Many U.S. companies are riding the Chinese growth wave. However, to maximize their gains from these pioneering U.S. firms, investors still need to choose the right stocks and time their purchases correctly. #-ad_banner-#One of the best times to buy a stock is during a pullback resulting from investor bearishness. Many investors have turned bearish on China due to a slowdown in growth. Catching long-term economic trends is one way in which fortunes are made in the financial markets, but identifying these macro trends at their beginning is very difficult. Some investors luck into a long-term trend at its… Read More

Many U.S. companies are riding the Chinese growth wave. However, to maximize their gains from these pioneering U.S. firms, investors still need to choose the right stocks and time their purchases correctly. #-ad_banner-#One of the best times to buy a stock is during a pullback resulting from investor bearishness. Many investors have turned bearish on China due to a slowdown in growth. Catching long-term economic trends is one way in which fortunes are made in the financial markets, but identifying these macro trends at their beginning is very difficult. Some investors luck into a long-term trend at its start by simply being at the right place at the right time — but for the rest of us, it’s not so easy. I’ve found the best way to catch massive trends like China’s growth is to wait for a pullback within the broader upward trend. With an economy that has been growing four to five times faster than the U.S.’ over the past couple of decades, there is no question that China represents a massive opportunity for investors. Many economists expect China will overtake the United States as the world’s largest economy within the next 10 years. So while… Read More

What a way to start 2014! Gloom and doom have struck the stock market with a roughly 1,000-point decline in the Dow Jones Industrial Average. #-ad_banner-#The Federal Reserve’s dialing back of its massive bond buying program, emerging-market weakness and several economic indicators turning downward are some of the culprits of the heavy selling in the first month of the year. While many supposed stock market experts and perma-bears are claiming that the selling is signaling much more downside to come, I wholeheartedly disagree. This selling is nothing more than simple profit-taking after the incredible bull market of 2013. One very… Read More

What a way to start 2014! Gloom and doom have struck the stock market with a roughly 1,000-point decline in the Dow Jones Industrial Average. #-ad_banner-#The Federal Reserve’s dialing back of its massive bond buying program, emerging-market weakness and several economic indicators turning downward are some of the culprits of the heavy selling in the first month of the year. While many supposed stock market experts and perma-bears are claiming that the selling is signaling much more downside to come, I wholeheartedly disagree. This selling is nothing more than simple profit-taking after the incredible bull market of 2013. One very practical reason is that investors wanted to delay paying taxes on their capital gains. This caused many to wait until 2014 to take profits. Another obvious reason is the fact that markets never travel in a straight line for long. There is always selling after a move higher, and this time that selling took longer, so it was more severe. I am confident in the stock market and think this pullback is a great time to find bargains. While many stocks sold off during January, a few bucked the downward trend. In fact, I located a stock that gained 8%… Read More

I love stories about regular people who have excelled in their chosen profession. The hedge fund and financial world is rife with tales of individuals who have built vast fortunes despite starting from modest beginnings. #-ad_banner-#To me, the most inspiring stories are about people who have fought their way to top, been knocked down, and then regained their top-dog status. These people are generally mavericks who go against the grain –and, in the financial realm, can find value in overlooked stocks that most of the investment world can’t readily see.  One of my favorite consistently successful money managers… Read More

I love stories about regular people who have excelled in their chosen profession. The hedge fund and financial world is rife with tales of individuals who have built vast fortunes despite starting from modest beginnings. #-ad_banner-#To me, the most inspiring stories are about people who have fought their way to top, been knocked down, and then regained their top-dog status. These people are generally mavericks who go against the grain –and, in the financial realm, can find value in overlooked stocks that most of the investment world can’t readily see.  One of my favorite consistently successful money managers is Ken Griffin of hedge fund Citadel LLC. Griffin started trading out of his college dorm room in 1986. He was so successful that he was quickly able to raise a million dollars from investors. By 1990, Griffin launched the Citadel Investment Group with a little over $4 million. This fund has grown to one of the largest hedge funds in the world with over $17 billion under management.  Griffin’s trip to the top has not been without its tribulations. One example is that during the financial crisis, Citadel sustained a drawdown of nearly 50%. During this time, many hedge… Read More

Even after a horrendous January and amid the bear market talk dominating the financial news, I remain bullish on the stock market. I will even so far as to say that one interest rate-sensitive sector that thrived in 2013 will continue its winning ways into next year.#-ad_banner-#​ There is no question that January was a difficult month for the stock market. A combination of the Federal Reserve starting to dial back on its massive bond-buying program, emerging-market fears and even the end of Ben Bernanke’s term as Fed chairman fueled investor anxiety. In addition, interest rates started a… Read More

