I’m often asked how I come up with a consistent stream of investment ideas. There is really no single answer to this question.#-ad_banner-# I have been immersed in the financial markets since my first trade back in 1990. Since that time, my investing library has grown so large that it has overwhelmed my bookshelves and spread into attic storage boxes. I am also a voracious reader of the financial media, reading several magazines and newspapers on a near-daily basis — not to mention subscribing to real-time news services to stay up on what’s happening. While my investing library has provided… Read More

I’m often asked how I come up with a consistent stream of investment ideas. There is really no single answer to this question.#-ad_banner-# I have been immersed in the financial markets since my first trade back in 1990. Since that time, my investing library has grown so large that it has overwhelmed my bookshelves and spread into attic storage boxes. I am also a voracious reader of the financial media, reading several magazines and newspapers on a near-daily basis — not to mention subscribing to real-time news services to stay up on what’s happening. While my investing library has provided the foundation, and the daily financial media torrent turns the knowledge actionable, my favorite fresh idea source is other investors. New ideas can come from anyone, from the most naive beginner to the most sophisticated hedge fund manager and everyone in between. This is the reason I make it a point to talk to every trader and investor I meet about what’s working and what’s not working in their investing. Another way to learn from others is by following the big-money players. There are several large hedge fund managers who have earned my respect, and I watch their every publicly… Read More

I am convinced that 2014 will go down in history as the year the European economy rose from the ashes. #-ad_banner-#​ Many nations in the European Union are showing signs of recovery after a prolonged economic slowdown. These slowly improving economies create profitable opportunities for savvy investors. The question is: What’s the best way to position your portfolio to capture profits from the nascent recovery? The answer lies in the United States’ financial crisis and recovery. While it isn’t likely that the European recovery will be as sharp and rapid as that of the U.S., powerful investing guidance can… Read More

I am convinced that 2014 will go down in history as the year the European economy rose from the ashes. #-ad_banner-#​ Many nations in the European Union are showing signs of recovery after a prolonged economic slowdown. These slowly improving economies create profitable opportunities for savvy investors. The question is: What’s the best way to position your portfolio to capture profits from the nascent recovery? The answer lies in the United States’ financial crisis and recovery. While it isn’t likely that the European recovery will be as sharp and rapid as that of the U.S., powerful investing guidance can be gleaned by studying what happened in the U.S. stock market during its dark days and recovery. First, let’s take a brief look at the European economic picture. In this year’s second quarter, the 17 countries comprised in the eurozone had collective economic growth of 0.3%. That doesn’t sound like much — until you look at it in context.  This is the first overall positive signal since 2011, and its importance is magnified by the fact that the Markit manufacturing purchasing managers’ index has remained above the critical 50 level through October. (I discussed the significance of PMI as a… Read More

I am a firm believer in using both technical analysis and fundamental research as stock picking tools. Many investors mistakenly specialize in one discipline or the other rather than a mixture of the two.  Market technicians are often guilty of reaching the conclusion that all the fundamental information is already inherent in the price of a security, therefore researching fundamentals is redundant. At the same time, hard-core fundamentalists believe that technical analysis only charts the past and thus cannot help with projecting the future. I have found both of these sentiments to be correct and to be wrong… Read More

I am a firm believer in using both technical analysis and fundamental research as stock picking tools. Many investors mistakenly specialize in one discipline or the other rather than a mixture of the two.  Market technicians are often guilty of reaching the conclusion that all the fundamental information is already inherent in the price of a security, therefore researching fundamentals is redundant. At the same time, hard-core fundamentalists believe that technical analysis only charts the past and thus cannot help with projecting the future. I have found both of these sentiments to be correct and to be wrong at the same time. All the fundamental information about a stock is inherent in its price. However, studying price alone will not increase your odds of making a winning trade. Knowing fundamentals while ignoring the technical picture may provide a reason for the stock movement, but does not confirm that price will move in any specific direction. Focusing solely on the technical picture will tell you what has happened and what may happen. But there are no guarantees or statistical tests that have uniformly proven much of traditional technical analysis works to provide an edge. So what’s an investor to… Read More

The recent stock market pullback has sparked a bearish fever in many traders.#-ad_banner-#​ All the major indices have slipped lower, prompting the bears to start their dance of doom. While in my view, the selling is clearly nothing but short-term profit taking and not a signal of anything ominous, it doesn’t prevent the bearish fearmongers from dominating the financial media with nebulous terms like “overextended” and “overvalued.” I love it when the stock market bears crawl out of their caves. The louder they get about an imminent market crash, the more confident I become that it’s not going… Read More

