As predictable as some market cycles are, they always seem to catch investors off guard. Mr. Market, senile old man that he is, just can’t seem to get past the euphoric buying around peaks and the panic selling around troughs. Smart investors know they don’t have to time a bottom perfectly. Sector leaders will always bounce back, and the wisest investors know how to pocket cash while they wait for a rebound. Some sectors are prone to extreme cycles. After a long period of high prices and capital investment, prices come crashing down and may take… Read More

As predictable as some market cycles are, they always seem to catch investors off guard. Mr. Market, senile old man that he is, just can’t seem to get past the euphoric buying around peaks and the panic selling around troughs. Smart investors know they don’t have to time a bottom perfectly. Sector leaders will always bounce back, and the wisest investors know how to pocket cash while they wait for a rebound. Some sectors are prone to extreme cycles. After a long period of high prices and capital investment, prices come crashing down and may take years to bottom. The best example of this is in agricultural commodities like corn and soybeans. Over the past 100 years, corn prices have peaked five times with the most recent at $8.54 per bushel in 2012. Each time it happened, prices soon plummeted as farmers planted as many acres as possible and supply went through the roof. Corn is now 55% off its 2012 highs, at $3.82 per bushel. Invariably, the drop in prices has led to a fall-off in planting and a drop in factors associated with increasing crop yields. And this, of course, takes a toll on… Read More

A recent headline read “Study: Preschoolers Better at Figuring out How Gadgets Work than College Students.” At first, it had me scratching my head. But then I figured it out. Preschoolers were more open-minded. They were willing to think unconventionally to solve problems. The Wall Street Journal quoted the research team saying “the best and brightest college students acted as if the machine would always follow the common and obvious rule, even when we showed them how it might work.” That says a lot about human nature. Human beings build barriers to change. The older we get, the more close-minded… Read More

A recent headline read “Study: Preschoolers Better at Figuring out How Gadgets Work than College Students.” At first, it had me scratching my head. But then I figured it out. Preschoolers were more open-minded. They were willing to think unconventionally to solve problems. The Wall Street Journal quoted the research team saying “the best and brightest college students acted as if the machine would always follow the common and obvious rule, even when we showed them how it might work.” That says a lot about human nature. Human beings build barriers to change. The older we get, the more close-minded we become. This provides an important lesson for investing. The common and obvious rule is that buying stocks is a good way to build wealth. And while that’s certainly true to an extent, there’s an unconventional rule that applies more so than ever before in today’s market. But before I get into the details, consider this.  In a 2011 survey, securities broker TD Ameritrade found that more than three-quarters of “buy and hold” investors have never bought or sold stock options. The reasons? “Too risky,” according to a third of the respondents. A quarter of them said they “don’t need… Read More

There’s a good reason why professional sports are so popular.  The athletes that compete at the highest level are the best in the world; they’ve beaten improbable odds to play sports for a living. In fact, according to a recent study from USA Football — the governing body for amateur American football in the United States — approximately 310,465 seniors played high school football in 2013. That same year, only 254 men were drafted into the NFL — less than one out of every thousand. This is the standard I had in mind when I set out to invent a… Read More

There’s a good reason why professional sports are so popular.  The athletes that compete at the highest level are the best in the world; they’ve beaten improbable odds to play sports for a living. In fact, according to a recent study from USA Football — the governing body for amateur American football in the United States — approximately 310,465 seniors played high school football in 2013. That same year, only 254 men were drafted into the NFL — less than one out of every thousand. This is the standard I had in mind when I set out to invent a proprietary screening system that would allow me to profit no matter what the market climate was.  I wanted it to be so picky, so elite, that it would squeeze out most of the risks associated with investing. And so far, that screen has led me and my readers to collect profits on all 60 trades it has recommended. You see, the companies that pass this rigorous screen are the most elite in the world. They’ve also beaten improbable odds. According to Bloomberg, 80% of small businesses will fail within the first 18 months. That number jumps to 90% within five… Read More

“It’s a terrible time to invest.” “Stocks are way overextended.” “The global economy is slowing. The probability of making money is low.” It might sound like I’m talking about current market conditions. But this was actually what one of my trader buddies said to me in January 2011 when I told him I was launching a wealth management firm. He wasn’t alone.  It seemed like everyone thought my idea was foolish and it was a terrible time to lead a group of investors into stocks. That bearish sentiment was apparent in the American Association of Individual Investors (AAII) Sentiment Survey… Read More

