The classic buy-and-hold strategy is in decline. That’s too bad, because the strategy is a good one. So what explains the lack of support from investors and financial writers for the strategy that arguably set Warren Buffet apart from almost every other investor in history? Personally, I think it owes to a fundamental misunderstanding of the strategy. You see, buy and hold is a strategy that still works for stocks purchased at a discount to their intrinsic values. That means an investor must buy the stock at the right price. And if the investor does this correctly, a portfolio will… Read More

The classic buy-and-hold strategy is in decline. That’s too bad, because the strategy is a good one. So what explains the lack of support from investors and financial writers for the strategy that arguably set Warren Buffet apart from almost every other investor in history? Personally, I think it owes to a fundamental misunderstanding of the strategy. You see, buy and hold is a strategy that still works for stocks purchased at a discount to their intrinsic values. That means an investor must buy the stock at the right price. And if the investor does this correctly, a portfolio will contain stocks that will be held for a very long time.  You see, a long holding period is just a natural result of prudent stock picking.  For sure, the hardest part of this process is resisting the temptation to sell — especially in times of economic distress. But significant gains can be had when investors hold stocks for the long term.  And this isn’t just an academic exercise, either… Below is a brief overview of three stocks I own which I will likely never sell. The High-Tech Darling The first is Nvidia (Nasdaq: NVDA). For readers familiar with… Read More

Let me ask you a question. Do you like heavy, clunky cell phones whose batteries lose their charge quickly? Of course not. Nobody does. And that’s why manufacturers are constantly seeking battery designs that are more compact and powerful.  In the old days, the best we could do was nickel-cadmium chemistries. You can still find them in ancient cordless phones built in the early 1990s. But then lithium-ion made its breakthrough, and the world has never looked back.  Lithium has more uses than duct tape. You’ll find it in fireworks, airplanes, glass cookware, and medicine cabinets. It’s even a key… Read More

Let me ask you a question. Do you like heavy, clunky cell phones whose batteries lose their charge quickly? Of course not. Nobody does. And that’s why manufacturers are constantly seeking battery designs that are more compact and powerful.  In the old days, the best we could do was nickel-cadmium chemistries. You can still find them in ancient cordless phones built in the early 1990s. But then lithium-ion made its breakthrough, and the world has never looked back.  Lithium has more uses than duct tape. You’ll find it in fireworks, airplanes, glass cookware, and medicine cabinets. It’s even a key raw material for rocket fuel propellant and nuclear reactor coolant.  But that’s not why I like it. These are just niche applications.  The true utility comes from the fact that lithium is endowed with some curious properties. It is the lightest of all metals (it can actually float on water) and has twice the energy storage density of previous materials. That’s an ideal combination, which is why lithium is coveted by battery makers.  Last quarter alone, approximately 307 million smartphones were produced worldwide (about 140,000 per hour), most of which were outfitted with lithium batteries. And it’s not just phones. Read More

After a tough 2016 due to political pressure, drug-makers looked to be having a good year. The SPDR S&P Pharmaceuticals ETF (NYSE: XPH) reached a 2017 high of $44.32 in late July, up nearly 14% on the year.  Even the hardest hit among the group were finding new life, such as when Valeant Pharmaceuticals (NYSE: VRX) (which had suffered from seemingly daily negative headlines) surged 96% from its April low through July. But second-quarter earnings have not been kind. A chorus of poor earnings reports, especially in generics makers, has wiped 6.3% of the value off XPH in just 10… Read More

After a tough 2016 due to political pressure, drug-makers looked to be having a good year. The SPDR S&P Pharmaceuticals ETF (NYSE: XPH) reached a 2017 high of $44.32 in late July, up nearly 14% on the year.  Even the hardest hit among the group were finding new life, such as when Valeant Pharmaceuticals (NYSE: VRX) (which had suffered from seemingly daily negative headlines) surged 96% from its April low through July. But second-quarter earnings have not been kind. A chorus of poor earnings reports, especially in generics makers, has wiped 6.3% of the value off XPH in just 10 trading days. New fears around increased competition and high levels of debt are dragging the entire industry lower. At the same time, this is an industry with an immense amount of support from multiple demographics. This could force government regulation that could start to clear the way for faster drug approvals. That means a rebound could be in the making for the best names in the group — those pulled lower with the industry but with strong fundamentals and upside potential. I’ve found three drug-makers trading at attractive valuations, without the debt that overhangs much of the group, and that… Read More

I am a confirmed contrarian when it comes to the stock market. Investment contrarians take the opposite position of the prevailing wisdom when it comes to choosing stocks, buying picks that no one else seems to want.  Bad news is a contrarian’s best friend, as it pushes prices lower into the deep-value zone. But even better is good news that results in a selloff. Many times, positive earnings or other good news is not quite good enough to satisfy investors who expected more. Shares are dumped despite the seemingly positive news, depressing prices. Savvy contrarian investors wait for these selloffs… Read More

