I think it was philosopher George Santayana’s cousin who said, “Those who do not learn from history are doomed to lose money in the stock market.”  It’s amazing how quickly we forget the mistakes of the past, and now one of the biggest factors that led to the Great Recession is building up again. #-ad_banner-# A booming housing market and relaxing loan standards led to the worst economic collapse in nearly 80 years. And looking at some recent loan data gave me a… Read More

I think it was philosopher George Santayana’s cousin who said, “Those who do not learn from history are doomed to lose money in the stock market.”  It’s amazing how quickly we forget the mistakes of the past, and now one of the biggest factors that led to the Great Recession is building up again. #-ad_banner-# A booming housing market and relaxing loan standards led to the worst economic collapse in nearly 80 years. And looking at some recent loan data gave me a serious sense of deja vu. But rather than home loans, this time it is the auto loans market that’s headed for trouble. Auto Loans Headed For A Crash? Just as larger economic drivers sparked the housing boom, super-low interest rates and falling gasoline prices have caused a spike in car sales over the past five years. New car sales hit a record in 2015, while the average transaction price reached an all-time high of $34,428. Yet, sluggish wage growth and a stalling economic recovery have threatened the good times. Not wanting to see the party end, car makers and dealers have… Read More

One of America’s beloved companies has produced an annualized return of 12.8% over the past three decades, easily beating the 7.5% annual return on the S&P 500.  From its 2011 lows to its all-time high in August 2015, the stock surged more than 350% as investors clamored to grab their stake in one of the world’s most recognized brands. And during this time, its trailing price-to-earnings (P/E) ratio more than doubled. As a die-hard value investor, I found it difficult to justify buying shares given how expensive they were. But now, with the stock trading at a nearly… Read More

One of America’s beloved companies has produced an annualized return of 12.8% over the past three decades, easily beating the 7.5% annual return on the S&P 500.  From its 2011 lows to its all-time high in August 2015, the stock surged more than 350% as investors clamored to grab their stake in one of the world’s most recognized brands. And during this time, its trailing price-to-earnings (P/E) ratio more than doubled. As a die-hard value investor, I found it difficult to justify buying shares given how expensive they were. But now, with the stock trading at a nearly 20% discount to its all-time high, I’m ready to pull the trigger. The House of Mouse Is Finally Affordable Shares of The Walt Disney Company (NYSE: DIS) have been under pressure since August, when CEO Bob Iger acknowledged subscriber losses in the media segment. This segment accounts for 45% of sales, and the warning sent shares tumbling. #-ad_banner-# After a quick rebound, shares plunged again when a November regulatory filing confirmed the negative trend. For instance, Disney’s most profitable channel, ESPN,… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or only buying and holding investments altogether. That’s how powerful this strategy is: It can drastically improve the way you make money in the markets. That goes for conservative income investors and aggressive traders alike. #-ad_banner-#The technique involves selling options. If you’ve never tried your hand at options before, don’t worry — the kind of options strategy I’m talking about is… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or only buying and holding investments altogether. That’s how powerful this strategy is: It can drastically improve the way you make money in the markets. That goes for conservative income investors and aggressive traders alike. #-ad_banner-#The technique involves selling options. If you’ve never tried your hand at options before, don’t worry — the kind of options strategy I’m talking about is perhaps the safest, easiest way to execute a trade for income that you’ll ever come across. Specifically, I’m referring to selling call options. A call option gives the buyer the right — but not the obligation — to buy a stock from the call seller if it’s trading above a specified price before a specified date. When you sell a call option, you accept the potential obligation to sell a particular stock at a specified price at a set time in the future. When you sell a call, you generate what… Read More

My favorite scene in Martin Scorsese’s hit movie “Casino” is when Nicky (Joe Pesci) expounds on Ace’s (Robert De Niro) uncanny knack for picking winners. Ace’s secret to picking the winning team was finding out all the “inside stuff that nobody else knew,” like whether the quarterback was doing drugs, how the wind velocity was going to affect field goals… all the way down to figuring out the different ways basketballs bounced off the various kinds of wood used on college basketball courts. #-ad_banner-#Ace’s story was based on the true life of Frank “Lefty” Rosenthal, who was arguably the top… Read More

