Do you follow the 80/20 rule? During the past century this simple ratio has developed into one of the most useful concepts and tools of modern-day routine. In a moment, I’ll show you how you can use a version of the 80/20 rule to help take your portfolio to a whole other level. #-ad_banner-#First, some background… The 80/20 rule assumes that most of the results in any situation — sales, finance and even personal relationships — are determined by a small number of events. The… Read More

Do you follow the 80/20 rule? During the past century this simple ratio has developed into one of the most useful concepts and tools of modern-day routine. In a moment, I’ll show you how you can use a version of the 80/20 rule to help take your portfolio to a whole other level. #-ad_banner-#First, some background… The 80/20 rule assumes that most of the results in any situation — sales, finance and even personal relationships — are determined by a small number of events. The notion of the “vital few” has its origins in 1906 in Italy, where economist Vilfredo Pareto observed that 80% of the wealth was controlled by 20% of the population. Pareto reportedly developed the principle after observing similar scenarios in everyday life, including the fact that 80% of the peas in his garden came from only 20% of the pea pods. Then came Joseph Juran, a quality management pioneer in the United States in the 1930s and ’40s. In citing the “Pareto Principle,” Juran postulated that 20% of product defects caused 80% of product problems. Read More

Southwest Airlines (NYSE: LUV) has always flown against the crowd with pick your own seats and free checked bags. The company was even forward thinking enough to buy oil futures when oil prices were still in the $50s back before the 2008 financial crisis and the subsequent spike of oil prices above $100 a barrel. #-ad_banner-#But there is one key area where the airline isn’t as progressive as its competitors: technology. From Bloomberg: “For most of its 45 years, Southwest Airlines Co. has operated with a kludgy hodgepodge of technology systems, mainly built in-house. It was generally a cheaper approach… Read More

Southwest Airlines (NYSE: LUV) has always flown against the crowd with pick your own seats and free checked bags. The company was even forward thinking enough to buy oil futures when oil prices were still in the $50s back before the 2008 financial crisis and the subsequent spike of oil prices above $100 a barrel. #-ad_banner-#But there is one key area where the airline isn’t as progressive as its competitors: technology. From Bloomberg: “For most of its 45 years, Southwest Airlines Co. has operated with a kludgy hodgepodge of technology systems, mainly built in-house. It was generally a cheaper approach that better fit the needs of its network, radically different from those of hub-and-spoke airlines.” Kludgy… That’s one way of putting it. Falling behind its competition is another. Because there’s a line between cost efficiencies and being cheap enough that you sacrifice other efficiencies. And Southwest crossed that line quite a bit ago, according to the company’s CEO Gary Kelly. Apparently, the company hasn’t updated its reservation system in 30 years… an unheard-of amount of time for a technology. One has to ask if they’re still using dot-matrix printers, too. The main reason for this update is the need for… Read More

Jessie Livermore was one of the greatest traders of all time. He first began trading stocks nearly a hundred years ago, making and losing multi-million dollar fortunes several times over.  His life and trading methods are recounted in the 1923 book “Reminiscences of a Stock Operator,” by Edwin LeFerve. The book is considered a classic among traders and is still read to this day (the hardback retails for $187.95 on Amazon).  #-ad_banner-#Livermore began his career in what were called “bucket shops” — typically a warehouse or storefront where smaller speculators could make bets on the price movements of stocks (although… Read More

Jessie Livermore was one of the greatest traders of all time. He first began trading stocks nearly a hundred years ago, making and losing multi-million dollar fortunes several times over.  His life and trading methods are recounted in the 1923 book “Reminiscences of a Stock Operator,” by Edwin LeFerve. The book is considered a classic among traders and is still read to this day (the hardback retails for $187.95 on Amazon).  #-ad_banner-#Livermore began his career in what were called “bucket shops” — typically a warehouse or storefront where smaller speculators could make bets on the price movements of stocks (although actual shares were rarely bought or sold). Of course, this practice was highly risky, since corruption was rampant and the bucket shops allowed individuals to make bets on as little as 1% margin. But somehow, Livermore was able to make $1,000 at the age of 15 (a small fortune back then). Later in life, he moved to New York and began trading in more legitimate markets. Among his accomplishments: — He shorted Union Pacific Railroad before the 1906 San Francisco earthquake — Shorted the market before the Panic of 1907 — Made… Read More

The Wall Street Journal calls it “world-changing.” Both the Financial Times and CNBC say it’s a “game-changer.” And Business Insider calls it the “next trillion dollar industry.” #-ad_banner-#Stop me if you’ve heard this before. Longtime readers know I’ve written a lot about ground-breaking companies, trends and products that end up attracting this kind of copy from the financial press. But as I’ve said before, it’s often not the large, well-known company getting all the headlines that makes the outsized gains for investors. After all, when the mainstream press… Read More