I am a confirmed contrarian when it comes to the stock market. Investment contrarians take the opposite position of the prevailing wisdom when it comes to choosing stocks, buying picks that no one else seems to want.  Bad news is a contrarian’s best friend, as it pushes prices lower into the deep-value zone. But even better is good news that results in a selloff. Many times, positive earnings or other good news is not quite good enough to satisfy investors who expected more. Shares are dumped despite the seemingly positive news, depressing prices. Savvy contrarian investors wait for these selloffs in the face of improving fundamentals to build long term positions.  The iconic American automobile company Ford (NYSE: F) is set up to be such an ideal contrarian buy right now. The overall bearish sentiment combined with bullish fundamental and technical metrics has skewed the risk/reward ratio solidly to the reward side.   Why Ford Should Be Your Next Buy 1. Solid Fundamentals And Performance Ford has just hit its highest free cash flow level in the last 10 years at just under $13 billion. Free cash flow is a very critical fundamental metric. In fact, as I argued in… Read More

If you fly for business or pleasure, you know that buying a plane ticket has almost become an art form.  And when it comes to your final ticket price, it turns out that when you buy may matter more than where you fly.  According to Cheapair.com, the average fare difference between the best day to buy your airline ticket and the worst is more than $200 — and that’s not counting the premium fares you’ll see if you’re purchasing a ticket within seven days of travel.  That’s because airlines don’t have a fixed ticket-price system. They change fares constantly, as… Read More

If you fly for business or pleasure, you know that buying a plane ticket has almost become an art form.  And when it comes to your final ticket price, it turns out that when you buy may matter more than where you fly.  According to Cheapair.com, the average fare difference between the best day to buy your airline ticket and the worst is more than $200 — and that’s not counting the premium fares you’ll see if you’re purchasing a ticket within seven days of travel.  That’s because airlines don’t have a fixed ticket-price system. They change fares constantly, as their goal is twofold: sell the most tickets for every flight (a goal best achieved with lower fares) and maximize the total amount received (a seemingly contradictory goal best achieved with higher ticket prices).  —Sponsored Link— Were You Born Before 1969? See if you qualify for Reagan’s secret 702(j) Retirement Plan. It could pay you $2,194 a month, tax-free… Learn more. Introducing: Revenue Management Instead, airlines utilize a system called “revenue management” — a process that looks at consumer demand patterns and the company’s business trends to ultimately determine best… Read More

Peter Lynch gave very good advice when he told investors to invest in what they know. And while I’ve found that many people still tend to ignore this most logical adage, it’s one rule I simply will not break.  To that end, I have found great success in going back again and again to the stocks I know best (and have made my Profit Amplifier subscribers and me money).  Michael Kors Holdings (NYSE: KORS) is one of those very stocks. About two weeks ago, we closed a quick trade in the luxury fashion brand for a 20.4% gain, and now… Read More

Peter Lynch gave very good advice when he told investors to invest in what they know. And while I’ve found that many people still tend to ignore this most logical adage, it’s one rule I simply will not break.  To that end, I have found great success in going back again and again to the stocks I know best (and have made my Profit Amplifier subscribers and me money).  Michael Kors Holdings (NYSE: KORS) is one of those very stocks. About two weeks ago, we closed a quick trade in the luxury fashion brand for a 20.4% gain, and now it is once again flashing a bearish signal after a recent rally. The recent jump in price means we can get back into a put options trade at the level we did before, and that makes me feel pretty good because I know things are only getting worse for KORS.  Investor sympathy and a hot market are what drove shares back up despite analysts becoming even more bearish. It’s this very equation that often produces the best results.  —Sponsored Link— Free Report: 7 Dividend Growth Stocks For 100 Percent-Plus Gains Forget about recent… Read More

Cash is the lifeblood of every company. It is the core ingredient that enables corporations to enrich their shareholders and thrive as a business. Without cash flow, a business will wither on the vine even faster than a plant without water.  #-ad_banner-#However, many fail to consider a company’s cash position when evaluating investments. Cash-rich stocks not only often boast higher dividends but can allow a company to support its own stock price through buybacks. Cash can also build a strong moat that provides the strength needed to make it through economic downturns. Finding a company with a cash-heavy balance sheet… Read More

Cash is the lifeblood of every company. It is the core ingredient that enables corporations to enrich their shareholders and thrive as a business. Without cash flow, a business will wither on the vine even faster than a plant without water.  #-ad_banner-#However, many fail to consider a company’s cash position when evaluating investments. Cash-rich stocks not only often boast higher dividends but can allow a company to support its own stock price through buybacks. Cash can also build a strong moat that provides the strength needed to make it through economic downturns. Finding a company with a cash-heavy balance sheet in a defensive sector is a powerful way to protect your wealth from market downturns. My favorite defensive sector is consumer staples. Consumers will always spend on necessities like food and beverages regardless of economic conditions. In fact, the sector is up over 10% this year and is poised to continue its solid performance, even as the “Trump trade” starts to unwind.  That’s why I expect these five stocks to be productive investments well into the future.  1. Coca Cola (NYSE: KO) This lynchpin stock in the American economy has suffered lackluster performance recently, with losing 1.5%  over the… Read More

