Trend following is a time-honored investing method.#-ad_banner-#​ Many investors erroneously believe trend following simply means following the price trend in a stock or commodity. Several books and many investment articles perpetuate the price-only myth, resulting in its widespread acceptance as truth.  But the savviest investors realize that although trend following may refer to following a price chart, to be effective, it needs a much deeper, all-encompassing investing method. I like to think of trend following from a top-down perspective.  Understanding the global or national economic climate by asking if we are in a bear or bull market is the… Read More

Trend following is a time-honored investing method.#-ad_banner-#​ Many investors erroneously believe trend following simply means following the price trend in a stock or commodity. Several books and many investment articles perpetuate the price-only myth, resulting in its widespread acceptance as truth.  But the savviest investors realize that although trend following may refer to following a price chart, to be effective, it needs a much deeper, all-encompassing investing method. I like to think of trend following from a top-down perspective.  Understanding the global or national economic climate by asking if we are in a bear or bull market is the first trend to follow. Next, societal trends need to be considered, such as what people are buying, what’s hot, what’s on the horizon, and what ideas and concepts are trending.  Finally, drilling down and discovering what industries and specific companies are poised to ride these trends makes far more sense than merely looking at a price chart that, by definition, only illustrates the past. Using this three-step, trend-following guide, I’ve discovered a company poised to ride an overwhelmingly powerful trend well into 2014. On Dec. 19, the Federal Reserve revealed that it will begin to taper its monthly $85 billion… Read More

I was one of the lucky few to be chosen by Google (Nasdaq: GOOG) to be a beta tester for the revolutionary Google Glass product.#-ad_banner-#​ Glass is a wearable computer screen that sits on the user’s face like a pair of glasses. Glass can be worn while other tasks are being completed, and all the user needs to do is glance upward to see the data on the screen. The beta testers are called Glass Explorers and use the product in everyday life while reporting likes and dislikes to Google. This is… Read More

I was one of the lucky few to be chosen by Google (Nasdaq: GOOG) to be a beta tester for the revolutionary Google Glass product.#-ad_banner-#​ Glass is a wearable computer screen that sits on the user’s face like a pair of glasses. Glass can be worn while other tasks are being completed, and all the user needs to do is glance upward to see the data on the screen. The beta testers are called Glass Explorers and use the product in everyday life while reporting likes and dislikes to Google. This is so the company can tweak the system prior to it actually going on the market, supposedly in early 2014.  After posting about my Google Glass Explorer invite on social media, I was inundated with offers to buy it. I could not believe how much money some folks were willing to pay just to obtain the invitation to purchase Glass and participate in Google’s program. I reasoned that I could purchase several pairs of Glass once it went on the market for the offers I was receiving. Therefore, I made the decision to trade the invite for a decent sum of… Read More

It’s been a good year for stocks that make up the Dow Jones Industrial Average, as 28 of the 30 components have risen in value (with IBM (NYSE: IBM) and Caterpillar (NYSE: CAT) as the only laggards).#-ad_banner-#​ And it’s been an even better year for the Dogs of the Dow. These are the 10 stocks that had the highest dividend yields when the year began, and this group has gained 25.5% in 2013 against a 24% gain for the broader index, according to DogsoftheDow.com. To be sure, that is not a significant… Read More

It’s been a good year for stocks that make up the Dow Jones Industrial Average, as 28 of the 30 components have risen in value (with IBM (NYSE: IBM) and Caterpillar (NYSE: CAT) as the only laggards).#-ad_banner-#​ And it’s been an even better year for the Dogs of the Dow. These are the 10 stocks that had the highest dividend yields when the year began, and this group has gained 25.5% in 2013 against a 24% gain for the broader index, according to DogsoftheDow.com. To be sure, that is not a significant level of outperformance. History has shown that this approach works best in so-so markets, and is not primed for relatively better gains when then market slumps badly or soars sharply. Considering the market has fared very well in 2013, 2014 gains may be much more muted, and if so, the Dow of the Dogs approach may again lead to sharp outperformance. Why Hated Is Good The appeal of this approach is self-evident. High dividend yields are a sign that a company is out of favor. And it’s a lot easier for a stock that has no supporters to win… Read More

“The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” – Alexis de Tocqueville#-ad_banner-#​ Old Alex, a noted French political thinker and writer, hit it on the screws with his observations of the American spirit during the early days of the Republic. Americans are good at recognizing (eventually) what’s broken, fixing it, and moving on. We’re also very good at figuring out how to profit from that change and evolution.  America has seen enormous change during the first decade of the 21st century. From the… Read More

