Do we or do we not have a stock market bubble in the United States today?  Looking back on the last fifteen years, almost all investors are familiar with how painful the popping of a stock bubble can be.  We have learned that we can’t ignore the overall valuation of the market if we want to avoid being part of the carnage. In 2000 investors saw the dot-com bubble pop, which led to huge losses for holders of internet and technology-focused companies. In 2008 there was no sector left unscathed by the financial crisis that caused the worst selloff since… Read More

Do we or do we not have a stock market bubble in the United States today?  Looking back on the last fifteen years, almost all investors are familiar with how painful the popping of a stock bubble can be.  We have learned that we can’t ignore the overall valuation of the market if we want to avoid being part of the carnage. In 2000 investors saw the dot-com bubble pop, which led to huge losses for holders of internet and technology-focused companies. In 2008 there was no sector left unscathed by the financial crisis that caused the worst selloff since the 1930s. #-ad_banner-#Today, one renowned investor is ringing the alarm bells — warning of a significantly overvalued stock market. According to market strategist John Hussman, the only points in U.S. stock market history that match today’s level of overbought and overvalued assets are 1929, 1972, 1987, 2000 and 2007. As you are likely well aware, each of those points in time were followed closely by a stock market collapse. Personally, I’m not sure that we are in a stock market bubble, but I can tell you one thing for sure. When the trailing five-year chart for the S&P… Read More

It’s official: Chinese e-commerce juggernaut Alibaba (NYSE: BABA) goes down as the biggest U.S. IPO in history. Shares were listed at $68 on Friday. By the close, they had soared 38% to $93.89, giving Alibaba a market cap that is bigger than rivals Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY) combined. #-ad_banner-#Alibaba also handled more in transactions in 2013 than Amazon and eBay combined, booking $248 billion. Controlling 80% of China’s e-commerce market, it is clearly a force to be reckoned with. The excitement on Wall Street is palpable and has… Read More

It’s official: Chinese e-commerce juggernaut Alibaba (NYSE: BABA) goes down as the biggest U.S. IPO in history. Shares were listed at $68 on Friday. By the close, they had soared 38% to $93.89, giving Alibaba a market cap that is bigger than rivals Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY) combined. #-ad_banner-#Alibaba also handled more in transactions in 2013 than Amazon and eBay combined, booking $248 billion. Controlling 80% of China’s e-commerce market, it is clearly a force to be reckoned with. The excitement on Wall Street is palpable and has everyone looking for the best way to profit. Buying shares of BABA may be appealing to some, but current valuations are rich and the company is still influenced by a communist government. I prefer to look for companies that will benefit directly from Alibaba’s growth and the e-commerce trend in general. Two names that will see continued windfalls from the societal shift toward e-commerce are package delivery companies UPS (NYSE: UPS) and FedEx (NYSE: FDX). Of the two, one stands out in growth, valuation and penetration in China. But the Street doesn’t seem to… Read More

If you’re a fan of the heavyweight boxers of the 1970s, then you know all about “The Fight.” That was the epic first battle between all-time greats Muhammad Ali and Joe Frazier, which Frazier won by unanimous decision in 15 rounds on March 8, 1971. Ali’s ringside physician, Dr. Ferdie Pacheco, has called it the greatest fight Ali ever lost. #-ad_banner-#​Well, today, more than 40 years later, there’s a highly touted new growth stock that’s sort of like that. It might be called the greatest growth stock nobody should own. And… Read More

If you’re a fan of the heavyweight boxers of the 1970s, then you know all about “The Fight.” That was the epic first battle between all-time greats Muhammad Ali and Joe Frazier, which Frazier won by unanimous decision in 15 rounds on March 8, 1971. Ali’s ringside physician, Dr. Ferdie Pacheco, has called it the greatest fight Ali ever lost. #-ad_banner-#​Well, today, more than 40 years later, there’s a highly touted new growth stock that’s sort of like that. It might be called the greatest growth stock nobody should own. And it has been impressive, more than doubling already in the six weeks or so since its initial public offering (IPO) on August 1. The IPO raised nearly $900 million, making it the largest ever by an Israeli company. But despite all the hype, analysts at Deutsche Bank recently showed some sense and downgraded the stock from “buy” to “hold” in the wake of its massive gains. Frankly, though, Deutsche Bank would have better served investors by recommending they sell Mobileye N.V. (NYSE: MBLY), which makes advanced driver assistance systems for the auto… Read More

Let me start today’s essay with a prediction. I predict that over the next few years, many of those who invest in traditional stocks will struggle through an era I call “the death of high dividend yields.” Don’t get me wrong though, as I’ll show you today, there are ways you can still earn annual dividend yields of 8% or even 10%. But you have to be willing to look off the beaten path. I probably don’t have to remind you that it’s difficult to find stocks with even moderate dividend yields… Read More