“It’s a terrible time to invest.” “Stocks are way overextended.” “The global economy is slowing. The probability of making money is low.” It might sound like I’m talking about current market conditions. But this was actually what one of my trader buddies said to me in January 2011 when I told him I was launching a wealth management firm. He wasn’t alone.  It seemed like everyone thought my idea was foolish and it was a terrible time to lead a group of investors into stocks. That bearish sentiment was apparent in the American Association of Individual Investors (AAII) Sentiment Survey at the time. In early 2011, bearish sentiment spiked to 34%, which was above the long-term average of 30%.  But they were all wrong. Since then, the S&P 500 has proceeded to deliver one of the best returns in history, climbing more than 55% in less than five years.  Investors who were buying in the face of pessimism have scored huge gains, but investors who sat on the sidelines and hoarded cash missed out on a narrow window to buy low. That conversation with my buddy back in early 2011 reminds me of the current market environment. The headlines are… Read More

This stock is on the wrong end of a fading trend. In 2010, customers couldn’t buy enough of this company’s then-chic watches, jewelry, belts and sunglasses. Today, sales are declining worldwide.  Fossil Group (Nasdaq: FOSL) — a name that wasn’t meant to be ironic but may prove to be. In the rapidly changing world of fashion, the worst thing a brand can be is antiquated. This isn’t just a subjective interpretation of fashion trends either; the numbers and the stock chart all support the argument that Fossil is in trouble. All Signs Point Down For Fossil Let’s… Read More

This stock is on the wrong end of a fading trend. In 2010, customers couldn’t buy enough of this company’s then-chic watches, jewelry, belts and sunglasses. Today, sales are declining worldwide.  Fossil Group (Nasdaq: FOSL) — a name that wasn’t meant to be ironic but may prove to be. In the rapidly changing world of fashion, the worst thing a brand can be is antiquated. This isn’t just a subjective interpretation of fashion trends either; the numbers and the stock chart all support the argument that Fossil is in trouble. All Signs Point Down For Fossil Let’s start with a few fundamental reasons to be concerned over Fossil’s business. #-ad_banner-# Fossil’s most recent quarterly results were weighed down by negative currency exchange rates. In mid-August, Fossil reported second-quarter revenue dropped 4% year over year to $740 million — below analyst estimates for revenue of $750 million.  Things don’t look to be getting better. Nearly half of Fossil’s revenues come from Europe and Asia. Economic slowdowns there, coupled with a rising U.S. dollar, could reduce the amount it earns. Anticipating this, management lowered its full-year earnings per share (EPS) guidance to $4.80 to $5.60, down from… Read More

Every investor wants to generate more income — and quicker. But how do you accomplish this without taking on extra risk? There’s a simple solution, but I bet only 1% of individual investors are doing it right now. It is not a complex trading strategy that involves a lot of time. But, then again, I’m also not simply buying and selling stocks either. My strategy is unique. Even Barron’s says, “One solution that deserves serious study is offsetting the expected lack of stock-investment returns with [this] strategy that, studies have shown, outperforms buy-and-hold investing.”  My strategy is a two-part approach… Read More

Every investor wants to generate more income — and quicker. But how do you accomplish this without taking on extra risk? There’s a simple solution, but I bet only 1% of individual investors are doing it right now. It is not a complex trading strategy that involves a lot of time. But, then again, I’m also not simply buying and selling stocks either. My strategy is unique. Even Barron’s says, “One solution that deserves serious study is offsetting the expected lack of stock-investment returns with [this] strategy that, studies have shown, outperforms buy-and-hold investing.”  My strategy is a two-part approach based on options — but not the tricky kind. Here’s how the first part works. Let’s say you own shares of Apple, and it’s trading for $100. You think Apple is a good, solid company that won’t necessarily skyrocket in the near term, but should reward you over the long haul. Your friend, however, thinks Apple’s share price is about to take off. He thinks that over the next few months it’s going to jump all the way to $200. So he comes to you with a proposal. He says he’ll pay you $500 today… if you agree to sell… Read More