“The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” – Alexis de Tocqueville#-ad_banner-#​ Old Alex, a noted French political thinker and writer, hit it on the screws with his observations of the American spirit during the early days of the Republic. Americans are good at recognizing (eventually) what’s broken, fixing it, and moving on. We’re also very good at figuring out how to profit from that change and evolution.  America has seen enormous change during the first decade of the 21st century. From the bursting of the tech bubble to the devastation of 9/11 to the financial crisis of 2008, the nation has struggled to get its economy and status as a global leader back on solid footing. But the seeds sown in that recovery process are beginning to bear fruit. It can only be described as an American Renaissance. Old line companies thought to be dead or dying are transforming themselves as leaders in new technology. All sorts of businesses are rushing to build infrastructure to support and transport America’s new found energy resources. Large manufacturers once caught up in the allure of… Read More

Popular apparel brands like Andrew Marc, Wilson Leather, Cole Haan, Levi’s, Nine West, Sean John, Calvin Klein and even Tommy Hilfiger all have a secret. If this secret was widely known, it might change many consumers’ perceptions of their favorite clothing brand. Years of expensive and highly effective marketing have differentiated each brand into a specific demographic, price range and even perceived quality.#-ad_banner-#​ One of the more extreme examples of brand marketing differentiation is the high-end swimsuit brand Vilebrequin. These swimsuits start at around $200 and go to… Read More

Popular apparel brands like Andrew Marc, Wilson Leather, Cole Haan, Levi’s, Nine West, Sean John, Calvin Klein and even Tommy Hilfiger all have a secret. If this secret was widely known, it might change many consumers’ perceptions of their favorite clothing brand. Years of expensive and highly effective marketing have differentiated each brand into a specific demographic, price range and even perceived quality.#-ad_banner-#​ One of the more extreme examples of brand marketing differentiation is the high-end swimsuit brand Vilebrequin. These swimsuits start at around $200 and go to over $8,000 for a pair of swim trunks embroidered with 24-karat gold thread. Marketed to the international jet-setters who party in Ibiza or Saint-Tropez, Vilebrequin swim trunks are truly high end.  On the other end of the exclusivity scale is a brand like Tommy Hilfiger. Hilfiger swim trunks look very similar to Vilebrequin, but can often be found in discount outlets for around $25 or full-price retail for about $55. Even when compared side by side, it’s difficult to see much of a quality difference between the two brands. Other than the label and the fact… Read More

While most companies will have plenty to cheer these holidays, as their stock prices soared in 2013, some companies would just as soon turn the page and focus on the new year.#-ad_banner-#​ Companies operating in the mining industry certainly fall into the latter category. This sector hasn’t suffered such tough times in several years. The sharp drop in commodity prices led to the rapid slump in demand for all kinds of mining equipment. Mining is a highly cyclical business, and though investors have been shunning mining stocks in 2013, signs of stabilization should boost them in 2014, especially… Read More

While most companies will have plenty to cheer these holidays, as their stock prices soared in 2013, some companies would just as soon turn the page and focus on the new year.#-ad_banner-#​ Companies operating in the mining industry certainly fall into the latter category. This sector hasn’t suffered such tough times in several years. The sharp drop in commodity prices led to the rapid slump in demand for all kinds of mining equipment. Mining is a highly cyclical business, and though investors have been shunning mining stocks in 2013, signs of stabilization should boost them in 2014, especially as the outlook for better days ahead comes into focus. And when that happens, investors will focus on the companies with a great deal of leverage. It helps if these companies have a wide moat around their business (that is, a significant competitive advantage that is extremely difficult to copy or emulate), thereby creating a barrier to entry for competing firms. This implies that they will have full pricing power when business conditions improve. Titan International (NYSE: TWI) fits this bill. The company makes huge truck tires used by massive mining trucks, agricultural equipment and other off-road mega-vehicles. TWI will… Read More

A long time ago, I learned that style counts for absolutely zero points in investing. Investing is all about results.#-ad_banner-#​ Borrowing a great investment idea from someone else is just as good as coming up with a great idea on your own. All that matters is compounding your investments at as high a rate as possible while minimizing your risk.  I’d even argue that it would be smarter to use ideas from successful investors because that adds one more layer of due diligence to your own — a layer that happens to have been performed by a respected… Read More

A long time ago, I learned that style counts for absolutely zero points in investing. Investing is all about results.#-ad_banner-#​ Borrowing a great investment idea from someone else is just as good as coming up with a great idea on your own. All that matters is compounding your investments at as high a rate as possible while minimizing your risk.  I’d even argue that it would be smarter to use ideas from successful investors because that adds one more layer of due diligence to your own — a layer that happens to have been performed by a respected investor. A couple of years ago, Warren Buffett hired two portfolio managers to take over part of Berkshire Hathaway’s (NYSE: BRK-B) investment portfolio. Each of the men were originally given about $2.5 billion (subsequently increased to $4 billion) to manage. With Buffett now 83 years old, the plan was (and still is) for these two men to eventually handle the investing duties for the bulk of Berkshire’s enormous portfolio. One of those portfolio managers is Ted Weschler, who, before joining Berkshire in 2011, managed a hedge fund called Peninsula Capital Advisors. From 2000 through 2011, Weschler’s… Read More