Let me start today’s essay with a prediction. I predict that over the next few years, many of those who invest in traditional stocks will struggle through an era I call “the death of high dividend yields.” Don’t get me wrong though, as I’ll show you today, there are ways you can still earn annual dividend yields of 8% or even 10%. But you have to be willing to look off the beaten path. I probably don’t have to remind you that it’s difficult to find stocks with even moderate dividend yields in today’s market. As our resident income expert, Nathan Slaughter, noted in a recent issue of Dividend Opportunities: “High-quality stocks with yields [of 4% or higher] are extremely rare [right now]… Here’s how the distribution of yields among S&P 500 stocks currently looks: Dividend Yield Number of Stocks % of Index Above 6% 3 0.6% 4% to 6% 31 6.2% 3% to 4% 61 12.2% 2% to 3% 119 23.8% Less than 2% 286 57.2% Source: Bloomberg As you can see, dividends of 7% to 8% don’t exactly grow… Read More

If you followed the recent presidential debates, you may have heard presidential candidate, Mitt Romney, attack the luxury electric car maker, Tesla Motors (NASDAQ: TSLA), calling the company a “loser.” #-ad_banner-#On the heels of President Barack Obama’s re-election, the comment seems ironic. Not only did Tesla recently report upbeat third-quarter results, but its flagship Model S luxury sports sedan just won a prestigious industry award. It was named “Automobile of the Year” by Automobile Magazine.#-ad_banner-# With President Obama’s clean energy policy plans, the electric vehicle company should continue to shine. Obama wants to see at least 1 million hybrid and… Read More

If you followed the recent presidential debates, you may have heard presidential candidate, Mitt Romney, attack the luxury electric car maker, Tesla Motors (NASDAQ: TSLA), calling the company a “loser.” #-ad_banner-#On the heels of President Barack Obama’s re-election, the comment seems ironic. Not only did Tesla recently report upbeat third-quarter results, but its flagship Model S luxury sports sedan just won a prestigious industry award. It was named “Automobile of the Year” by Automobile Magazine.#-ad_banner-# With President Obama’s clean energy policy plans, the electric vehicle company should continue to shine. Obama wants to see at least 1 million hybrid and electric vehicles on the road by 2015. And Tesla is working hard to help make this goal a reality. The car company is currently producing more than 200 cars a week, or more than 10,000 cars a year. This production level is the critical threshold needed to generate positive operating cash flow, according to management. Resolving important production issues, the company now plans to further ramp up production to 400 cars per week by December 2013. In addition, Tesla plans to install “fast-charging stations” on all major routes throughout the United States… Read More

Stocks were mostly lower last week but rose Friday, Nov. 16, when U.S. political leaders expressed optimism that a deal to avert the fiscal cliff is possible. Trend may be determined by answer to ‘What If…?’ What if the tax increases and spending cuts associated with the fiscal cliff are allowed to take place? Stocks fell last week as traders pondered this possibility. What if Congress and the president can reach a deal and avoid the cliff? We saw stock prices move higher when this scenario became a possibility in the minds of traders. The long-term trend in stocks may… Read More

Stocks were mostly lower last week but rose Friday, Nov. 16, when U.S. political leaders expressed optimism that a deal to avert the fiscal cliff is possible. Trend may be determined by answer to ‘What If…?’ What if the tax increases and spending cuts associated with the fiscal cliff are allowed to take place? Stocks fell last week as traders pondered this possibility. What if Congress and the president can reach a deal and avoid the cliff? We saw stock prices move higher when this scenario became a possibility in the minds of traders. The long-term trend in stocks may be revealed when one of these two questions is answered definitively.   Despite a 0.49% gain on Nov. 16, SPDR S&P 500 (NYSE: SPY) was down 1.3% for the week. PowerShares QQQ (NASDAQ: QQQ), an exchange-traded fund (ETF) that tracks the 100 largest Nasdaq stocks, fell 1.78% last week and is now down more than 5% in the past four weeks.   ProShares UltraShort QQQ (NYSE: QID), an ETF that goes up when the Nasdaq 100 goes down, was up 3.5% last week and is up 13.52%… Read More

At least once a day, I am asked what I think about the future of Apple (Nasdaq: AAPL) shares. Most of the time I decline to go into a detailed answer, as there are many folks out there who follow the shares a lot closer than I do. But when you follow stocks and the markets for a living, you simply cannot avoid having an opinion on the personal technology giant that’s been the most dominant single stock for the past couple of years.#-ad_banner-# Now, there’s been a whole lot of… Read More

