If you asked for investment advice from the world’s greatest investors, the message would be the same… Sure, their investment philosophies would differ, but their guiding principles on what it takes to be successful wouldn’t. Every one of them would cite one single thing as the key ingredient to building wealth. And that’s risk management. #-ad_banner-#Hedge Fund founder Paul Tudor Jones has a trading manifesto with 21 rules. The majority of them deal with risk management. For example, Rule No. 3 is “If I have positions going against me, I get out; if they are going for me, I keep… Read More

If you asked for investment advice from the world’s greatest investors, the message would be the same… Sure, their investment philosophies would differ, but their guiding principles on what it takes to be successful wouldn’t. Every one of them would cite one single thing as the key ingredient to building wealth. And that’s risk management. #-ad_banner-#Hedge Fund founder Paul Tudor Jones has a trading manifesto with 21 rules. The majority of them deal with risk management. For example, Rule No. 3 is “If I have positions going against me, I get out; if they are going for me, I keep them.” In other words, he cuts his losers short and lets his winners ride. Rule No. 5: “Don’t ever average losers.” Said another way, don’t throw good money after bad. Rule No. 10: “The most important rule of trading is to play great defense, not offense.” In other words, protect and preserve the capital you’ve made. Rule No. 17: “Don’t focus on making money; focus on protecting what you have.” American financier Bernard Baruch, whom after success in business devoted his time to advising U.S. Presidents Woodrow Wilson and Franklin D. Roosevelt, wrote in his 10 Rules of Investing, “Learn… Read More

It’s good to have the best seat in the house… In all of my years at StreetAuthority, I’ve been fortunate enough to watch some of the brightest financial minds at work in this business. And every so often I like to take the spotlight and shine it exclusively on one of our premium newsletter analysts. —Recommended Link— MiracleBlood postpones old age by 50 years The full details are in our new podcast, but believe me when I say that this is huge. Click here to listen for free. I’ve done this a number of times. Often it’s in the… Read More

It’s good to have the best seat in the house… In all of my years at StreetAuthority, I’ve been fortunate enough to watch some of the brightest financial minds at work in this business. And every so often I like to take the spotlight and shine it exclusively on one of our premium newsletter analysts. —Recommended Link— MiracleBlood postpones old age by 50 years The full details are in our new podcast, but believe me when I say that this is huge. Click here to listen for free. I’ve done this a number of times. Often it’s in the form of one-on-one interviews. On other rare occasions, I’ll hand the reins of these pages over to the analyst so that they can speak directly, personally, to you. When it comes to an in-depth look at a winning strategy or important issue that could fundamentally change the way you think about investing, I’ve found that there’s simply no better way to get the message across than to sit down with one of our experts and have a detailed discussion. And judging from the feedback I’ve received over the years from you, our StreetAuthority Daily readers, a lot of you agree. Read More

Last week, news outlets reported the release of minutes from the Federal Reserve’s meeting in January. We all know that when the Fed meets, it’s usually big news. Since the financial crisis, the central bank has been ever-so-gradually raising interest rates, from zero, to where they now sit, in a range of 2.25% to 2.5%. But ever since equities markets fell sharply to end 2018, the Fed has been sending mixed signals. I won’t bore you with the details, but the short version is that Fed Chair Jerome Powell seemed committed to gradual increases… until things… Read More

Last week, news outlets reported the release of minutes from the Federal Reserve’s meeting in January. We all know that when the Fed meets, it’s usually big news. Since the financial crisis, the central bank has been ever-so-gradually raising interest rates, from zero, to where they now sit, in a range of 2.25% to 2.5%. But ever since equities markets fell sharply to end 2018, the Fed has been sending mixed signals. I won’t bore you with the details, but the short version is that Fed Chair Jerome Powell seemed committed to gradual increases… until things got a little ugly. So the question became whether the Fed would continue raising rates gradually or take an even softer stance going forward. So here’s what we learned from the official notes from the meeting… #-ad_banner-#As it stands, the central bank still holds about $3.8 trillion in Treasury bonds on its balance sheet. The “balance sheet reduction” program, where the Fed was holding U.S. government bonds to maturity without making any new repurchases, will likely conclude at the end of the year. (Remember QE, or quantitative easing? Well, this was quantitative “tightening,” if you will.) Still with me? Good,… Read More

