I recently posed a hard-to-answer question: Where will next year’s top-performing markets be? To answer that question, you have to make certain assumptions:#-ad_banner-# • Will commodity prices rebound? If so, then the iShares MSCI All Peru Capped ETF (NYSE: EPU), which has been the worst country fund of 2013, could post a great rebound. • Will the rebuilding process in the damaged parts of the Philippines lead that economy to resume its recently spectacular rates of economic growth? That was the case in Indonesia, which went on to deliver one of the world’s most impressive growth rates after the… Read More

I recently posed a hard-to-answer question: Where will next year’s top-performing markets be? To answer that question, you have to make certain assumptions:#-ad_banner-# • Will commodity prices rebound? If so, then the iShares MSCI All Peru Capped ETF (NYSE: EPU), which has been the worst country fund of 2013, could post a great rebound. • Will the rebuilding process in the damaged parts of the Philippines lead that economy to resume its recently spectacular rates of economic growth? That was the case in Indonesia, which went on to deliver one of the world’s most impressive growth rates after the devastating tsunami of 2004. • Will it be Turkey, which is aiming to bring down inflationary pressures so the country’s ideal geographic positioning help it again become the trade conduit between Europe and Asia, the Middle East and Africa? • Will it be the BRICs (Brazil, Russia, India and China), which collectively account for more than half of the world’s population — and, as a result, possess huge domestic market growth prospects? Simply using a one-year time horizon for potential gains is the wrong way to focus on the topic. All these countries have great long-term potential, but some are… Read More

In a bid to curry favor with investors, some companies overhype seemingly trivial business developments. The daily business newswires are laden with contract announcements that will likely have almost no effect on a company’s financial statements.#-ad_banner-#​ Yet other companies prefer the opposite approach: tucking major news announcements deep in a press release for only the most patient readers to notice. Buried beneath the recent quarterly financial figures released by municipal bond insurer Assured Guaranty Ltd. (NYSE: AGO), you’ll find this small item: “In November 2013, AGL became tax resident in the United… Read More

In a bid to curry favor with investors, some companies overhype seemingly trivial business developments. The daily business newswires are laden with contract announcements that will likely have almost no effect on a company’s financial statements.#-ad_banner-#​ Yet other companies prefer the opposite approach: tucking major news announcements deep in a press release for only the most patient readers to notice. Buried beneath the recent quarterly financial figures released by municipal bond insurer Assured Guaranty Ltd. (NYSE: AGO), you’ll find this small item: “In November 2013, AGL became tax resident in the United Kingdom … As a U.K. tax resident, AGL will be subject to the tax rules applicable to companies resident in the U.K., including the benefits afforded by the U.K.’s tax treaties. AGL expects that, as a result of it becoming a U.K. tax resident, it will be able to more efficiently manage capital within the Assured Guaranty group.” This is precisely the kind of move that shareholders have been clamoring for. Before making this change, many investors knew that AGO traded too far below book value, but tax regulations made it hard for the company to take full advantage. Sure,… Read More

Across the country, investment bankers are catching up on their sleep. They’ve been remarkably busy helping a stunning number of companies go public over the past two months. The IPO docket should now be quiet for the next few weeks as the market digests more than 50 IPOs that were launched since late October, according to Renaissance Capital. And that only counts deals underwritten by top-tier firms such as Goldman Sachs and Merrill Lynch.#-ad_banner-#​ The flurry of activity caps off one of the busiest years for IPOs in recent memory. Dealogic notes that 166… Read More

Across the country, investment bankers are catching up on their sleep. They’ve been remarkably busy helping a stunning number of companies go public over the past two months. The IPO docket should now be quiet for the next few weeks as the market digests more than 50 IPOs that were launched since late October, according to Renaissance Capital. And that only counts deals underwritten by top-tier firms such as Goldman Sachs and Merrill Lynch.#-ad_banner-#​ The flurry of activity caps off one of the busiest years for IPOs in recent memory. Dealogic notes that 166 companies have raised $64 billion thus far this year. To put that in perspective, there were never more than 80 IPOs in any given year from 2006 through 2011, and around 120 last year. The volume of secondary offerings this year (in terms of number of deals and dollars raised), is also on track to break records. And these aren’t no-name companies stepping up to the IPO trough: Household names such as Hilton (NYSE: HLT), Extended Stay America (Nasdaq: STAY), The Container Store (NYSE: TCS) and of course Twitter (Nasdaq: TWTR) have all come public in… Read More

With just a couple of weeks left in the year, the stampeding bull is starting to wheeze.#-ad_banner-#​ Ever since investors celebrated the recent monthly employment report with a nearly 200-point surge in the Dow, the trading mood has turned darker. The market is fell roughly 2%  last week, the biggest weekly fall since mid-August. And even as the major indices still trade near their all-time highs, several technical indicators are flashing red. They may just be sign to tread with caution, or a harbinger of a broader market reversal. That’s why some leading traders suggest a tight grip… Read More

