In one old western movie I saw as a kid, a young entrepreneur took a job driving a nitroglycerin wagon down a rocky road to a mine. He was willing to get paid well to do a job no one else wanted to do, so in time he grew rich and eventually bought the mine. Similarly, I like the stocks of companies that do the job no one else wants to do or go where no one else wants to go. The stocks are typically undervalued, but the companies make tons of money and reward their shareholders.  The… Read More

In one old western movie I saw as a kid, a young entrepreneur took a job driving a nitroglycerin wagon down a rocky road to a mine. He was willing to get paid well to do a job no one else wanted to do, so in time he grew rich and eventually bought the mine. Similarly, I like the stocks of companies that do the job no one else wants to do or go where no one else wants to go. The stocks are typically undervalued, but the companies make tons of money and reward their shareholders.  The French oil giant Total (NYSE: TOT) fits this profile perfectly. Formed in 2000 with the merger of TotalFina and Elf Aquitaine, Total operates in over 130 countries and boasts annual sales of more than $230 billion. Shares have gained nearly 20% this year, but the combination of Total’s fundamentals and macro-environmental conditions should send shares even higher in the near future. When I profile large, vertically integrated oil companies, I like to see what veteran investment strategist and energy analyst Bill O’Grady of Confluence Investment Management has to see. O’Grady contends… Read More

Polyester-draped family photos aside, being a child of the 1970s was pretty cool in some ways. There were many things to dislike — bad hair, bad clothes and a lot of terrible music — but the TV shows weren’t too bad. For several years in the mid-’70s, my family used to sit down faithfully on Tuesday nights in front of our ridiculous console TV set to watch “Happy Days.” The series ran well into the ’80s, but most viewers gave up on it after the famous episode in which the Fonz jumped a shark while waterskiing. The series… Read More

Polyester-draped family photos aside, being a child of the 1970s was pretty cool in some ways. There were many things to dislike — bad hair, bad clothes and a lot of terrible music — but the TV shows weren’t too bad. For several years in the mid-’70s, my family used to sit down faithfully on Tuesday nights in front of our ridiculous console TV set to watch “Happy Days.” The series ran well into the ’80s, but most viewers gave up on it after the famous episode in which the Fonz jumped a shark while waterskiing. The series went downhill fast after that, giving rise to the awesome phrase “jumped the shark,” which is used to describe when something has peaked and rolled over.  Stocks, of course, are highly capable of jumping the shark. Let me be upfront. I’ve never been to a Chipotle Mexican Grill (NYSE: CMG) — but being in the investing biz, I’m familiar with the brand, thanks to the financial media’s nonstop gushing about the company and its stock. Clearly, Chipotle is a bona fide rock star. A double in two years is impressive, but these numbers are unsustainable. I don’t care… Read More

The Lone Ranger was a big fan of silver.  He named his horse after the shiny metal and fashioned bullets out of it. If werewolves ever threatened Wild West homesteaders, I’m sure the masked man and Tonto could’ve taken care of them. Lately, silver bulls probably feel like the Lone Ranger — with the emphasis on the “Lone.” With the recent correction in precious metals prices, silver has been pounded extra hard. Since its top in mid-2011, iShares Silver Trust (NYSE: SLV), which tracks the price of silver, has slid more than 50%. Compare that with… Read More

The Lone Ranger was a big fan of silver.  He named his horse after the shiny metal and fashioned bullets out of it. If werewolves ever threatened Wild West homesteaders, I’m sure the masked man and Tonto could’ve taken care of them. Lately, silver bulls probably feel like the Lone Ranger — with the emphasis on the “Lone.” With the recent correction in precious metals prices, silver has been pounded extra hard. Since its top in mid-2011, iShares Silver Trust (NYSE: SLV), which tracks the price of silver, has slid more than 50%. Compare that with the gold tracker iShares Gold Trust (NYSE: GLD), which has given back less than 30%. Why?  Secondary trades like silver are often afterthoughts for investors. When the price of the popular asset class seems to bid up, buyers will violently pile in to a cheaper alternative. The cheaper the investment, the higher it climbs. They are also punished more severely when things go south. But as always, the herd, in its infinite lack of wisdom, is missing a major point: Silver is useful outside of being a currency proxy. Recently, I discussed a short-term trading idea for GLD  based purely… Read More

“You got to know when to hold ’em, know when to fold ’em.”  Kenny Rogers’ “The Gambler” earned the silver-bearded singer a gazillion dollars and carried him on to fame and fortune as a rotisserie chicken magnate. But when it comes to trading — especially when it comes to trading gold — it’s really darn good advice. Now, as I wrote a few months ago, I’m no fan of the shiny yellow metal. But after a merciless pounding this summer, gold is due for a near-term rally. The best way to play this bounce is through the SPDR… Read More

“You got to know when to hold ’em, know when to fold ’em.”  Kenny Rogers’ “The Gambler” earned the silver-bearded singer a gazillion dollars and carried him on to fame and fortune as a rotisserie chicken magnate. But when it comes to trading — especially when it comes to trading gold — it’s really darn good advice. Now, as I wrote a few months ago, I’m no fan of the shiny yellow metal. But after a merciless pounding this summer, gold is due for a near-term rally. The best way to play this bounce is through the SPDR Gold Trust ETF (Nasdaq: GLD). The weekly chart explains it all. After blowing through $170 around this time last year, GLD has taken a nasty tumble of over 30%. Apparently, the fear trade can be scary on both sides of the table. When shares pierced $120, they bounced nicely by 18% — and immediately proceeded to give most of that gain back. However, looking at the chart, it seems that a double bottom is in place for GLD.#-ad_banner-#​ Typically (and technically), a double-bottom formation can be a bullish signal. Besides… Read More

