In 1990, in a suburb outside of Boston, something unusual happened…#-ad_banner-# As part of their schoolwork, seventh graders at the St. Agnes School in Arlington, Mass. were asked to pick stocks for a model portfolio. In the following two years, the students’… Read More
Investing Basics
Interest rates could be the factor that finally triggers a sell-off in the stock market, and that sell-off could be closer than most traders think. Interest Rates Can Impact Stocks In studying the recent market plunge in Japan, I had a feeling that I was missing an indicator that should have warned of the risk. The Nikkei 225 benchmark… Read More
Interest rates could be the factor that finally triggers a sell-off in the stock market, and that sell-off could be closer than most traders think. Interest Rates Can Impact Stocks In studying the recent market plunge in Japan, I had a feeling that I was missing an indicator that should have warned of the risk. The Nikkei 225 benchmark index fell as much as 14.97% from its high in a week.#-ad_banner-# I think I found that indicator and was shocked to discover the exact same setup exists in the United States right now. As a trader, it is important to change positions when the facts change, and after months of bullishness, I am moving to a cautious position in the stock market. In Japan, officials attributed the sell-off to disappointing economic news from China. But news rarely causes an immediate change in the trend of a market. Sell-offs related to news events usually occur when the market… Read More
After another big gain, the S&P 500 closed in overbought territory for the first time since October. Overbought, But Not A Sell Signal To define overbought, the 52-week rate of change (… Read More
The lessons I learned in college during the summer vacation months have proved more valuable than the hard-earned academic ones. While working in the evenings and Saturday mornings at my uncle’s small marketing company in Miami, my cousin and I were fortunate to spend the days at the beach. Having grown up with a very fiscally conservative family in the Pennsylvania countryside, the fast life and glamour of Miami really took me by surprise! Fancy cars, speedboats, yachts and massive homes immediately caught my attention. It was truly mad money, and to top it… Read More
The lessons I learned in college during the summer vacation months have proved more valuable than the hard-earned academic ones. While working in the evenings and Saturday mornings at my uncle’s small marketing company in Miami, my cousin and I were fortunate to spend the days at the beach. Having grown up with a very fiscally conservative family in the Pennsylvania countryside, the fast life and glamour of Miami really took me by surprise! Fancy cars, speedboats, yachts and massive homes immediately caught my attention. It was truly mad money, and to top it off, some of these folks never seemed to work. While some were my uncle’s friends who owned this or that company, some of the over-the-top lifestyles really seemed to have arisen from out of thin air — in other words, from dubious sources.#-ad_banner-# Fascinated by what I was seeing, I naively asked my uncle whether most people in that area were millionaires. He chuckled. “While there are very successful people around, many of them are fakers,” he said. Fakers? What did he mean? He explained to my overly impressed self that many of the… Read More
It’s the feel-good story of 2013 that nobody is talking about. The nation’s budget deficit, which had been spiraling out of control, is finally returning to manageable levels. Thanks to higher government revenues and lower government spending, this… Read More
You’ve probably heard his popular catchphrase, “You’re fired!” The Donald has long been a bombastic figure on the American financial scene. He is a well-known real estate magnate, and he is almost as famous for his companies’ bankruptcies as he is for his companies’ lavish real estate projects.#-ad_banner-# Through it all, however, Donald Trump has shown that he knows what he’s doing. He’s been a wily businessman, and his real estate development projects have been, overall, fairly successful. Read More
You’ve probably heard his popular catchphrase, “You’re fired!” The Donald has long been a bombastic figure on the American financial scene. He is a well-known real estate magnate, and he is almost as famous for his companies’ bankruptcies as he is for his companies’ lavish real estate projects.#-ad_banner-# Through it all, however, Donald Trump has shown that he knows what he’s doing. He’s been a wily businessman, and his real estate development projects have been, overall, fairly successful. But how did he get his start? And what does he think would make a great investment right now? The Trump Secret We hear a lot about Donald Trump’s real estate empire. Yes, he’s built it up to something truly lucrative. (Forbes puts his worth at $3.2 billion.) However, he didn’t get his start from nothing. So what’s his secret? Like so many successful and… Read More