At least once a day, I am asked what I think about the future of Apple (Nasdaq: AAPL) shares. Most of the time I decline to go into a detailed answer, as there are many folks out there who follow the shares a lot closer than I do. But when you follow stocks and the markets for a living, you simply cannot avoid having an opinion on the personal technology giant that’s been the most dominant single stock for the past couple of years.#-ad_banner-# Now, there’s been a whole lot of action in Apple shares during the past couple of months, and for cultish bulls of the stock, that action has been quite painful. Since reaching an all-time high of over $702 midway through September, shares of the mighty Apple have plummeted. In fact, from that September high through the mid-November low of $522.62, Apple fell more than 25%, putting it decisively in bear market territory. Since those November lows, traders have been returning to the stock, and shares have come back with a vengeance, surging nearly 13% in just the past seven trading… Read More

The “fiscal cliff” has dominated the trading landscape ever since Election Day, and that issue‘s primacy has continued throughout this week’s trading. On Monday, Dec. 17, stocks surged on news that Republican House Speaker John Boehner has softened his stance on taxing the most successful and wealthiest Americans. Reportedly, Rep. Boehner is willing to raise tax rates on individuals making more than a $1 million a year, in exchange for some concessions by President Obama on spending cuts.#-ad_banner-# Now, a lot of political pundits have… Read More

The “fiscal cliff” has dominated the trading landscape ever since Election Day, and that issue‘s primacy has continued throughout this week’s trading. On Monday, Dec. 17, stocks surged on news that Republican House Speaker John Boehner has softened his stance on taxing the most successful and wealthiest Americans. Reportedly, Rep. Boehner is willing to raise tax rates on individuals making more than a $1 million a year, in exchange for some concessions by President Obama on spending cuts.#-ad_banner-# Now, a lot of political pundits have read Boehner’s move as the first of many concessions he’s willing to make to get a deal done that avoids the automatic kicking in of spending cuts and tax increases adding up to about a $600 billion bite out of 2013 GDP. I suspect that a deal is going to get done soon, and that deal will likely be a political win for the president. Of course, Wall Street wants a deal, because the newfound certainty on this… Read More

Occasionally, I sort stocks by price-to-earnings (P/E) ratios looking for trading opportunities. This idea is well-known to value investors who often start their investment selection process with low P/E stocks.#-ad_banner-# I think it can be useful to flip that idea around and look at the stocks with the highest P/E ratios. Sometimes that list will include rapidly growing companies that are shaping consumer and industrial markets. Lists of high P/E stocks will also almost always include… Read More

Occasionally, I sort stocks by price-to-earnings (P/E) ratios looking for trading opportunities. This idea is well-known to value investors who often start their investment selection process with low P/E stocks.#-ad_banner-# I think it can be useful to flip that idea around and look at the stocks with the highest P/E ratios. Sometimes that list will include rapidly growing companies that are shaping consumer and industrial markets. Lists of high P/E stocks will also almost always include stocks that make great short candidates or offer trading ideas based on put options. There are at least 10 stocks with a market cap of more than $400 million and a triple-digit P/E ratio based on earnings from the past 12 months and forecasted earnings for the next 12 months. One of these seems to be an especially appealing trading candidate, Wright Medical Group (Nasdaq: WMGI). Wright makes medical devices used in ankle, knee… Read More

It’s hard to be a consumer these days. We want to buy the best brands, but we don’t want to support companies that waste natural resources or pollute the Earth. We want to find the lowest priced options, but we don’t want to back companies that pay pennies on the dollar to outsourced workers in impoverished countries. #-ad_banner-#​More than ever, buyers are focusing on the social responsibility of companies — and this trend towards guilt-free consumption is changing how consumers view their purchasing habits. From donating shares of corporate profits and promoting sustainable products to offering… Read More

It’s hard to be a consumer these days. We want to buy the best brands, but we don’t want to support companies that waste natural resources or pollute the Earth. We want to find the lowest priced options, but we don’t want to back companies that pay pennies on the dollar to outsourced workers in impoverished countries. #-ad_banner-#​More than ever, buyers are focusing on the social responsibility of companies — and this trend towards guilt-free consumption is changing how consumers view their purchasing habits. From donating shares of corporate profits and promoting sustainable products to offering equal employment rights to people of all genders, ethnicities and sexual orientations, the correlation between strong earnings and corporate social responsibility has never been higher. For like minded investors, an obvious play might be to invest in individual companies, but that approach may open your portfolio to unnecessary risk. Take Tesla Motors, Inc. (Nasdaq: TSLA) for example. It’s no wonder why consumers consider a company like Tesla a breath of fresh air — not only does it offer an innovative, new product, but the company’s vehicles are designed with global preservation in… Read More