Despite new market highs and a rebound in corporate profits, post-recession job growth has been uneven at best. Falling unemployment numbers don’t accurately depict the whole picture — or even how dire the circumstances are for some families affected by joblessness.  #-ad_banner-#Discount retailers have stepped up to meet the demands of consumers who might not be so well-to-do but still need to fill their cupboards… without breaking the bank.  National chains such as Family Dollar (NYSE: FDO), Dollar General (NYSE: DG) and Dollar Tree (Nasdaq: DLTR) have been aggressively expanding their presence across the country since 2008, looking to steal… Read More

Despite new market highs and a rebound in corporate profits, post-recession job growth has been uneven at best. Falling unemployment numbers don’t accurately depict the whole picture — or even how dire the circumstances are for some families affected by joblessness.  #-ad_banner-#Discount retailers have stepped up to meet the demands of consumers who might not be so well-to-do but still need to fill their cupboards… without breaking the bank.  National chains such as Family Dollar (NYSE: FDO), Dollar General (NYSE: DG) and Dollar Tree (Nasdaq: DLTR) have been aggressively expanding their presence across the country since 2008, looking to steal market share from the granddaddy of all discount stores, Wal-Mart (NYSE: WMT). Shopping at Wal-Mart has long been a comprehensive experience, supplying consumers with everything under one roof. However, discount retailers are now following suit, lining their shelves with an ever-growing catalogue of new offerings, the most promising being perishables (staples such as eggs and milk) and tobacco. It remains to be seen whether these consumables will help dollar stores become true one-stop shops and edge out future trips to their larger counterparts. Rising consumer confidence has kept the stock prices of this sector low.  Are they at attractive levels… Read More

People retiring now or in the near future have my sympathy. It’s a tough time to be retired. #-ad_banner-#Few people have a pension anymore, and Social Security doesn’t provide anywhere near the purchasing power it used to. So, as never before, the onus for financial security in retirement is on the individual. Clearly, retirees need all the help they can get in generating sufficient income, which is why I always keep an eye out for the best income-producing investments available. And I’ve got one that’s perfect for the equity portion of their portfolios. One thing that makes this… Read More

People retiring now or in the near future have my sympathy. It’s a tough time to be retired. #-ad_banner-#Few people have a pension anymore, and Social Security doesn’t provide anywhere near the purchasing power it used to. So, as never before, the onus for financial security in retirement is on the individual. Clearly, retirees need all the help they can get in generating sufficient income, which is why I always keep an eye out for the best income-producing investments available. And I’ve got one that’s perfect for the equity portion of their portfolios. One thing that makes this stock so right for retirees is its safety factor. Typically, it’s 76% less volatile than the market. So if the market corrects by 10%, this stock might only fall 2% or so. In general, to get a sense of a stock’s safety, I like to see how it did in 2008, a terrible year in which the broader market took a nasty 37% tumble thanks to the financial crisis. However, my ideal retirement stock was up 9.5% that year. With dividends, it posted a total return of 12.2%. I’m referring to General Mills (NYSE: GIS), a well-known global leader in… Read More

The past 18 months have been a great time for investors to pursue IPOs. Many companies have seen strong demand for their newly issued shares, and in many instances, their valuations are now two or three times higher than what bankers envisioned. But investors haven’t responded quite so warmly to all IPOs. And when a new issue stumbles out of the gate, fleeing investors can send shares much lower.  That’s surely been the case for concert promoter SFX Entertainment (Nasdaq: SFXE), which priced shares at $13 back in October (and I profiled briefly last July). Read More

The past 18 months have been a great time for investors to pursue IPOs. Many companies have seen strong demand for their newly issued shares, and in many instances, their valuations are now two or three times higher than what bankers envisioned. But investors haven’t responded quite so warmly to all IPOs. And when a new issue stumbles out of the gate, fleeing investors can send shares much lower.  That’s surely been the case for concert promoter SFX Entertainment (Nasdaq: SFXE), which priced shares at $13 back in October (and I profiled briefly last July). They fell 56% to a low of $5.70 in late March, and are currently trading around $6.50.  #-ad_banner-#It was a regrettable IPO experience, to be sure — but there are no do-overs. What’s the remedy for this broken IPO? Proof that the company, recently loaded up with a series of acquisitions, will ultimately become the cash-producing machine that management promised investors. SFXE produces roughly 30 major outdoor music festivals and another 700 to 800 smaller events every year. A focus on electronic dance music (EDM) has been a sweet spot, as it is one of the fastest growing… Read More

Like clockwork, the investing adage “sell in May and go away” has re-emerged. Most investing clichés don’t hold water, but this one does. Strategists at S&P Capital IQ found an unusual set of calendar-based returns: “On a seasonal basis, the six-month stretch from May to October is historically a weak period for the S&P500 Index, dating back to 1990. On average, the broader market has risen just 1.3%, compared to a 7.0% gain from November to April.” #-ad_banner-#Why would such a trading pattern persist? Two reasons are usually cited.  First, active investors, professional traders and hedge fund managers start to take… Read More