Although the S&P 500 has made a substantial recovery off its late-August lows, the technical condition of the broader market is still shaky. For starters, the death cross (200-day moving average crosses below the 50-day) is still in force on the index. The same technical configuration applies to both the Dow Jones industrials and transports as well. Further, overhead resistance on the S&P 500 looms close by. The declining 50-day moving average is at 2,039. Slightly above is strong lateral resistance near 2,045, which was the previous support level. For the cherry on top, many technicians believe a… Read More

Although the S&P 500 has made a substantial recovery off its late-August lows, the technical condition of the broader market is still shaky. For starters, the death cross (200-day moving average crosses below the 50-day) is still in force on the index. The same technical configuration applies to both the Dow Jones industrials and transports as well. Further, overhead resistance on the S&P 500 looms close by. The declining 50-day moving average is at 2,039. Slightly above is strong lateral resistance near 2,045, which was the previous support level. For the cherry on top, many technicians believe a double-bottom will need to be traced out before any all-clear signal can be given. #-ad_banner-# In this environment, weak stocks make good shorts, and one of the most vulnerable is XenoPort (Nasdaq: XNPT). The California-based biopharmaceutical firm focuses on developing treatments for neurological and autoimmune disorders.  The stock suffered an enormous blow on Sept. 15, when shares plummeted 28% on staggering volume following news the company’s psoriasis drug, XP23829 — currently in a mid-stage, Phase II trial — caused negative and potentially harmful side effects, including diarrhea, stomach pain and vomiting. Due to these health risks, nearly a third of… Read More

For five years, investors wondered if China’s growth story was dead and its market would ever rise again. Then late last year, investors began rushing back in, sending the Shanghai Composite zooming higher. The index surged nearly non-stop until June of this year, when it looked like the… Read More

Warren Buffett is one of the greatest investors of all time. His net worth jumped to $65 billion in 2014, ranking him as one of the very richest people in the world, and I’m going to show you how to start investing like Warren Buffett. His average annual return of 20% in the past 55 years doesn’t just put him ahead of all peers… it means he doesn’t even have any peers. #-ad_banner-#Buffett loves a great deal. This was on full display in the financial crisis of 2008, when he lent Goldman Sachs $5… Read More

Warren Buffett is one of the greatest investors of all time. His net worth jumped to $65 billion in 2014, ranking him as one of the very richest people in the world, and I’m going to show you how to start investing like Warren Buffett. His average annual return of 20% in the past 55 years doesn’t just put him ahead of all peers… it means he doesn’t even have any peers. #-ad_banner-#Buffett loves a great deal. This was on full display in the financial crisis of 2008, when he lent Goldman Sachs $5 billion at the height of the panic. He landed amazing terms on the deal as the financial sector scrambled for cash, securing options to purchase 43.5 million shares of Goldman at or below $125 before October 2013. All told, Buffett netted a gain of of $2 billion in addition to lucrative dividend payments. Not long after, in 2009, Buffett and his holding company, Berkshire Hathaway, went “all in on America’s future” with a $34 billion investment in rail shipper Burlington Northern Santa Fe. Once again Buffett bought at the exact right time after prices had swung lower… Read More

As the market made new highs over the past six years, many companies could seemingly do no wrong. Investors rushed into highfliers as enthusiasm trumped reason, driving prices even higher.  When enthusiasm begins to crumble, though, as it has in the recent market sell-off, these investor favorites are typically some of the hardest hit. Luckily, due to their high levels of volatility, they can be even more profitable on the way down and offer a hedge against market weakness in your overall portfolio. To that end, one once-soaring stock –which boasts a valuation more than five times that… Read More

As the market made new highs over the past six years, many companies could seemingly do no wrong. Investors rushed into highfliers as enthusiasm trumped reason, driving prices even higher.  When enthusiasm begins to crumble, though, as it has in the recent market sell-off, these investor favorites are typically some of the hardest hit. Luckily, due to their high levels of volatility, they can be even more profitable on the way down and offer a hedge against market weakness in your overall portfolio. To that end, one once-soaring stock –which boasts a valuation more than five times that of the S&P 500 — may be headed for a big drop that traders can leverage into 25% profits. Shares of Under Armour (NYSE: UA) have rocketed more than 1,500% over the past six years as the apparel company posted strong growth, added new products such as footwear and accessories, and took market share from larger rivals. #-ad_banner-# After the huge run up, shares trade for an unbelievable 103 times trailing earnings. And there are numerous risks beyond its sky-high valuation. For starters, the company is aggressively expanding — both internationally and through new products like its line… Read More