There’s a dangerous idea in the world of finance that’s been floating around for years. The man who coined this idea won a Nobel Prize for his work, but even he has stated that there are “threats” to his theory. #-ad_banner-#Today, I’m going to tell you about one of those “threats,” and why it’s time to put this dangerous idea to bed for good. Because if you buy into it, you could miss out on some of the greatest opportunities the market has to offer. To frame our discussion, I’d like… Read More

There’s a dangerous idea in the world of finance that’s been floating around for years. The man who coined this idea won a Nobel Prize for his work, but even he has stated that there are “threats” to his theory. #-ad_banner-#Today, I’m going to tell you about one of those “threats,” and why it’s time to put this dangerous idea to bed for good. Because if you buy into it, you could miss out on some of the greatest opportunities the market has to offer. To frame our discussion, I’d like you to consider one thing: When an investor buys shares of a stock hoping that its value will rise, the person is often betting against the market — that other investors are wrong (about the stock’s value) and that his valuation is correct. It’s with this idea that theory called the “efficient market hypothesis” becomes important. The man behind the theory — economist Dr. Eugene Fama — is hailed as one of the fathers of modern finance. At its most basic, his hypothesis says that because the public has access to… Read More

We all know the constant struggle between the bulls and the bears on Wall Street. Some investors are always convinced that we sit on the edge of a cliff, that the enemies are always ready to storm the castle. Others take a rosier view. I’m with the latter crowd for two reasons. #-ad_banner-#First, I love business, and I love people who leverage their passion to Do Something and build an enterprise that serves a need or even creates one. One day a fellow named Lonnie Johnson was sitting around, thinking about heaven knows what, and he decided to build a… Read More

We all know the constant struggle between the bulls and the bears on Wall Street. Some investors are always convinced that we sit on the edge of a cliff, that the enemies are always ready to storm the castle. Others take a rosier view. I’m with the latter crowd for two reasons. #-ad_banner-#First, I love business, and I love people who leverage their passion to Do Something and build an enterprise that serves a need or even creates one. One day a fellow named Lonnie Johnson was sitting around, thinking about heaven knows what, and he decided to build a better water gun. The SuperSoaker is now a staple of the top 20 toys since its release in 1989. Sales have surpassed a billion dollars. I learned about Johnson — an African American who has some 80 patents to his name — a decade or so ago. He was the subject of a student essay I was helping judge for Black History Month. The SuperSoaker was a game-changer — such to the point that it has become a part of our language. It’s not like the world was clamoring for a better water pistol, but Johnson had an idea, and… Read More

Today I want to tell you about an investing strategy that defies logic. It shouldn’t work based on everything you’ve learned about the stock market. Yet it does. In fact, for over half a century, investors and traders have used this strategy to produce unparalleled results. #-ad_banner-#And no, for those of you who may be wondering, this strategy doesn’t involve options, derivatives or any other obscure financial product. What’s more, what I’m about to show you can be used as part of any general investing strategy — regardless of whether you’re focusing on income, growth, blue chips, small caps or… Read More

Today I want to tell you about an investing strategy that defies logic. It shouldn’t work based on everything you’ve learned about the stock market. Yet it does. In fact, for over half a century, investors and traders have used this strategy to produce unparalleled results. #-ad_banner-#And no, for those of you who may be wondering, this strategy doesn’t involve options, derivatives or any other obscure financial product. What’s more, what I’m about to show you can be used as part of any general investing strategy — regardless of whether you’re focusing on income, growth, blue chips, small caps or commodities. Specifically, I’m talking about relative-strength investing. Longtime readers might already be familiar with relative-strength investing. We’ve talked about it before in previous StreetAuthority Daily issues. But for those who need a refresher, allow me to provide a brief recap. Relative-strength investing is simply a type of momentum investing. It involves buying the best-performing stocks (relative to the market) and holding them until their momentum changes course. To most investors, especially those considered value investors, this strategy probably sounds ridiculous. After all, most people have heard the phrase “buy low, sell high.” Since relative-strength investors buy stocks that are already… Read More

When people around the world want something to eat, there’s a good chance they reach for a  product made by Kraft Heinz. And for investors looking for a combination of value and quality, Kraft Heinz (Nasdaq: KHC) should be on your menu right now. #-ad_banner-#Formed by the mega-merger of Kraft Foods Group and H.J. Heinz in July 2015, Kraft Heinz is the third largest food and beverage company in North America, and the fifth largest in the world. The company boasts more than 200 brands, including Kraft, Heinz, Oscar Mayer, Jell-O, Kool-Aid, and Lunchables. Eight of the company’s brands… Read More

