner-#Eventually docks appeared around the park. And because of its proximity to Wall Street, it became a favored location for Wall Street bankers and brokers to dock their very expensive yachts. So it was on this day that the tour guide was extolling the virtues of Wall Street moneymen. He told his audience that the yachts were the rewards for creating enormous wealth for their customers. To which one lone voice asked, “Where are the customers’ yachts?” Selling Is More Lucrative Than Buying Now, I don’t know if this story is true. It was described in a book about Wall Street written in 1940 by Fred Schwed. The name of the book is “Where Are the Customers’ Yachts?” It’s a lighthearted look about a serious subject that every investor should read. But despite its humorous undertone, the message is dead on. There is far more money in providing financial advice to investors than there is in receiving financial advice from Wall Street experts. Read More

A rising interest rate environment also supports a bearish case for some stocks, and I’ve found a trade to capitalize on this scenario.  Janet Yellen and the FOMC increased interest rates another quarter point last Wednesday, and Yellen made it very clear that she intends on being more aggressive with hikes than previously expected. Some are calling this new, market restrictive policy the “Yellen Collar.” Her promise for higher rates will slow down the flow of money in the economy, and will also trigger investors to move out of certain income-oriented sectors and into other assets.  This is where my… Read More

A rising interest rate environment also supports a bearish case for some stocks, and I’ve found a trade to capitalize on this scenario.  Janet Yellen and the FOMC increased interest rates another quarter point last Wednesday, and Yellen made it very clear that she intends on being more aggressive with hikes than previously expected. Some are calling this new, market restrictive policy the “Yellen Collar.” Her promise for higher rates will slow down the flow of money in the economy, and will also trigger investors to move out of certain income-oriented sectors and into other assets.  This is where my Profit Amplifier readers and I will position our next trade. —Recommended Link— How This Small Group Will Make MILLIONS On The Greatest Tech Innovation Of 2017 In the last few years they’ve seen gains of 296%… 545%… even as much as 696%! But a single new technology is poised to make 2017 their biggest year yet… Full story… How Rising Rate Environments Hurt Real Estate  One of the most rate sensitive investments is real estate. When interest rates rise, the higher loan costs squeeze profit margins and diminish investors’ returns. The affordability of real… Read More

Geopolitical issues have dominated the markets this year, and polls have been useless in lending any kind of certainty to asset prices. OPEC has successfully managed expectations for a production freeze, even if an eventual deal is still unlikely, which has driven oil prices to nearly double since their February lows. Few would have predicted in January the momentum of the Trump campaign and the potential uncertainty on global trade. #-ad_banner-#As important as these events have been, however, 2016 will likely be remembered for one event in particular.  A referendum that most polls predicted would fail has forced a massive… Read More

Geopolitical issues have dominated the markets this year, and polls have been useless in lending any kind of certainty to asset prices. OPEC has successfully managed expectations for a production freeze, even if an eventual deal is still unlikely, which has driven oil prices to nearly double since their February lows. Few would have predicted in January the momentum of the Trump campaign and the potential uncertainty on global trade. #-ad_banner-#As important as these events have been, however, 2016 will likely be remembered for one event in particular.  A referendum that most polls predicted would fail has forced a massive selloff in one of the world’s top currencies, and has put in doubt the future of one of its largest economies. As is always the case, investors have rushed to the exits in this environment of economic uncertainty. When the dust settles, though, it may turn out to be one of the year’s best trades. Investors Fearfully Look To The Future Of The UK The British pound is now the worst performing currency of the year, down nearly 16% this year and to its lowest level in 31 years against the U.S. dollar. A flash crash of 6% in… Read More

The S&P 500 is trapped in a nasty earnings recession. Earnings have now declined for five consecutive quarters. The last time that happened was during the financial crisis in 2009. In the elusive quest for earnings growth, more companies are turning to a controversial strategy: replacing humans with robots to help cut costs and increase productivity. #-ad_banner-#For example, Amazon (Nasdaq: AMZN) has more than 30,000 Kiva Robots buzzing around its global network of warehouses. According to Dave Clark, Amazon’s SVP of Worldwide Operations and Customer Service, the robots helped reduce operating expenses by 20%. Just five years ago, those tasks… Read More

