Quick, what’s 0.19% of $3.6 trillion? I’ll give you a hint: that’s how much, on average, passively “managed” mutual fund giant Vanguard Group collects in management fees annually. Since Vanguard is not a publicly traded entity, the actual revenue numbers are held pretty close to the vest. But the math comes out to be $6.8 billion in fees based on the average Vanguard fund expense ratio of 0.19%. #-ad_banner-#So, while the fund company prides itself on being shareholder owned, and pounds the table on passing value to the investor, make no mistake, Vanguard is a business and a profitable one… Read More

Quick, what’s 0.19% of $3.6 trillion? I’ll give you a hint: that’s how much, on average, passively “managed” mutual fund giant Vanguard Group collects in management fees annually. Since Vanguard is not a publicly traded entity, the actual revenue numbers are held pretty close to the vest. But the math comes out to be $6.8 billion in fees based on the average Vanguard fund expense ratio of 0.19%. #-ad_banner-#So, while the fund company prides itself on being shareholder owned, and pounds the table on passing value to the investor, make no mistake, Vanguard is a business and a profitable one at that. And while Vanguard founder John Bogle is nowhere close to being a Wall Street fat cat, his tenure at the company made him an incredibly wealthy man by most standards.  The other day while driving in to work, I listened to an interview with Mr. Bogle on Bloomberg radio, as always, trumpeting his case for cheap, passive index investing. He complained, like most of us, of the low-rate, low-growth environment. He said that the stock market is overvalued with a forward P/E of 20-plus (most estimates put it closer to 18), dividend yields barely around 2%, and U.S. Read More

It’s like a report card for the economy. Late last month, the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department released the latest information on our country’s gross domestic product (GDP) growth for the three months ended in September.  #-ad_banner-#As with all economic report cards, investors await this report eagerly and read it closely, looking for clues about the nation’s economic health. Of course, the main idea is to give us a sense of how fast the economy can grow and whether it’s been doing better or worse than in previous quarters and years. But investors also look… Read More

It’s like a report card for the economy. Late last month, the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department released the latest information on our country’s gross domestic product (GDP) growth for the three months ended in September.  #-ad_banner-#As with all economic report cards, investors await this report eagerly and read it closely, looking for clues about the nation’s economic health. Of course, the main idea is to give us a sense of how fast the economy can grow and whether it’s been doing better or worse than in previous quarters and years. But investors also look for details on where the growth comes from and how well the U.S. economy is positioned to continue economic progress.  The GDP report also provides hints about overall economic and industry trends. But perhaps the biggest question on investors’ minds these days is whether — and when — the Federal Reserve will raise interest rates.  While third-quarter GDP increased at an annualized rate of 2.9% (which was much better than the 2.5% that most economists had expected), much of the growth stemmed from one-time factors.  For instance, a build-up in inventories accounted for 60 basis points of that growth. On… Read More

One of the hottest trends over the last few years has been the shift in electronics and tech to what is called the Internet of Things (IoT).  The IoT is a convergence of electronics and internet connectivity, in which virtually every electronic device and household appliance can be controlled through a single internet connection. It’s the next evolution of connectivity and has the potential to rival the importance of smartphones, tablets, and even home computers. #-ad_banner-#Research firm IDC estimates the market for IoT products could triple to $1.7 trillion in 2020 from just $655 billion in 2014. Another firm, Smart… Read More

One of the hottest trends over the last few years has been the shift in electronics and tech to what is called the Internet of Things (IoT).  The IoT is a convergence of electronics and internet connectivity, in which virtually every electronic device and household appliance can be controlled through a single internet connection. It’s the next evolution of connectivity and has the potential to rival the importance of smartphones, tablets, and even home computers. #-ad_banner-#Research firm IDC estimates the market for IoT products could triple to $1.7 trillion in 2020 from just $655 billion in 2014. Another firm, Smart America Challenge, estimates that cities around the world will invest as much as $41 trillion over the next 20 years to integrate IoT infrastructure into city planning. Most IoT investing has targeted the connected products themselves like wearables, connected-home devices and hardware — but success depends on finding the needle within a haystack of companies that could produce the next hot consumer gadget. There’s one common theme that connects all IoT products — a theme that could mean a boom in earnings for one industry. Investing in the best-of-breed within this industry could allow you to benefit from the IoT… Read More

The inherent volatility of biotech shares makes biotech investing among the most lucrative ways to invest in the stock market. At the same time, that volatility also makes it one of the most dangerous. Often, biotech stocks are powered by sector- and stock-specific factors unrelated to the overall economy. Price drivers like FDA approvals, drug sales, product announcements, test results, and even government regulations are the catalysts behind biotech share prices.  #-ad_banner-#However, this volatility serves me well, because I love buying weakness in the stock market.  Not just any weakness, but a weakness that is tied to a short-term situation… Read More