Value investing is one of the most popular investment strategies used today by individual investors and portfolio managers.  Value investors seek out stocks that can be purchased at a discount to a company’s “real” worth. It’s an approach that’s been refined over the years, but its foundation goes back roughly 85 years with the publishing of Benjamin Graham and David Dodd’s college textbook, “Security Analysis.” Benjamin Graham is properly credited as one of the fathers of value investing. Disciples of his include such notables as Warren Buffett (who is reportedly the only student to receive an “A” in his class),… Read More

Value investing is one of the most popular investment strategies used today by individual investors and portfolio managers.  Value investors seek out stocks that can be purchased at a discount to a company’s “real” worth. It’s an approach that’s been refined over the years, but its foundation goes back roughly 85 years with the publishing of Benjamin Graham and David Dodd’s college textbook, “Security Analysis.” Benjamin Graham is properly credited as one of the fathers of value investing. Disciples of his include such notables as Warren Buffett (who is reportedly the only student to receive an “A” in his class), Walter J. Schloss, Seth Klarman, and Bill Ackman. Graham’s approach was to identify stocks that were trading at a discount to their intrinsic value. And although Graham never fully explained how to determine “intrinsic” value for a stock, we do know that he felt a firm’s tangible assets were a particularly important component. Other factors included earnings, dividends, financial strength, and stability.  Graham knew that identifying such neglected, undervalued stocks was a protracted and patience-trying experience. But he also knew the rewards could be great. And so did his most famous student…  —Recommended Link— The most powerful market research you’ll… Read More

Should I stay or should I go? If you’ve been singing this 1981 tune by the English punk rock band The Clash to yourself since late September, you are not alone.  In the fourth-quarter selloff last year, U.S. equities lost $4 trillion in combined market value. For those who had chosen to stay and not to go, a sharp market bounce has helped recover much of the losses: after the 17% rally off the December low, the S&P 500 has now returned to early January 2018 levels. For the tech-heavy Nasdaq 100, the decline was deeper, but the bounce was… Read More

Should I stay or should I go? If you’ve been singing this 1981 tune by the English punk rock band The Clash to yourself since late September, you are not alone.  In the fourth-quarter selloff last year, U.S. equities lost $4 trillion in combined market value. For those who had chosen to stay and not to go, a sharp market bounce has helped recover much of the losses: after the 17% rally off the December low, the S&P 500 has now returned to early January 2018 levels. For the tech-heavy Nasdaq 100, the decline was deeper, but the bounce was sharper. At its lowest levels of 2018, the Nasdaq was down 23% from its highs. Since its December lows, though, it has rallied some 19%.  As a result, the Nasdaq is now higher by about 10% from its 2017 levels. —Recommended Link— How I hacked the stock market and got away with thousands. Make $30,000 in 2 months exploiting mispriced stocks like Apple, Starbucks and other quality blue chips. Click here for the easy (and legal) secret… Hardly a record, but still better than money-market returns. It Pays To Hold Fast But stocks are risky, you might… Read More

As a child, I wanted to be a weatherman. I knew more than any ten-year-old should about barometric pressure and relative humidity and spent countless hours in the winter staring at the radar praying for snow (understand, it’s a rarity in my home state of Louisiana).  Back then, one of our local network meteorologists never predicted any of the white stuff, even when his colleagues assured kids that several inches were coming and schools would be closed the next day. I hated that guy. But my ski gloves and sled never got much use — he was right 99% of… Read More

As a child, I wanted to be a weatherman. I knew more than any ten-year-old should about barometric pressure and relative humidity and spent countless hours in the winter staring at the radar praying for snow (understand, it’s a rarity in my home state of Louisiana).  Back then, one of our local network meteorologists never predicted any of the white stuff, even when his colleagues assured kids that several inches were coming and schools would be closed the next day. I hated that guy. But my ski gloves and sled never got much use — he was right 99% of the time.  Of course, you can’t really blame the weatherman for the forecast. They are simply the messengers. Please keep that in mind when I tell you the stock market forecast appears rather stormy right now.  I’d much prefer to say that conditions look lovely — but honestly, you might want to keep an umbrella handy the next few weeks.  Here’s what’s got me worried.  This chart shows the change in S&P first-quarter earnings estimates over the past 18 weeks. Back in September, analysts were anticipating a decent 6.7% increase. By December 31, that projection had been cut in half… Read More

Lately, I’ve been noting the importance of the 200-day moving average (MA). The first chart I want to look at this week shows that the S&P 500 failed to break above that MA.  I’ve also highlighted another section of the chart that is a good illustration of how important the 200-day MA can be. During that period, the index reached its top in October and began selling off. The initial declined when the price broke below the 200-day MA.  For almost eight weeks, the S&P 500 remained within a few percentage points of this level. Then, in early December, the… Read More

