You have undoubtedly heard that various components or asset classes of the market are, from time to time, manipulated. “Manipulating the market” means that by some purposeful and sometimes with nefarious intentions, a market that should move higher, moves lower… or, as in the case of September, the market moved… Read More

In recent weeks, stock market pundits have been wrestling with a curious phenomenon. Trading activity has fallen sharply, which these market-watchers presume to mean that investors have lost interest in stocks. Mom-and-pop investors have likely become more gun-shy this year. But the main culprit for lower trading volumes: Wall Street’s… Read More

Here’s the thing about sin: though ugly, it tends to roll on in any economy. This fact is a huge benefit to companies that deal in vice. When searching for investments in a slow-growth or uncertain economy, investors often look to defensive industries such as healthcare, food and utilities. After all, people still get sick and need to eat and stay warm regardless of the state of the economy. But, it’s seldom mentioned that people consistently do something else in any economy — drink and smoke. In… Read More

Here’s the thing about sin: though ugly, it tends to roll on in any economy. This fact is a huge benefit to companies that deal in vice. When searching for investments in a slow-growth or uncertain economy, investors often look to defensive industries such as healthcare, food and utilities. After all, people still get sick and need to eat and stay warm regardless of the state of the economy. But, it’s seldom mentioned that people consistently do something else in any economy — drink and smoke. In fact, vice just might be the most defensive business of all. Stocks in the cigarette and beer industries seem to keep on making profits and the stocks keep going up regardless of what the market is doing. While the S&P 500 is lower now than it was 10 years ago, Morningstar’s cigarette industry category soared at a remarkable average of more than +21% a year for the past 10 years. The Beverage-Brewer (beer) category returned an average of about +16% per year for the same period. And the outperformance is continuing. Read More

With reward comes risk. That’s the painful lesson learned by biotech investors last month. Investors in Arena Pharma (Nasdaq: ARNA), Idenix Pharma (Nasdaq: IDIX), AMAG Pharma (Nasdaq: AMAG) and Vical (Nasdaq: VICL) all saw their investments plunge by nearly a fourth– or more — thanks to bad news on the drug approval front. Of the top four losers in the Russell 2000 last month, all are in biotech — an industry for which you’ve got to have a strong stomach. Company (Ticker) Recent Price September Loss 52-Week High 52-Week Low Catalyst Arena Pharma (Nasdaq: ARNA) $1.54 -76% $8.00 $1.51 FDA… Read More

With reward comes risk. That’s the painful lesson learned by biotech investors last month. Investors in Arena Pharma (Nasdaq: ARNA), Idenix Pharma (Nasdaq: IDIX), AMAG Pharma (Nasdaq: AMAG) and Vical (Nasdaq: VICL) all saw their investments plunge by nearly a fourth– or more — thanks to bad news on the drug approval front. Of the top four losers in the Russell 2000 last month, all are in biotech — an industry for which you’ve got to have a strong stomach. Company (Ticker) Recent Price September Loss 52-Week High 52-Week Low Catalyst Arena Pharma (Nasdaq: ARNA) $1.54 -76% $8.00 $1.51 FDA spurns company’s anti-obesity drug Idenix Pharma (Nasdaq: IDIX) $3.14 -48% $6.11 $1.81 Setback in Hepatitis C trials AMAG Pharma (Nasdaq: AMAG) $17.85 -32% $52.49 $16.70 Disappointing results for anemia drug Vical (Nasdaq: VICL) $2.21 -29% $4.43 $2.20 Poor results from blood-vessel growth drug Flagstar Bancorp (NYSE: FBC) $1.86 -26% $7.85 $2.91 False start on a capital raise Genoptix (Nasdaq: GXDX) $14.39 -20% $39.00 $13.51 Pre-announced tepid Q3 results Virginia Commerce Bank (Nasdaq: VCBI) $4.81 -17% $7.69 $3.01 Being acquired by Discover Arena looks unlikely to rebound, as the FDA made it clear that Arena’s weight-loss drug offered too… Read More

Of the 2,000 stocks that comprise the Russell 2000 Index, 10 of them rose by at least +50% in September. And half of those are the beneficiary of very generous buyout offers (while a sixth name rebuffed an… Read More

The Telecommunications Act of 1996 mandated the need for disparate telecom networks to be able to communicate with each other. It also prescribed the need for number portability, which allowed consumers and businesses to keep their phone numbers even if they switched to another telecom provider or network. Read More

It’s important to keep track of the moves by insiders, as they can point you in the direction of undervalued (or overvalued) stocks. I like to scan the recent buying and selling lists from insiders either daily or weekly, but a monthly look is… Read More

I recently came across an insightful article that boldly detailed how the Internet is changing the world. The piece offered a number of stats and detailed that 750 tweets are written from Twitter every second, 2.5 billion photos are uploaded to Facebook every month, and overall Internet traffic is growing… Read More

There are plenty of good reasons to believe inflation is coming. U.S. government debt has surpassed $9 trillion, nearly tripling from $3.4 trillion in 2000. And things are getting worse. The government ran a deficit of $1.42 trillion in 2009 alone. Even as the economy has recovered, the current administration estimates the deficit for 2010 will be $1.5 trillion. [See Nathan Slaughter’s “Shocking Facts About the U.S. Debt Problem…”] How is the… Read More

There are plenty of good reasons to believe inflation is coming. U.S. government debt has surpassed $9 trillion, nearly tripling from $3.4 trillion in 2000. And things are getting worse. The government ran a deficit of $1.42 trillion in 2009 alone. Even as the economy has recovered, the current administration estimates the deficit for 2010 will be $1.5 trillion. [See Nathan Slaughter’s “Shocking Facts About the U.S. Debt Problem…”] How is the government going to pay all that debt? One way is inflation. The Federal Reserve has every incentive to boost inflation because it would in effect reduce the debt, as it would be paid with devalued dollars. Meanwhile, the government is injecting money into the system by basically giving it away. The current discount rate (the rate charged to commercial banks to borrow money from the Fed) is a microscopic 0.75%. To add perspective, the discount rate was 5.25% in 2006 and 19% in 1980. A massive flood of… Read More

It’s been a nutty summer for the nation’s largest operator of book stores. Soon after Memorial Day, Barnes & Noble (NYSE: BKS) delivered the sobering news that sales and profit targets would not be met. By late July,… Read More