Active trading is a never-ending educational process. No matter how long one has participated in the endeavor, there is always something new to learn. I have actively invested in the financial markets since 1990, and I am still constantly fascinated by new ideas and even sectors.#-ad_banner-# This is how the markets have captivated me for over two decades. They are never boring and are constantly offering up new ways to capture profits. My stock screener recently alerted me to a low-priced stock that could easily double in the next 90 days. This company is part of an industry… Read More

Active trading is a never-ending educational process. No matter how long one has participated in the endeavor, there is always something new to learn. I have actively invested in the financial markets since 1990, and I am still constantly fascinated by new ideas and even sectors.#-ad_banner-# This is how the markets have captivated me for over two decades. They are never boring and are constantly offering up new ways to capture profits. My stock screener recently alerted me to a low-priced stock that could easily double in the next 90 days. This company is part of an industry that I knew very little about, so I set out to learn all I could prior to investing. What I learned got me very excited about this company’s potential.  If you have ever spent time on the beach, you may have noticed several large cargo ships traveling along the horizon. These ships transport products around the world from their country of manufacture.  Shipping rates are determined by supply and demand for ships. Obviously, the supply of ships in this business is fixed or inelastic, as economists would call it. However, demand is variable (elastic), leading to shipping rates increasing as… Read More

Being healthy is no longer a fad. In many respects, it’s becoming a requirement.#-ad_banner-# People are spending increasing amounts of money on healthy lifestyles, from gym memberships to supplements. However, there has been some controversy recently around multivitamins and whether they actually provide any health benefits. Most notably, an editorial last month in the Annals of Internal Medicine, a prestigious academic journal, questioned the validity of vitamins in preventing heart attacks and cancer. But nutritionists are rushing to the defense of the multivitamin industry, noting that the purpose of taking a multivitamin is to address the nutritional deficiencies in our… Read More

Being healthy is no longer a fad. In many respects, it’s becoming a requirement.#-ad_banner-# People are spending increasing amounts of money on healthy lifestyles, from gym memberships to supplements. However, there has been some controversy recently around multivitamins and whether they actually provide any health benefits. Most notably, an editorial last month in the Annals of Internal Medicine, a prestigious academic journal, questioned the validity of vitamins in preventing heart attacks and cancer. But nutritionists are rushing to the defense of the multivitamin industry, noting that the purpose of taking a multivitamin is to address the nutritional deficiencies in our diets. For vitamin company investors, the thing to remember is that this isn’t the first time that the benefits of multivitamins have been called into question. The same debate came up in the early ’90s, but the industry has remained resilient and grown into a billion-dollar market. People want to look and feel good, and they’ll continue to spend on supplements to do so. With 6,500 stores and a growing presence in e-commerce, GNC (NYSE: GNC) is one of the top retailers of vitamins and supplements. One of the most commonly overlooked aspects of GNC is its suite of proprietary… Read More

It’s funny sometimes how a great growth stock can be right under our noses, but we just don’t notice. #-ad_banner-# The company might have lots of locations, offer quality products, be doing a brisk business, and have a soaring stock price. Yet for some reason, it really isn’t on anyone’s radar. I say this with a particular company in mind — a large, well-established, well-known company with products just about every consumer is familiar with. Sales at this company have been strong and steady, climbing 7% a year from $7.1 billion in 2009 to $9.6 billion in 2013. Earnings per… Read More

It’s funny sometimes how a great growth stock can be right under our noses, but we just don’t notice. #-ad_banner-# The company might have lots of locations, offer quality products, be doing a brisk business, and have a soaring stock price. Yet for some reason, it really isn’t on anyone’s radar. I say this with a particular company in mind — a large, well-established, well-known company with products just about every consumer is familiar with. Sales at this company have been strong and steady, climbing 7% a year from $7.1 billion in 2009 to $9.6 billion in 2013. Earnings per share (EPS) have also been solid, rising 12.5% a year from $3.78 in 2009 to $6.80 this year. The company’s stock has been awesome: Since the beginning of 2009, it’s up about 205%. That’s nearly twice the 104% return of SPDR S&P 500 (NYSE: SPY), an exchange-traded fund (ETF) that tracks the overall market. You’d think a stock like that would be making headlines everywhere. But you don’t see it mentioned much, maybe because it’s not in a very glamorous business. Or investors might assume it lacks the potential for appreciation simply because the company has been around so long… Read More

The number of consumers participating in recreational activities has declined over the past half decade, in part because people have been looking to save as much money as possible. However, as discretionary money starts flowing back into consumers’ pockets, what better way to spend that money than on recreational activities? A higher level of disposable income should help drive spending on recreation and outdoor activities higher in 2014. Wal-Mart (NYSE: WMT) and Amazon.com (Nasdaq: AMZN) sell various apparel and recreational equipment, but one of the best plays in the market is a one-stop shop that offers a cornucopia of sports… Read More