When people around the world want something to eat, there’s a good chance they reach for a  product made by Kraft Heinz. And for investors looking for a combination of value and quality, Kraft Heinz (Nasdaq: KHC) should be on your menu right now. #-ad_banner-#Formed by the mega-merger of Kraft Foods Group and H.J. Heinz in July 2015, Kraft Heinz is the third largest food and beverage company in North America, and the fifth largest in the world. The company boasts more than 200 brands, including Kraft, Heinz, Oscar Mayer, Jell-O, Kool-Aid, and Lunchables. Eight of the company’s brands each generate $1 billion a year in sales, and the combined company’s overall revenue was $27.4 billion in 2015. Kraft Heinz sells products in dozens of countries around the world, but the United States accounts for just over 70% of earnings, with the rest focused in Canada, Europe and Latin America. That’s a big plus, because it implies that the company has room to grow by increasing market share overseas. (Some of this expansion may take a few years, because of noncompete agreements made with former Kraft sibling Mondelez when the companies split.) Strong brands don’t guarantee a string of… Read More

Mark Twain understood the mind of an investor. The world-renowned author once proclaimed: “A dollar picked up in the road is more satisfaction to us than the 99 which we had to work for, and the money won in the stock market snuggles into our hearts in the same way.” #-ad_banner-#Twain acknowledged the rush that can accompany earning money without any labor. He understood that the human brain is not wired for clear thinking in regard to money. That’s because the area of the brain that responds to financial reward is the same part… Read More

Mark Twain understood the mind of an investor. The world-renowned author once proclaimed: “A dollar picked up in the road is more satisfaction to us than the 99 which we had to work for, and the money won in the stock market snuggles into our hearts in the same way.” #-ad_banner-#Twain acknowledged the rush that can accompany earning money without any labor. He understood that the human brain is not wired for clear thinking in regard to money. That’s because the area of the brain that responds to financial reward is the same part that lights up from cocaine. This presents a major problem. Investors can become insatiable, searching high and low for the next “big winners.” What they’re really interested in is a get-rich-quick scheme. That’s a terrific way to lose money — and quickly. However, if you are a regular reader of my Game-Changing Stocks newsletter, then you know that I have been making a habit of finding stocks with the most “big winner” potential for a while. In fact, I’ve found more than 23 triple-digit winners since joining StreetAuthority… Read More

In February 2013, my Dad called. It was unusual. I talk to my father a few times each week, but it’s generally me calling him. Then my Dad said something that really scared me. He asked me to have my wife join the call. At the time, my Dad was in his late 60s. He’d been a smoker all his life — and a fairly heavy one — and my heart sank. Dad had been in excellent health his whole life. He ran hospitals for years and has an immune system that would eat… Read More

In February 2013, my Dad called. It was unusual. I talk to my father a few times each week, but it’s generally me calling him. Then my Dad said something that really scared me. He asked me to have my wife join the call. At the time, my Dad was in his late 60s. He’d been a smoker all his life — and a fairly heavy one — and my heart sank. Dad had been in excellent health his whole life. He ran hospitals for years and has an immune system that would eat the Ebola virus like a midnight snack. There was something going on, though, and I feared that the old man’s luck had run out. #-ad_banner-#Thankfully, Dad’s lungs were fine. But one of his kidneys was loaded with cancer. He’d experienced an unusual symptom and went to the doc the next day. A lot of my friends’ folks have had things go wrong and done nothing, which in some cases has turned out badly. But Dad doesn’t mess around. I like that about him. God help us all if I ever have to put him in a home,… Read More

At the risk of sounding anti-American, I have to begin by saying this… I don’t like Budweiser. #-ad_banner-#But if I have a redeeming, patriotic leg to stand on, it’s that I’m a huge fan of craft beers, and really, what’s more American than a little upstart with passion and hops? One of my good friends is a master brewer in the midst of opening his own brewery in Milwaukee, Wisconsin, home of the Brewers, and, yes, the Champagne of Beers, Miller High Life, along with many, many others. There are already a number of popular craft beers in the area,… Read More

At the risk of sounding anti-American, I have to begin by saying this… I don’t like Budweiser. #-ad_banner-#But if I have a redeeming, patriotic leg to stand on, it’s that I’m a huge fan of craft beers, and really, what’s more American than a little upstart with passion and hops? One of my good friends is a master brewer in the midst of opening his own brewery in Milwaukee, Wisconsin, home of the Brewers, and, yes, the Champagne of Beers, Miller High Life, along with many, many others. There are already a number of popular craft beers in the area, but the market just keeps growing. That may be one reason why such big beer behemoths like Anheuser Busch-InBev (NYSE: BUD) and SABMiller (OTC: SBMRY) are making a deal. News of the potential deal came out last November, but needed approval from a number of bodies, including the U.S. Justice Department. That approval could come as early as this month. The combined companies would then account for almost a third of the world’s beer, according to Reuters. The deal is worth a reported $107 billion, making it the biggest brewer by capitalization. But why are these two companies merging? As… Read More