Nobody ever believes me when I tell them this is probably the best way to find great stocks. My trick is to use Wall Street‘s army of thousands of analysts. They’ve led to relative easy gains as high as 810% in the past few years. Honestly. And best of all, they’re continuing to do it even as the markets are showing the greatest signs of weakness in years. It’s not the way you’re probably thinking,… Read More
Nobody ever believes me when I tell them this is probably the best way to find great stocks. My trick is to use Wall Street‘s army of thousands of analysts. They’ve led to relative easy gains as high as 810% in the past few years. Honestly. And best of all, they’re continuing to do it even as the markets are showing the greatest signs of weakness in years. It’s not the way you’re probably thinking, though. Here’s how to do it. Wall Street’s Best-Kept Secret Exposed You see, most Wall Street analysts are truly awful at their jobs. And I mean awful. A recent analysis of Wall Street analysts’ “buy” and “sell” recommendations shows how you can turn these high-priced suits into safe, consistent gains. The research found that between 2008 and 2012 investors could have made a fortune by doing one simple thing — the exact opposite of what Wall Street says. Let me explain… Had you bought the 10 stocks Wall Street rated the highest… Read More
Described as “a vulture, albeit a well-dressed one,” Wilbur Ross is also “one of the best bottom feeders in the business,” according to no less an authority than a fellow billionaire, real estate magnate Leonard Stern. These comparisons may seem unflattering,… Read More
If you regularly shop at department store chain Kohl’s (NYSE: KSS), you may have spotted an unusual merchandising misstep in the spring of 2012. The retailer, which had built a longstanding reputation for solid designs, good quality and reasonable prices, started to carry less appealing merchandise that spring. Many shoppers browsed but went home empty-handed.#-ad_banner-# Just a few months later, you would have seen this problem appear on Kohl’s financial statements. In the second quarter of fiscal 2012 (ended July 30, 2012), Kohl’s unsold inventory of… Read More
If you regularly shop at department store chain Kohl’s (NYSE: KSS), you may have spotted an unusual merchandising misstep in the spring of 2012. The retailer, which had built a longstanding reputation for solid designs, good quality and reasonable prices, started to carry less appealing merchandise that spring. Many shoppers browsed but went home empty-handed.#-ad_banner-# Just a few months later, you would have seen this problem appear on Kohl’s financial statements. In the second quarter of fiscal 2012 (ended July 30, 2012), Kohl’s unsold inventory of goods stood at $3.5 billion, or 83% of that company’s quarterly sales base. Just a year earlier, that percentage stood at 73%. Investors willing to take the time to track this retailer’s inventory levels (as a percentage of sales) were the first ones to realize that Kohl’s was in trouble. By the time the next quarter’s results came out, this balance sheet ratio had swelled to a company record 107%. (What that means is that the company had more inventory than… Read More
Stock prices are definitely overbought. Overbought markets occur when prices move up sharply, and based on current charts, prices appear to be too high. This situation actually occurs fairly often. Traders might be tempted to enter a short trade expecting the gains to be at least partially reversed. But that idea has led to large losses for many traders over the years. Prices might be irrational, but as traders, we need to remember that irrational behavior is irrelevant. Economist John Maynard… Read More
Stock prices are definitely overbought. Overbought markets occur when prices move up sharply, and based on current charts, prices appear to be too high. This situation actually occurs fairly often. Traders might be tempted to enter a short trade expecting the gains to be at least partially reversed. But that idea has led to large losses for many traders over the years. Prices might be irrational, but as traders, we need to remember that irrational behavior is irrelevant. Economist John Maynard Keynes supposedly said, “Markets can remain irrational longer than you can remain solvent.” Traders use momentum indicators like the stochastics to decide when prices are overbought. The monthly chart of SPDR Dow Jones Industrial Average (NYSE: DIA) is shown below, and we can see that stochastics has been overbought for more than a year. Based on the stochastics indicator, we can see that… Read More