The S&P 500 is trapped in a nasty earnings recession. Earnings have now declined for five consecutive quarters. The last time that happened was during the financial crisis in 2009. In the elusive quest for earnings growth, more companies are turning to a controversial strategy: replacing humans with robots to help cut costs and increase productivity. #-ad_banner-#For example, Amazon (Nasdaq: AMZN) has more than 30,000 Kiva Robots buzzing around its global network of warehouses. According to Dave Clark, Amazon’s SVP of Worldwide Operations and Customer Service, the robots helped reduce operating expenses by 20%. Just five years ago, those tasks were being performed by people. Deutsche Bank estimates that adding a fleet of robots to a new warehouse saves $22 million in fulfillment expenses. Other S&P 500 companies are following Amazon’s lead. Drug store leader CVS Health (NYSE: CVS) has replaced cashiers with self-checkout kiosks in most of its stores. Fast food leaders McDonalds (NYSE: MCD) and Pizza Hut are experimenting with replacing human labor with automated machinery in their restaurants. As Amazon, CVS, McDonalds and Pizza Hut demonstrate, robots can have a huge impact on a company’s profitability. Not only do they have the ability to operate 24/7, robots… Read More

There’s been a trend emerging in the U.S. dollar (USD) for the past few weeks that makes little sense. At a time when the dollar should be gaining momentum, its value has been drained quicker than a keg of cheap beer at a frat party. According to several sources, the recent drop can be at least partially attributed to technical and algorithmic trading.  When you strip out the commotion and look only at the real data, though, it seems there could be a fair amount of upside in the USD over the next few months. But before I tell you… Read More

There’s been a trend emerging in the U.S. dollar (USD) for the past few weeks that makes little sense. At a time when the dollar should be gaining momentum, its value has been drained quicker than a keg of cheap beer at a frat party. According to several sources, the recent drop can be at least partially attributed to technical and algorithmic trading.  When you strip out the commotion and look only at the real data, though, it seems there could be a fair amount of upside in the USD over the next few months. But before I tell you about how to profit from this situation, let’s break down the basics of my thesis… — Recommended Link — It Won’t Matter Who Wins In November… The right thinks Democrats will sink this country’s economy. The left thinks Republicans will bring economic destruction. Truth is: They’re both right. It doesn’t matter who takes office in January, because history says the market could drop up to 58%. But these three investments are a shoo-in for double and triple-digit returns no matter what happens. The U.S. dollar can have dramatic effects on basically everything in our economy, including the value of other… Read More

Growing up in Philly, I developed an appreciation for the “little guy.” My father, uncle and grandmother were all small business owners, and some of my fondest memories were the times I spent working with them and the people I met along the way. I vividly remember our neighborhoods lined with small row homes, many with businesses on the bottom floor where you could get anything from a good cheesesteak to a loan from one of the many regional banks.  Back in the day, small businesses were the soul of the city (and America), and banks often supplied the capital… Read More

Growing up in Philly, I developed an appreciation for the “little guy.” My father, uncle and grandmother were all small business owners, and some of my fondest memories were the times I spent working with them and the people I met along the way. I vividly remember our neighborhoods lined with small row homes, many with businesses on the bottom floor where you could get anything from a good cheesesteak to a loan from one of the many regional banks.  Back in the day, small businesses were the soul of the city (and America), and banks often supplied the capital to keep them going. At the time, the business landscape wasn’t dominated by gigantic banks, big-box stores or mega chains. It was a menagerie of boutique business owners from every background, all with the same vision: to make their version of the American dream come true. Small business is still at the core of our economy and accounts for 54% of all sales in the United States. But one key component of small business commerce in America is dying. —Sponsored Link— Revealed: The Investing Secret That Turned Amateur Investors Into Millionaires How did a group of amateur investors crush… Read More