With just a couple of weeks left in the year, the stampeding bull is starting to wheeze.#-ad_banner-#​ Ever since investors celebrated the recent monthly employment report with a nearly 200-point surge in the Dow, the trading mood has turned darker. The market is fell roughly 2%  last week, the biggest weekly fall since mid-August. And even as the major indices still trade near their all-time highs, several technical indicators are flashing red. They may just be sign to tread with caution, or a harbinger of a broader market reversal. That’s why some leading traders suggest a tight grip on stop-loss orders. Placing a stop-loss limit order roughly 5% to 10% below current prices can provide a lot of peace of mind.   Here’s a closer look: 1. Surging New Lows ​ One of the most remarkable aspects of this year’s bull market has been its breadth. So many stocks have rallied, and only the absolute duds have fallen sharply. In fact, the number of stocks on the NYSE hitting new 52-week highs has handily outpaced the number of new lows all year long. But that’s changing. ​  On the Friday after Thanksgiving, new highs on the NYSE… Read More

We are closing the books on a remarkable six-year cycle for stocks, bonds and the global economy. You can break this cycle down into four distinct phases: • In early 2008, global economies began to show some cracks, especially in the all-important U.S. housing sector, yet concerns of global overheating were still evident, as seen by the “super-spike” in crude oil to more than $140 a barrel in June 2008. That surge may have been the tipping point that pushed many economies to the breaking point, and by year’s end, the global economy was in freefall.  • In… Read More

We are closing the books on a remarkable six-year cycle for stocks, bonds and the global economy. You can break this cycle down into four distinct phases: • In early 2008, global economies began to show some cracks, especially in the all-important U.S. housing sector, yet concerns of global overheating were still evident, as seen by the “super-spike” in crude oil to more than $140 a barrel in June 2008. That surge may have been the tipping point that pushed many economies to the breaking point, and by year’s end, the global economy was in freefall.  • In 2009, unemployment surged, a slew of European economies appeared to be on the cusp of collapse, and government policy makers were scrambling to avoid a truly catastrophic global economic meltdown. • In 2010 and 2011, business conditions began to improve, most notably in the U.S. And China’s economic resilience helped many Asian neighbors buck the global malaise.  • In 2012 and 2013, investors finally realized that further global crises wouldn’t derail an impressive market rally in the U.S. (and eventually Europe), and as we wind down this six-year cycle, economists are calling for calmer days ahead in 2014, led by… Read More

It’s been hard to lose money in the market in 2013. But anyone unlucky enough to own the worst-performing stocks among the various S&P indices (400, 500 and 600) has to be less than displeased.​ In my first look at 2013’s losers earlier this week, I reviewed the carnage among commodity producers and retailers. This time around, I’m looking at the rest of the 2013 laggards in search of the best rebound candidates. I took a look at the factors affecting these stocks, and to be sure, many of them should still be avoided. #-ad_banner-#​Among… Read More

It’s been hard to lose money in the market in 2013. But anyone unlucky enough to own the worst-performing stocks among the various S&P indices (400, 500 and 600) has to be less than displeased.​ In my first look at 2013’s losers earlier this week, I reviewed the carnage among commodity producers and retailers. This time around, I’m looking at the rest of the 2013 laggards in search of the best rebound candidates. I took a look at the factors affecting these stocks, and to be sure, many of them should still be avoided. #-ad_banner-#​Among the “don’t bother” names: • Cincinnati Bell (NYSE: CBB), which is on the wrong end of the sweeping changes in the wireline and wireless telecom industry. • Strayer Education (Nasdaq: STRA), a for-profit educator that is posting falling sales and profits in the face of staff layoffs and school closures. • Rackspace Holding (NYSE: RAX), as price cuts from cloud storage rivals such as Google (Nasdaq: GOOG) ratchet up the pressure. Similar competitive pressures will likely dog Teradata (NYSE: TDC) in 2014 as well.  Among the remaining stocks on that table, some have huge upside but carry… Read More

In any given year, you’ll come across “no-brainer” investments that are universally loved by the crowd. Trouble is, these stocks can be loved too much, and no matter how sales trends develop, some disappointment will be inevitable.#-ad_banner-# Indeed, one of the most popular stocks of the past few years has lost its way, buried under a set of unrealistic growth expectations. Yet, as shares bounce just above multi-year lows, contrarian investors finally see an opening. This “can’t miss” stock is Westport Innovations (Nasdaq: WPRT), which appeared set to dominate the burgeoning market for truck engines that can run on natural… Read More

