Sometimes, names can be misleading. Consider hedge funds, for example. The “hedging” in hedge funds’ day-to day-operations sometimes generates more risk, not less. How much more? Well, Long-Term Capital Management L.P. (LTCM), which had a great name that implied longevity and long-term thinking, had a fantastic team that counted not one but two Nobel Laureates in economics. Long-Term Capital Management ended up being relatively short-lived during the 1990s, lasting only about six years. Fast forward two decades. The hedge fund industry is alive and well, having survived not only LTCM, but also the Great Recession, during which many funds closed. Read More

Sometimes, names can be misleading. Consider hedge funds, for example. The “hedging” in hedge funds’ day-to day-operations sometimes generates more risk, not less. How much more? Well, Long-Term Capital Management L.P. (LTCM), which had a great name that implied longevity and long-term thinking, had a fantastic team that counted not one but two Nobel Laureates in economics. Long-Term Capital Management ended up being relatively short-lived during the 1990s, lasting only about six years. Fast forward two decades. The hedge fund industry is alive and well, having survived not only LTCM, but also the Great Recession, during which many funds closed. The industry has also weathered outright frauds such as the Bernie Madoff scandal. The modern hedge fund world is diverse. Some hedge funds (defined as private investment pools available to qualified, or “accredited,” investors) are similar, by composition, to mutual funds, albeit with more concentrated portfolios. Some invest in everything from stocks to bonds to real estate to gold and other commodities, and many continue using derivative strategies and hedging techniques. Leverage is not uncommon. These days, many hedge funds invest (and trade) in equities, and it’s normal to see a hedge fund or two among the top holders of… Read More

This is BIG… For the first time since 1933, the SEC is now allowing regular people like you and me to invest in brand-new explosive-growth companies BEFORE THEY GO PUBLIC. Imagine getting in on the next Facebook for 33 cents a share or the next Apple at 78 cents. In StreetAuthority’s Pre-IPO Millionaire, I vet six to eight deals like this one each month, and offer my exclusive in-depth analysis of a single opportunity that I believe could return 1,000% or more. Click here for more information. — Joseph Hogue, CFA The leading cause of teenage fatalities in the United… Read More

This is BIG… For the first time since 1933, the SEC is now allowing regular people like you and me to invest in brand-new explosive-growth companies BEFORE THEY GO PUBLIC. Imagine getting in on the next Facebook for 33 cents a share or the next Apple at 78 cents. In StreetAuthority’s Pre-IPO Millionaire, I vet six to eight deals like this one each month, and offer my exclusive in-depth analysis of a single opportunity that I believe could return 1,000% or more. Click here for more information. — Joseph Hogue, CFA The leading cause of teenage fatalities in the United States is car accidents — not guns or drugs, but automobile collisions. Nearly 40,000 people of all ages lost their lives in car accidents last year, on top of the 4.4 million people that needed medical assistance after an accident. The U.S. Department of Transportation estimates that 94% of these accidents were a result of human error — speeding and reckless and distracted driving. #-ad_banner-#With estimated costs of $847 billion a year for accidents and related injuries, America desperately needs a solution. To date, the only advances have been in monitoring a driver’s habits to better price insurance. A few… Read More

Over the years, one thing has become abundantly clear: that is being a contrarian makes sense in the stock market. To be clear, I am not talking about going against my research. When I say contrarian, what I mean is going against the prevailing public/media sentiment. Often, when everyone is saying one thing, it’s time to take the opposite side. #-ad_banner-#For example, when everyone is overtly bullish, it’s time to look for compelling reasons to get short. The same thing can be said when the entire financial press has turned bearish, meaning it’s actually a superb time to search for… Read More

Over the years, one thing has become abundantly clear: that is being a contrarian makes sense in the stock market. To be clear, I am not talking about going against my research. When I say contrarian, what I mean is going against the prevailing public/media sentiment. Often, when everyone is saying one thing, it’s time to take the opposite side. #-ad_banner-#For example, when everyone is overtly bullish, it’s time to look for compelling reasons to get short. The same thing can be said when the entire financial press has turned bearish, meaning it’s actually a superb time to search for reasonable long ideas. Along with offering a reliable supporting case for the contrarian view, the recent Presidential election made several additional market axioms clear. First, things are not always as they seem. The media tends to exaggerate the harmful to obtain viewership. Second, it is critical to look behind the headlines and think for yourself when it comes to making investment decisions. This can be tough, but the rewards for bucking media bias and the consensus are often handsome. Even the mighty George Soros has been carried away with biases and media hype. One particular error in judgment resulted in… Read More

After flirting with the major psychological milestone of 20,000, the Dow Jones Industrial Average finally eclipsed the mark on Wednesday, January 25. It seems as if nearly everything has been going up since the financial crisis of 2008-2009. With this bull market going on eight years, it’s hard to believe there’s any stock out there that hasn’t seen a surge. After all, a rising tide lifts all boats, right? But believe it or not, there’s one sector that’s fallen for six straight years — a feat that hasn’t been accomplished since the Great Depression. At some point, the pain and… Read More

