Small-cap stocks have been a reliable way for investors to outperform the S&P 500 for a long time. In the last 17 years the iShares Core S&P Small Cap (NYSE: IJR) has gained 335%. That’s more than a 300% premium to the 74% return of the SPDR S&P 500 ETF (NYSE: SPY) over the same period. This huge discrepancy is shown below. However, over the last three years this performance gap has evaporated. With investors fearful of another big stock market crash and huge waves of retirees piling into dividend stocks in search of yield, small-caps have temporarily… Read More

Small-cap stocks have been a reliable way for investors to outperform the S&P 500 for a long time. In the last 17 years the iShares Core S&P Small Cap (NYSE: IJR) has gained 335%. That’s more than a 300% premium to the 74% return of the SPDR S&P 500 ETF (NYSE: SPY) over the same period. This huge discrepancy is shown below. However, over the last three years this performance gap has evaporated. With investors fearful of another big stock market crash and huge waves of retirees piling into dividend stocks in search of yield, small-caps have temporarily fallen out of favor. As you can see in the chart below, small caps have only fared slightly better than the S&P 500 over the last three years. Take a look below. In the short run, this has been frustrating for small cap investors. They took the risk of higher volatility without the reward of outsized returns. However, it has also created a rare value opportunity. Right now there are an abnormal number of small cap stocks that are trading with historically low valuations while still offering huge growth potential. I put together a screen of… Read More

You’ve no doubt heard of the company that’s bringing electric vehicles to the masses. Founded in 2003 and based in Palo Alto, California, the company was co-founded by entrepreneur Elon Musk — founder of Space-X and co-founder of PayPal, SolarCity and Zip2. Of course, I’m talking about Tesla (Nasdaq: TSLA). The company sells solar panels and solar roofs for energy generation, plus batteries for stationary storage for residential and commercial properties — and, of course, Tesla makes electric vehicles. With the Tesla Roadster debuting in 2008, the S in 2012 and the X in 2015, the company is working on… Read More

You’ve no doubt heard of the company that’s bringing electric vehicles to the masses. Founded in 2003 and based in Palo Alto, California, the company was co-founded by entrepreneur Elon Musk — founder of Space-X and co-founder of PayPal, SolarCity and Zip2. Of course, I’m talking about Tesla (Nasdaq: TSLA). The company sells solar panels and solar roofs for energy generation, plus batteries for stationary storage for residential and commercial properties — and, of course, Tesla makes electric vehicles. With the Tesla Roadster debuting in 2008, the S in 2012 and the X in 2015, the company is working on the Model 3, a vehicle developed for the masses with a starting price of about $35,000, compared with the base price of $68,000 for the Model S. Tesla is one of the most controversial stocks in the market. Bring it up and you’ll hear arguments from both sides: there are loyal admirers of Tesla and Musk, and there are those that haven’t yet been sold on either. Tesla fans argue that it’s the vehicle of the future and you’re paying for earnings that are quite possibly still five-to-10 years out. Many will argue that it’s following in similar footsteps as… Read More

Bill Miller is back on a winning streak. Once a hero of Wall Street with an enviable record of 15 straight years of beating the S&P 500, he suffered the same fate as everyday investors during the financial crisis, and has since failed to return to his former level of success.  But today, Bill Miller’s stock picks are earning back their stellar reputation for market outperformance.  A Truly Exceptional Track Record Most funds have difficulty just beating the S&P 500 in any given year. To do so for multiple years in a row is even more impressive. So it’s… Read More

Bill Miller is back on a winning streak. Once a hero of Wall Street with an enviable record of 15 straight years of beating the S&P 500, he suffered the same fate as everyday investors during the financial crisis, and has since failed to return to his former level of success.  But today, Bill Miller’s stock picks are earning back their stellar reputation for market outperformance.  A Truly Exceptional Track Record Most funds have difficulty just beating the S&P 500 in any given year. To do so for multiple years in a row is even more impressive. So it’s crazy to think that Bill Miller beat the index for 15 years straight while working at Legg Mason. These returns are simply unparalleled in the mutual fund world. His track record even outperformed Fidelity’s legendary Peter Lynch.  However, his well-tested value investing strategy of buying stocks at a discount was no match for the crashing stock market. Convinced his holdings would bounce back, Mr. Miller kept averaging into positions and the market kept proving him wrong.  From 2007 to 2011, his Legg Mason Opportunity Fund plunged over 50% as large bets on troubled financial stocks failed to turn a profit. Read More

Warren Buffett became one of the richest men on the planet by making smart investments in what many would consider boring, unglamorous businesses. Property-casualty insurance, railroads, soft serve ice cream, and residential real estate brokerage are a few of the mundane sectors that have enriched him and Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B) shareholders.  One of the most lucrative “boring” sectors I’ve watched throughout my career has been retail aftermarket auto parts. It’s consistent. It’s still extremely fragmented, which means that the biggest players have plenty of room to grow market share organically or through acquisition. And when the stock… Read More