Like clockwork, the investing adage “sell in May and go away” has re-emerged. Most investing clichés don’t hold water, but this one does. Strategists at S&P Capital IQ found an unusual set of calendar-based returns: “On a seasonal basis, the six-month stretch from May to October is historically a weak period for the S&P500 Index, dating back to 1990. On average, the broader market has risen just 1.3%, compared to a 7.0% gain from November to April.” #-ad_banner-#Why would such a trading pattern persist? Two reasons are usually cited.  First, active investors, professional traders and hedge fund managers start to take three-day weekends, and they devote less time looking for stocks to buy and more time looking for existing positions to cull.  Second, the European sales offices of U.S. firms start to detect a hesitance when it comes to purchasing decisions. Few European customers want to ink deals just as they are starting to prepare for their extended summer holidays. Though the market has been in a solid uptrend for the past five years, pockets of weakness have emerged in the spring and summer months. To inject a further note of caution, investors should proceed especially cautiously with tech… Read More

If you think back to your school days, you may remember a kid or two who constantly had their hands raised and contradicted the teacher at every opportunity. The kid questioned everything, to an irritating extent: Why couldn’t they just accept what they were being told and move on? #-ad_banner-#However, I usually had another thought that crept into my mind. What if they were right about everything? Could they really be that much smarter than everyone else? Years later, you might still hear that same kid’s voice, contradicting your investment ideas and your research — only this time, that kid… Read More

If you think back to your school days, you may remember a kid or two who constantly had their hands raised and contradicted the teacher at every opportunity. The kid questioned everything, to an irritating extent: Why couldn’t they just accept what they were being told and move on? #-ad_banner-#However, I usually had another thought that crept into my mind. What if they were right about everything? Could they really be that much smarter than everyone else? Years later, you might still hear that same kid’s voice, contradicting your investment ideas and your research — only this time, that kid is known as something else… a short seller.  Short sellers have the reputation of being smarter than everyone in the room. Wall Street calls these investors the “smart money” because of the presumption that they must have sophisticated knowledge to predict when a stock is going to fall.  It doesn’t necessarily make them right, though. Shorting a stock is a dangerous game, which is why only the “smart money” usually engages in it. If the stock begins to rise, short sellers will have to cover their positions by buying stock, an action that puts upward pressure on an already rising… Read More

There’s a little-known indicator that’s making a small group of investors a lot of money. I call this indicator the “Alpha Score,” because it consistently beats the market and often with less risk than buy-and-hold investing. It can flag exactly which stocks are about to jump double and triple digits in the coming days… weeks… and months. I’ll tell you more about the Alpha Score in a second, but just know that the indicator can range from 0 to 200. The higher the number, the more potential the stock has. #-ad_banner-#For example, you’ve probably never heard of Westmoreland Coal (Nasdaq:… Read More

There’s a little-known indicator that’s making a small group of investors a lot of money. I call this indicator the “Alpha Score,” because it consistently beats the market and often with less risk than buy-and-hold investing. It can flag exactly which stocks are about to jump double and triple digits in the coming days… weeks… and months. I’ll tell you more about the Alpha Score in a second, but just know that the indicator can range from 0 to 200. The higher the number, the more potential the stock has. #-ad_banner-#For example, you’ve probably never heard of Westmoreland Coal (Nasdaq: WLB). It operates six surface coal mines and two power generating units in the western United States. The company looked promising when we recommended it on Dec. 18. Westmoreland had sold 95% of its future production under long-term contracts, and the market for coal looked stable. But that’s not what attracted us to the stock. What most investors didn’t know about WLB is that it had an Alpha Score of 158. Less than 1% of stocks have a score that high at any given time. The stock bounced 33% higher within two weeks. And as I write this,… Read More

“Are you going to retire after you sell your company?” I once asked the chief financial officer of a company about to be sold for a huge sum. #-ad_banner-#”Are you kidding me?” he replied. “Why would I retire? I’m just getting started.” This surprised me at the time — but over the next few years, I realized that many people who have the drive and acumen to build vast fortunes aren’t even motivated by wealth. Yet it seems that monetary rewards are a result of their actions nonetheless. This realization made it clear to me that the key to investing… Read More

