You probably already know that hedge funds have been dominating the financial news headlines recently. I wish I could say the coverage of these unique investment vehicles has been positive, but the media has focused on the few bad actors in the hedge fund business and the sector’s overall lackluster returns. While there are bad apples in every business and solid due diligence should weed most of them out, it’s the lack of overall returns (or “… Read More

You probably already know that hedge funds have been dominating the financial news headlines recently. I wish I could say the coverage of these unique investment vehicles has been positive, but the media has focused on the few bad actors in the hedge fund business and the sector’s overall lackluster returns. While there are bad apples in every business and solid due diligence should weed most of them out, it’s the lack of overall returns (or “alpha,” as market-beating returns are called in the business) that has most investors concerned.  A few funds have bucked the trend, delivering market-busting returns year after year. But they are usually difficult to gain access to, have high minimum investments and charge outrageous fees.#-ad_banner-# There are ways for average investors to follow the lead of these successful hedge funds without directly investing. Obviously, this isn’t an exact replication, but enough clues can be gleaned to… Read More

Anytime a new CEO takes the reins of a struggling company, he or she is typically given a full year to implement a full turnaround. That’s the time in which the CEO can boost flagging employee morale, articulate a fresh game plan for Wall Street to assess, and put the wheels in motion for a sustained upturn in… Read More

Anytime a new CEO takes the reins of a struggling company, he or she is typically given a full year to implement a full turnaround. That’s the time in which the CEO can boost flagging employee morale, articulate a fresh game plan for Wall Street to assess, and put the wheels in motion for a sustained upturn in sales and profits. Yet when that one-year grace period (also known as the “honeymoon phase”) is over, investors tend to take a much more circumspect view. Talk becomes cheap, and financial results start to speak for themselves. July 16 marks the one-year anniversary of Marissa Mayer’s debut as CEO of Yahoo (Nasdaq: YHOO), so the time is at hand for a steady path to much improved results. Considering that shares have rallied 70% since Mayer arrived 10 months ago, investors already appear… Read More

My job as chief investment strategist for Game-Changing Stocks requires me to look for “the next big thing.” Sometimes that means I’m looking through obscure government reports to learn about the latest technology the Pentagon is using that… Read More

We’re coming up on the five-year anniversary of an epic global economic meltdown. And while many major European companies are still struggling with weak demand, U.S. rivals have fared better, thanks to a slightly perkier U.S. economy. Yet you won’t find the executives… Read More

When it comes right down to it, nothing is more American than the desire to achieve and to profit. In fact, buying great American companies has been a winning strategy of mine over the years. The key is to buy the right ones at the right time. With that in mind, I thought I would take a look at some great American companies and see how they stack up in today’s market. Home Depot (NYSE: HD) is one of the truly great American success stories. The company started… Read More

When it comes right down to it, nothing is more American than the desire to achieve and to profit. In fact, buying great American companies has been a winning strategy of mine over the years. The key is to buy the right ones at the right time. With that in mind, I thought I would take a look at some great American companies and see how they stack up in today’s market. Home Depot (NYSE: HD) is one of the truly great American success stories. The company started in 1978 with two stores in Atlanta and has been the fastest-growing retailer in U.S. history. Today the company has 2,257 stores in the U.S., Mexico and Canada. It’s the world’s largest home improvement retailer — and with the real estate markets starting to improve, Home Depot is in the sweet spot for future growth. As American’s situation continues to improve, they will feel more comfortable spending money to fix up their houses… Read More

Personal, business, class and even international – this trend crosses all boundaries. While it is built upon the basic principles of human collaboration and friendship, this trend has been supercharged by the connective power of the Internet. I am talking about networking. Before the Internet, individuals had no choice but… Read More

Hidden inflation is an insidious devourer of profit. Forget what the Consumer Price Index is telling us — higher costs don’t always get passed on to the consumer. Sometimes quality is reduced instead. Whether it’s the bag of potato chips that’s half-filled with air, the controversy of “pink slime,” or the shrinking amounts of cake mix in packages that used to hold more — whether we admit it or not, the inflation we’ve been worried about is already here. Read More