My favorite scene in Martin Scorsese’s hit movie “Casino” is when Nicky (Joe Pesci) expounds on Ace’s (Robert De Niro) uncanny knack for picking winners. Ace’s secret to picking the winning team was finding out all the “inside stuff that nobody else knew,” like whether the quarterback was doing drugs, how the wind velocity was going to affect field goals… all the way down to figuring out the different ways basketballs bounced off the various kinds of wood used on college basketball courts. #-ad_banner-#Ace’s story was based on the true life of Frank “Lefty” Rosenthal, who was arguably the top bookmaker in America for decades. In fact, I admired Rosenthal, not because of his illegal dealings (of which he had many), but because he had the utmost confidence in odds and understood the importance of stacking them in his favor. In a sense, I often borrow from his playbook. While I don’t lie, cheat or steal, I do go the extra length to stack the odds in my favor by layering on as much “edge” as I can in every trade. Where I Found My First Edge I got my first taste of the market was when I was… Read More

Every now and then, someone comes along who changes the way we see the world and how we live in it. Some of these people give us hope when we need it most, others offer guidance through difficult times, and some create new technologies that affect our daily lives. From the great mathematician Euclid to visionary philosopher Socrates and even the modern technologist Steve Jobs, our world is molded by these people’s ability to influence, inspire and steer the masses for good.  We often don’t see their genius until after they’ve passed on. Fortunately, there’s a modern, living… Read More

Every now and then, someone comes along who changes the way we see the world and how we live in it. Some of these people give us hope when we need it most, others offer guidance through difficult times, and some create new technologies that affect our daily lives. From the great mathematician Euclid to visionary philosopher Socrates and even the modern technologist Steve Jobs, our world is molded by these people’s ability to influence, inspire and steer the masses for good.  We often don’t see their genius until after they’ve passed on. Fortunately, there’s a modern, living maestro whose name is synonymous with success around the world. He’s already been dubbed the “Oracle of Omaha” for his skill at interpreting the economy and social trends to inform his investing choices. His talents have made him the third-wealthiest man in America, and his words soothe even the most fragile investor’s mind. #-ad_banner-# Warren Buffett may be 85 years old, but he is sharp as a tack and has built a $360 billion empire around his company, Berkshire Hathaway (NYSE: BRK-B). This… Read More

I have an urgent message for all traders: We are about to enter a short-term bull market. Over the next six weeks, hundreds of stocks — both large and small — are going to deliver rapid-fire gains. #-ad_banner-#Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), even typically slow-moving companies like General Electric (NYSE: GE) and Coca-Cola (NYSE: KO) could all see huge double-digit and even triple-digit gains practically overnight. Financial writer Kurtis Hemmerling said it’s going to be “one of the most exciting times for an investor,” adding that there’s “massive upside potential.”… Read More

I have an urgent message for all traders: We are about to enter a short-term bull market. Over the next six weeks, hundreds of stocks — both large and small — are going to deliver rapid-fire gains. #-ad_banner-#Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), even typically slow-moving companies like General Electric (NYSE: GE) and Coca-Cola (NYSE: KO) could all see huge double-digit and even triple-digit gains practically overnight. Financial writer Kurtis Hemmerling said it’s going to be “one of the most exciting times for an investor,” adding that there’s “massive upside potential.” The profit potential is unlimited. You could make well over 80% or 100% in a matter of days, as I’ve done many times when we’ve entered one of these short-term bull markets before. Now, just to be clear, this isn’t your typical bull market. It has several major differences that separate it from most. First, it’s inevitable. Not even the SEC can stop it. In fact, in a unique twist, the SEC inadvertently created it, as I’ll explain in a moment. Second, it’s not the kind of bull… Read More

One of my guilty pleasures lately has been the new hit series on Showtime, “Billions.” The show is about a powerful hedge fund billionaire, Bobby Axelrod, who has more than a few dark secrets. One of them is that he and his associates are playing fast and loose with the law and raking in — you guessed it — billions of dollars in the process. The show is full of high-tension moments, of course. But there are a few of us around the StreetAuthority office who can’t help but snicker when characters on the show describe the actual… Read More

