Investors are faced with a mountain of information, strategies and tactics to choose from. Value, growth, momentum, options, futures… which strategy is right for you? While every strategy has their pros and cons, one of the better-performing strategies has come from focusing on growth stocks. Growth stocks have certainly done well over the last decade, outpacing the popular value approach over that time period. But that doesn’t mean we should ignore value.  In fact, long-term studies still suggest that following a disciplined contrarian, value-driven strategy is the best path to success. Value investors argue that while the market may be… Read More

Investors are faced with a mountain of information, strategies and tactics to choose from. Value, growth, momentum, options, futures… which strategy is right for you? While every strategy has their pros and cons, one of the better-performing strategies has come from focusing on growth stocks. Growth stocks have certainly done well over the last decade, outpacing the popular value approach over that time period. But that doesn’t mean we should ignore value.  In fact, long-term studies still suggest that following a disciplined contrarian, value-driven strategy is the best path to success. Value investors argue that while the market may be efficient in the long term, emotions often dominate in the short run. These emotions can overtake rational analysis, pushing a stock’s price above its intrinsic value during periods of euphoria and below its true worth when reacting to bad news. Value screens, such as searching for stocks with a low price-earnings ratio, typically look for low prices relative to actual measures of company performance or assets. The price-earnings ratio, or multiple, is computed by dividing a stock’s price by its most recent 12 months’ earnings per share. The price-earnings ratio is followed closely because it embodies the market’s expectations of… Read More

If you’ve been reading ​my work for any length of time then you know that I talk a lot about emotions and how they can greatly impact whether you’re successful or not in investing… and really everyday life. But we’ll stick mostly to investing in this issue. Gaining a better understanding of the emotional behavior of investors — commonly referred to as behavioral economics — can not only help you avoid common pitfalls that plague average investors, but it can also help you better understand momentum investing. You see, when it comes to finance and money, humans don’t behave rationally (part of… Read More

If you’ve been reading ​my work for any length of time then you know that I talk a lot about emotions and how they can greatly impact whether you’re successful or not in investing… and really everyday life. But we’ll stick mostly to investing in this issue. Gaining a better understanding of the emotional behavior of investors — commonly referred to as behavioral economics — can not only help you avoid common pitfalls that plague average investors, but it can also help you better understand momentum investing. You see, when it comes to finance and money, humans don’t behave rationally (part of the reason why we have momentum investing at all). When it comes to profits and losses, the fear of losing money greatly outweighs the joy in achieving additional gains. It’s this very premise that has created the mantra, “Let your winners run, and cut your losers short.” How many times have you sold a winning stock just to see it keep climbing in the days and weeks that followed? And on the flip side of that, think about how many times you’ve held on to a loser just to see it keep falling. That’s a lesson I learned the hard… Read More

Investors are beginning to turn their attention back to corporate earnings. They might not like what they see. While actual results are still coming in, we are tracking toward a 3% decline. That would mark the second-straight negative quarter — the technical definition of an earnings recession. This slowdown follows ten straight quarters of uninterrupted growth, including an extended streak of double-digit increases.  By itself, this isn’t necessarily a reason to panic. Still, there are other troubling signs…  Business investment has been tepid. The boom in capital spending on new equipment and factories has stalled, the stimulative effects of corporate… Read More

Investors are beginning to turn their attention back to corporate earnings. They might not like what they see. While actual results are still coming in, we are tracking toward a 3% decline. That would mark the second-straight negative quarter — the technical definition of an earnings recession. This slowdown follows ten straight quarters of uninterrupted growth, including an extended streak of double-digit increases.  By itself, this isn’t necessarily a reason to panic. Still, there are other troubling signs…  Business investment has been tepid. The boom in capital spending on new equipment and factories has stalled, the stimulative effects of corporate tax overhaul wearing off… Meanwhile, the damaging trade war could reignite at any time. The hostilities may even spill over into the currency markets if the White House decided to weaponize the U.S. dollar, deliberately weakening it to put domestic exporters on a more level playing field. Meanwhile, the global economy continues to cool, particularly across Europe. Even more concerning, China (the world’s economic growth engine) is seeing the weakest economic output in 30 years.  The point is, any of these wild cards could trip up the market. And with the major averages having ascended to record heights, it’s a… Read More

