#-ad_banner-#This past Wednesday (June 1), the Dow Jones Industrial Average (DJIA) dropped nearly 300 points in just one day, causing investors to feel a bit shaken. Tempting as it may be to load up on names that now seem like bargains, further market… Read More

The frenzy over the recent initial public offering (IPO) (Nasdaq: LNKD) made one thing clear: Investors are desperate to get a piece of companies that look destined to be thriving long-term businesses. Yet many new IPOs don’t really have an extended shelf life. They… Read More

#-ad_banner-#Back in February, I took a close look at Warren Buffett’s $12 billion stake in Wells Fargo (NYSE: WFC). Well, it’s now more like a $10 billion position. He hasn’t sold shares, but the bank’s stock has been steadily dropping, giving the Oracle of Omaha a rare black eye. To understand Buffett’s next move with this massive banking concern, you need to understand why shares are marching backward. The long-term view Buffett didn’t simply start acquiring shares in recent quarters. He’s been doing so for a… Read More

#-ad_banner-#Back in February, I took a close look at Warren Buffett’s $12 billion stake in Wells Fargo (NYSE: WFC). Well, it’s now more like a $10 billion position. He hasn’t sold shares, but the bank’s stock has been steadily dropping, giving the Oracle of Omaha a rare black eye. To understand Buffett’s next move with this massive banking concern, you need to understand why shares are marching backward. The long-term view Buffett didn’t simply start acquiring shares in recent quarters. He’s been doing so for a number of years. But you could argue that his long-term bullishness has been a bit misplaced, or at least a bit premature. He steadily bought Wells Fargo shares in the middle of the last decade, despite signs the housing sector was starting to overheat. More recently, he bought a lot of stock last fall and winter on hopes the U.S. economy was on the cusp of a broad-based upturn. As a result, his buying binges in 2007 and again in late 2010 took place in the low $30s, above the current price.   The appeal to… Read More

#-ad_banner-#Economists love to run a series of experiments based on “Game Theory,” testing whether individuals rationally account for the actions of others before making their own moves. When it comes to companies in the dry-bulk shipping industry, only one player has been acting rationally. Read More

Billionaire investor George Soros and his team of advisors take a “top-down” approach. This means they seek out big, “macro” investing themes, and then work their way down to the best ways to play that theme. Every quarter, they adjust their stakes in a range of companies, either by loading… Read More

When it comes to stock-picking, it’s better to be early than late. I’d rather buy shares in a promising company and have to wait for the stock to jump than buy in long after others already have. So from time to time, I like to look back on stocks… Read More

As spring morphs into summer, many stocks are starting to move sideways. The summer doldrums often spell lackluster demand for stocks — unless they are really deep value plays. Value investors will wade in, even when most other buyers take a break. These folks tend to rummage through the waste basket, looking for discarded stocks that have been tossed out by the crowd. Value investors love to focus on two key points: stocks that are well off of their 52-week high and sport price-to-earnings (P/E) ratios well below the market… Read More

As spring morphs into summer, many stocks are starting to move sideways. The summer doldrums often spell lackluster demand for stocks — unless they are really deep value plays. Value investors will wade in, even when most other buyers take a break. These folks tend to rummage through the waste basket, looking for discarded stocks that have been tossed out by the crowd. Value investors love to focus on two key points: stocks that are well off of their 52-week high and sport price-to-earnings (P/E) ratios well below the market average. Many of the names they’ll encounter are in the table below. The table holds four names that I’ve mentioned in the past, each of which looks quite appealing if you can ride out the problems of 2011.   1. Central European Distribution (Nasdaq: CEDC) This purveyor of wine and spirits is glad to be looking ahead and not behind. The last six quarters have been an exercise in frustration as Russian authorities threatened to revoke its licenses, key rivals started price wars, its bonds were downgraded, and wheat, rye and other… Read More