Even after a horrendous January and amid the bear market talk dominating the financial news, I remain bullish on the stock market. I will even so far as to say that one interest rate-sensitive sector that thrived in 2013 will continue its winning ways into next year.#-ad_banner-#​ There is no question that January was a difficult month for the stock market. A combination of the Federal Reserve starting to dial back on its massive bond-buying program, emerging-market fears and even the end of Ben Bernanke’s term as Fed chairman fueled investor anxiety. In addition, interest rates started a slow climb higher, prompting an overreaction on the sell side.  Uncertainty is stocks’ #1 enemy. Seeing as some of the past month’s uncertainty has been realized, I think the overall downward price trend will soon stabilize, forcing stocks back into their long-term upward drift.  But rather than speculate about the future, let’s look at what actually occurred in the first month of 2014, with the Dow Jones Industrial Average as a guide.  After hitting an all-time high near 16,600 at the end of December, the Dow dropped to just under 15,700 by Jan. 31. Yet it’s crucial to remember the… Read More

Several years ago, during one of my journalistic endeavors, I scored an interview with one of my investing heroes, commodity trading legend Jim Rogers. I couldn’t believe my good luck.#-ad_banner-# My assignment was to interview one famous trader, money manager or financial professional on a weekly basis. The editors wanted me to drill down into their methods, tactics and ideas for fresh, actionable ideas for our readers. While I knew Jim Rogers was a unique individual, I was taken aback and surprised at our interview, which he conducted while running on a treadmill. Although Rogers was gracious and… Read More

Several years ago, during one of my journalistic endeavors, I scored an interview with one of my investing heroes, commodity trading legend Jim Rogers. I couldn’t believe my good luck.#-ad_banner-# My assignment was to interview one famous trader, money manager or financial professional on a weekly basis. The editors wanted me to drill down into their methods, tactics and ideas for fresh, actionable ideas for our readers. While I knew Jim Rogers was a unique individual, I was taken aback and surprised at our interview, which he conducted while running on a treadmill. Although Rogers was gracious and kind, he avoided my direct questions, answering me instead with broad generalities and stories. The one thing that he stressed again and again when asked for investment ideas was to simply look around — in other words, invest in what you buy and what you see. At the time I was disappointed with his answer, which I saw as a cop-out. However, I’ve learned to appreciate the wisdom of his words. By following this simple investment rule, I have discovered far more profitable opportunities and ideas than I ever would have expected. In the search for the next profitable investment,… Read More

Whether this industry’s products are in a mansion owned by the wealthiest 1% or a poverty-stricken housing project, it plays an unmistakable role in nearly every family.#-ad_banner-#​ These products have nothing to do with basic needs like food or shelter — they fall strictly into the “want” category. Yet this demand is so strong that this industry is an $84 billion global behemoth. Even the global economic downturn of 2007 to 2009 barely affected this industry’s sales. Those of you who have had children are probably familiar with this business — the toy industry, to be specific. I… Read More

Whether this industry’s products are in a mansion owned by the wealthiest 1% or a poverty-stricken housing project, it plays an unmistakable role in nearly every family.#-ad_banner-#​ These products have nothing to do with basic needs like food or shelter — they fall strictly into the “want” category. Yet this demand is so strong that this industry is an $84 billion global behemoth. Even the global economic downturn of 2007 to 2009 barely affected this industry’s sales. Those of you who have had children are probably familiar with this business — the toy industry, to be specific. I am amazed at how recession-resistant this industry is, and I think the world’s largest toy company is poised to be a great investment in 2014.   Mattel (NYSE: MAT) is a household name in the western world. Named for founders Harold “Matt” Matson and Elliot Handler, the company was born in a garage workshop in 1945. Mattel started out as a picture frame manufacturer but soon became a toy company after Matson and Handler found success selling dollhouse furniture built from scrap wood. Mattel’s first big break came when it acquired the rights to make products for the popular Mickey… Read More

Financial market prices are moved by participants anticipating changes in supply or demand, the fundamental forces of economic activity. Prices move based on what is expected to happen at some point in the future.#-ad_banner-#​ This is why markets often seem to move in the opposite direction many investors expect. The anticipation of a sharp change in supply or demand is often much more powerful than the actual confirmation of the change. The old market saying “Buy the rumor, sell the fact” is a great way to think of this concept. Nowhere is this better demonstrated than in the… Read More

Financial market prices are moved by participants anticipating changes in supply or demand, the fundamental forces of economic activity. Prices move based on what is expected to happen at some point in the future.#-ad_banner-#​ This is why markets often seem to move in the opposite direction many investors expect. The anticipation of a sharp change in supply or demand is often much more powerful than the actual confirmation of the change. The old market saying “Buy the rumor, sell the fact” is a great way to think of this concept. Nowhere is this better demonstrated than in the commodity markets. Rumors and forecasts of supply disruptions due to weather, government action or a host of other factors can send short-term commodity prices skyrocketing. Next, after the disruptive event occurs (or doesn’t), prices fall back to the norm. (Regular readers of Dave Forrest’s Junior Resource Advisor are kept abreast of potential changes in investors’ perception of supply & demand in the commodity markets.)   Recently, this is being witnessed in the natural gas market. Forecasts and the reality of an ultra-cold winter in the northeastern U.S. have pushed the spot price of natural gas prices from $3 per million… Read More