After flirting with the major psychological milestone of 20,000, the Dow Jones Industrial Average finally eclipsed the mark on Wednesday, January 25. It seems as if nearly everything has been going up since the financial crisis of 2008-2009. With this bull market going on eight years, it’s hard to believe there’s any stock out there that hasn’t seen a surge. After all, a rising tide lifts all boats, right? But believe it or not, there’s one sector that’s fallen for six straight years — a feat that hasn’t been accomplished since the Great Depression. At some point, the pain and suffering have to end. There is no lower low. The bad luck runs out eventually… and when such a hated and beaten down sector finally turns the corner, huge returns typically follow. Consider coal. After five consecutive down years — and an 87% plunge — coal stocks finally turned the corner and rallied 98% in 2016, making it the best-performing industry of the year. Gold shares a similar story. From highs in 2011, prices dropped about 45% to the 2015 lows before rallying about 30% in the first half of last year. —Recommended Link— Want A… Read More

It’s been more than a decade since investors have felt this confident. The Wells Fargo/Gallup U.S. Investor and Retirement Optimism Index hit 96 at the end of the fourth quarter, its highest level since January of 2007. But this wave of confidence shouldn’t come as a surprise — U.S. stocks are on a roll. The S&P 500 delivered a total return of 13% in 2016. That was the eighth consecutive year that the S&P 500 has closed in the green, its second longest annual win streak ever. This impressive win streak has been great for returns and confidence. However, it… Read More

It’s been more than a decade since investors have felt this confident. The Wells Fargo/Gallup U.S. Investor and Retirement Optimism Index hit 96 at the end of the fourth quarter, its highest level since January of 2007. But this wave of confidence shouldn’t come as a surprise — U.S. stocks are on a roll. The S&P 500 delivered a total return of 13% in 2016. That was the eighth consecutive year that the S&P 500 has closed in the green, its second longest annual win streak ever. This impressive win streak has been great for returns and confidence. However, it has also created a problem. The S&P 500 is expensive. Its P/E ratio of 25 is the highest level since the financial crisis in 2009. Take a look below. This high P/E ratio is creating some uncertainty that is lurking below the high investor confidence reading. Not only can it be intimidating for investors to buy stocks trading at an all-time high, but this makes it difficult to find value stocks. #-ad_banner-#A recent study by Bank of America/Merrill Lynch highlights the strong performance history of value stocks. The study tracked the performance of value stocks and growth stocks… Read More

There are few things more exciting in stock investing than buyout rumors. Since the stock market runs on an anticipatory mechanism, just the talk of a buyout can light the bullish fire under the shares. The old “buy the rumor, sell the fact” mantra can be very right when it… Read More

In the fall of 2016, I warned readers of my premium advisory, Profit Amplifier, of continued weakness in China and the subsequent fallout in its fragile stock market. The Chinese market is ruled by twitchy individual investors. By late December, the iShares China Large-Cap ETF (NYSE: FXI) had fallen 12% to a key retracement level around $34. But the New Year has brought buyers back into the Asian markets and back to FXI. Shares have rallied nearly 8% from their recent lows, likely due to a massive short squeeze (which I will detail later). Yet despite… Read More

In the fall of 2016, I warned readers of my premium advisory, Profit Amplifier, of continued weakness in China and the subsequent fallout in its fragile stock market. The Chinese market is ruled by twitchy individual investors. By late December, the iShares China Large-Cap ETF (NYSE: FXI) had fallen 12% to a key retracement level around $34. But the New Year has brought buyers back into the Asian markets and back to FXI. Shares have rallied nearly 8% from their recent lows, likely due to a massive short squeeze (which I will detail later). Yet despite the apparent bullishness, there have been no fundamental improvements. In fact, I’m seeing quite the opposite. China is a conundrum because deception reigns supreme. This is a country where a major construction company that defaulted on its bonds has delayed releasing its earnings for more than two years. It would be like Enron “hiding” its balance sheet manipulation for 26 months while it continued to scam the public. —Recommended Link— Big Kahuna Profits In Energy Storage Tesla CEO Elon Musk is building a large battery farm in Hawaii to store energy from island sunshine. It’s just his latest move… Read More

When cell phones became popular in 1981, they were as big as bricks and felt twice as heavy. The only thing you could do with one was make a call — and sometimes not even that would work. #-ad_banner-#The second generation of phones allowed voice and data connections in 1992 while 3G and 4G brought advancements in speed and the ability to view videos. They’re not even called cell phones anymore. They’ve evolved into ‘smart phones’. With each evolutionary step, they ‘ve become more ubiquitous in our daily lives. Now, the next stage in mobile technology is upon us. And… Read More

When cell phones became popular in 1981, they were as big as bricks and felt twice as heavy. The only thing you could do with one was make a call — and sometimes not even that would work. #-ad_banner-#The second generation of phones allowed voice and data connections in 1992 while 3G and 4G brought advancements in speed and the ability to view videos. They’re not even called cell phones anymore. They’ve evolved into ‘smart phones’. With each evolutionary step, they ‘ve become more ubiquitous in our daily lives. Now, the next stage in mobile technology is upon us. And it might not be merely evolutionary but revolutionary. 5G technology could bring the capabilities for which consumers have been waiting for more than a decade. The speed available could allow consumers to take their computing completely mobile. The next wave in mobile tech could refresh the buying cycle, from manufacturers to carriers and consumers, and a few leaders are already positioning for an advantage. Internet Speeds Up To 200-Times Faster Could Create A Tectonic Shift 5G could finally mean the death of the desktop. Mobile is already over half of search and 5G could bring speeds comparable with desktop… Read More

As an analyst who spends every day looking at numbers, I have a tendency to try and quantify everything. We humans, as a species, tend to do this all the time. For the most part, it serves us well. But it can also sometimes be a trap, diminishing the value… Read More