With a rising economy comes rising expectations. CEOs at mid-sized and large companies need to find new paths to growth to justify — or boost — their company’s stock price. That’s no mean feat in an economy still in slow-growth mode. As a… Read More

T.S. Eliot once wrote that “April is the cruelest month.” Yet a half-dozen companies that sell optical networking equipment would beg to differ: March has been quite cruel and they’re hoping April will be far kinder. The entire group rallied higher in the first week on word… Read More

Think of the economic cycle as a wheel…     This image roughly captures the whole cycle, highlighting the various stages of economic growth and contraction. Right now, we’re just past “9 o’clock” on the wheel, as commodity prices have been steadily rising (although with some recent profit-taking). We’re surely done with the “8 o’clock” phase, where we saw stocks post a remarkable two-year rally after a sudden plunge. If the current cycle plays out as it has in the past, then more stock gains lie ahead, but perhaps in a more limited… Read More

Think of the economic cycle as a wheel…     This image roughly captures the whole cycle, highlighting the various stages of economic growth and contraction. Right now, we’re just past “9 o’clock” on the wheel, as commodity prices have been steadily rising (although with some recent profit-taking). We’re surely done with the “8 o’clock” phase, where we saw stocks post a remarkable two-year rally after a sudden plunge. If the current cycle plays out as it has in the past, then more stock gains lie ahead, but perhaps in a more limited fashion than some realize. We may be looking at an extended period of economic expansion in coming years, but stocks prices always look ahead and have already anticipated some of that expansion. [For more on how sector rotation can lead you to the right stocks to profit, go here.] The economy has started to sputter back to life, as seen by rising employment figures and positive quarterly gross domestic product (GDP) reports. We’re just about at “9 o’clock,” or “general recovery.” When monthly employment trends really start to… Read More

Warren Buffett takes a seemingly cavalier approach to leadership succession plans. The 80-year-old investing legend likes to insist that when it comes time for him to step down from Berkshire Hathaway (NYSE: BRK-B), very little will change. After all, the Berkshire has a deep bench of executives, all of whom are well-schooled in the firm’s winning investment philosophy. In reality, a change in leadership at Berkshire brings significant risk. First, Buffett’s unique intellectual skills can be hard to replicate. Simply mimicking his approach is not the same as thinking creatively, as he does. Second, even if such… Read More

Warren Buffett takes a seemingly cavalier approach to leadership succession plans. The 80-year-old investing legend likes to insist that when it comes time for him to step down from Berkshire Hathaway (NYSE: BRK-B), very little will change. After all, the Berkshire has a deep bench of executives, all of whom are well-schooled in the firm’s winning investment philosophy. In reality, a change in leadership at Berkshire brings significant risk. First, Buffett’s unique intellectual skills can be hard to replicate. Simply mimicking his approach is not the same as thinking creatively, as he does. Second, even if such a successor were a very solid candidate, it will be hard to follow Buffett’s plain-spoken folksy style that really connects with investors. A successor that lacks Buffett’s charisma may not be able to retain the key relationship between Berkshire and its investors, turning the firm into just another anonymous mega-sized investment organization. Since Warren Buffett dropped hints at a March 21 conference in India that Berkshire insider Ajit Jain could easily assume the reins, investors need to take a close look at his background and style. Could he really fill those giant shoes? A… Read More

In a broadly diversified portfolio, it always pays to hold a batch of blue-chip stocks and a few more speculative names. Some of these speculative names can surge very quickly, giving your portfolio a healthy boost. Since the start of 2011, roughly a dozen stocks (with a… Read More

It’s been nearly 80 years since economists Benjamin Graham and David Dodd wrote their investing bible Security Analysis. Their book established a framework for value investors like Warren Buffett and David Dreman to make their fortunes. Graham and Dodd’s whole approach was based on one simple premise:… Read More

Len Riggio must be kicking himself. The chairman — and largest shareholder — of Barnes & Noble (NYSE: BKS) rebuffed a takeover last summer from Ron Burkle of Yucaipa Investments for a reported $20 a share. At the time, I thought any buyer of the beleaguered bookseller… Read More

The year surely got off on the wrong foot for travel site operator Expedia.com (Nasdaq: EXPE). On New Year’s Day, AMR (NYSE: AMR), parent of American Airlines, announced it was pulling its flight information from Expedia’s listing service. AMR’s move was just the latest twist in an airline vs. website… Read More

Investors are feeling a bit whip-sawed these days. An improving U.S. economy and troubling events abroad make it hard to know where the market will head next. In times like these, it may pay to de-emphasize growth stocks, as these types of investments need a really… Read More

Every two weeks, data is released on the level of short interest in specific stocks. You can find this data in places like the Wall Street Journal, for example. It can clue you into possible problems ahead, but it can also spell opportunity. If the short-sellers are wrong, you can… Read More