I once had a subscriber write in response to some questions I asked about readers’ long-term investing goals. “At this age, I don’t buy green bananas,” he said. I had to laugh; my father used the same line for years. But it does bring up a great point. I’m willing… Read More

In global economics, there are several emerging truisms. Growth is likely to be somewhat muted in the West as efforts to reverse massive budget deficits will create a drag as governments tax more than they spend. A second truism: emerging market economies have come a very long way in a very short time, and they’re unlikely to revert to their old habits that stifled growth. [See: “Forget About BRIC — Buy These Emerging Economies Instead”] The third truism: these upstart economies are likely to stumble on their way to a higher plane. The biggest concern:… Read More

In global economics, there are several emerging truisms. Growth is likely to be somewhat muted in the West as efforts to reverse massive budget deficits will create a drag as governments tax more than they spend. A second truism: emerging market economies have come a very long way in a very short time, and they’re unlikely to revert to their old habits that stifled growth. [See: “Forget About BRIC — Buy These Emerging Economies Instead”] The third truism: these upstart economies are likely to stumble on their way to a higher plane. The biggest concern: inflation. It’s just appearing now, and could well get much worse in 2011. And if that happens, many of the world’s hottest stock markets — many of which have doubled or even tripled in the past two years — could be hit by profit-taking. In recent days China has expressed increasing concern that inflation is starting to percolate. The government is seeking to rein in bank lending and has also started to impose price controls on key foodstuffs. But China is lucky. Its economy has so many hidden strengths, its… Read More

Which sector is going to be hot in 2011? If history is any clue, it won’t be what was hot in 2010. In fact, a look back through history tells us the leading groups in one year often become disappointments the next. Moreover, lagging sectors in one particular year often blaze bullish trails in the next. Technology is one such example. Though the sector led the way in 2009 with a whopping +57% jump — and attracted a lot of buyers based on that strength — these stocks have actually scored in the bottom half of all… Read More

Which sector is going to be hot in 2011? If history is any clue, it won’t be what was hot in 2010. In fact, a look back through history tells us the leading groups in one year often become disappointments the next. Moreover, lagging sectors in one particular year often blaze bullish trails in the next. Technology is one such example. Though the sector led the way in 2009 with a whopping +57% jump — and attracted a lot of buyers based on that strength — these stocks have actually scored in the bottom half of all sectors during 2010, trailing the market by more than a little. Before identifying what’s waiting in the wings for 2011 though, let’s just walk through the industry ebb and flow for 2010 — using iShares’ major sector exchange-traded funds (ETFs) as a proxy to verify the premise. For the year so far, while basic materials haven’t surprised anyone as a leading group, it has not actually been the hottest sector of 2010. That title belongs to consumer services, up +18% year-to-date. Basic materials stocks are up an average of +14% for the year,… Read More

On average, they’re yielding 7.5%. That’s more than three times the yield of the S&P 500. Try getting that amount from a money market or savings account.   But that’s not the half of it. In tandem with those high yields, the capital gains have… Read More

The direction of the stock market in 2011 could well be determined in the next few months, as I noted last week. At the time, I suggested you tune in to Tuesday’s economic reports for the next read on the economy‘s pulse. With these reports hitting the tape, let’s see what the economy is telling us: Manufacturing heats up A monthly survey of business activity in Chicago (PMI) is flashing green. The index came in at 62.5, nicely ahead of forecasts of 60.0. (Any reading above 50.0 signals expansion in… Read More

The direction of the stock market in 2011 could well be determined in the next few months, as I noted last week. At the time, I suggested you tune in to Tuesday’s economic reports for the next read on the economy‘s pulse. With these reports hitting the tape, let’s see what the economy is telling us: Manufacturing heats up A monthly survey of business activity in Chicago (PMI) is flashing green. The index came in at 62.5, nicely ahead of forecasts of 60.0. (Any reading above 50.0 signals expansion in the factory sector). And the numbers behind the big number look even better. A gauge of new orders rose from 65.0 in October to 67.2 in November, and inventories fell sequentially from 54.9 to 48.4. That sub-50 reading means that inventories may be getting too lean, so we may be on the cusp of another inventory rebuilding cycle. It also means that economists are likely to raise their PMI forecasts for the next few months. Investors may want to see this level sustained for a few more months before calling it a trend. The… Read More

I’ve never worked a day on Wall Street. I’ve never worked at Goldman Sachs (NYSE: GS) or a hedge fund, either. I’m not what you call an insider by any means.   But that hasn’t stopped me from being a successful investor. Read More

When business school professors look back on this era, they’ll likely talk to their students about one of the greatest turnarounds in the history of enterprise. Few companies have gone from near-death to industry titan in such a short time as Ford Motor (NYSE: F). And investors have showed their respect, with shares rising from under $2 in early 2009 to $17 just 20 months later. That’s an +850% gain! But signs are emerging that the party may be over for now. Shares made a quick move from $12 since mid-September… Read More

When business school professors look back on this era, they’ll likely talk to their students about one of the greatest turnarounds in the history of enterprise. Few companies have gone from near-death to industry titan in such a short time as Ford Motor (NYSE: F). And investors have showed their respect, with shares rising from under $2 in early 2009 to $17 just 20 months later. That’s an +850% gain! But signs are emerging that the party may be over for now. Shares made a quick move from $12 since mid-September (a +40% jump in two months), yet now appear to be hit by some profit-taking since last Monday. There’s no doubt that shares have plenty more upside: the stock trades for just eight times projected 2010 profits, and the auto industry is likely to see higher volume down the road. But the coming year still holds real challenges for this auto maker. Here are five key issues you’ll need to track if you own shares of Ford. If these items come to pass and shares slip back to the lower teens, it would create a fresh compelling… Read More

The ranks of “super-investors” are few, highlighted by the likes of Warren Buffett, George Soros and Carl Icahn. Investors like to track their every move. Smart investors should also watch the moves of David Einhorn, who runs Greenlight Capital. He started with just $1 million in 1996,… Read More

Since the financial crisis in 2008, corporate executives have taken a cautious approach to making big decisions. This has been especially the case with mergers & acquisitions (M&A). But according to a recent survey from Thomson Reuters and Freeman (a consulting firm), it looks like 2011 is… Read More

I’ve always had a contrarian streak. Conventional wisdom is more a jumping off point for me than it is an anchor for my investment decisions. And I’ve found it usually pays off handsomely to follow my own research rather than… Read More