Warren Buffett became one of the richest men on the planet by making smart investments in what many would consider boring, unglamorous businesses. Property-casualty insurance, railroads, soft serve ice cream, and residential real estate brokerage are a few of the mundane sectors that have enriched him and Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B) shareholders.  One of the most lucrative “boring” sectors I’ve watched throughout my career has been retail aftermarket auto parts. It’s consistent. It’s still extremely fragmented, which means that the biggest players have plenty of room to grow market share organically or through acquisition. And when the stock of one of the biggest players goes on sale, DO NOT miss an opportunity to buy. The chart below shows how the top four aftermarket auto parts retailer stocks have performed over a three-year period.   The third company, one of the weakest performers, is Genuine Parts Company (NYSE: GPC).It’s,my favorite of the group. Here’s why… Getting Paid Genuine Parts has increased its dividend payment steadily over the last 60 years. Over the last decade, the company has grown its dividend at an annual rate of 7%. AutoZone and O’Reilly pay no dividends, while Advance pays… Read More

Computers and the internet have become indispensable parts of our lives. From smart phones and automobiles to how we bank and even exercise, rarely does a day go by that we do not interface with the silicon chip-powered machines.  Most investors focus on the microprocessor when they think of computer chips. Giants such as Intel (Nasdaq: INTC) have built empires on the back of the microprocessor revolution.  Obviously, microprocessors are here to stay, but decent opportunities for investors in the space are rapidly diminishing. The mature industry is in the midst of a long-term plateau as manufacturing efficiencies, economies of… Read More

Computers and the internet have become indispensable parts of our lives. From smart phones and automobiles to how we bank and even exercise, rarely does a day go by that we do not interface with the silicon chip-powered machines.  Most investors focus on the microprocessor when they think of computer chips. Giants such as Intel (Nasdaq: INTC) have built empires on the back of the microprocessor revolution.  Obviously, microprocessors are here to stay, but decent opportunities for investors in the space are rapidly diminishing. The mature industry is in the midst of a long-term plateau as manufacturing efficiencies, economies of scale, and market saturation drive prices ever lower.  If you missed the microprocessor boom, it’s not too late to capitalize on the chip market. Today’s explosive trends, including artificial intelligence, machine learning, and the ubiquitous Internet of Things, all have one thing in common: An insatiable thirst for recalling and analyzing massive amounts of information.  We are in the infancy of the next technological revolution, and memory chips are at the core of these radical changes. Even better, their rise could bring investors the same results seen by early backers of microprocessors. What Are Memory Chips Memory chips are… Read More

It’s not hard to find quality income-producing stocks. Nearly every investor out there can screen for stocks based on dividend yields. However, there is far more to successful income investing than buying high-yielding dividend payers.  Many times, the highest yielding stocks are also the least reliable. Remember, the yield is inversely proportional to the share price. In other words, the lower the share price moves, the higher the yield (assuming the dividend payment stays the same). Therefore, high-yielding stocks may only provide the high yields due to a plunging stock price. Investors must now look beyond dividends for income. Stock… Read More

It’s not hard to find quality income-producing stocks. Nearly every investor out there can screen for stocks based on dividend yields. However, there is far more to successful income investing than buying high-yielding dividend payers.  Many times, the highest yielding stocks are also the least reliable. Remember, the yield is inversely proportional to the share price. In other words, the lower the share price moves, the higher the yield (assuming the dividend payment stays the same). Therefore, high-yielding stocks may only provide the high yields due to a plunging stock price. Investors must now look beyond dividends for income. Stock buybacks have become a popular way for companies to give excess cash back to investors.  Buybacks, or share repurchase programs, are a viable alternative for savvy investors. The trick is to find companies with long term buyback plans that also have growth catalysts. This combination is the key to finding ideal income stocks. Here are three income stocks with high growth potential over the long term. Today’s disconnect between revenue and share price make these stocks a welcome anomaly.  3 Income-Producing Stocks With Strong Buyback Plans 1. American International Group (NYSE: AIG)  This nearly $60 billion global insurance company… Read More

What started as a minor theme just decades ago looks to be turning the corner with the force of more than 75 million investors in the United States alone.  Investors have long supported the idea of a greater good through philanthropic projects. But it wasn’t until late in the 20th century that they started accepting dual-missions of profitability and social responsibility at companies in which they invested. The idea has fought a tough argument against the traditional singular mandate of increasing wealth. Now it seems the theme is becoming a major force, and new evidence points to surprising upside for… Read More

