After falling for six straight months, oil prices are still in search of a bottom. A greater than 50% plunge over the past year is the second-largest annual decline on record.   Sector share prices have followed suit. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP), for example, is down more than 40% from its 52-week high.   Considering previously planned production increases are still boosting the supply of oil, investors are left to wonder when the bleeding will stop. Read More

  After falling for six straight months, oil prices are still in search of a bottom. A greater than 50% plunge over the past year is the second-largest annual decline on record.   Sector share prices have followed suit. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP), for example, is down more than 40% from its 52-week high.   Considering previously planned production increases are still boosting the supply of oil, investors are left to wonder when the bleeding will stop.     The sell-off has been especially pronounced over the past two months, leading to a huge spike in volatility. The OVX index, a measure of West Texas Intermediate Crude’s (WTI) implied volatility, has spiked sharply and is now at its highest level since 2012 despite relative calm in the VIX volatility gauge for equities.     And with more oil supply coming in the near-term (thanks to nearly $300 billion in energy exploration spending in the U.S. alone last year), few expect a quick rebound in prices or a drop in volatility. The tug-of-war… Read More

Some traders argue that once an indicator or strategy is well known it loses its effectiveness. But that doesn’t seem to ring true for the Dogs of the Dow, which was popularized in the early ’90s. The Dogs are the 10 highest yielding stocks in the Dow Jones Industrial Average, which is comprised of 30 of the largest — and arguable safest — companies in the world.  The idea is that the higher yields indicate better value, and the chance for above-average returns. And indeed, the strategy does appear to deliver on that. Between 1973 and 1996, the Dogs returned 20.3%… Read More

Some traders argue that once an indicator or strategy is well known it loses its effectiveness. But that doesn’t seem to ring true for the Dogs of the Dow, which was popularized in the early ’90s. The Dogs are the 10 highest yielding stocks in the Dow Jones Industrial Average, which is comprised of 30 of the largest — and arguable safest — companies in the world.  The idea is that the higher yields indicate better value, and the chance for above-average returns. And indeed, the strategy does appear to deliver on that. Between 1973 and 1996, the Dogs returned 20.3% annually versus 15.8%for the Dow. In 2013, the Dogs beat the Dow 30 by 8.4 percentage points, returning 35%. #-ad_banner-#Following the basic strategy involves investing an equal amount of money in each of these 10 stocks on Dec. 31, and holding them for one year. But for the past two years, I’ve shared a variation of this strategy with Profitable Trader readers that has delivered triple-digit profits.  While the Dogs had a great year in 2013, when I reviewed my strategy in mid-December of last year, a $1,089 investment had already grown to over… Read More

The phrase “cost avoidance” doesn’t have the same cachet as “revenue growth.” Still, they have the same beneficial impact on the bottom line. In fact, in the electrical industry, cost avoidance is emerging as the dominant goal. And one small company is helping utilities achieve it. #-ad_banner-#Little-known EnerNOC (NASDAQ: ENOC) was founded just over a decade ago, but it recently hit a key milestone: According to the company, its customers have now saved more than $1 billion by using its software and services. And EnerNOC has barely scratched its total addressable market. Every year, the nation’s electrical grid… Read More

The phrase “cost avoidance” doesn’t have the same cachet as “revenue growth.” Still, they have the same beneficial impact on the bottom line. In fact, in the electrical industry, cost avoidance is emerging as the dominant goal. And one small company is helping utilities achieve it. #-ad_banner-#Little-known EnerNOC (NASDAQ: ENOC) was founded just over a decade ago, but it recently hit a key milestone: According to the company, its customers have now saved more than $1 billion by using its software and services. And EnerNOC has barely scratched its total addressable market. Every year, the nation’s electrical grid is pushed to capacity during heatwaves. When that happens, the local, regulated power companies must obtain power on the open market from wholesale power providers, often at exorbitant prices.   The regulated power companies hate it and so do consumers when they see their monthly bills spike. The power companies could build more power plants, but that’s an expensive option, especially when they will only be needed as backup when the grid is strained. That’s where EnerNOC’s expertise comes in. The company uses its Network Operating Center (NOC) to provide energy management and energy efficiency solutions to assist grid operators… Read More