“Are you going to retire after you sell your company?” I once asked the chief financial officer of a company about to be sold for a huge sum. #-ad_banner-#”Are you kidding me?” he replied. “Why would I retire? I’m just getting started.” This surprised me at the time — but over the next few years, I realized that many people who have the drive and acumen to build vast fortunes aren’t even motivated by wealth. Yet it seems that monetary rewards are a result of their actions nonetheless. This realization made it clear to me that the key to investing success was to learn from and try to follow the examples of the wealthiest businesspeople and investors. Most of the self-made millionaires I know made their fortunes through real estate investments, and many of my small-business friends use real estate to supplement their income. This piqued my interest in real estate investment and led me to start a successful part-time marketing business. Through my hands-on experience, I’ve noticed a distinct shift in residential real estate trends. From around 1980 to 2007, homes kept getting larger and larger,  culminating in so-called McMansions — huge new homes on tiny lots squeezed up… Read More

When it comes to trading, there are two strategies I like to use.  #-ad_banner-#The first is to buy a quality company after it has fallen from grace and then wait patiently while the rest of Wall Street comes to its senses and sees the ugly duckling for the beautiful swan it really is.  The other strategy I like to use is to buy a winning stock that keeps making new highs on strong fundamentals. The latter is my strategy when it comes to Ryder System (NYSE: R). I think traders will be able to ride shares of this… Read More

When it comes to trading, there are two strategies I like to use.  #-ad_banner-#The first is to buy a quality company after it has fallen from grace and then wait patiently while the rest of Wall Street comes to its senses and sees the ugly duckling for the beautiful swan it really is.  The other strategy I like to use is to buy a winning stock that keeps making new highs on strong fundamentals. The latter is my strategy when it comes to Ryder System (NYSE: R). I think traders will be able to ride shares of this transportation and supply chain management firm higher over the next several months. In February, my colleague Serge Berger analyzed the performance of Ryder shares over the past several years. He pointed out that the stock had “built a good layer of support and a solid base from which it can now potentially attack and overcome the 2008 highs.” Those highs were around $75, and by late February, R had eclipsed that mark. It ran all the way to $84.40 on April 23, and now is about 4% below that peak.  Part of the reason… Read More

The second “dot-com” bubble is collapsing. Here’s what you need to know… Unless you were living under a rock in 2001, you undoubtedly remember the “dot-com” bubble. At the time, rapid changes in technology (the Internet) had investors so enamored with tech stocks that any company with “.com” in its name was instantly loved by the market, regardless of its future earnings potential. #-ad_banner-#As a result, the Nasdaq Composite Index soared 550% between 1995 and the year 2000… Most of us know what happened after that. By 2001, the bubble had burst. Investors realized companies like Pets.com, the infamous website… Read More

The second “dot-com” bubble is collapsing. Here’s what you need to know… Unless you were living under a rock in 2001, you undoubtedly remember the “dot-com” bubble. At the time, rapid changes in technology (the Internet) had investors so enamored with tech stocks that any company with “.com” in its name was instantly loved by the market, regardless of its future earnings potential. #-ad_banner-#As a result, the Nasdaq Composite Index soared 550% between 1995 and the year 2000… Most of us know what happened after that. By 2001, the bubble had burst. Investors realized companies like Pets.com, the infamous website that tried to convince us selling dog food over the Internet was a good idea, were nothing more than big dreams with little economic substance. The Nasdaq — which traded as high as 5,132 at the bubble’s peak — was below 1,500 by July 2002. Today, we’re seeing a similar situation develop in the stock market. And if we’re right, then like the “dot-com” crash of the early millennium, this event could also produce devastating losses for investors. To understand why, all you need to do is look at social media companies… Over the past five years, social… Read More

Paradoxically, the trying economic conditions over the past several years have been perfect for super-rich and connected investors — the top 1% of the 1% — to exponentially increase their wealth. #-ad_banner-#One of the more popular but seldom talked-about tactics is known as IPO flipping. This refers to the practice of buying IPO shares at the initial offered price then quickly reselling them once the shares start trading — and profiting from the initial pop. However, only institutions, hedge funds and very wealthy investors are allocated shares by the underwriting broker before the IPO. Even though most regular investors are… Read More

Paradoxically, the trying economic conditions over the past several years have been perfect for super-rich and connected investors — the top 1% of the 1% — to exponentially increase their wealth. #-ad_banner-#One of the more popular but seldom talked-about tactics is known as IPO flipping. This refers to the practice of buying IPO shares at the initial offered price then quickly reselling them once the shares start trading — and profiting from the initial pop. However, only institutions, hedge funds and very wealthy investors are allocated shares by the underwriting broker before the IPO. Even though most regular investors are precluded from IPO flipping, they can still learn a profitable lesson — never purchase an IPO on the first day of trading. Sure, it’s tempting to buy a newly issued stock as prices rocket higher that first day — but share prices often retreat just as quickly. This is because the flippers are dumping their often substantial allocations as the public is trying to scoop up shares. Last year saw the most IPOs since the height of the dot-com bubble in 2000, and the surge in IPOs is showing no signs of abating this year. As of February, IPO filings… Read More