The recent stock market pullback has sparked a bearish fever in many traders.#-ad_banner-#​ All the major indices have slipped lower, prompting the bears to start their dance of doom. While in my view, the selling is clearly nothing but short-term profit taking and not a signal of anything ominous, it doesn’t prevent the bearish fearmongers from dominating the financial media with nebulous terms like “overextended” and “overvalued.” I love it when the stock market bears crawl out of their caves. The louder they get about an imminent market crash, the more confident I become that it’s not going to happen anytime soon. These bears cite the risk of recession, the end of the Federal Reserve’s quantitative easing measures, weak corporate earnings and even China’s slowdown as the potential catalysts that will send stocks into the next bear market. The funny thing is, the more bears there are, the lower the likelihood of a crash or sharp correction taking place. The opposite also holds true.  When everyone is super bullish, that’s when it’s time to expect a market correction. Even the bears have a name for this phenomenon: climbing the “wall of worry.” Stocks are said to be climbing… Read More

Real estate is in my blood. My first job, when I was 8 years old, was working for my grandfather rehabbing single-family homes and small apartment buildings for his one-man investment company. I remember being paid a dollar an hour and thinking how rich I would be on payday.#-ad_banner-#​ What I didn’t understand at the time was that the work wasn’t about the trivial jobs I learned to hate. It was more about the start of a learning process. He was teaching me the value of hard work and the ability to find opportunities in the most distressed situations. The… Read More

Real estate is in my blood. My first job, when I was 8 years old, was working for my grandfather rehabbing single-family homes and small apartment buildings for his one-man investment company. I remember being paid a dollar an hour and thinking how rich I would be on payday.#-ad_banner-#​ What I didn’t understand at the time was that the work wasn’t about the trivial jobs I learned to hate. It was more about the start of a learning process. He was teaching me the value of hard work and the ability to find opportunities in the most distressed situations. The most important thing I learned is that there are dozens of creative ways to earn profits with real estate. From the 1960s until about 2007, real estate was truly the golden goose for many Americans, commonly believed to be a can’t-lose investment. Prices seemed to always be climbing higher, and even after short pullbacks, the uptrend resumed quickly.  Then, in 2007, the bottom fell out of the market. Many investors were forced into bankruptcy as their overleveraged properties plunged in value, and many homeowners lost their homes in the perfect storm of extended leverage meeting plummeting prices. This situation forced… Read More

Newport, R.I., is the small seaside town where the titans of industry such as John Rockefeller, J.P. Morgan and Andrew Carnegie used their great wealth to build castlelike vacation homes during the Gilded Age of American capitalism. Although sometimes derided as robber barons, these industrial leaders helped build America into the bastion of free enterprise it is today.#-ad_banner-#​ Between 1860 and 1900, the U.S. economy expanded 400%, fueled by vastly improved technology, hands-off government policy and the growth of monopolies. Along with the industrial moguls, many regular investors who held shares in the monopolies also became wealthy. Just imagine being… Read More

Newport, R.I., is the small seaside town where the titans of industry such as John Rockefeller, J.P. Morgan and Andrew Carnegie used their great wealth to build castlelike vacation homes during the Gilded Age of American capitalism. Although sometimes derided as robber barons, these industrial leaders helped build America into the bastion of free enterprise it is today.#-ad_banner-#​ Between 1860 and 1900, the U.S. economy expanded 400%, fueled by vastly improved technology, hands-off government policy and the growth of monopolies. Along with the industrial moguls, many regular investors who held shares in the monopolies also became wealthy. Just imagine being a investor during the Gilded Age, knowing that you owned shares in a company that basically ruled its industry.   Most U.S.-based monopolies have long since been regulated out of existence in name of fair competition. However, there are a few near-monopolies that are still creating vast wealth for investors. These natural monopolies and duopolies were in the right place at the right time to gain significant market share. Although there is competition, some of these companies are so far advanced compared with their competition that it would take governmental intervention to knock them off their perches.   StreetAuthority co-founder… Read More

Just as every fisherman has stories about the big one that got away, every investor has “woulda, coulda, shoulda” tales of investments that would have been wildly profited wildly if they had only purchased. I myself have one such tale from the past year. It gnaws at my insides to think about the massive profits that I missed out on, even though I felt a strong conviction to buy. The good news is that it’s not too late to jump on board.#-ad_banner-# This stock was trading near $65 in 2007 before the financial crisis knocked it down below $5. The… Read More

Just as every fisherman has stories about the big one that got away, every investor has “woulda, coulda, shoulda” tales of investments that would have been wildly profited wildly if they had only purchased. I myself have one such tale from the past year. It gnaws at my insides to think about the massive profits that I missed out on, even though I felt a strong conviction to buy. The good news is that it’s not too late to jump on board.#-ad_banner-# This stock was trading near $65 in 2007 before the financial crisis knocked it down below $5. The price wallowed in the nowhere zone under $5 for several years before slipping into penny-stock territory below $1. Although this company was (and is) majority owned and controlled by the U.S. government, most investors had written it off as not viable. At one point, the stock price fell to less than a dime a share. The price collapse caused the company to be delisted from the New York Stock Exchange, relegating its shares to the over-the-counter market.  I considered buying shares in the $0.15 area, thinking that there was no place for this once-mighty quasi-government agency to go but up. Read More