Investing in foreign markets can be scary. You have to deal with geopolitical issues, currency fluctuations and a general lack of available information.#-ad_banner-#​ Fortunately for investors, some fast-growing emerging markets are much better than others. This includes Latin America’s largest economy, Brazil.  Although it’s still the prize of South America, the country has yet to live up its true growth potential. As a result, the Brazilian economy is expected to grow by close to 3% in 2014, with unemployment remaining below 6%. (Two of my colleagues are split on the country’s prospects: Andy Obermueller, Chief Investment Strategist of… Read More

Investing in foreign markets can be scary. You have to deal with geopolitical issues, currency fluctuations and a general lack of available information.#-ad_banner-#​ Fortunately for investors, some fast-growing emerging markets are much better than others. This includes Latin America’s largest economy, Brazil.  Although it’s still the prize of South America, the country has yet to live up its true growth potential. As a result, the Brazilian economy is expected to grow by close to 3% in 2014, with unemployment remaining below 6%. (Two of my colleagues are split on the country’s prospects: Andy Obermueller, Chief Investment Strategist of Game-Changing Stocks, is bullish on Brazil. My colleague Joseph Hogue, on the other hand, thinks the country may be headed for bankruptcy.)  What the country needs is a catalyst. Enter next year’s World Cup, which is expected to bring more than 600,000 tourists to Brazil, with another 3 million Brazilians traveling around the country for the monthlong tournament.  With all this activity, Brazil is expected to become the world’s fourth-largest aviation market in 2014, with more than 100 million passengers. That growth is poised to continue with the Summer Olympics coming in 2016.  Gol Linhas Aereas Inteligentes (NYSE: GOL) is one… Read More

Luxury retailer Michael Kors (NYSE: KORS) has been taking market share away from rivals like Coach (NYSE: COH) and Ralph Lauren (NYSE: RL). Since its initial public offering in late 2011, the stock has displayed wonderfully trending price action for investors and traders alike.#-ad_banner-#​ KORS made a big entrance with its IPO. It was priced at $20 a share, above its estimated range of $17 to $19, and soared 21% that day to close at $24.20. The company sold 47.2 million shares, raising $944 million. The offering gave the company… Read More

Luxury retailer Michael Kors (NYSE: KORS) has been taking market share away from rivals like Coach (NYSE: COH) and Ralph Lauren (NYSE: RL). Since its initial public offering in late 2011, the stock has displayed wonderfully trending price action for investors and traders alike.#-ad_banner-#​ KORS made a big entrance with its IPO. It was priced at $20 a share, above its estimated range of $17 to $19, and soared 21% that day to close at $24.20. The company sold 47.2 million shares, raising $944 million. The offering gave the company a market value of roughly $1.2 billion, which has expanded to $16.7 billion. At its current size, Michael Kors is larger than Ralph Lauren, a Fortune 500 company. And Michael Kors is quickly expanding both domestically and internationally in its efforts to gain more brand awareness. On Nov. 5, Michael Kors reported strong quarterly earnings and gave a rosy outlook, which led to another leg higher in its stock price. For its fiscal second quarter, the company reported that total revenue increased 38.9%, to $740 million, from the same period last year. At the end of the quarter, Michael Kors… Read More

In a bid to curry favor with investors, some companies overhype seemingly trivial business developments. The daily business newswires are laden with contract announcements that will likely have almost no effect on a company’s financial statements.#-ad_banner-#​ Yet other companies prefer the opposite approach: tucking major news announcements deep in a press release for only the most patient readers to notice. Buried beneath the recent quarterly financial figures released by municipal bond insurer Assured Guaranty Ltd. (NYSE: AGO), you’ll find this small item: “In November 2013, AGL became tax resident in the United… Read More

In a bid to curry favor with investors, some companies overhype seemingly trivial business developments. The daily business newswires are laden with contract announcements that will likely have almost no effect on a company’s financial statements.#-ad_banner-#​ Yet other companies prefer the opposite approach: tucking major news announcements deep in a press release for only the most patient readers to notice. Buried beneath the recent quarterly financial figures released by municipal bond insurer Assured Guaranty Ltd. (NYSE: AGO), you’ll find this small item: “In November 2013, AGL became tax resident in the United Kingdom … As a U.K. tax resident, AGL will be subject to the tax rules applicable to companies resident in the U.K., including the benefits afforded by the U.K.’s tax treaties. AGL expects that, as a result of it becoming a U.K. tax resident, it will be able to more efficiently manage capital within the Assured Guaranty group.” This is precisely the kind of move that shareholders have been clamoring for. Before making this change, many investors knew that AGO traded too far below book value, but tax regulations made it hard for the company to take full advantage. Sure,… Read More