Have you heard? The U.S. Postal Service (USPS) just raised the price of a Forever stamp to $0.55 from $0.50. This is the sharpest percentage increase (10%) since 1991 — and the biggest hike on record in nominal terms. As a young financial advisor in the late 1990s, I would always stress the impact of inflation when meeting with prospective clients, modeling it into any retirement funding projections. And the best way to drive home the point was to show how stamp prices had increased steadily over the years. In fact, they are directly tethered to inflation rates. Back… Read More

Have you heard? The U.S. Postal Service (USPS) just raised the price of a Forever stamp to $0.55 from $0.50. This is the sharpest percentage increase (10%) since 1991 — and the biggest hike on record in nominal terms. As a young financial advisor in the late 1990s, I would always stress the impact of inflation when meeting with prospective clients, modeling it into any retirement funding projections. And the best way to drive home the point was to show how stamp prices had increased steadily over the years. In fact, they are directly tethered to inflation rates. Back then, stamps had doubled in price from $0.15 to $0.32 over the prior two decades. Twenty years later, and they’ve continued to march all the way to $0.55. How long do you think it will be before they hit $0.60, or $1.00?  An acquaintance of mine had the foresight back in 2007 to “invest” $1,000 in Forever Stamps, purchasing 2,439 at a fixed price of $0.41 each. It really wasn’t that different from speculating in commodities by using futures contracts. She didn’t do too bad. The value of those 2,439 stamps has now risen to $1,341, an increase of 34.1%. Read More

It may be frigid across much of the country, but corporate earnings growth remains quite steamy. As of February 1, 230 members of the S&P 500 (46%) had posted fourth-quarter results. That means we’re about halfway through the reporting season. And thus far, nearly three-out-of-four companies beat expectations. The torrid 20%-plus growth rate we’ve seen the past several quarters is finally beginning to moderate (that pace is unsustainable for long). Still, if you blend the actual results with the latest estimates from the other 270 companies that are due to report soon, S&P earnings are on track to increase 12.4%. Read More

It may be frigid across much of the country, but corporate earnings growth remains quite steamy. As of February 1, 230 members of the S&P 500 (46%) had posted fourth-quarter results. That means we’re about halfway through the reporting season. And thus far, nearly three-out-of-four companies beat expectations. The torrid 20%-plus growth rate we’ve seen the past several quarters is finally beginning to moderate (that pace is unsustainable for long). Still, if you blend the actual results with the latest estimates from the other 270 companies that are due to report soon, S&P earnings are on track to increase 12.4%. That would mark the fifth consecutive quarter of healthy double-digit profit growth. A week earlier, the same methodology pointed toward a growth rate of 10.9%. That means we’ve had some big upside surprises in recent days — mostly in the energy sector. On average, the energy sector is beating consensus earnings expectations by 23%, versus 3.5% for the S&P 500. In fact, this group is single-handedly propping up growth rates for the entire market. As you can see from the chart below, it has been a disappointing quarter for utilities, whose earnings have slipped 5.2% from a year ago. Tech… Read More

I saw an interesting chart recently that I believe summarizes the current state of the stock market.  Essentially, it shows that U.S. stocks are extremely overvalued compared to the rest of the world.  Why does this matter? And, more importantly, how can we profit? Now, those are the key questions… But first, let’s use what we know as investors to unpack the information.  The chart below shows the cyclically adjusted price-to-earnings (CAPE) ratio for both U.S. and global stocks. It was developed by Nobel Prize-winning economist Dr. Robert Schiller.  —Recommended Link— “It’s like getting 26 paychecks advanced to you in… Read More

I saw an interesting chart recently that I believe summarizes the current state of the stock market.  Essentially, it shows that U.S. stocks are extremely overvalued compared to the rest of the world.  Why does this matter? And, more importantly, how can we profit? Now, those are the key questions… But first, let’s use what we know as investors to unpack the information.  The chart below shows the cyclically adjusted price-to-earnings (CAPE) ratio for both U.S. and global stocks. It was developed by Nobel Prize-winning economist Dr. Robert Schiller.  —Recommended Link— “It’s like getting 26 paychecks advanced to you in ONE LUMP SUM!” Executive Dividends are one of Wall Street’s best-kept secrets, paying out a small fortune in unannounced cash seemingly at random — and today, Nathan Slaughter shows you where to find them. Read more here. ​Source: Global Financial Data via MebFaber.com  Cyclical, in this case, means the indicator measures over 10 years, the amount of time Schiller believes covers an economic cycle. Ben Graham, the father of fundamental analysis (and Warren Buffett’s business school professor), explained the importance of accounting for the economic cycle when calculating earnings. Graham suggested averaging earnings over eight years to account for… Read More

Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for… Read More

Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for concern.  ​ I expected a breakout last week as traders reacted to earnings from Apple, Facebook, and Amazon. Instead of a defined breakout, the S&P 500 just drifted higher.  The index has now retraced more than half of the decline that came at the end of last year. That’s bullish. But we remain about 1.3% below the 200-day moving average (MA), shown as the solid blue line in the chart. This is a widely followed indicator, and I expect the test of the MA will be a topic of conversation on CNBC this week. A close above the MA is… Read More

One of the most important lessons I learned during my days in the Army was the KISS principle: Keep it simple, stupid. Outside of the military, one of the greatest minds of all time believed in the KISS philosophy, but Albert Einstein expressed the idea in more poetic terms: “Everything should be made as simple as possible, but not simpler.” —Recommended Link— A Hacker’s Guide To Stock Arbitrage… (And Getting Away With $37,000) (All you need is an online brokerage account and your laptop.)  Click here for all the details… I bring that same mindset to investment analysis. I… Read More

One of the most important lessons I learned during my days in the Army was the KISS principle: Keep it simple, stupid. Outside of the military, one of the greatest minds of all time believed in the KISS philosophy, but Albert Einstein expressed the idea in more poetic terms: “Everything should be made as simple as possible, but not simpler.” —Recommended Link— A Hacker’s Guide To Stock Arbitrage… (And Getting Away With $37,000) (All you need is an online brokerage account and your laptop.)  Click here for all the details… I bring that same mindset to investment analysis. I want every process to be as simple as possible, but not so simple that I’m leaving out anything important. While I have spent a great deal of time studying complex investment techniques, what I discovered is that the KISS principle applies in investment analysis as well as it did in the military. #-ad_banner-#For example, although I look at complex valuation models, the simple PEG ratio consistently identifies undervalued stocks. The PEG ratio compares the price-to-earnings (P/E) ratio to the growth rate of earnings per share (EPS). A stock is considered fairly valued when the PEG ratio is equal to 1,… Read More

Kinder Morgan (NYSE: KMI) is back. Publicly, the energy pipeline master limited partnership (MLP) issued guidance calling for distributable cash flow (DCF) of $4.6 billion in 2018 or $2.05 per share. Quietly, it has been telling stockholders that the numbers were tracking ahead of expectations.  Well, the official count is now in. The company indeed beat the mark, generating $4.73 billion in DCF or $2.12 per share. That’s within two cents of the record high of $2.14 set in 2015. So for all intents and purposes, it has made a full recovery. Yet back then, KMI shares commanded a price… Read More

Kinder Morgan (NYSE: KMI) is back. Publicly, the energy pipeline master limited partnership (MLP) issued guidance calling for distributable cash flow (DCF) of $4.6 billion in 2018 or $2.05 per share. Quietly, it has been telling stockholders that the numbers were tracking ahead of expectations.  Well, the official count is now in. The company indeed beat the mark, generating $4.73 billion in DCF or $2.12 per share. That’s within two cents of the record high of $2.14 set in 2015. So for all intents and purposes, it has made a full recovery. Yet back then, KMI shares commanded a price north of $40. Today, they are still well below $20. That’s difficult to reconcile. Clearly, many investors haven’t forgiven Kinder Morgan for its forced dividend cut in late 2015 as the bottom fell out of the oil market and many midstream partnerships suffered a liquidity crunch. But those days are long gone — distributions were hiked 60% last year, and management is aiming for a 25% encore both this year and next. If you prefer to look at standard earnings rather than cash flow, Kinder Morgan reported net income of $1.481 billion ($0.66 per share) in 2018, versus $27 million… Read More

Over at Fast-Track Millionaire, our mandate requires us to stay abreast of the most recent scientific achievements.  And how could it be any other way? Most game-changing companies change the game by either finding real-life applications for modern scientific or technological discoveries or using those discoveries to modernize or disrupt entire businesses or industries.  We’ve had good success with these types of investments so far — but they don’t come close to the kind of potential I’m seeing in one field in particular…  I’m talking about the up-and-coming field of personalized medicine. —Recommended Link— Congratulations On 10 Years Of Profits… Read More

Over at Fast-Track Millionaire, our mandate requires us to stay abreast of the most recent scientific achievements.  And how could it be any other way? Most game-changing companies change the game by either finding real-life applications for modern scientific or technological discoveries or using those discoveries to modernize or disrupt entire businesses or industries.  We’ve had good success with these types of investments so far — but they don’t come close to the kind of potential I’m seeing in one field in particular…  I’m talking about the up-and-coming field of personalized medicine. —Recommended Link— Congratulations On 10 Years Of Profits We’ve unleashed it again — our annual Game-Changing Predictions report, filled cover-to-cover with a dozen potentially life-changing picks for 2019. And to mark this 10th anniversary edition, we’re doing something a little different… In addition to the full write up on each prediction (complete with the tickers), the first 250 readers to claim their copy will get instant access to 2 additional “bonus picks” that are positioned to bring home double… even triple-digit gains in 2019. If the thought of an extra $1,543… $2,184… even $4,200 each month in cash sounds good to you, click here now to see if… Read More