Experts all seem to agree that the stock market is overvalued from a fundamental perspective. This conclusion can be reached based on almost any fundamental ratio. The price-to-earnings (P/E) ratio of the S&P 500, for example, is about 24.5. This is about 67% above its long-term average of 14.7. —Sponsored Link— Small Group Uncovers Millionaire’s Simple Stock-Picking Strategy With no Wall Street experience, a chemical engineer at DuPont accidentally uncovered a powerful pattern that often appears just before a stock’s share price doubles, triples, or even quadruples — seemingly out of nowhere. But not long… Read More

Experts all seem to agree that the stock market is overvalued from a fundamental perspective. This conclusion can be reached based on almost any fundamental ratio. The price-to-earnings (P/E) ratio of the S&P 500, for example, is about 24.5. This is about 67% above its long-term average of 14.7. —Sponsored Link— Small Group Uncovers Millionaire’s Simple Stock-Picking Strategy With no Wall Street experience, a chemical engineer at DuPont accidentally uncovered a powerful pattern that often appears just before a stock’s share price doubles, triples, or even quadruples — seemingly out of nowhere. But not long ago, this unassuming engineer began sharing his discovery with a handful of “beta testers” to confirm his theory. This year alone, his pattern has pinpointed 31 triple-digit windfalls. And now, he’s ready to unveil it to a whole new group of investors. Full Story… Nobel Prize-winning economist Robert Shiller’s cyclically adjusted P/E ratio is also warning the market is overvalued. At 30.2, this ratio is more than 85% above its long-term average of 16.1. Shiller is well known for calling market tops. He called the top in 2000, just before the dot-com bubble burst, and also… Read More

In July, on my instruction, a few thousand traders walked away with thousands of dollars in cash.  I’m not saying that to brag or boast — I wasn’t brought up that way.  I’m telling you because I want to help ordinary investors and retirees everywhere.  With today’s climate of economic uncertainty and global unrest, we need the best tools available to ensure a high, sustainable income… no matter what happens on Capitol Hill, to the economy, or to the American dollar. —Sponsored Link— My #1 Rule: Don’t Buy Options Most options traders place high-risk trades,… Read More

In July, on my instruction, a few thousand traders walked away with thousands of dollars in cash.  I’m not saying that to brag or boast — I wasn’t brought up that way.  I’m telling you because I want to help ordinary investors and retirees everywhere.  With today’s climate of economic uncertainty and global unrest, we need the best tools available to ensure a high, sustainable income… no matter what happens on Capitol Hill, to the economy, or to the American dollar. —Sponsored Link— My #1 Rule: Don’t Buy Options Most options traders place high-risk trades, hoping for a big payout. But they lose… a LOT! That’s why Jim Fink flips options trading on its head, allowing him to make money more than 85% of the time. For a brief window, he’s offering his personal strategy guide to readers which could unlock $67,548 in extra income for you in the next 12 months. Get your copy now by clicking here. That’s why I use a put selling strategy that targets the lowest-risk opportunities to make the highest gains possible.  Selling puts is how I generate an incredible supplemental income, often reaching into… Read More

Many people seem to believe that history began when they first became aware of the world around them. At least, that’s how everyone acts. In some areas, we never seem to learn from history. Too many of us believe everything we see is unprecedented. While that may truly apply to a few things — I, for one, cannot find a historical precedent for the idea of “Keeping Up with the Kardashians” — much of what we are seeing now has happened before. In the stock market, we also see familiar patterns. Stocks are overvalued — certainly not the first time… Read More

Many people seem to believe that history began when they first became aware of the world around them. At least, that’s how everyone acts. In some areas, we never seem to learn from history. Too many of us believe everything we see is unprecedented. While that may truly apply to a few things — I, for one, cannot find a historical precedent for the idea of “Keeping Up with the Kardashians” — much of what we are seeing now has happened before. In the stock market, we also see familiar patterns. Stocks are overvalued — certainly not the first time that’s happened. However, this time, we are seeing a rather extreme valuation. Below is a chart comparing the value of the stocks in the S&P 500 to the gross domestic product (GDP). That ratio is shown as the red line. The blue line is a broader indicator that compares the value of exchange-listed stocks to GDP.  Both measures show stocks are more overvalued now than then they were even before the 2008 bear market. Valuation is not a timing tool. Stocks can remain overvalued for years. But it is a warning. History tells us that, when stocks do… Read More

Alan Greenspan is back in the news. The former chairman of the Federal Reserve is now 91 years old but still sounds just like he did 30 years ago when he burst onto the world stage. I’ve always found that he speaks in a reassuring tone, which was important back in 1987, when he was beginning his tenure at the Fed. You see, in October of that year — just months after Greenspan’s nomination was confirmed by the Senate — the market suffered a major crash. While investors were reacting, Greenspan reassured the world that the Fed would be the lender of… Read More