One of my guilty pleasures lately has been the new hit series on Showtime, “Billions.” The show is about a powerful hedge fund billionaire, Bobby Axelrod, who has more than a few dark secrets. One of them is that he and his associates are playing fast and loose with the law and raking in — you guessed it — billions of dollars in the process. The show is full of high-tension moments, of course. But there are a few of us around the StreetAuthority office who can’t help but snicker when characters on the show describe the actual trades made by the fictional hedge fund, and why they place them. The show’s writers, as well as the rest of the financial media it seems, would have you believe that it takes some sort of “insider information” or “hot tip” to truly make the big bucks on Wall Street. #-ad_banner-#But in my experience, that just ain’t so. That’s not to say, however, that whenever a big fish makes a bet on a particular stock we shouldn’t investigate further and possibly go along for the ride My colleague Jared Levy agrees. Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have ever played the market. Many generously revealed their favorite metrics and secret tips for finding market trends and picking the best stocks. #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was… Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have ever played the market. Many generously revealed their favorite metrics and secret tips for finding market trends and picking the best stocks. #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was a critical part of the equation, and one that most market gurus never address. I remember feeling inadequate because, as hard as I tried, I still couldn’t pick winners 100% of the time. It wasn’t until I became an options market maker that I learned how to add real odds to my trading. As a market marker, I was required to trade hundreds of contracts on a daily basis. For every trade I took, I was trying desperately to time the market so I could gain a sliver of an advantage. One of my competitors, a trader named Brett, noticed… Read More

The British newspaper The Economist recently released its updated ranking of threats to the global economy, and number one on the list isn’t what you might think. It’s not ISIS, Russia or even low energy prices. #-ad_banner-#It’s China. Specifically, the Global Forecasting Service at The Economist says that the likelihood of China experiencing a “hard landing” within the next five years is the top threat to the global economy. The culprits: deterioration in the manufacturing sector, sky-high debt levels, ongoing currency depreciation and ill-conceived interventions into the country’s stock market. The… Read More

The British newspaper The Economist recently released its updated ranking of threats to the global economy, and number one on the list isn’t what you might think. It’s not ISIS, Russia or even low energy prices. #-ad_banner-#It’s China. Specifically, the Global Forecasting Service at The Economist says that the likelihood of China experiencing a “hard landing” within the next five years is the top threat to the global economy. The culprits: deterioration in the manufacturing sector, sky-high debt levels, ongoing currency depreciation and ill-conceived interventions into the country’s stock market. The backdrop for this turmoil is the need for policymakers to guide China’s maturation from a largely manufacturing-based economy to a consumer and services-based economy. From the report:       This month we are raising our risk of China experiencing a hard landing at some point in the next five years to 40%, from one in three previously. There are many conceivable routes to such an outcome, varying from a house price crash to the state sector crowding out investment, but we are particularly concerned by the rapid build-up of debt in the economy. At more than 200% of GDP,… Read More

Over the years, I’ve observed a myriad of financial experts try to beat the S&P 500 and reduce volatility in their portfolios. There are literally hundreds of methodologies traders and investors use to this end — everything from basic diversification to proprietary, complex mathematical algorithms that select the best stocks to buy. #-ad_banner-#But reality and theory are different beasts, especially when markets aren’t trending smoothly. When the market trades in a volatile, sideways pattern, which has been the case since the start of 2015, many investing tactics are rendered all but useless. Read More

Over the years, I’ve observed a myriad of financial experts try to beat the S&P 500 and reduce volatility in their portfolios. There are literally hundreds of methodologies traders and investors use to this end — everything from basic diversification to proprietary, complex mathematical algorithms that select the best stocks to buy. #-ad_banner-#But reality and theory are different beasts, especially when markets aren’t trending smoothly. When the market trades in a volatile, sideways pattern, which has been the case since the start of 2015, many investing tactics are rendered all but useless. However, there is one uncommon yet simple strategy that reduces volatility and allows you to make money whether a stock goes up, sideways or even down. Think about that for a moment. When you buy a stock, you have a 50/50 shot at winning. But the little-known strategy I’ll introduce you to today increases your odds to 70%, 80%, even 90% per trade. And it usually costs under $1,000 no matter what stock you’re trading. So even expensive stocks like Apple (Nasdaq: AAPL), Alphabet (Nasdaq: GOOGL) and Amazon.com (Nasdaq:… Read More