Last week, I looked at stocks that could be worth buying if the Federal Reserve raises interest rates in June. Since then, Fed Chair Janet Yellen confirmed that a rate hike is likely this summer, either in June or July. Fed economists’ view that the economy is picking up steam got some validation this week when U.S. consumer spending rose 1% in April, the largest percentage in more than six years. Personal income was up 0.4% and wages rose 0.5% — both signs that American households will continue to have more money to spend in the coming months. As I’ve… Read More

Last week, I looked at stocks that could be worth buying if the Federal Reserve raises interest rates in June. Since then, Fed Chair Janet Yellen confirmed that a rate hike is likely this summer, either in June or July. Fed economists’ view that the economy is picking up steam got some validation this week when U.S. consumer spending rose 1% in April, the largest percentage in more than six years. Personal income was up 0.4% and wages rose 0.5% — both signs that American households will continue to have more money to spend in the coming months. As I’ve written in recent months, consumer durable stocks should benefit from this trend. Another area that should thrive in a low-unemployment, rising-wage environment is the housing market. Indeed, home sales have shown signs of picking up in recent months as the sector’s long, slow recovery from the financial crisis continues. #-ad_banner-#Stocks associated with home sales, such as homebuilders, should be hurt by rising mortgage rates, but often are helped in the short run, as home buyers move to lock in existing rates before the Fed decides on additional rate hikes. That’s especially likely in the current environment, as consumers with cash… Read More

In less than a month, the world will have a new Disney theme park. This time, it’s in China. Shanghai, to be exact. The park has already been “open” for trial guests, and the company is pretty excited about the feedback it’s been getting. But Disney’s really hanging a lot on this park. The company expects to earn $300 million from the park in the third quarter of this year. #-ad_banner-#To put that in perspective, Disney (NYSE: DIS) brought in revenues of $12.97 billion in the second quarter of this year. But while you might think that Shanghai Disney’s projected… Read More

In less than a month, the world will have a new Disney theme park. This time, it’s in China. Shanghai, to be exact. The park has already been “open” for trial guests, and the company is pretty excited about the feedback it’s been getting. But Disney’s really hanging a lot on this park. The company expects to earn $300 million from the park in the third quarter of this year. #-ad_banner-#To put that in perspective, Disney (NYSE: DIS) brought in revenues of $12.97 billion in the second quarter of this year. But while you might think that Shanghai Disney’s projected haul is chump change in comparison, consider this: Disney’s net income in the second quarter was only $2.1 billion. That means a $300 million paycheck isn’t so small. Disney has spent $5 billion to bring this park to life, so it would take nearly 17 quarters, or more than 4 years worth of $300 million proceeds in order to make back its initial investment, not to mention upkeep and operational costs. So here’s the thing… Is a $5 billion theme park in China a good bet? Well, if you’re a Chinese billionaire member of the Communist Party, you might not… Read More

The economic trends we saw developing earlier this year have continued, albeit with a little turbulence here and there: U.S. job creation remains solid, unemployment remains low and consumer incomes are rising. While the drag from economic woes in Europe and Asia is a concern, and any economy that relies on the energy industry is hurting (including ours, in part), for the most part American consumers are in better shape than they’ve been in years. Meanwhile, the inexorable aging of America is fueling growth for any provider of goods and services to older Americans. While healthcare is the obvious beneficiary,… Read More

The economic trends we saw developing earlier this year have continued, albeit with a little turbulence here and there: U.S. job creation remains solid, unemployment remains low and consumer incomes are rising. While the drag from economic woes in Europe and Asia is a concern, and any economy that relies on the energy industry is hurting (including ours, in part), for the most part American consumers are in better shape than they’ve been in years. Meanwhile, the inexorable aging of America is fueling growth for any provider of goods and services to older Americans. While healthcare is the obvious beneficiary, so is leisure: companies that profit from more spending on travel, dining, recreation and, well, fun. And few companies fit the bill better than the cruise ship lines. #-ad_banner-#The cruise industry has already grown rapidly in recent decades — passenger volume has risen at a compound annualized growth rate of about 7% over the past 35 years. And while most U.S. cruises still start in Florida, California or New York, the number of ports in use is expanding; in North America, more than 30 embarkation ports have been established, which puts a port within reasonable driving distance of 75% of… Read More