Hidden inflation is an insidious devourer of profit. Forget what the Consumer Price Index is telling us — higher costs don’t always get passed on to the consumer. Sometimes quality is reduced instead. Whether it’s the bag of potato chips that’s half-filled with air, the controversy of “pink slime,” or the shrinking amounts of cake mix in packages that used to hold more — whether we admit it or not, the inflation we’ve been worried about is already here. It’s the kind of environment where we see “Forever Stocks” shine. These are companies that have businesses built to last through bear markets, rising interest rates and, yes, inflation. This “Forever Stock” has an operating margin of 44%, which gives it plenty of wiggle room to withstand economic hardships. Expected earnings growth is 11.8%, and its business model has started to turn the heads of some of the biggest… Read More

The Wall Street crowd is starting to get the picture. On the cover of a recent issue of Fortune magazine: “The Death of Cash,” there was an article examining an impending transition that I’ve been talking about for some time. The magazine examined some large companies as the drivers in this new technological push, which hinges largely on the continued adoption of portable devices, like cellphones, that can be used much like a credit or… Read More

The Wall Street crowd is starting to get the picture. On the cover of a recent issue of Fortune magazine: “The Death of Cash,” there was an article examining an impending transition that I’ve been talking about for some time. The magazine examined some large companies as the drivers in this new technological push, which hinges largely on the continued adoption of portable devices, like cellphones, that can be used much like a credit or debit card. Its winners are Google (Nasdaq: GOOG) because of its Google Wallet initiative, which I was among the first to cover; eBay’s (Nasdaq: EBAY) PayPal; Visa (NYSE: V); MasterCard (NYSE: MA); Apple (Nasdaq: AAPL) and Facebook (Nasdaq: FB). Those are great companies that will lead the trend. But while everyone else is looking at the obvious “winners,” it will take some time for this macro trend to move the needle for companies as big as these. Instead, I’ve got my eye on a small company that’s at the forefront of this game-changing trend. I first told… Read More

Second-quarter earnings season was a bit of a bust. Although earnings remain at an all-time high, the pace of earnings growth continues to look weak. Earnings growth is up just 3% from last year, a small improvement from the first quarter’s 2.6% gain and the 2.8% average for the past four quarters. The headlines reflected that disappointment, with stories about the biggest… Read More

Second-quarter earnings season was a bit of a bust. Although earnings remain at an all-time high, the pace of earnings growth continues to look weak. Earnings growth is up just 3% from last year, a small improvement from the first quarter’s 2.6% gain and the 2.8% average for the past four quarters. The headlines reflected that disappointment, with stories about the biggest blue chips struggling with the weak global economy and falling short of expectations. That includes misses from bellwethers like IBM (NYSE: IBM), Google (Nasdaq: GOOG) and Microsoft (Nasdaq: MSFT). But in spite of some earnings headwinds, there were a number of companies that bucked the trend and delivered big earnings surprises. For instance, take Facebook (Nasdaq: FB), which delivered a 44% earnings surprise last month that sent the company’s share price soaring. But if you missed out on that first… Read More

Small companies typically outperform over time because they have greater growth prospects than the market leaders.  Between 1927 and 2012, for instance, small caps produced annual returns of 12.9%, compared with 9.9% for large companies. Even now, when many indices have hit highs, the S&P 600 Small Cap Index has gained 31%, in the past year compared with a 23% gain for the S&P 500 over the same period. #-ad_banner-#But most… Read More

Small companies typically outperform over time because they have greater growth prospects than the market leaders.  Between 1927 and 2012, for instance, small caps produced annual returns of 12.9%, compared with 9.9% for large companies. Even now, when many indices have hit highs, the S&P 600 Small Cap Index has gained 31%, in the past year compared with a 23% gain for the S&P 500 over the same period. #-ad_banner-#But most retail investors shy away from small caps mainly because they perceive them to be part of the seedy underbelly of investing, the world of pump-and-dump boiler rooms. That reputation is not entirely undeserved. Many illiquid companies exist whose financials are at best an educated guess.  So to find small-cap stocks that could be assumed to be reasonably safe investments, I used a several-step screening process, starting with solid fundamentals and substantial… Read More