Fox Business recently tapped our resident options expert Jared Levy to discuss earnings results and debate a recent research report on the future of the U.S. economy from Morgan Stanley. The report’s headline: “No Fed Rate Hike Until 2018.” That’s news enough, but as Jared dug deeper, he found some troubling signs relating to the American consumer as well…… Read More

Fox Business recently tapped our resident options expert Jared Levy to discuss earnings results and debate a recent research report on the future of the U.S. economy from Morgan Stanley. The report’s headline: “No Fed Rate Hike Until 2018.” That’s news enough, but as Jared dug deeper, he found some troubling signs relating to the American consumer as well… Here’s what Jared told readers of his premium newsletter, Pro Trader, about the report:       “The Morgan Stanley report forecast 2017 U.S. GDP growth at only 1.5%, which is 35% lower than the consensus of 2.3%. The report detailed just how bad things are for American consumers and how many were skimping on expenditures and saving in record numbers. Morgan Stanley explained that the Fed would be working overtime just to… Read More

If there is one thing the banking sector hates, it is a flat yield curve. And the way the bond market is acting right now, there seems to be one on the way. The traditional banking business borrows money at short-term rates and lends it out at long-term rates. Currently, the spread between the benchmark 10-year Treasury rate and the 2-year rate, which is the proxy for the yield curve, is at levels not seen since late 2007. For context, the spread went negative in late 2006, meaning the yield curve was inverted. Economists note that… Read More

If there is one thing the banking sector hates, it is a flat yield curve. And the way the bond market is acting right now, there seems to be one on the way. The traditional banking business borrows money at short-term rates and lends it out at long-term rates. Currently, the spread between the benchmark 10-year Treasury rate and the 2-year rate, which is the proxy for the yield curve, is at levels not seen since late 2007. For context, the spread went negative in late 2006, meaning the yield curve was inverted. Economists note that an inverted yield curve is often a precursor to a recession, and in the stock market at that time, the writing was on the wall. While big international banks have diverse business interests, smaller banks still rely on lending money to individuals and businesses, making their fortunes much more intimately connected to the yield curve. If there is no money to be made borrowing short and lending long, their profits will suffer. The SPDR S&P Regional Banking ETF (NYSE: KRE) is a good representation of the sector, and we can see in the chart below that it sports bearish technicals. … Read More

Smart Beta exchange traded funds (ETFs) have been around since 2003, but they’ve exploded in popularity in the past year. Several major investment product providers, including Franklin Templeton, Legg Mason, John Hancock and Goldman Sachs, have all moved recently to introduce new Smart Beta ETFs. Let’s try to understand why — and how you can use them to make big bucks in a volatile market. #-ad_banner-#First, a few terms you should know: •    ETF: An exchange-traded fund tracks an underlying index, portfolio or commodity but trades like a security on a stock exchange. It can be bought and sold throughout… Read More

Smart Beta exchange traded funds (ETFs) have been around since 2003, but they’ve exploded in popularity in the past year. Several major investment product providers, including Franklin Templeton, Legg Mason, John Hancock and Goldman Sachs, have all moved recently to introduce new Smart Beta ETFs. Let’s try to understand why — and how you can use them to make big bucks in a volatile market. #-ad_banner-#First, a few terms you should know: •    ETF: An exchange-traded fund tracks an underlying index, portfolio or commodity but trades like a security on a stock exchange. It can be bought and sold throughout the day like a stock.  •    Beta: A statistical measure of the volatility of an individual stock (or other security, index or portfolio) versus a given benchmark, such as the S&P 500. When measuring a stock’s volatility versus the S&P 500, for example, the S&P 500 has a Beta of 1.0. If the stock has a Beta of 1.5, it means that stock tends to be 50% more volatile than the S&P 500, in the same direction. If the S&P 500 goes up 10%, the stock tends to go up 15%. A stock with a Beta of 2.0 would tend… Read More