I have three young boys running around in the yard right now. They seem to be playing “Calvinball.” That’s a game from the old “Calvin & Hobbes” comic strip.  Now, if you’ve never played Calvinball, the rules are confusing. It’s a game that you never play the same way twice. Anyone can add a rule, and any player can change the rules at any time, even if no one else agrees with the change.  Calvinball is what I call it when the boys are just running around and getting along. It’s simply a few moments of peaceful chaos.  Now that… Read More

I have three young boys running around in the yard right now. They seem to be playing “Calvinball.” That’s a game from the old “Calvin & Hobbes” comic strip.  Now, if you’ve never played Calvinball, the rules are confusing. It’s a game that you never play the same way twice. Anyone can add a rule, and any player can change the rules at any time, even if no one else agrees with the change.  Calvinball is what I call it when the boys are just running around and getting along. It’s simply a few moments of peaceful chaos.  Now that you know I’m a fan of Calvinball, you might understand why I’m so excited about the chart below. It’s a chaotic picture, but it offers investors important information.  —Recommended Link— BOMBSHELL: America’s Favorite New “Paychecks” You need to see this to believe it. CLICK HERE to see how a 3-minute phone call could hand you the opportunity to collect checks worth up to $225,326. And best of all, this program is backed by the full force and authority of the United States government… Click here to see all the details. Let… Read More

Don’t get lulled into a false sense of security.  Yes, it’s been an amazing run for the markets this year. The 17% surge in the Dow Jones Industrial Average since the beginning of 2019 has made us forget all about the market’s woes last December. That 700-point freefall on Christmas Eve is now just a distant memory.  #-ad_banner-#All that consternation about an inverted yield curve? Those worries have melted away.  The prospect of an interest rate cut has provided a temporary distraction. But understand that the Federal Reserve is only shifting course and loosening monetary policy because it sees darkening… Read More

Don’t get lulled into a false sense of security.  Yes, it’s been an amazing run for the markets this year. The 17% surge in the Dow Jones Industrial Average since the beginning of 2019 has made us forget all about the market’s woes last December. That 700-point freefall on Christmas Eve is now just a distant memory.  #-ad_banner-#All that consternation about an inverted yield curve? Those worries have melted away.  The prospect of an interest rate cut has provided a temporary distraction. But understand that the Federal Reserve is only shifting course and loosening monetary policy because it sees darkening in the macro skies. Now more than ever, it’s important to focus on what’s working in the market. And what better way to start than by looking for companies that are raising their dividends? After all, all things being equal, if a company is giving shareholders a raise at this late point of the economic cycle, then there’s a good chance management has confidence that it can generate enough cash to cover the payout in any condition.  That’s why every month I make a point to research possible dividend raisers for the next month or so and share my findings… Read More

The market’s comeback this year is one for the record books: The S&P 500 closed the best first half of a year since 1997. Not too many analysts predicted such a big rally — but then again, not too many thought the U.S. Federal Reserve would consider the first interest rate cut in 10 years as early as this July and that the rest of the world would become more dovish as the year progressed.  But investors are still not happy. Just as with so many times during the last few years, they are questioning whether the recent records will… Read More

The market’s comeback this year is one for the record books: The S&P 500 closed the best first half of a year since 1997. Not too many analysts predicted such a big rally — but then again, not too many thought the U.S. Federal Reserve would consider the first interest rate cut in 10 years as early as this July and that the rest of the world would become more dovish as the year progressed.  But investors are still not happy. Just as with so many times during the last few years, they are questioning whether the recent records will hold and whether the rally has some power remaining in it.  —Recommended Link— 5 stocks you need to know about ASAP One Minneapolis cash machine is yielding us 65% (it has hiked its dividend 28 years in a row). A Philadelphia firm yielding us 62% (we’re up 2,559% in this one). The North Dakota juggernaut that has made us 1,881%. The New Orleans utility yielding us 71%-just paid its 188th consecutive dividend. The telecom from New York City yielding us 62%. Get these five stocks now. Reasons For Caution One… Read More