The number of consumers participating in recreational activities has declined over the past half decade, in part because people have been looking to save as much money as possible. However, as discretionary money starts flowing back into consumers’ pockets, what better way to spend that money than on recreational activities? A higher level of disposable income should help drive spending on recreation and outdoor activities higher in 2014. Wal-Mart (NYSE: WMT) and Amazon.com (Nasdaq: AMZN) sell various apparel and recreational equipment, but one of the best plays in the market is a one-stop shop that offers a cornucopia of sports gear, Dick’s Sporting Goods (NYSE: DKS). Beyond that, this particular recreational retailer has a number of growth levers that it is set to pull in 2014.#-ad_banner-# Dick’s operates the Dick’s Sporting Goods and Golf Galaxy retail brands, covering 44 states with over 600 locations. With its variety of sports apparel and equipment, the company will be one of the biggest benefactors of rising employment and personal income — but the story that investors should really be excited about is on the growth side. Earnings per share (EPS) and sales for Dick’s fiscal year (which ended in October) bested consensus estimates,… Read More

We are losing the battle of the bulge. Though health care practitioners have been trying to raise awareness about the perils of obesity for a decade, the numbers keep getting worse. According to a survey conducted by Gallup-Healthways, 27.2% of all Americans are classified as obese, up a full percentage point from 2012. A stunning 32.5% of people ages 45 to 64 are considered obese. Those figures go hand in hand with rising rates of diabetes and hypertension. Although investors had been pinning their hopes on obesity drugs offered by Vivus (Nasdaq: VVUS), Orexigen Therapeutics (Nasdaq: OREX) and Arena Pharmaceuticals… Read More

We are losing the battle of the bulge. Though health care practitioners have been trying to raise awareness about the perils of obesity for a decade, the numbers keep getting worse. According to a survey conducted by Gallup-Healthways, 27.2% of all Americans are classified as obese, up a full percentage point from 2012. A stunning 32.5% of people ages 45 to 64 are considered obese. Those figures go hand in hand with rising rates of diabetes and hypertension. Although investors had been pinning their hopes on obesity drugs offered by Vivus (Nasdaq: VVUS), Orexigen Therapeutics (Nasdaq: OREX) and Arena Pharmaceuticals (Nasdaq: ARNA), the fact that all three of those stocks still trade below $10 — despite many years of hype — shows that pill-based approaches have been underwhelming.#-ad_banner-# Little-known EnteroMedics (Nasdaq: ETRM) may have come up with a better approach. The company has developed an implantable device that impedes signals coming from the vagus nerve. EnteroMedics’ VBLOC (vagal blocking therapy) keeps the stomach from sending the brain a message that it’s time to eat. Though the company has already received regulatory approval in Australia and Europe, it’s the U.S. market that represents the holy grail for EnteroMedics, simply because the… Read More

Forget almost everything you learned about investing over the past few years.#-ad_banner-# The past 48 months have been characterized by sluggish U.S. economic growth, a helping hand from the Federal Reserve, global scares, and a steadily rising U.S. stock market. Yet as we head into 2014, many of these variables will no longer apply — and how you adjust to these changes can spell the difference between profits, losses or merely capital preservation. Sustainable 3% Growth? The U.S. economy surged an impressive 4.1% in the third quarter, thanks in large part to inventory restocking. That led economists to assume… Read More

Forget almost everything you learned about investing over the past few years.#-ad_banner-# The past 48 months have been characterized by sluggish U.S. economic growth, a helping hand from the Federal Reserve, global scares, and a steadily rising U.S. stock market. Yet as we head into 2014, many of these variables will no longer apply — and how you adjust to these changes can spell the difference between profits, losses or merely capital preservation. Sustainable 3% Growth? The U.S. economy surged an impressive 4.1% in the third quarter, thanks in large part to inventory restocking. That led economists to assume that fourth-quarter GDP growth would be notably weaker, especially as further inventory stocking was unlikely. Yet in recent weeks, it’s become apparent that the economy is on track for a second straight quarter of robust GDP growth. Economists at Deutsche Bank now anticipate 3.8% GDP growth in the quarter just ended (which they will revise after digesting an international trade report due Jan. 7). Two consecutive quarters of GDP growth above 3% is quite unusual. It’s happened only once in the past five years (the fourth quarter of 2011 and the first quarter of 2012). The economy subsequently rose, on… Read More

Let’s be honest. When you hear about a stock that yields 12% or more, your first thought should be that the company is probably a basket case that can’t even turn a profit. If it’s offering a yield that sounds too good to be true, it probably is. #-ad_banner-#And you’d be right most of the time. Usually, yields are this high because a company’s share price is falling — signaling underlying problems in its business. A lower share price gives a higher dividend yield. That means profitable companies paying yields this high should be rare. In fact, my staff and… Read More

