“Three dollars for a cup of coffee, I would short that stock now!” said the grizzled old stock trader at the 1992 IPO of the coffee chain.  Believing that high-priced coffee and a company that encourages customers to hang out in a relaxed atmosphere was nothing but a fad, the market veteran, like many investors of his time, saw only a bleak future for Starbucks (Nasdaq: SBUX).   As we all know, the shorts were crushed as SBUX exceeded all expectations. A $100,000 investment at the IPO price of $17.00 per share would have grown to over $10… Read More

“Three dollars for a cup of coffee, I would short that stock now!” said the grizzled old stock trader at the 1992 IPO of the coffee chain.  Believing that high-priced coffee and a company that encourages customers to hang out in a relaxed atmosphere was nothing but a fad, the market veteran, like many investors of his time, saw only a bleak future for Starbucks (Nasdaq: SBUX).   As we all know, the shorts were crushed as SBUX exceeded all expectations. A $100,000 investment at the IPO price of $17.00 per share would have grown to over $10 million when splits and dividends are taken into consideration. That’s an amazing return no matter how you look at it.  But the question on every investor’s mind is what does the future hold for the stock? Has the company reached its potential or will the outsized performance continue long into the future?  The World’s Coffee Shop As I sit here in Starbucks writing this article, I can’t help but marvel at the steady stream of customers that has fueled an incredible growth story.  #-ad_banner-#The coffee chain has become a behemoth, with 26,000 stores spread across 75 countries that employ… Read More

Over the last decade, we’ve published thousands of in-depth research reports. Everything from high dividend payers, game-changing innovations, top stocks in emerging markets — you name it, we’ve told you how to profit from it.  But the research I’m going to tell you about today stands head and shoulders above everything else we’ve ever done.  In fact, it ranks as our single most popular report of all time. We call it: Our Ultimate “Forever Stocks.” —Recommended Link— $43K A Year For Life… (Takes 20 Minutes) Want an extra $43,543 a year in bonus income? You need to see this…… Read More

Over the last decade, we’ve published thousands of in-depth research reports. Everything from high dividend payers, game-changing innovations, top stocks in emerging markets — you name it, we’ve told you how to profit from it.  But the research I’m going to tell you about today stands head and shoulders above everything else we’ve ever done.  In fact, it ranks as our single most popular report of all time. We call it: Our Ultimate “Forever Stocks.” —Recommended Link— $43K A Year For Life… (Takes 20 Minutes) Want an extra $43,543 a year in bonus income? You need to see this… And fast. It shows the five simple steps to take to start collecting this money. Your checks should start coming in within a month… And continue to roll in forever. You can even pass your payments on to your heirs… And they can collect the money after you’re gone. It’s all here. And you can get set up in 20 minutes.  You’ve probably heard us talk about the idea of “Forever Stocks” before. Simply put, these are solid companies that we think you can feel confident buying and holding onto for years, even decades.  And we believe they will continue… Read More

Big tech is having another monster year. The big four technology leaders, also known as FANG — Facebook, Amazon, Netflix, and Google (Alphabet) — have returned an average of 29% in 2017. Take a look at the chart below. This basket of tech high flyers has been great for growth investors, crushing the S&P 500’s 9% return in 2017.  However, for income investors, these outsized gains have been painful to watch. Most of the FANG stocks don’t pay a dividend. And watching this group of stocks deliver a 29% gain in less than six months can make a… Read More

Big tech is having another monster year. The big four technology leaders, also known as FANG — Facebook, Amazon, Netflix, and Google (Alphabet) — have returned an average of 29% in 2017. Take a look at the chart below. This basket of tech high flyers has been great for growth investors, crushing the S&P 500’s 9% return in 2017.  However, for income investors, these outsized gains have been painful to watch. Most of the FANG stocks don’t pay a dividend. And watching this group of stocks deliver a 29% gain in less than six months can make a normally impressive 5% dividend yield seem insignificant. But don’t worry, I have the perfect solution for income investors looking for a piece of tech growth — a well-known global leader that I consider to be the best growth and income stock in the S&P 500. This global leader is still delivering outsized sales and earnings growth. It offers one of the best dividend yields in the technology sector and one of the fastest growing dividends in the S&P 500. And even better, compared to FANG stocks it looks undervalued. Microsoft (Nasdaq: MSFT) is one of the greatest growth stocks in… Read More

What an ideal time to be in the market! Long-term stock investors are reaping the benefits of a massive, eight-year-long bull market. Driven by ultra-low interest rates, fiscal stimulus, economic growth, and a pro-business White House, equities just keep pushing higher.  No one knows how long these glory days will last. Investors are scrambling to find the safest way to invest right amid mounting uncertainty. Despite the bullish environment, there are a wide variety of bearish pressures that could quickly quash the bullish advance.  Anything from terrorism fears, geopolitical worries, or overly aggressive Federal Reserve actions could bring the bull… Read More

What an ideal time to be in the market! Long-term stock investors are reaping the benefits of a massive, eight-year-long bull market. Driven by ultra-low interest rates, fiscal stimulus, economic growth, and a pro-business White House, equities just keep pushing higher.  No one knows how long these glory days will last. Investors are scrambling to find the safest way to invest right amid mounting uncertainty. Despite the bullish environment, there are a wide variety of bearish pressures that could quickly quash the bullish advance.  Anything from terrorism fears, geopolitical worries, or overly aggressive Federal Reserve actions could bring the bull market to a screeching halt. Savvy investors are aggressively seeking to diversify and protect their gains. Protecting gains must be on the forefront of everyone’s mind as the market keeps climbing the wall of worry.  The Safest Places To Invest For The Days Ahead 1. Cash Most people do not consider money itself as an investment. However, cash is the one must-have for any and all investment strategies. As crazy as it might sound, you should consider selling highly profitable stock investments to build your cash reserves.  Nearly every stock brokerage offers the ability to hold cash in a… Read More