Alan Greenspan is back in the news. The former chairman of the Federal Reserve is now 91 years old but still sounds just like he did 30 years ago when he burst onto the world stage. I’ve always found that he speaks in a reassuring tone, which was important back in 1987, when he was beginning his tenure at the Fed. You see, in October of that year — just months after Greenspan’s nomination was confirmed by the Senate — the market suffered a major crash. While investors were reacting, Greenspan reassured the world that the Fed would be the lender of last resort, ensuring the financial system didn’t fail. In the end, Greenspan never needed to act because the stock market stopped its decline as quickly as it began. Maybe the markets calmed down because Greenspan jumped in front of the news so quickly. We’ll never know what caused the panic selling to end but we know Greenspan continued to exert a calming influence on the markets. —Sponsored Link— Buy These 5 Stocks To Cash In On The Marijuana Megatrend Legalization of marijuana for medicinal and recreational use is creating a multibillion-dollar industry. But don’t think… Read More

Change can be difficult. I was reminded of this when I saw Spencer Johnson’s obituary in The New York Times.  I didn’t recognize the name at first, but after reading the headline, I immediately knew who he was:  If you’ve ever worked for the government or in a large company, you probably read one of the 28 million copies that have been sold.  This was a short book — 94 pages of very large type. According to the article, the book “told the story of two mice, Sniff and Scurry, and two tiny people, Hem and Haw, looking… Read More

Change can be difficult. I was reminded of this when I saw Spencer Johnson’s obituary in The New York Times.  I didn’t recognize the name at first, but after reading the headline, I immediately knew who he was:  If you’ve ever worked for the government or in a large company, you probably read one of the 28 million copies that have been sold.  This was a short book — 94 pages of very large type. According to the article, the book “told the story of two mice, Sniff and Scurry, and two tiny people, Hem and Haw, looking for cheese in a maze. When the cheese supply runs out at Cheese Station C, the mice leave without angst to find more. But Hem and Haw resist, refusing to accept change. Haw overcomes his anxiety and ventures out of his comfort zone — at first timidly, but then, gradually, with more confidence — in search of a new supply of cheese.”  “Before long, he knew why he felt good,” Mr. Johnson wrote about Haw. “He stopped to write again on the wall: ‘When you stop being afraid, you feel good!'”  Johnson’s obituary noted that although the book was short,… Read More

  Federal Reserve officials are great at making forecasts. Unfortunately, their forecasts aren’t always very good. That’s probably why their forecasts attract so much attention.  Earlier this week, John Williams, the president of the San Francisco Federal Reserve Bank, said, “The stock market seems to be running pretty much on fumes. It’s something that clearly is a risk to the U.S. economy, some correction there — it’s something we have to be prepared for to respond to if it does happen.” This can be read as a warning from a Fed president that stocks are due for a decline. Read More

  Federal Reserve officials are great at making forecasts. Unfortunately, their forecasts aren’t always very good. That’s probably why their forecasts attract so much attention.  Earlier this week, John Williams, the president of the San Francisco Federal Reserve Bank, said, “The stock market seems to be running pretty much on fumes. It’s something that clearly is a risk to the U.S. economy, some correction there — it’s something we have to be prepared for to respond to if it does happen.” This can be read as a warning from a Fed president that stocks are due for a decline. This is the latest in a long line of stock market forecasts from the Fed. —Sponsored Link— The Greatest Commodity Shortage In History  It’s no secret the world faces shortages in many commodities. The world’s diminishing supply of everything from cocoa to coffee… Lithium to lumber… Phosphate to plutonium… Silver to sugar… Is of great concern. But there’s an even bigger and more imminent commodity shortage at hand that no one is talking about. Details here… The most famous warning that stocks could fall probably came from former Fed chairman Alan… Read More

Compared to the past, there’s something fundamentally different about the challenges central banks face today — further proof that we’re in uncharted economic waters. Low interest rates, even negative rates in some countries, are a prime example. A couple of years ago, a chart of interest rates over the past 5,000 years began to circulate. One version of that chart, shown below, highlights that rates fell to a nearly 400-year low in the Great Recession. One noted economic commentator, James Grant, asked, “If these are the first sub-zero interest rates in 5,000 years, is this not… Read More

