Most investors have been trained to think that earning 6% or 8% a year on their trades is admirable. And the old saying is true: No one ever went broke taking a profit. But that doesn’t mean they got rich that way. You can bet Wall Street traders don’t settle for such meager returns, and your average trader doesn’t have to either. The same methods used by Wall Street’s elite are available to average traders. It’s just that they often don’t know about them or are too scared to try them. #-ad_banner-# For instance, there is a way to potentially… Read More

Most investors have been trained to think that earning 6% or 8% a year on their trades is admirable. And the old saying is true: No one ever went broke taking a profit. But that doesn’t mean they got rich that way. You can bet Wall Street traders don’t settle for such meager returns, and your average trader doesn’t have to either. The same methods used by Wall Street’s elite are available to average traders. It’s just that they often don’t know about them or are too scared to try them. #-ad_banner-# For instance, there is a way to potentially amplify those 6% to 8% gains into 30%, 50%, even 65% windfalls or more in a matter of months, weeks or even days. And I’m not talking about buying micro-cap stocks that no one has ever heard of. You can make these returns from some of America’s biggest and most well-known companies.  Wall Street’s ‘Backdoor’ Trading Method Some of the most famous and richest investors in history (including Warren Buffett) use a backdoor trading method to amass much of their wealth. I say “backdoor” because, while it’s certainly not a secret, you won’t hear it talked about by 99% of… Read More

Back in 1991, rapper LL Cool J released his single, “Mama Said Knock You Out,” which famously begins with this line: “Don’t call it a comeback/I’ve been here for years.” The story goes that many critics thought LL’s career was on the decline when his grandmother told him to “knock out” all the naysayers. The single became a number-one hit. #-ad_banner-#Well, something similar could be said about OPEC’s surge back to the top of the production line. Saudi Arabia has reclaimed its spot as the top oil producer, besting the United States with 12.58 million barrels of oil a day… Read More

Back in 1991, rapper LL Cool J released his single, “Mama Said Knock You Out,” which famously begins with this line: “Don’t call it a comeback/I’ve been here for years.” The story goes that many critics thought LL’s career was on the decline when his grandmother told him to “knock out” all the naysayers. The single became a number-one hit. #-ad_banner-#Well, something similar could be said about OPEC’s surge back to the top of the production line. Saudi Arabia has reclaimed its spot as the top oil producer, besting the United States with 12.58 million barrels of oil a day in August, versus 12.2 million produced in the United States. The International Energy Agency (IEA) reported that Saudi Arabia added 400,000 barrels a day of production last month. At the same time, the United States took 460,000 barrels a day out of its production. This shift is exactly what Saudi Arabia and OPEC were hoping for. It’s been keeping the taps on its competitors and driving down oil prices in order to price out high-cost shale oil production in the United States. It worked. Investment in shale oil has fallen 66% since 2014, according to Rystad Energy and Bloomberg. And… Read More

Last week’s hawkish chatter from the Federal Reserve put the kibosh on the market’s advance. And although more soothing rhetoric doled out Monday sparked a rebound, the market could not sustain it, and stocks fell on Tuesday. What was once a calm, serene market has turned stormy, and one of the hardest hit sectors, at least from a technical perspective, is the homebuilders. #-ad_banner-# It’s easy for bears to look at the year’s biggest winners and think that’s where the easy money is in a market correction. However,… Read More

Last week’s hawkish chatter from the Federal Reserve put the kibosh on the market’s advance. And although more soothing rhetoric doled out Monday sparked a rebound, the market could not sustain it, and stocks fell on Tuesday. What was once a calm, serene market has turned stormy, and one of the hardest hit sectors, at least from a technical perspective, is the homebuilders. #-ad_banner-# It’s easy for bears to look at the year’s biggest winners and think that’s where the easy money is in a market correction. However, it’s rarely a good idea to bet against winning stocks such as Facebook (NASDAQ: FB), as they tend to remain in strong rising trends. It’s far better to look for sectors and individual stocks that have not fared as well. Within the homebuilding group, I like Lennar (NYSE: LEN) for a bearish play, as the charts show the stock is poised for a double-digit drop. Lennar has been floundering since March, and unlike the broader market S&P 500, it never eclipsed its 2015 highs. As you can see in the chart below, the trading range formed over the past few… Read More

The beaches were closed here in the New York City area this past Labor Day weekend as the slow-moving and dangerous tropical storm Hermine approached the area. People were told to expect stormy conditions, strong winds and rain, and to prepare for flash floods.  After the devastation of Superstorm Sandy nearly four years ago, nobody wanted to take any chances. Fortunately, this time, the storm took a slightly different path than was predicted, and its effects on the city were more or less contained to the beaches.  So even though the sun was shining and the winds were calm, there… Read More