Let’s be honest. When you hear about a stock that yields 12% or more, your first thought should be that the company is probably a basket case that can’t even turn a profit. If it’s offering a yield that sounds too good to be true, it probably is. #-ad_banner-#And you’d be right most of the time. Usually, yields are this high because a company’s share price is falling — signaling underlying problems in its business. A lower share price gives a higher dividend yield. That means profitable companies paying yields this high should be rare. In fact, my staff and I recently ran the numbers. When we looked only at the companies that turned a profit over the past year, we found just 25 U.S. common stocks paying yields of more than 12%.  Here, you can see the 10 highest yields for yourself:   Ticker Company Yield CXW Corrections Corp. 24.2% MFA MFA Financial 22.7% ARR ARMOUR Residential 22.3% AGNC American Capital 21.9% ISSC Innovative Solutions 20.4% AMTG Apollo Residential 19.2% GNI Great Northern Iron Ore 17.2% EFC Ellington Financial 16.8% IVR… Read More

We all remember the subprime mortgage crisis. The financial system was thrown into chaos, and many homeowners lost their overleveraged homes during those dark days.#-ad_banner-#​ Fortunately, the vast powers of the Federal Reserve were summoned to help stabilize the housing market, and along with it, the entire economy. The Fed worked its monetary magic, and the housing market is finally returning to normal. However, there is another crisis brewing just under the surface.  The sector this potential crisis is in isn’t as large as the subprime mortgage sector, but it’s still a $27 billion sector,… Read More

We all remember the subprime mortgage crisis. The financial system was thrown into chaos, and many homeowners lost their overleveraged homes during those dark days.#-ad_banner-#​ Fortunately, the vast powers of the Federal Reserve were summoned to help stabilize the housing market, and along with it, the entire economy. The Fed worked its monetary magic, and the housing market is finally returning to normal. However, there is another crisis brewing just under the surface.  The sector this potential crisis is in isn’t as large as the subprime mortgage sector, but it’s still a $27 billion sector, according to Forbes magazine. In fact, Forbes reports that 1 in 4 Americans may be participants in this potential crisis. I became aware of this potential time bomb last year. A close friend was financially destroyed by the subprime mortgage crisis. He is an investor and was overleveraged on more than a dozen investment properties. He was finally forced to declare bankruptcy to get out from under the mountain of debt.  Within a week of the bankruptcy filing, he started getting letters from companies like Wells Fargo (NYSE: WFC) and General Motors (NYSE: GM). While my friend was used to… Read More

Thanks to a popular financial website, the term “alpha” has become popular over the past few years. Yet the ETF industry wants you to think a lot more about “beta.” #-ad_banner-# Dozens of new exchange-traded funds were launched in 2013 in an emerging category known as “smart beta,” and investors will be treated to many more of these ETFs in the coming year. It’s a welcome development for an industry that risked growing stale. While the term “alpha” refers to any gains an investor can reap above the broader market, beta refers to how… Read More

Thanks to a popular financial website, the term “alpha” has become popular over the past few years. Yet the ETF industry wants you to think a lot more about “beta.” #-ad_banner-# Dozens of new exchange-traded funds were launched in 2013 in an emerging category known as “smart beta,” and investors will be treated to many more of these ETFs in the coming year. It’s a welcome development for an industry that risked growing stale. While the term “alpha” refers to any gains an investor can reap above the broader market, beta refers to how a stock or fund should be expected to perform relative to a given benchmark. In recent years, investors have had plenty of options among ETFs that can be expected to trade in a predictable fashion. From S&P 500 index funds to technology funds to high-yield bond funds, these passively managed ETFs are a great way to provide predictable exposure at a very low cost. These ETFs have emerged as great values, especially in relation to higher-cost actively managed mutual funds, which can carry expense ratios exceeding 2%. Now, this new class of smart-beta ETFs — which also go by terms… Read More

Easy access to data and charting software has contributed to information overload for many investors. Some investors will spend time looking for the perfect chart while other investors will review charts that really contain nothing of value.#-ad_banner-# Many of the charts we see are useless. And although we don’t believe there is a perfect chart that will identify every market turning point in advance, we find there are some charts that can better help investors understand what to do in the market. It is important to remember that successful investing is not easy. It requires an edge, which… Read More

Easy access to data and charting software has contributed to information overload for many investors. Some investors will spend time looking for the perfect chart while other investors will review charts that really contain nothing of value.#-ad_banner-# Many of the charts we see are useless. And although we don’t believe there is a perfect chart that will identify every market turning point in advance, we find there are some charts that can better help investors understand what to do in the market. It is important to remember that successful investing is not easy. It requires an edge, which can be defined as a unique and repeatable insight into the behavior of markets. To succeed, you will need to understand what your edge is, and a true edge in the markets will not include information that is widely available. You will not find an edge simply by looking at the price-to-earnings (P/E) ratio for a stock or spotting a buy signal with a widely followed technical indicator like stochastics. Old traders summarize this problem with a memorable saying: “To know what everyone knows is to know nothing.” Rather than spending time reviewing what everyone knows,… Read More