Compared to the past, there’s something fundamentally different about the challenges central banks face today — further proof that we’re in uncharted economic waters. Low interest rates, even negative rates in some countries, are a prime example. A couple of years ago, a chart of interest rates over the past 5,000 years began to circulate. One version of that chart, shown below, highlights that rates fell to a nearly 400-year low in the Great Recession. One noted economic commentator, James Grant, asked, “If these are the first sub-zero interest rates in 5,000 years, is this not the worst economy since 3,000 BC?” I don’t believe this is the worst economy in history, but I am seeing more and more indicators that this is an unprecedented economy. Within the past few years, we have seen many longstanding economic relationships change. Among them is the number of unfilled jobs. Historically, we’ve come to expect that there will be more job seekers than jobs. That relationship changed in 2015. Now, there are more job openings (the blue line in the chart above) than jobs (the red line). In theory, this should lead to higher wages… Read More

Earnings season is an emotional time on Wall Street, and I think it’s the perfect time to revisit Ben Graham’s famous description of “Mr. Market.” Ben Graham was Warren Buffett’s business school professor. Graham wrote several books explaining how he thought about the markets, and in one of those books, he compared the market’s price swings to the lunatic ravings of Mr. Market. In Graham’s description, when Mr. Market is happy, he will bid the price of stocks up. But suddenly and often for no apparent reason, Mr. Market will fall into a deep fit of despair. Then he wants… Read More

Earnings season is an emotional time on Wall Street, and I think it’s the perfect time to revisit Ben Graham’s famous description of “Mr. Market.” Ben Graham was Warren Buffett’s business school professor. Graham wrote several books explaining how he thought about the markets, and in one of those books, he compared the market’s price swings to the lunatic ravings of Mr. Market. In Graham’s description, when Mr. Market is happy, he will bid the price of stocks up. But suddenly and often for no apparent reason, Mr. Market will fall into a deep fit of despair. Then he wants to sell all of his holdings at low prices, and he won’t take no for an answer. Graham explained that it’s important to ignore Mr. Market and make buy and sell decisions based on value. This can be difficult to do because it’s easy to get caught up in the market’s reaction. But both Graham and Buffett achieved success by ignoring the market swings and focusing on value. Sometimes, Mr. Market’s judgment is entirely rational. Selling may seem to come from nowhere and be extreme, but it may actually be the right response. This is especially true during earnings season. Read More

An old trader once told me, “Trading is the hardest easy money you’ll ever make.” In theory, trading is easy enough — all you have to do is buy low and sell high, right? After all, there are thousands of books claiming to have all the information we’ll ever need. #-ad_banner-#In practice, however, trading is among the most difficult activities in the financial world. Despite the availability of a wealth of information, few do it well. In fact, all that accessible information actually makes it harder to trade successfully. Think about that for a moment. If you could really win… Read More

An old trader once told me, “Trading is the hardest easy money you’ll ever make.” In theory, trading is easy enough — all you have to do is buy low and sell high, right? After all, there are thousands of books claiming to have all the information we’ll ever need. #-ad_banner-#In practice, however, trading is among the most difficult activities in the financial world. Despite the availability of a wealth of information, few do it well. In fact, all that accessible information actually makes it harder to trade successfully. Think about that for a moment. If you could really win in the markets by simply buying stocks with low price-to-earnings (P/E) ratios, then we would all be successful. As an old trader also once told me, “To know what everyone knows is to know nothing.” If everyone has the same tools, it’s difficult to use them to gain an advantage over everyone else. The secret to beating the market — and your fellow investors — is to use little-known indicators, which act like secret weapons for trading. That’s why I developed my own indicator, which I call the Income Trader Volatility (ITV) indicator. ITV is similar to the Volatility S&P… Read More

My years in the military have allowed me to see the world in a totally different way. While deployed overseas I tracked IED locations, went on convoy missions and gathered intelligence from local villages. I learned the importance of analyzing data to forecast what was likely to happen, and I used this information to determine the level of risk our soldiers were dealing with. #-ad_banner-#My service opened my eyes to the bigger picture — not just in the military, but in everyday life. My experience assessing risk in the military taught me to think outside the box and take different… Read More

My years in the military have allowed me to see the world in a totally different way. While deployed overseas I tracked IED locations, went on convoy missions and gathered intelligence from local villages. I learned the importance of analyzing data to forecast what was likely to happen, and I used this information to determine the level of risk our soldiers were dealing with. #-ad_banner-#My service opened my eyes to the bigger picture — not just in the military, but in everyday life. My experience assessing risk in the military taught me to think outside the box and take different approaches to problems or situations, including the financial markets. Today, there are myriad investing techniques and strategies. And when I was first introduced to them, like most I found myself overwhelmed. That’s where my training came in handy because I was able to look at the market from a different angle. As I put my years of service analyzing data and forecasting and assessing risk to work, I was instantly drawn to one particular strategy… selling put options. Options can be powerful income-generating tools — safe enough even for retirees — when used correctly. Here’s an easy way to understand… Read More