I wasn’t a very good physics student in high school. I was a writing, reading, and history guy. But I do remember Newton’s Third Law: “For every action, there is an equal and opposite reaction.” The operative word is “opposite”.  That’s what the bond market experienced last week after the Federal Reserve raised its benchmark Fed Funds rate by 25 basis points, or one quarter of one percent. If the Fed raises rates, yields are going higher, right? Nope. Newton’s Third Law reared its head and proved itself. As the Fed announced its intentions, the yield on the… Read More

I wasn’t a very good physics student in high school. I was a writing, reading, and history guy. But I do remember Newton’s Third Law: “For every action, there is an equal and opposite reaction.” The operative word is “opposite”.  That’s what the bond market experienced last week after the Federal Reserve raised its benchmark Fed Funds rate by 25 basis points, or one quarter of one percent. If the Fed raises rates, yields are going higher, right? Nope. Newton’s Third Law reared its head and proved itself. As the Fed announced its intentions, the yield on the 10-Year U.S. Treasury fell. Along with raising the Fed Funds rate, the central bank also articulated its plan to shrink its holdings of government securities.  During the financial crisis of 2007-2008 as part of its quantitative easing (QE) strategy, the Fed created excess liquidity in the monetary system by buying up U.S. government securities. Their holdings ballooned to nearly $4.5 trillion. #-ad_banner-#As the economy improved, the Fed first slowed its purchase schedule (the “Taper Tantrum”). Now, the Fed has announced that as its holdings mature, the cash will not be reinvested. This is the Fed’s long game. Rather than increase… Read More

When setting up a covered call trade, it is important to estimate ahead of time what that trade is likely to return. Not only will this allow you to evaluate the expected return on your current trade, but it will also give you a benchmark for comparing this trade with other opportunities that may be on your radar. I have set up a simple spreadsheet that allows me to input the necessary data to determine what a covered call setup will return if the position is called away at expiration. The sheet also tells me the amount of risk that… Read More

When setting up a covered call trade, it is important to estimate ahead of time what that trade is likely to return. Not only will this allow you to evaluate the expected return on your current trade, but it will also give you a benchmark for comparing this trade with other opportunities that may be on your radar. I have set up a simple spreadsheet that allows me to input the necessary data to determine what a covered call setup will return if the position is called away at expiration. The sheet also tells me the amount of risk that the covered call protects me against should the stock trade lower. Below is a screen shot of the spreadsheet, which can be easily replicated in Microsoft Excel. The blue cells represent numbers that are entered manually, and the white cells represent data calculated by the formulas. The first three cells are fairly clear. For a covered call setup, we will enter the market price of the stock, the strike price of the call option that we are selling, and the premium (or price) of the option. So, for the example above, we are interested in buying… Read More

At a recent conference, a question was asked about whether it’s still possible to get rich from the stock market. My reply… It has never been easier to get rich from stock investing. Now, that’s a bold statement. But it’s absolutely true. You see, humanity will change more in the next 20 years than in all of recorded history! In fact, the changes coming over the next two decades will dwarf the introduction of the automobile, the airplane, the computer, and even the internet. The average American will soon be receiving four or five packages every week by drone —… Read More

At a recent conference, a question was asked about whether it’s still possible to get rich from the stock market. My reply… It has never been easier to get rich from stock investing. Now, that’s a bold statement. But it’s absolutely true. You see, humanity will change more in the next 20 years than in all of recorded history! In fact, the changes coming over the next two decades will dwarf the introduction of the automobile, the airplane, the computer, and even the internet. The average American will soon be receiving four or five packages every week by drone — everything from groceries and prescriptions to building supplies. Americans will spend 40% of their commuting time in driverless cars, use 3D printers to “print” custom meals, and spend most of their leisure time on activities not yet invented. #-ad_banner-#We will see nearly 2 billion jobs disappear, everything from physicians and lawyers to grocery clerks. Now, the vast majority of those jobs will come back in a different form, with more than 50% of them being self-employed freelance jobs.  In the next 20 years, half of the companies that currently make up the S&P 500 index will be gone. The same… Read More

Compared to the past, there’s something fundamentally different about the challenges central banks face today — further proof that we’re in uncharted economic waters. Low interest rates, even negative rates in some countries, are a prime example. A couple of years ago, a chart of interest rates over the past 5,000 years began to circulate. One version of that chart, shown below, highlights that rates fell to a nearly 400-year low in the Great Recession. One noted economic commentator, James Grant, asked, “If these are the first sub-zero interest rates in 5,000 years, is this not… Read More

Compared to the past, there’s something fundamentally different about the challenges central banks face today — further proof that we’re in uncharted economic waters. Low interest rates, even negative rates in some countries, are a prime example. A couple of years ago, a chart of interest rates over the past 5,000 years began to circulate. One version of that chart, shown below, highlights that rates fell to a nearly 400-year low in the Great Recession. One noted economic commentator, James Grant, asked, “If these are the first sub-zero interest rates in 5,000 years, is this not the worst economy since 3,000 BC?” I don’t believe this is the worst economy in history, but I am seeing more and more indicators that this is an unprecedented economy. Within the past few years, we have seen many longstanding economic relationships change. Among them is the number of unfilled jobs. Historically, we’ve come to expect that there will be more job seekers than jobs. That relationship changed in 2015. Now, there are more job openings (the blue line in the chart above) than jobs (the red line). In theory, this should lead to higher wages… Read More