America’s greatest turnaround story looks like it’s stuck in the mud. Shares of Ford Motor Co. (NYSE: F) raced from under $2 in early 2009 to above $18 in early 2011. A move toward the $25 mark started to become the next target for many analysts, myself included. Instead, shares have drifted steadily lower and now trade below $15. Even at that lower level, shares are heavily shorted. Many analysts clearly expect the stock to fall even further, but their logic looks flawed. A… Read More

America’s greatest turnaround story looks like it’s stuck in the mud. Shares of Ford Motor Co. (NYSE: F) raced from under $2 in early 2009 to above $18 in early 2011. A move toward the $25 mark started to become the next target for many analysts, myself included. Instead, shares have drifted steadily lower and now trade below $15. Even at that lower level, shares are heavily shorted. Many analysts clearly expect the stock to fall even further, but their logic looks flawed. A commodity drag After losing a cumulative $7.5 billion in 2008 and 2009, Ford earned a hefty $6.7 billion ($1.91 a share) in 2010. By late last year, analysts started to wonder if $2.50 a share or even $3 a share in profits might be possible by 2012. Now a series of headwinds have altered that view. Short sellers increasingly aver that Ford’s profits may actually drop in 2011 and 2012. They note that commodity prices are rising even faster than Ford can increase prices. What these bears are missing… Read More

Investors need to be on guard against “the sideways churn.” This happens when a market that had been steadily rising is now see-sawing back and forth. Such a shift is often a sign that buyers are slowly pulling back and sellers are starting to take root. The sideways churn often presages the next move: a market downturn, where the sellers get even bolder and buyers lose interest. With that in mind, it’s time to focus on five companies that could see sharp pullbacks in the months ahead. #-ad_banner-# 1. Sprint Nextel (NYSE: S)… Read More

Investors need to be on guard against “the sideways churn.” This happens when a market that had been steadily rising is now see-sawing back and forth. Such a shift is often a sign that buyers are slowly pulling back and sellers are starting to take root. The sideways churn often presages the next move: a market downturn, where the sellers get even bolder and buyers lose interest. With that in mind, it’s time to focus on five companies that could see sharp pullbacks in the months ahead. #-ad_banner-# 1. Sprint Nextel (NYSE: S) Shares of this wireless phone service provider have risen nearly 50% since early December as optimism spreads that faster phone networks will lead consumers to justify ever-higher phone bills. Indeed, Sprint has been able to push through recent price hikes as it rolls out 4G service in more markets. But investors seem to be forgetting a few important facts. First, Sprint’s network remains inferior to its rivals, especially Verizon (NYSE: VZ). That may explain why Verizon continues to steal market share: it added 907,000 net new subscribers in the… Read More

#-ad_banner-#The challenge for great investors is to do a regular reality-check on each stock you own, assessing whether it still holds value every time it moves up a few points. When shares of Couer D’Alene Mines (NYSE: CDE) started to rally, soon after I recommended it, I noted that a quick upward move was taking place. [See: “The 3 Best Stocks to Own Now”] The silver-mining firm was riding the back of a powerfully rally in the underlying metal. Shares moved up from $22 in mid-January to $35 by mid-April. Read More

#-ad_banner-#The challenge for great investors is to do a regular reality-check on each stock you own, assessing whether it still holds value every time it moves up a few points. When shares of Couer D’Alene Mines (NYSE: CDE) started to rally, soon after I recommended it, I noted that a quick upward move was taking place. [See: “The 3 Best Stocks to Own Now”] The silver-mining firm was riding the back of a powerfully rally in the underlying metal. Shares moved up from $22 in mid-January to $35 by mid-April. The 60% gain in just two months gave me pause, especially as the precious metal itself was showing all the signs of a manic buying spree that would end badly. The logical move then was to take profits, as I suggested in April. But it’s time to shift course yet again. Those who missed out on the 60% upward move have just been given a second chance, though this move could take many quarters to play out. Most importantly, Couer D’Alene doesn’t need to ride the back of another powerful silver rally — it needs to simply… Read More