When I was a kid, I always wanted my own Coke machine. How cool would that be? Want a Coke? Done — and I get my money back.#-ad_banner-# When I attended college, the guys around the fraternity house talked about how cool it would… Read More

When America was on the doorstep of the Roaring ’20s and the birth of modern American consumerism, the predecessor to SunTrust Bank (NYSE: STI) made a shrewd investment.#-ad_banner-# When Coca-Cola (NYSE: KO) went public, the bank was part of the underwriting group. The lead underwriter, J.P. Morgan (NYSE: JPM), took its $100,000 fee in cash. SunTrust took its payment in the company’s newly issued shares, which came out… Read More

When America was on the doorstep of the Roaring ’20s and the birth of modern American consumerism, the predecessor to SunTrust Bank (NYSE: STI) made a shrewd investment.#-ad_banner-# When Coca-Cola (NYSE: KO) went public, the bank was part of the underwriting group. The lead underwriter, J.P. Morgan (NYSE: JPM), took its $100,000 fee in cash. SunTrust took its payment in the company’s newly issued shares, which came out to be around $70,000. The stock certificates and Coca-Cola’s secret formula sat in the bank’s vault for nearly a century growing to nearly 30 million shares worth more than $2 billion and paying around $53 million annually in dividends. Fast-forward to 2012. After a brutal financial crisis, SunTrust decided to do what many considered sacrilege. After being battered by a soft economy, tighter government regulation and bad loans, the company decided to sell… Read More

What happens to a forest after a forest fire? More often than not, it grows back even healthier than before. Trees damaged in a fire typically die within two years, and dead vegetation falls to the ground. The remaining snags provide a habitat for wildlife and eventually fall to the forest floor, becoming a long-term source of nutrients. It’s a process of creative destruction. Financial markets can behave the same way. They can crash and burn, clearing out irrational excess in order to build a foundation of sustainable growth. Two… Read More

What happens to a forest after a forest fire? More often than not, it grows back even healthier than before. Trees damaged in a fire typically die within two years, and dead vegetation falls to the ground. The remaining snags provide a habitat for wildlife and eventually fall to the forest floor, becoming a long-term source of nutrients. It’s a process of creative destruction. Financial markets can behave the same way. They can crash and burn, clearing out irrational excess in order to build a foundation of sustainable growth. Two prime examples: the tech bubble of the late 1990s and the so-called commodities supercycle. “Technology is here to stay.” This is one of the most ridiculous statements I’ve heard uttered by investors as they bid up the likes of Pets.com and CMGI to ridiculous, stratospheric prices. Along the way, the stocks of many great long-term companies were lifted as well. One of my favorite “Forever Stocks,” chip-making giant Intel (Nasdaq: INTC), has been punished for over a decade, thanks to guilt by association. But what happened after the crash is that… Read More

What happens to a forest after a forest fire? More often than not, it grows back even healthier than before. Trees damaged in a fire typically die within two years, and dead vegetation falls to the ground. The remaining snags provide a habitat for wildlife and eventually fall to the forest floor, becoming a long-term source of nutrients. It’s a process of creative destruction. Financial markets can behave the same way. They can crash and burn, clearing out irrational excess in order to build a foundation of sustainable growth. Two… Read More

What happens to a forest after a forest fire? More often than not, it grows back even healthier than before. Trees damaged in a fire typically die within two years, and dead vegetation falls to the ground. The remaining snags provide a habitat for wildlife and eventually fall to the forest floor, becoming a long-term source of nutrients. It’s a process of creative destruction. Financial markets can behave the same way. They can crash and burn, clearing out irrational excess in order to build a foundation of sustainable growth. Two prime examples: the tech bubble of the late 1990s and the so-called commodities supercycle. “Technology is here to stay.” This is one of the most ridiculous statements I’ve heard uttered by investors as they bid up the likes of Pets.com and CMGI to ridiculous, stratospheric prices. Along the way, the stocks of many great long-term companies were lifted as well. One of my favorite “Forever Stocks,” chip-making giant Intel (Nasdaq: INTC), has been punished for over a decade, thanks to guilt by association. But what happened after the crash is that… Read More

Four years ago, if an individual investor even entertained the idea of buying a stock, chances are it was in the utility sector. They were boring. Our grandparents would collect them like tourists collect sippy cups from amusement parks. While some people feared the… Read More

The duck-billed platypus defies all scientific reason. This beaver-tailed, otter-footed, semi-aquatic creature is the only mammal on the planet that lays eggs instead of giving live birth. On top of that, it is the ONLY living representative of its family and species. Basically, the platypus is an inexplicable freak of nature. Although the platypus officially has no relatives, I have a theory that it may be distantly related to financial and commodity markets — which often also look really weird and defy explanation. Recently, I’ve noticed an odd disconnect between the price of… Read More

The duck-billed platypus defies all scientific reason. This beaver-tailed, otter-footed, semi-aquatic creature is the only mammal on the planet that lays eggs instead of giving live birth. On top of that, it is the ONLY living representative of its family and species. Basically, the platypus is an inexplicable freak of nature. Although the platypus officially has no relatives, I have a theory that it may be distantly related to financial and commodity markets — which often also look really weird and defy explanation. Recently, I’ve noticed an odd disconnect between the price of oil and the performance of oil- and energy-related stocks. I’m no Dennis Gartman or Jim Rogers, so reading commodity price tea leaves is not my thing. But there’s something going on — and if there’s something quirky going on in the investment world, there’s an opportunity to make money. Here’s an interesting chart of the one-year price action on West Texas Intermediate crude (WTI): The spot… Read More