The beaches were closed here in the New York City area this past Labor Day weekend as the slow-moving and dangerous tropical storm Hermine approached the area. People were told to expect stormy conditions, strong winds and rain, and to prepare for flash floods.  After the devastation of Superstorm Sandy nearly four years ago, nobody wanted to take any chances. Fortunately, this time, the storm took a slightly different path than was predicted, and its effects on the city were more or less contained to the beaches.  So even though the sun was shining and the winds were calm, there weren’t many complaints about the extra steps that officials took in response to the National Weather Service’s (NWC) warnings. It’s still prudent to be prepared for all eventualities rather than ignore the clear signs of an impending danger — even if it might not materialize.  These days, it feels like it’s the Federal Reserve that serves as some kind of National Weather Service for the stock market. The Fed does not know if there will be a storm — but what Fed governors do know is that the market conditions might be changing, and they keep telling us as much. … Read More

In late 2015, before the first interest rate hike in ten years, Goldman Sachs (NYSE: GS) released a note to investors about financial companies that stood to benefit from a lift in interest rates. The company namechecked Ramond James (NYSE: RJF), Bank of New York Mellon (NYSE: BK), Northern Trust (Nasdaq: NTRS) and Bank of America (NYSE: BAC) in particular, as potential winners in the event that the Federal Reserve raised rates by 50 basis points… a bit of an outlier, but an interesting hypothesis nonetheless. Goldman said that these companies would benefit from a 50 basis-point hike because they… Read More

In late 2015, before the first interest rate hike in ten years, Goldman Sachs (NYSE: GS) released a note to investors about financial companies that stood to benefit from a lift in interest rates. The company namechecked Ramond James (NYSE: RJF), Bank of New York Mellon (NYSE: BK), Northern Trust (Nasdaq: NTRS) and Bank of America (NYSE: BAC) in particular, as potential winners in the event that the Federal Reserve raised rates by 50 basis points… a bit of an outlier, but an interesting hypothesis nonetheless. Goldman said that these companies would benefit from a 50 basis-point hike because they would “get most of the earnings upside from rates in the initial hikes rather than relying on normalized rates.” But did they? Not according to their share price movements. These four companies have been flat to down during the past nine months since the hike… Historical data doesn’t back up Goldman, either. From Fortune, on December 16, 2015, the day of the rate hike: Banks often get pointed at as potential buys when interest rates rise. And share of the biggest banks have been rising lately. That’s because they can benefit from higher interest rates as long… Read More

Yesterday, I told you about a select group of stocks we’ve come to refer to around the StreetAuthority office as “Forever Stocks.”  For those of you aren’t familiar, these are the companies that have rewarded shareholders for generations. They outlast (and in some cases outperform) during even the worst economic and market conditions. That’s because not only do these companies often sport durable brand names and impenetrable economic moats, but they have strong competitive advantages that help them consistently outperform the market for decades. — Recommended Link — 10 Top ‘Buys’ With Political Backing What better way to get on the… Read More

Yesterday, I told you about a select group of stocks we’ve come to refer to around the StreetAuthority office as “Forever Stocks.”  For those of you aren’t familiar, these are the companies that have rewarded shareholders for generations. They outlast (and in some cases outperform) during even the worst economic and market conditions. That’s because not only do these companies often sport durable brand names and impenetrable economic moats, but they have strong competitive advantages that help them consistently outperform the market for decades. — Recommended Link — 10 Top ‘Buys’ With Political Backing What better way to get on the “millionaire track” than investing in companies owned by millionaires who also happen to write the law? In this special presentation, you’ll get the names and tickers of several of congress’ favorite stocks. Details here. In my previous essay, I went into further detail about Forever Stocks and even gave away the name and ticker symbol of one company you could consider holding “forever.” (To read that issue, go here.) #-ad_banner-# I also mentioned that my colleague Jimmy Butts recently identified seven of his absolute favorite Forever Stocks his latest report. And while I won’t give those names away out of… Read More

Ok. I was a little early with my call on rising bond yields. In fact, they actually went down a little after I wrote that article. However, last week, bonds saw a healthy sell off which, naturally, bumped interest rates up. The blame fell on hawkish comments from a Fed official concerned about an economy that could overheat due to stubbornly low interest rates. Maybe someone should remind him that they’ve already gone up in the past year. When the Federal Reserve raised their target Fed funds rates (the interest rate they charge member banks) towards the end of… Read More

Ok. I was a little early with my call on rising bond yields. In fact, they actually went down a little after I wrote that article. However, last week, bonds saw a healthy sell off which, naturally, bumped interest rates up. The blame fell on hawkish comments from a Fed official concerned about an economy that could overheat due to stubbornly low interest rates. Maybe someone should remind him that they’ve already gone up in the past year. When the Federal Reserve raised their target Fed funds rates (the interest rate they charge member banks) towards the end of last year, they literally more than doubled interest rates. And with Fed Funds being right at 40 basis points, the Fed is within striking distance of its current target for the Fed Funds rate of 50 basis points. Stock markets reacted negatively to the change, and stayed depressed until spring of this year. But bond yields stayed stubbornly low. That may be changing. Since bottoming in July, the yield on the 10-year treasury has risen 22%. The longer end of the treasury yields has also gone up. #-ad_banner-#On average, long rates are up 17%; a significant number. With… Read More