What started as a minor theme just decades ago looks to be turning the corner with the force of more than 75 million investors in the United States alone.  Investors have long supported the idea of a greater good through philanthropic projects. But it wasn’t until late in the 20th century that they started accepting dual-missions of profitability and social responsibility at companies in which they invested. The idea has fought a tough argument against the traditional singular mandate of increasing wealth. Now it seems the theme is becoming a major force, and new evidence points to surprising upside for investors. As the market shifts to rewarding socially-responsible companies, investors need to know what to look for and how to take advantage of the new paradigm. A Generation Of Impact Investors Impact investing is led by not only financial criteria but also influenced by environmental, social and governance standards (ESG). Adopting an ESG framework means management is explicitly embracing social issues and responsibilities beyond shareholder profits.  #-ad_banner-#Several endowments and pension funds have adopted ESG rules for companies in which they will invest but the theme has yet to be adopted by many individual investors. University endowments, pension funds, and… Read More

The hacker group known as Shadow Brokers publicly released a set of tools on the social network platform Medium in April. Called EternalBlue and EternalRomance, the tools allow hackers backdoor access for remote control of infected computers.  While the market hasn’t reacted to the news of the release, Sean Dillon of cybersecurity firm RiskSense Inc. told Bloomberg that these tools are “10-times worse” than recent viruses like the Heartbleed bug that infected computers at Yahoo and Amazon.  We’re talking about government-quality hacking tools — and they’ve just been spammed out to every hacker with an internet connection.  Dillon says the… Read More

The hacker group known as Shadow Brokers publicly released a set of tools on the social network platform Medium in April. Called EternalBlue and EternalRomance, the tools allow hackers backdoor access for remote control of infected computers.  While the market hasn’t reacted to the news of the release, Sean Dillon of cybersecurity firm RiskSense Inc. told Bloomberg that these tools are “10-times worse” than recent viruses like the Heartbleed bug that infected computers at Yahoo and Amazon.  We’re talking about government-quality hacking tools — and they’ve just been spammed out to every hacker with an internet connection.  Dillon says the tools are, “the kind of thing [security analysts] see used very rarely on very special, covert cybermissions.” He’s already found computers infected in dozens of clients from startups, government agencies and Fortune 100 companies. That means it’s only a matter of time before reports of large-scale and sophisticated cyberattacks start flooding the news. When it happens, expect a pop in the shares of cybersecurity companies. Cybercrime Headline Risks Move To Red Alert Corporate America prepared for years against the potential for hacker threats related to the Y2K bug. Headlines screamed warnings in 2014 for dangers related to the Heartbleed… Read More

I want to share with you something that’s been bothering me for a while now… Jamie Dimon, Chairman and CEO of banking giant JPMorgan Chase, recently released his annual letter to shareholders. Dimon is, as you might imagine, smart as a whip. In fact, Buffett says he considers Dimon’s shareholder letters indispensable reading. Two lines stuck out from Dimon’s latest missive: “The United States of America is truly an exceptional country… But it is clear that something is wrong — and it’s holding us back.”  I’ve got to be honest… this has stuck with me for… Read More

I want to share with you something that’s been bothering me for a while now… Jamie Dimon, Chairman and CEO of banking giant JPMorgan Chase, recently released his annual letter to shareholders. Dimon is, as you might imagine, smart as a whip. In fact, Buffett says he considers Dimon’s shareholder letters indispensable reading. Two lines stuck out from Dimon’s latest missive: “The United States of America is truly an exceptional country… But it is clear that something is wrong — and it’s holding us back.”  I’ve got to be honest… this has stuck with me for weeks. It’s something I’ve been thinking long and hard about for the past few years, and I’m willing to bet you’ve at least felt it on some sort of visceral level yourself.  —Recommended Link— How Jim Cashed $13,784 In Daily Paychecks Experimenting With This Wildly Successful System Jim took a cool $13,784… Annie grabbed $2,194 in one month… and Curtis cashes $4,200 in daily payments every month. It’s all perfectly legal. Their fortunes have been documented. See for yourself how easy it will be for YOU to start collecting paychecks each and every day… Dimon offered little in the… Read More

“Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.” The above is a quote by Laurence J. Peter, the man who formulated the Peter Principle. For the uninitiated, the Peter Principle states that an employee is promoted based on their performance in their current position — not on their ability to do the new job. This means the employee will continue to receive promotions until they get a job they can’t do.  Once they reach this level, they have gone as far as they can… Read More

“Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it.” The above is a quote by Laurence J. Peter, the man who formulated the Peter Principle. For the uninitiated, the Peter Principle states that an employee is promoted based on their performance in their current position — not on their ability to do the new job. This means the employee will continue to receive promotions until they get a job they can’t do.  Once they reach this level, they have gone as far as they can in that organization. Peter called this level their “level of incompetence.” Unfortunately, once an employee reaches his level of incompetence, the organization begins to suffer. And by default, the customers of that organization are harmed by the incompetent person’s inability to do their job. What The Peter Principle Looks Like In Reality The Wall Street Journal has been taking comments in an online debate over the idea of investing the Social Security trust fund in stocks. The idea is that the Social Security trust fund has about $2.9 trillion in assets that, if invested in… Read More