Sometimes, great investments are found in the most unusual places.  Regions that most investors avoid — due to fear, misinformation or a general lack of knowledge — can harbor overlooked stock gems.   One such location is Russia. This former Soviet state is home to an extremely successful company that investors everywhere should know about. #-ad_banner-# There is no question that the transition to a capitalistic society has been difficult for Russia. However, there are signs of improvement. According to research by Deloitte, private consumption expanded by over 6% in each of this year’s first two quarters. A strong… Read More

Sometimes, great investments are found in the most unusual places.  Regions that most investors avoid — due to fear, misinformation or a general lack of knowledge — can harbor overlooked stock gems.   One such location is Russia. This former Soviet state is home to an extremely successful company that investors everywhere should know about. #-ad_banner-# There is no question that the transition to a capitalistic society has been difficult for Russia. However, there are signs of improvement. According to research by Deloitte, private consumption expanded by over 6% in each of this year’s first two quarters. A strong summer harvest has eased food prices, providing consumers greater discretionary income, and inflation has been slipping lower this year. In addition, retail sales climbed more than 4% in July from the same month last year. Most interesting is the fact that the Bank of Russia is expected to continue a policy of interest rate cuts through 2014. Lower borrowing costs are one key factor in economic growth, and the Bank of Russia is on the right track in this regard.  Not only is the central bank staying with the policy of lowering interest rates, it’s also clamping down on unfettered… Read More

Whether you’re measuring by the latest economic data or just by the pickup in traffic at your local mall, it’s apparent the consumer is back in a big way — and that’s opening up a new way for investors to profit.#-ad_banner-#​ After the lingering economic downturn that followed the financial crisis, consumers are finally feeling confident enough to ramp up spending.  This improvement started in earnest during the final quarter of 2012, which marked the end of household deleveraging, according to the chief U.S. economist for Italian banking giant UniCredit.  During this quarter of change, the net worth of U.S. Read More

Whether you’re measuring by the latest economic data or just by the pickup in traffic at your local mall, it’s apparent the consumer is back in a big way — and that’s opening up a new way for investors to profit.#-ad_banner-#​ After the lingering economic downturn that followed the financial crisis, consumers are finally feeling confident enough to ramp up spending.  This improvement started in earnest during the final quarter of 2012, which marked the end of household deleveraging, according to the chief U.S. economist for Italian banking giant UniCredit.  During this quarter of change, the net worth of U.S. households rose 1.8%, marking the highest level since the first quarter of 2007.  In fact, the net worth of U.S. households rocketed 29% between the first quarter of 2009 and the fourth quarter of 2012, fueled by the soaring stock market and growth in housing. The stock market has continued its bullish ways throughout 2013, further boosting the consumer’s rebirth. According to the U.S. Bureau of Economic Analysis, personal consumption expenditures grew 0.2%, or nearly $25 billion, in September.   Long considered the most popular shopping day of the year, the day after Thanksgiving is known as Black Friday because… Read More

IPOs — initial public offerings of stock — are the financial world’s Super Bowl. The enthusiasm, anticipation, and chance to make millions out of seemingly nothing are what drive investor’s excitement.#-ad_banner-#​ In this year’s third quarter, the three top-performing IPOs were Sprouts Farmers Market (Nasdaq: SFM), Benefitfocus (Nasdaq: BNFT) and Rocket Fuel (Nasdaq: FUEL), up 123%, 102% and 93%, respectively, in their first day of trading. Even if you hadn’t heard of these three offerings, big-name IPOs such as Twitter (Nasdaq: TWTR) and Facebook (Nasdaq: FB) have been on nearly everyone’s radar due to massive media coverage. Not… Read More

IPOs — initial public offerings of stock — are the financial world’s Super Bowl. The enthusiasm, anticipation, and chance to make millions out of seemingly nothing are what drive investor’s excitement.#-ad_banner-#​ In this year’s third quarter, the three top-performing IPOs were Sprouts Farmers Market (Nasdaq: SFM), Benefitfocus (Nasdaq: BNFT) and Rocket Fuel (Nasdaq: FUEL), up 123%, 102% and 93%, respectively, in their first day of trading. Even if you hadn’t heard of these three offerings, big-name IPOs such as Twitter (Nasdaq: TWTR) and Facebook (Nasdaq: FB) have been on nearly everyone’s radar due to massive media coverage. Not only do many IPOs make the company’s founders and initial investors wealthy, initial offerings usually provide much-needed cash to expand operations (and increase shareholder value). The problem for most investors is that it’s difficult if not impossible to obtain IPO shares before they’re listed. These shares go to insiders and others with special relationships with the investment house issuing the shares. There are some “backdoor” ways in which regular investors can profit from the first day of an IPO: for example, in the case of Twitter’s IPO, investing in a high-tech incubator like Japan’s Digital Garage or a fund like… Read More