What do Coca-Cola (NYSE: KO), Campbell’s Soup (NYSE: CPB) and Deere & Co. (NYSE: DE) all have in common? In short, they’ve all survived some of the biggest economic catastrophes the world has ever seen. While thousands of business have come and gone since the early 1900s, these companies have managed to prosper through more than a century of political and economic turbulence. So what’s allowed these companies to continually generate wealth for shareholders despite two world wars, the Great Depression, and countless bull markets and recessions? It’s simple: They all belong to a select group of investments that we… Read More

What do Coca-Cola (NYSE: KO), Campbell’s Soup (NYSE: CPB) and Deere & Co. (NYSE: DE) all have in common? In short, they’ve all survived some of the biggest economic catastrophes the world has ever seen. While thousands of business have come and gone since the early 1900s, these companies have managed to prosper through more than a century of political and economic turbulence. So what’s allowed these companies to continually generate wealth for shareholders despite two world wars, the Great Depression, and countless bull markets and recessions? It’s simple: They all belong to a select group of investments that we like to call Forever Stocks. — Sponsored Link — Grab Fast 290% Profit With ORRP The lithium industry just tripled in value as demand is reaching epic proportions. As the world races to buy as much as possible, early shareholders in ORRP could be the biggest benefactors. Read this report before your chance at 290% profits is gone. For those of you aren’t familiar, Forever Stocks is a distinction we’ve come up with at StreetAuthority for companies that have rewarded shareholders for generations. Not only do these companies often sport durable brand… Read More

After two months of sideways market action, during which I’ve been warning of a stock market correction, the dam finally broke on Friday. The decline was led by the small-cap Russell 2000, which lost 2.6% for the week. But the move was broad-based, as all major indices finished more than 2% lower last week. #-ad_banner-# Depending on what you read, Friday’s sell-off was either triggered by institutional bond investor Jeffrey Gundlach of DoubleLine Capital’s talk of surprise tightening by the Federal Reserve or… Read More

After two months of sideways market action, during which I’ve been warning of a stock market correction, the dam finally broke on Friday. The decline was led by the small-cap Russell 2000, which lost 2.6% for the week. But the move was broad-based, as all major indices finished more than 2% lower last week. #-ad_banner-# Depending on what you read, Friday’s sell-off was either triggered by institutional bond investor Jeffrey Gundlach of DoubleLine Capital’s talk of surprise tightening by the Federal Reserve or Boston Fed President Eric Rosengren stating that it has become increasingly risky to delay an interest rate hike. In my opinion, though, Friday’s collapse was the result of two months of extreme investor complacency, as evidenced by a historically low Volatility S&P 500 (VIX) index (which I began talking about in the July 18 Market Outlook), rather than any particular statement by an influential market voice. In other words, the market has been vulnerable to a scare for months, and last week’s remarks by Gundlach and Rosengren were just the trigger to a gun that was… Read More

With more than a third of the global sovereign bonds market offering negative yields, it’s no surprise that investors have flocked to any source for cash yield.  The global hunt for yield has pushed prices up and rates down for everything from bonds to dividend stocks. You see it in the yield on the 10-year Treasury, which has fallen 1.26% over the last three years despite the fact that the Fed is aggressively trying to prepare investors for an increase in the Fed Funds Rate. You also see it in valuations for traditional dividend-paying sectors.  #-ad_banner-#Traditional dividend picks in consumer… Read More

With more than a third of the global sovereign bonds market offering negative yields, it’s no surprise that investors have flocked to any source for cash yield.  The global hunt for yield has pushed prices up and rates down for everything from bonds to dividend stocks. You see it in the yield on the 10-year Treasury, which has fallen 1.26% over the last three years despite the fact that the Fed is aggressively trying to prepare investors for an increase in the Fed Funds Rate. You also see it in valuations for traditional dividend-paying sectors.  #-ad_banner-#Traditional dividend picks in consumer staples and utilities are trading well above historic valuation multiples, creating a bubble that is destroying conventional views on safety sectors. The consumer staples sector is trading for almost 21-times expected earnings over the next year, a premium of 25% over its 10-year average, while utilities are trading 22% over their average at 17.8-times forward earnings. Those safety sectors offered no shelter in Friday’s 2.45% selloff in the S&P 500. Utilities fell more than any other sector with a 3.75% plunge on rate fears, and consumer staples underperformed the market with a 2.71% loss on the day.  In fact, the… Read More