The inherent volatility of biotech shares makes biotech investing among the most lucrative ways to invest in the stock market. At the same time, that volatility also makes it one of the most dangerous. Often, biotech stocks are powered by sector- and stock-specific factors unrelated to the overall economy. Price drivers like FDA approvals, drug sales, product announcements, test results, and even government regulations are the catalysts behind biotech share prices.  #-ad_banner-#However, this volatility serves me well, because I love buying weakness in the stock market.  Not just any weakness, but a weakness that is tied to a short-term situation rather than an inherent flaw in the company.  When a short-term negative situation is combined with the inherent volatility of a biotech company on the cutting edge of its market, I see an opportunity… Ophthotech (Nasdaq: OPHT) fits the above description to a tee. Let’s take a closer look. Ophthotech describes itself as a biopharmaceutical company focusing on the development of novel therapeutics to manage diseases of the rear of the eye. They specialize in developing creative therapies for age-related macular degeneration (AMD).  The company’s most promising product candidate, Fovista anti-platelet-derived growth factor (anti-PDGF) therapy, is in Phase 3 clinical… Read More

Mergers and acquisitions are significant price driving forces in the stock market. Purchasing shares in a company before it is acquired is a time-tested way to earn huge returns. Should a bidding war erupt over the enterprise, that’s even better for the investors! Locating a potential acquisition target already leading its industry and riding a major technological trend places the odds of a winning investment solidly in your court. #-ad_banner-#Sounds easy to accomplish, right? Nothing could be further from the truth. The most efficient way to locate likely acquisition candidates is to wait for a rumor to surface.  To be… Read More

Mergers and acquisitions are significant price driving forces in the stock market. Purchasing shares in a company before it is acquired is a time-tested way to earn huge returns. Should a bidding war erupt over the enterprise, that’s even better for the investors! Locating a potential acquisition target already leading its industry and riding a major technological trend places the odds of a winning investment solidly in your court. #-ad_banner-#Sounds easy to accomplish, right? Nothing could be further from the truth. The most efficient way to locate likely acquisition candidates is to wait for a rumor to surface.  To be clear, I am not advocating investing in every acquisition rumor, but rather that you should use rumors as a first step in identifying potential investments.  In most cases, the rumor itself is enough to push share prices sharply higher. Astute investors make certain that the target company is a strong investment, even if the acquisition never takes place. In other words, the company should have much more going for it than an iffy buyout.  I have identified a cutting edge, trend-leading company that has acquisition rumors swirling, yet would make a solid investment even without them.  The company is InvenSense… Read More

2016 is on pace to be another record year for gun sales in the United States. According to a recent report released by the FBI, gun sales hit a 17th consecutive monthly record in October, up 27% from the same period last year. #-ad_banner-#This spike in demand is being driven by two powerful forces. The first is crime. Although the national crime rate remains near 20-year lows, crime rates in major cities have spiked. For example, Chicago recently recorded its 600th murder in 2016, a number already 100% higher than that rate in 2015. Demand for guns is also being… Read More

2016 is on pace to be another record year for gun sales in the United States. According to a recent report released by the FBI, gun sales hit a 17th consecutive monthly record in October, up 27% from the same period last year. #-ad_banner-#This spike in demand is being driven by two powerful forces. The first is crime. Although the national crime rate remains near 20-year lows, crime rates in major cities have spiked. For example, Chicago recently recorded its 600th murder in 2016, a number already 100% higher than that rate in 2015. Demand for guns is also being driven by politics. Gun owners and potential buyers worry about stricter gun laws. This is pulling demand forward and prompting consumers to purchase firearms sooner rather than later. Looking forward, I don’t expect either of these forces to fade away quickly — in fact, I am expecting gun sales to hit another monthly record in December and close the year at an all-time high. That’s why it’s a great time to take a fresh look at one of the most undervalued growth stocks in the S&P 500. This global leader’s share price is up more than 145% in the last… Read More

It’s nearly over… With Election Day finally upon us, the rumblings from both sides regarding the “doomsday” scenario that will fall upon our economy should their opponent get elected continue to grow louder. But here’s the thing… both sides are probably right. Do I think we’re going fall into a recession in the future? Yes, absolutely. It’s part of the economic cycle. Now I know this sort of talk might anger folks, especially those who like to point fingers and give blame to the opposing party. But the truth is that the market doesn’t really care who you vote for. Read More

It’s nearly over… With Election Day finally upon us, the rumblings from both sides regarding the “doomsday” scenario that will fall upon our economy should their opponent get elected continue to grow louder. But here’s the thing… both sides are probably right. Do I think we’re going fall into a recession in the future? Yes, absolutely. It’s part of the economic cycle. Now I know this sort of talk might anger folks, especially those who like to point fingers and give blame to the opposing party. But the truth is that the market doesn’t really care who you vote for. —Recommended Link— The Best Place To Put Your Money In 2017 Since 1926, one collection of stocks has accounted for HALF of the S&P’s return — through every market environment imaginable. If you don’t have this group in your own portfolio, you could be missing out on the single best place to put your money this year and next. Get the details here… It’s true that the market has been more volatile than usual in the weeks leading up to today. The CBOE Volatility Index was at the top of its longest streak of gains since 2013 at the… Read More