I couldn’t believe my eyes when I read the name of the company whose stock ticker triggered a buy alert on my quantitative stock screener.#-ad_banner-# My first thought was, “Didn’t these guys go out of business in the technology stock crash at the turn of the century?” Next, memories of my professional day-trading career came flooding back. This was the same company with which more than a few friends of mine earned over $100,000 a week for weeks on end, trading in and out of the stock by using insane amounts of leverage and proprietary trading firm capital. I don’t… Read More

I couldn’t believe my eyes when I read the name of the company whose stock ticker triggered a buy alert on my quantitative stock screener.#-ad_banner-# My first thought was, “Didn’t these guys go out of business in the technology stock crash at the turn of the century?” Next, memories of my professional day-trading career came flooding back. This was the same company with which more than a few friends of mine earned over $100,000 a week for weeks on end, trading in and out of the stock by using insane amounts of leverage and proprietary trading firm capital. I don’t want to name any names, but suffice it to say that several of these gentlemen went on to become successful hedge fund managers. Others used their massive good fortune to open a variety of businesses, but unfortunately, several went broke during the tech bust. Needless to say, this company was the darling of both investors and short-term day traders during the high-tech boom years of the 1990s. This stock provided huge trading volume and monster volatility on a daily basis. These factors, combined with virtually unlimited leverage, is how numerous day traders made their fortunes during the glory days of… Read More

Dividends, those seemingly tiny cash payouts to company shareholders, have been the lifeblood of stock market returns over the past 80 years. #-ad_banner-#In today’s age of ultra-low Treasury yields, nearly nonexistent fixed-income payouts and near-zero interest rates, the yield provided by dividend-paying stocks has become even more critical for investors seeking above-market returns. A look at the historical picture between 1930 and 2010 shows that dividends accounted for 44% of the market’s returns in that time. In the lackluster stock markets of the 1970s, dividends provided 71% of returns. That’s an astounding number, no matter how it is… Read More

Dividends, those seemingly tiny cash payouts to company shareholders, have been the lifeblood of stock market returns over the past 80 years. #-ad_banner-#In today’s age of ultra-low Treasury yields, nearly nonexistent fixed-income payouts and near-zero interest rates, the yield provided by dividend-paying stocks has become even more critical for investors seeking above-market returns. A look at the historical picture between 1930 and 2010 shows that dividends accounted for 44% of the market’s returns in that time. In the lackluster stock markets of the 1970s, dividends provided 71% of returns. That’s an astounding number, no matter how it is crunched.  As you can see in this chart, dividend-paying companies have outperformed the overall market by 155% between 1972 and 2012:  Source: Dreyfus Corp. While 2013 was a banner year for dividends, the positive trend is slated to continue throughout 2014. Research firm Markit forecasts that S&P 500 dividends are expected to increase by 8.9%, to $352 billion. Regular readers of Amy Calistri’s Daily Paycheck advisory understand the importance of dividends, know which stocks the smart money is buying — and even understand the occasional dangers of high-yielding stocks. Let me explain.  High dividends do not… Read More

Driven by a surge in e-commerce, low interest rates and accommodative Federal Reserve policy, this stock surged over 46% higher in 2013. #-ad_banner-#But at the start of 2014, the company suffered a reversal of fortune. Word of a weaker-than-expected Christmas season, combined with profit-taking, sent shares tumbling. An earnings warning from the company accelerated the selling. The selling intensified despite the company’s strong fundamentals, incredible $10 billion stock repurchase plan and solid dividend. Shares have plunged nearly 8% since the selling began. The selling resulted in many investors panicking or avoiding the stock completely. While this reaction is… Read More

Driven by a surge in e-commerce, low interest rates and accommodative Federal Reserve policy, this stock surged over 46% higher in 2013. #-ad_banner-#But at the start of 2014, the company suffered a reversal of fortune. Word of a weaker-than-expected Christmas season, combined with profit-taking, sent shares tumbling. An earnings warning from the company accelerated the selling. The selling intensified despite the company’s strong fundamentals, incredible $10 billion stock repurchase plan and solid dividend. Shares have plunged nearly 8% since the selling began. The selling resulted in many investors panicking or avoiding the stock completely. While this reaction is understandable, it is the exact opposite of what savvy investors do. Although sell-offs are often harbingers of worse things to come, they’re also often great opportunities to purchase shares at a discount. This is particularly true when the stock’s fundamentals are strong and the selling is an overreaction to short-term bad news.  I think that’s the case here — and investors should buy rather than sell shares of package delivery giant United Parcel Service (NYSE: UPS), which is setting up to be an incredibly discounted buy candidate.  A nearly $93 billion company that posted revenue of nearly $55 billion and… Read More