For years, the stock market mantra has been, “Don’t fight the Fed.” Despite slow global growth, multiple geopolitical incidents and a struggling U.S. economy, the historic monetary program enacted by the Federal Reserve has driven stock prices higher.  #-ad_banner-#While U.S. stocks are not particularly expensive compared to prior bubbles, the Fed wrapped up its bond-buying program and is ready to start hiking interest rates sometime in 2015.  Even against the potential for stronger economic growth on lower energy prices, I can’t help but wonder if the mantra is now warning investors of risks in U.S. stocks. If monetary… Read More

For years, the stock market mantra has been, “Don’t fight the Fed.” Despite slow global growth, multiple geopolitical incidents and a struggling U.S. economy, the historic monetary program enacted by the Federal Reserve has driven stock prices higher.  #-ad_banner-#While U.S. stocks are not particularly expensive compared to prior bubbles, the Fed wrapped up its bond-buying program and is ready to start hiking interest rates sometime in 2015.  Even against the potential for stronger economic growth on lower energy prices, I can’t help but wonder if the mantra is now warning investors of risks in U.S. stocks. If monetary stimulus can send markets higher even against weak economic data, will a restrictive monetary policy send shares lower even during good economic times? Fortunately, there is a market that should see strong gains in 2015 even as the Fed is taking the punch bowl away.   It’s not Japan where the Bank of Japan has engineered its own stock market rally with an aggressive monetary program. The Nikkei 225 jumped 63% in the past two years, but Prime Minister Shinzo Abe is having a tough time launching the final arrow of his reform program, and record spending has yet to… Read More

The cyber attack on Sony Pictures has morphed into an international thriller to rival any Hollywood spy movie. New information is still leaking out on a daily basis, and this story could translate to even bigger growth for one industry. #-ad_banner-#Sources within Sony (NYSE: SNE) reported in late… Read More

Have you ever noticed the abundance of articles with catchy titles? “Five Favorite Stocks Of The 1%” “Secret Money Management Tricks Of The Super-Wealthy?” #-ad_banner-#It’s easy to see the appeal of these articles for everyday investors. After all, that’s the whole purpose of investing — to build wealth. Who better to assist with that aspiration than the rich? Surely, they know a few things we don’t. I worked with affluent high net-worth clients for years, and while most are knowledgeable about business and… Read More

Have you ever noticed the abundance of articles with catchy titles? “Five Favorite Stocks Of The 1%” “Secret Money Management Tricks Of The Super-Wealthy?” #-ad_banner-#It’s easy to see the appeal of these articles for everyday investors. After all, that’s the whole purpose of investing — to build wealth. Who better to assist with that aspiration than the rich? Surely, they know a few things we don’t. I worked with affluent high net-worth clients for years, and while most are knowledgeable about business and industry, that doesn’t always mean they are financial gurus. These articles are often entertaining and informative, but they typically don’t have a real impact on my portfolio. But when a decorated portfolio manager, such as Mario Gabelli, says to avoid telecom and overweight commodities, or when Franklin Templeton’s Mark Mobius says it’s time to double down on emerging-market debt, I pay attention. I’m a voracious reader of annual reports and other shareholder communiques where fund managers enlighten us with their commentary and outlooks. But really, the simplest and most direct way… Read More

The stock market is heading into its sixth year of this bull run, and investors are getting increasingly skittish with each sell-off. With the threat of higher interest rates in 2015, investors may be in for a rough ride. If you haven’t started thinking about diversifying your portfolio away from stocks, now would be a good time.  But cash and fixed-income are earning next to nothing, and many of the “safe” asset classes carry interest rate risks. Fortunately, there is an alternative investment class that can help diversify your portfolio and should continue to benefit from a stronger… Read More

The stock market is heading into its sixth year of this bull run, and investors are getting increasingly skittish with each sell-off. With the threat of higher interest rates in 2015, investors may be in for a rough ride. If you haven’t started thinking about diversifying your portfolio away from stocks, now would be a good time.  But cash and fixed-income are earning next to nothing, and many of the “safe” asset classes carry interest rate risks. Fortunately, there is an alternative investment class that can help diversify your portfolio and should continue to benefit from a stronger economy and higher rates. Diversify With BDCs Business development corporations (BDCs) are special finance companies that invest and lend money to small- and medium-sized companies much the same way that a private equity firm operates. Strategies are pretty diverse from providing capital for buyouts and restructuring to lending money on a short-term basis for projects and securitization. #-ad_banner-# BDCs are a good diversifier for a portfolio of shares in regular corporations because of their diversified financial investments. The UBS ETRACS Wells Fargo Business… Read More