The Wall Street Journal calls it “world-changing.” Both the Financial Times and CNBC say it’s a “game-changer.” And Business Insider calls it the “next trillion dollar industry.” #-ad_banner-#Stop me if you’ve heard this before. Longtime readers know I’ve written a lot about ground-breaking companies, trends and products that end up attracting this kind of copy from the financial press. But as I’ve said before, it’s often not the large, well-known company getting all the headlines that makes the outsized gains for investors. After all, when the mainstream press gets a hold of the kinds of ideas I regularly discuss in my newsletter, it’s often too late. Instead, it’s the smaller, lesser-known companies behind the innovation that savvy investors should put their money into — and it’s important to get in on the early stages before things really kick off. That’s where the real money is made. For example, up until recently I’ve dedicated a lot of time to telling readers of my Game-Changing Stocks newsletter about the revolutionary advances being made by Apple with its payment technology — Apple… Read More

Recently, I was listening to a podcast interview with market guru Byron Wien of Blackstone. While the talk focused mainly on building wealth with large, concentrated bets, the winning combination of investing in technology and emerging markets caught my attention. #-ad_banner-#Technology changes worlds and history and, if you choose wisely, makes investors rich. The same can be said for macro market and demographic trends. The world changed as wireless telecom penetrated emerging and frontier markets. People who had never had a telephone due to lack of infrastructure in their communities were now connected. While wireless phone proliferation in these economies… Read More

Recently, I was listening to a podcast interview with market guru Byron Wien of Blackstone. While the talk focused mainly on building wealth with large, concentrated bets, the winning combination of investing in technology and emerging markets caught my attention. #-ad_banner-#Technology changes worlds and history and, if you choose wisely, makes investors rich. The same can be said for macro market and demographic trends. The world changed as wireless telecom penetrated emerging and frontier markets. People who had never had a telephone due to lack of infrastructure in their communities were now connected. While wireless phone proliferation in these economies has exploded over the last decade, there’s still room to grow. Now, as the same emerging societies give birth to a new middle class thanks to a globalized economy, banking is emerging as the next growth industry in developing markets. I’ve found a stock that covers both: Vodafone (Nasdaq: VOD). The leading provider of international wireless telecommunications, Vodafone’s footprint covers more than 20 countries across four continents. If you’re a Verizon (NYSE: VZ) subscriber, you used to do business with Vodafone. Up until 2014, Vodafone owned a 45% stake in Verizon. After selling back to Verizon, Vodafone walked away with… Read More

I recently spent Memorial Day in Las Vegas on the tail-end of a road trip through Nevada and Utah. And while I didn’t win big in Sin City, I’m happy to report that I did well enough to pay for a nice dinner that night with a little bit left to spare. (Hey, if Vegas doesn’t get you one way, they get you another.) #-ad_banner-# As I was caught up in the action, I was reminded of how similar gambling and investing. It’s often the things we focus on least that are the biggest markers of success in… Read More

I recently spent Memorial Day in Las Vegas on the tail-end of a road trip through Nevada and Utah. And while I didn’t win big in Sin City, I’m happy to report that I did well enough to pay for a nice dinner that night with a little bit left to spare. (Hey, if Vegas doesn’t get you one way, they get you another.) #-ad_banner-# As I was caught up in the action, I was reminded of how similar gambling and investing. It’s often the things we focus on least that are the biggest markers of success in either endeavor. Think about it… Just like in poker, for example, long-term success in investing is more about not losing than winning. Avoiding losing investments is perhaps even more important than finding big winners. And knowing when to sell is just as important as knowing what to buy. My colleague Jimmy Butts recently touched on this idea in a recent issue of his premium newsletter, Maximum Profit:         “Ask Warren Buffett what it takes to be a successful investor and he’ll likely tell you this: “Rule No. Read More

As we explained yesterday, small-cap investments are a historically-proven way to beat the market.  Our goal when we started Project Alpha was to selectively pick small-cap stocks which could outperform the market without excess risk. Since our first pick in March of last year, the Project Alpha portfolio has returned 12.8% while the S&P 500 has returned a meager 0.19%. #-ad_banner-#While Project Alpha was originally reserved for premium subscribers, we have decided to open the series to all our readers. And today, we are excited to bring you our first new pick this summer. This Misunderstood Company Could Be The Next… Read More

As we explained yesterday, small-cap investments are a historically-proven way to beat the market.  Our goal when we started Project Alpha was to selectively pick small-cap stocks which could outperform the market without excess risk. Since our first pick in March of last year, the Project Alpha portfolio has returned 12.8% while the S&P 500 has returned a meager 0.19%. #-ad_banner-#While Project Alpha was originally reserved for premium subscribers, we have decided to open the series to all our readers. And today, we are excited to bring you our first new pick this summer. This Misunderstood Company Could Be The Next Big Tech Breakthrough Though small caps outperform the market in the long term, these picks are far from a dime a dozen. In fact, small-cap companies often face more obstacles than their larger counterparts. One of the biggest difficulties small-cap companies encounter is staying on top of innovation. Frequently strapped for R&D capital, these firms can easily be crushed by well established companies with huge budgets and armies of researchers. It’s even harder for these companies to achieve sufficient market penetration, and it is rare for them to gain the traction needed to compete with the “big kids” on the… Read More