In any given year, you’ll come across “no-brainer” investments that are universally loved by the crowd. Trouble is, these stocks can be loved too much, and no matter how sales trends develop, some disappointment will be inevitable.#-ad_banner-# Indeed, one of the most popular stocks of the past few years has lost its way, buried under a set of unrealistic growth expectations. Yet, as shares bounce just above multi-year lows, contrarian investors finally see an opening. This “can’t miss” stock is Westport Innovations (Nasdaq: WPRT), which appeared set to dominate the burgeoning market for truck engines that can run on natural gas. The appeal is evident. Natural gas is far cheaper than crude oil, and truckers could save thousands of dollars a year by moving away from pricey diesel fuel. Westport was also expected to benefit from legislation that provided huge subsidies for truckers to switch to natural gas. That legislation never arrived, and the company’s most bullish supporters had to concede that the loftiest sales forecasts simply couldn’t be met. As you can see in this chart, shares responded as you might expect. There are four key reasons for this stock’s slump. First, sales are expected to rise… Read More

As we close the books on 2013, one clear theme has emerged. Investors have flocked to developed economies and shunned emerging markets. The S&P 500 Index is on track for a nearly 30% gain this year, but many emerging markets have tumbled by double digits.#-ad_banner-# That kind of massive performance gap only emerges every decade or so, and for farsighted investors willing to look past near-term headwinds, emerging markets now represent tremendous relative value. You don’t need to tell that to the executives at major U.S. companies. They already know that emerging markets have generated — and will continue to… Read More

As we close the books on 2013, one clear theme has emerged. Investors have flocked to developed economies and shunned emerging markets. The S&P 500 Index is on track for a nearly 30% gain this year, but many emerging markets have tumbled by double digits.#-ad_banner-# That kind of massive performance gap only emerges every decade or so, and for farsighted investors willing to look past near-term headwinds, emerging markets now represent tremendous relative value. You don’t need to tell that to the executives at major U.S. companies. They already know that emerging markets have generated — and will continue to generate — robust growth rates, thanks in large part to ever-rising middle classes. While developed economies are growing at a 2% pace, emerging-market economies are growing at a 4% to 5% pace. Asian emerging markets are rising an even more impressive 6%, according the International Monetary Fund (IMF). The key takeaway: Even if you’re wary of investing in volatile emerging markets directly, you can focus on the U.S. companies that are positioned to derive a rising level of sales and profits in these countries. Thankfully, the strategists at Citigroup have already done the heavy lifting. In a recent report, Citi’s… Read More

It may seem like a long time ago, but the epic stock market meltdown of half a decade ago is again worth pondering.#-ad_banner-# From around 1,300 in August 2008, the S&P 500 Index plummeted to 1,100 by late September and below 900 by the end of November. By the time we hit bottom in March 2009, the index had tumbled below the 700 mark. A nearly 50% plunge in just seven months is virtually unprecedented. Now, with the S&P back up to around 1,800, we’ve seen a five-year rebound that should make us all quite thankful. This year has been… Read More

It may seem like a long time ago, but the epic stock market meltdown of half a decade ago is again worth pondering.#-ad_banner-# From around 1,300 in August 2008, the S&P 500 Index plummeted to 1,100 by late September and below 900 by the end of November. By the time we hit bottom in March 2009, the index had tumbled below the 700 mark. A nearly 50% plunge in just seven months is virtually unprecedented. Now, with the S&P back up to around 1,800, we’ve seen a five-year rebound that should make us all quite thankful. This year has been especially fruitful, as the S&P 500 has tacked on more value this year (on the basis of market cap) than in any year in its history. The market hasn’t even needed any breather this year on its path to record heights. S&P 500 By Quarter But such success can breed hubris. As Warren Buffett said back in 2011, “Once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact… Read More

When the Dow Jones Industrial Average was reformulated in September, former technology leader Hewlett-Packard (NYSE: HPQ) was quietly replaced. It was yet another tough blow for a firm that is on track for its third straight year of sales declines. CEO Meg Whitman, who was just celebrating her second full year at the company’s helm, could not have been pleased. But Whitman is surely getting the last laugh. Because against the odds, Hewlett-Packard has turned out to be one of the top-performing tech stocks of 2013. Shares have doubled in value, putting the S&P 500 Index’s 25% gain to shame. Read More

When the Dow Jones Industrial Average was reformulated in September, former technology leader Hewlett-Packard (NYSE: HPQ) was quietly replaced. It was yet another tough blow for a firm that is on track for its third straight year of sales declines. CEO Meg Whitman, who was just celebrating her second full year at the company’s helm, could not have been pleased. But Whitman is surely getting the last laugh. Because against the odds, Hewlett-Packard has turned out to be one of the top-performing tech stocks of 2013. Shares have doubled in value, putting the S&P 500 Index’s 25% gain to shame. More than $25 billion in market value has been added, and Whitman has less need to worry about job security. #-ad_banner-#Yet a deeper look reveals a company that remains mired in a deep slump, and a stock price that is now sharply overvalued. As UBS’ Steve Milunovich noted in a recent report, “The stock has rebounded as fundamentals improved from very poor to mediocre,” adding that “HP appears secularly challenged with too much hardware and a paucity of software revenue.” Indeed, the only good news for Hewlett-Packard is that it isn’t performing as poorly as many had expected. Read More