When searching for trades, I typically focus on fundamentals first and use the chart as a tool to time the trade and estimate the anticipated move. But from time to time, a technical breakout is so powerful it cannot be ignored, and the fundamentals play a supporting role. #-ad_banner-#Today’s pick is breaking out from a highly reliable chart pattern. This same pattern delivered gains of 27% in just two weeks in Darden Restaurants (NYSE: DRI) and 70% in less than two months in Mattel (NASDAQ: MAT). A breakout from a… Read More

When searching for trades, I typically focus on fundamentals first and use the chart as a tool to time the trade and estimate the anticipated move. But from time to time, a technical breakout is so powerful it cannot be ignored, and the fundamentals play a supporting role. #-ad_banner-#Today’s pick is breaking out from a highly reliable chart pattern. This same pattern delivered gains of 27% in just two weeks in Darden Restaurants (NYSE: DRI) and 70% in less than two months in Mattel (NASDAQ: MAT). A breakout from a wedge formation is one of the most compelling, explosive and successful technical signals I use.  The wedge patterns that led to winning trades in MAT and DRI were of the bearish variety. Now we have an opportunity to jump on a breakout from a bullish wedge in DSW Inc. (NYSE: DSW). The pattern emerged on DSW’s chart after the shoe retailer announced better-than-expected Q3 earnings and raised its full-year guidance. Shares gapped up on the opening on Nov. 25, breaking out of a channel and hitting an eight-month high. The stock then made a series of lower highs. Read More

Winter weather investing is always popular this time of year. Who can forget last year’s polar vortex that sent natural gas prices up 40% between December and February? This December has started out relatively mild across the United States, but January could bring the need for extra heating. Trading on the weather can be a gamble, though, as Mother Nature does not always cooperate with our bets. That’s why I like to hedge my cold-weather plays by investing in stocks with strong year-round drivers as well.  #-ad_banner-#While many look to utility companies and retailers for their winter plays, I like… Read More

Winter weather investing is always popular this time of year. Who can forget last year’s polar vortex that sent natural gas prices up 40% between December and February? This December has started out relatively mild across the United States, but January could bring the need for extra heating. Trading on the weather can be a gamble, though, as Mother Nature does not always cooperate with our bets. That’s why I like to hedge my cold-weather plays by investing in stocks with strong year-round drivers as well.  #-ad_banner-#While many look to utility companies and retailers for their winter plays, I like power generation. Demand for backup generators can spike during the winter if storms knock out transmission lines. Not only could equipment providers see higher sales on a rough winter, but spring brings the potential for higher sales on storm activity. Generac Holdings (NYSE: GNRC) dominates the market for home standby generators with a 75% share. It books 51% of its $1.43 billion in annual sales from residential equipment. The company’s industrial and commercial segment, responsible for 44% of sales, is diversified across the energy, industrial, light commercial and construction markets. The company has a strong footprint in North… Read More

“Residential housing is a tough business.” These were the words told to me by two extremely wealthy real estate moguls from New York — right after I bought my first rental property.  #-ad_banner-#I couldn’t believe what I was hearing. I knew several people who were making a killing buying, renting and flipping houses. And I figured I would get my piece of the pie. I was guiding these wealthy New Yorkers and a handful of other successful businessmen down a 100-mile stretch of whitewater — through the largest wilderness area in the lower 48. Six days in the middle of… Read More

“Residential housing is a tough business.” These were the words told to me by two extremely wealthy real estate moguls from New York — right after I bought my first rental property.  #-ad_banner-#I couldn’t believe what I was hearing. I knew several people who were making a killing buying, renting and flipping houses. And I figured I would get my piece of the pie. I was guiding these wealthy New Yorkers and a handful of other successful businessmen down a 100-mile stretch of whitewater — through the largest wilderness area in the lower 48. Six days in the middle of nowhere with no connection to the outside world is a great way to get to know and pick the brains of some of America’s elite. I took self-made millionaires, CEOs, hedge funders and top executives down the river — my mother even once took Jimmy Carter and George H.W. Bush down.  In short, it was a great way to meet interesting people and receive great advice. So one night in camp I was curious as to why these two New Yorkers thought residential housing was such a tough business, especially when it contradicted with pretty much everything I had heard… Read More