There’s an old adage in finance that goes, “sell in May and go away,” and it’s not without good reason. According to the Stock Trader’s Almanac, the Dow Jones Industrial Average has returned -1.1% on average from May to October since 1950 compared to an average 8.4% return from November to April. #-ad_banner-#Selling all your holdings every summer isn’t always reasonable, though, due to transactions costs and various tax penalties. Instead, we here at StreetAuthority decided to focus on a different strategy. Small-Cap Companies: A Proven Approach To Beating The Market Rather than investing in a lagging market over the… Read More

There’s an old adage in finance that goes, “sell in May and go away,” and it’s not without good reason. According to the Stock Trader’s Almanac, the Dow Jones Industrial Average has returned -1.1% on average from May to October since 1950 compared to an average 8.4% return from November to April. #-ad_banner-#Selling all your holdings every summer isn’t always reasonable, though, due to transactions costs and various tax penalties. Instead, we here at StreetAuthority decided to focus on a different strategy. Small-Cap Companies: A Proven Approach To Beating The Market Rather than investing in a lagging market over the summer, we wanted to find small stocks primed to outperform in the long-term. It’s a pretty simple concept — just like people, companies have the most room to grow when they are still small. Historically, small-cap companies (firms with a market value of less than $2 billion), have significantly outperformed their larger peers in the S&P 500. The chart below shows the performance of a small-cap ETF compared to the S&P 500 since 2000.     ​   Guided by this principle, we started a series called Project Alpha. On Wall Street, alpha is a term to describe high returns… Read More

The S&P 500 is almost exactly where it was one year ago. But fortunately, it took a bumpy path to get back to this point. Corrections in August and January, and milder but significant selloffs in September, November and February, created ample buying opportunities for attractive stocks — and we were happy to take advantage. Let’s take a look at some of our winners to see whether they remain worthwhile buy candidates, or if holding or taking profits makes more sense. #-ad_banner-#​Arotech (Nasdaq: ARTX) is up about 50% since I recommended it on Dec. 17. The specialty defense contractor makes… Read More

The S&P 500 is almost exactly where it was one year ago. But fortunately, it took a bumpy path to get back to this point. Corrections in August and January, and milder but significant selloffs in September, November and February, created ample buying opportunities for attractive stocks — and we were happy to take advantage. Let’s take a look at some of our winners to see whether they remain worthwhile buy candidates, or if holding or taking profits makes more sense. #-ad_banner-#​Arotech (Nasdaq: ARTX) is up about 50% since I recommended it on Dec. 17. The specialty defense contractor makes simulators, trainers and high-performance batteries for aviation and marine use. Its customers include U.S. and foreign military and homeland security forces. As I wrote in December, the U.S. defense budget is on the rise, thanks to a rare bipartisan agreement between Congress and the White House that loosened the purse strings after a few years of austerity. Arotech’s innovative products are on the shopping lists of every military procurement strategist, as they provide next-generation capabilities of use in modern conflicts. For example, Arotech is the supplier for the U.S. Army’s SWIPES program (Soldier Worn Integrated Power Equipment Systems), which give… Read More

A few years ago I bought a Dodge Ram pickup — fire-engine red. It had a Hemi V8 that could have powered an aircraft carrier. It was ridiculously fast. I’d barely have my foot on the gas pedal, and I’d be doing 90. There was no cruise control, a rubber floor — I was lucky the darn thing even had a radio. It got about 12 miles to the gallon. I loved it. Whoever owned it before me installed some serious exhaust upgrades, and that truck was the loudest-running vehicle I’ve ever heard, including our farm equipment. Read More

A few years ago I bought a Dodge Ram pickup — fire-engine red. It had a Hemi V8 that could have powered an aircraft carrier. It was ridiculously fast. I’d barely have my foot on the gas pedal, and I’d be doing 90. There was no cruise control, a rubber floor — I was lucky the darn thing even had a radio. It got about 12 miles to the gallon. I loved it. Whoever owned it before me installed some serious exhaust upgrades, and that truck was the loudest-running vehicle I’ve ever heard, including our farm equipment. It sounded like a pack of Harleys tearing through a Billy Idol concert. Sometimes I’d sneak out of church early. But my wife, Pastor Jen, always knew — she could hear my truck start up over the mighty old pipe organ. #-ad_banner-# My daughter Laurel loved the pickup. She liked that she was allowed to sit in front, as it had no back seat, and she loved being up high. She was also completely blown away by the windows. She had never before seen crank windows. She thought they were a new feature. She was used to cars… Read More