So far, it hasn’t been a very good year for real estate investment trusts (REITs).  However, this isn’t to say these stocks have performed badly as a whole.  So far this year, the Dow Jones Equity REIT Total Return Index is up about 3.8%. Even though it’s less than the return of the market — the S&P 500 index is up more than 13% over the same period — these aren’t the numbers to really complain about. Especially in the context of this market environment. As we move a little more than six months into the year, the U.S. Federal… Read More

So far, it hasn’t been a very good year for real estate investment trusts (REITs).  However, this isn’t to say these stocks have performed badly as a whole.  So far this year, the Dow Jones Equity REIT Total Return Index is up about 3.8%. Even though it’s less than the return of the market — the S&P 500 index is up more than 13% over the same period — these aren’t the numbers to really complain about. Especially in the context of this market environment. As we move a little more than six months into the year, the U.S. Federal Reserve has already hiked interest rates twice — something that many had anticipated would trigger a REIT sell-off.  So, the good news is that the sector and its investors are taking the rate hikes in stride — so far, at least. But bad news is hiding in plain sight. The performance among REIT subsectors has been widely divergent, as the sector’s investors sold off stocks impacted by some of the major economic shifts. I’m talking about the retail business, the big changes that this industry faces, and the subsequent reaction of the market.  According to REIT.com, the weakest two sectors… Read More

If baseball great Yogi Berra looked at a 20-year chart of the Nasdaq Composite Index, he might say that it’s “Déjà vu all over again.” To those who lived through the tech bubble, yours truly included, the chart does look eerily foreboding. And always remember that the most dangerous, and expensive, phrase in the English language is “this time it’s different”. At the turn of the century, top internet service provider American Online (AOL), now owned by telecom giant Verizon (NYSE: VZ), had just announced a now ill-fated merger with content trove Time Warner (NYSE: TWX). Recently, online… Read More

If baseball great Yogi Berra looked at a 20-year chart of the Nasdaq Composite Index, he might say that it’s “Déjà vu all over again.” To those who lived through the tech bubble, yours truly included, the chart does look eerily foreboding. And always remember that the most dangerous, and expensive, phrase in the English language is “this time it’s different”. At the turn of the century, top internet service provider American Online (AOL), now owned by telecom giant Verizon (NYSE: VZ), had just announced a now ill-fated merger with content trove Time Warner (NYSE: TWX). Recently, online retailer Amazon (Nasdaq: AMZN) announced it was acquiring grocery chain Whole Foods Market (NYSE: WFM) in its attempt to conquer the world, I guess. But while history may be starting to rhyme as the Nasdaq reaches nosebleed territory, and there is room to argue that the index does need to blow off a little froth, things may not be as treacherous as they may appear. Here are three observations. 1. Inflated Valuations Are Concentrated While the Nasdaq may be hitting all-time highs, the charge is being led by five stocks: Apple (Nasdaq: AAPL), Alphabet (Nasdaq: GOOG), Microsoft (Nasdaq: MSFT),… Read More

A pioneer in her own right, her incredible journey is well documented… as it should be. It’s gone on to help save the lives of thousands, if not hundreds of thousands, of women. It also set the stage for one the greatest developments in medical history. The year was 1990, and Barbara Bradfield discovered one of the worst things anybody can find: a lump on her breast and swollen lymph nodes under her arm.  A biopsy confirmed her worst nightmare — she had metastatic breast cancer. Surgery to remove her breast and the lymph nodes quickly followed. Then chemotherapy —… Read More

A pioneer in her own right, her incredible journey is well documented… as it should be. It’s gone on to help save the lives of thousands, if not hundreds of thousands, of women. It also set the stage for one the greatest developments in medical history. The year was 1990, and Barbara Bradfield discovered one of the worst things anybody can find: a lump on her breast and swollen lymph nodes under her arm.  A biopsy confirmed her worst nightmare — she had metastatic breast cancer. Surgery to remove her breast and the lymph nodes quickly followed. Then chemotherapy — one of the few treatments available at the time. In 1991, more than 43,000 people died of breast cancer. Barbara expected to be one of them, as the survival rate for patients like her was about 20%. In fact, Barbara’s form of cancer was so aggressive that most doctors gave her no chance of surviving.  The surgery and chemotherapy didn’t work. Cancer returned. And her doctor offered the only thing he could at the time: more chemotherapy. But they both knew that this would only extend her life by a few months.  Barbara declined all further treatment.  She was staring… Read More