Lately, I’ve been noting the importance of the 200-day moving average (MA). The first chart I want to look at this week shows that the S&P 500 failed to break above that MA.  I’ve also highlighted another section of the chart that is a good illustration of how important the 200-day MA can be. During that period, the index reached its top in October and began selling off. The initial declined when the price broke below the 200-day MA.  For almost eight weeks, the S&P 500 remained within a few percentage points of this level. Then, in early December, the index broke sharply below its moving average, sparking a 15% tumble that reached a low of 2,351 on December 24.  In the six weeks since those lows, the S&P 500 staged a steady rally back toward its 200-day MA (spurring an increase of bullish opinions)… but it stalled out last week after failing to break through the MA for two days.  —Recommended Link— Thousands Of Americans Have Joined A Revolutionary New Marijuana Profit-Sharing Plan. Their payouts have been breathtaking. The company behind this plan sends out profit-sharing checks like clockwork, and you could quickly find… Read More

I recently finished remaking one of the rooms at my house into a personal office. After rearranging and unpacking boxes, I found myself thumbing through an old copy of “Beating the Street,” by Peter Lynch. It had been a while since I’ve read it, and I can faithfully report that most of what Lynch writes about still holds up in today’s market. I’m sure you’re familiar with Lynch, but his track record bears repeating. While at the helm of the Magellan Fund at Fidelity, Lynch delivered a 29.2% average annual return from 1977 to 1990. Probably the greatest mutual fund… Read More

I recently finished remaking one of the rooms at my house into a personal office. After rearranging and unpacking boxes, I found myself thumbing through an old copy of “Beating the Street,” by Peter Lynch. It had been a while since I’ve read it, and I can faithfully report that most of what Lynch writes about still holds up in today’s market. I’m sure you’re familiar with Lynch, but his track record bears repeating. While at the helm of the Magellan Fund at Fidelity, Lynch delivered a 29.2% average annual return from 1977 to 1990. Probably the greatest mutual fund manager of all time, we have Lynch to thank for popular investing phrases like “invest in what you know,” “10-bagger” (a stock that gains 1,000%), “GARP” (growth at a reasonable price), and more. But what you might not know about Lynch is the story behind his exit from the Magellan Fund… —Recommended Link— The Single Best Group of Stocks to Buy NOW Since 1926, one collection of stocks has accounted for HALF of the S&P’s return — through every market environment imaginable. If you don’t have these picks in your own portfolio, you could be missing out on the… Read More

Have you heard? The U.S. Postal Service (USPS) just raised the price of a Forever stamp to $0.55 from $0.50. This is the sharpest percentage increase (10%) since 1991 — and the biggest hike on record in nominal terms. As a young financial advisor in the late 1990s, I would always stress the impact of inflation when meeting with prospective clients, modeling it into any retirement funding projections. And the best way to drive home the point was to show how stamp prices had increased steadily over the years. In fact, they are directly tethered to inflation rates. Back… Read More

Have you heard? The U.S. Postal Service (USPS) just raised the price of a Forever stamp to $0.55 from $0.50. This is the sharpest percentage increase (10%) since 1991 — and the biggest hike on record in nominal terms. As a young financial advisor in the late 1990s, I would always stress the impact of inflation when meeting with prospective clients, modeling it into any retirement funding projections. And the best way to drive home the point was to show how stamp prices had increased steadily over the years. In fact, they are directly tethered to inflation rates. Back then, stamps had doubled in price from $0.15 to $0.32 over the prior two decades. Twenty years later, and they’ve continued to march all the way to $0.55. How long do you think it will be before they hit $0.60, or $1.00?  An acquaintance of mine had the foresight back in 2007 to “invest” $1,000 in Forever Stamps, purchasing 2,439 at a fixed price of $0.41 each. It really wasn’t that different from speculating in commodities by using futures contracts. She didn’t do too bad. The value of those 2,439 stamps has now risen to $1,341, an increase of 34.1%. Read More

Back in December, I wrote about why the major cruise lines are compelling investment candidates right now. One of our loyal readers, Jim C., wrote in to point out that anyone who owns at least 100 shares of Carnival Cruise Lines (NYSE: CCL) is entitled to a unique fringe benefit — up to $250 in complimentary onboard spending credits per cruise.  This isn’t one of those promotional offers you see advertised to the general public. It’s a special perk reserved strictly for Carnival shareholders. Put another way, this $250 offer is equivalent to $2.50 per share for an investor who holds 100 shares. Read More

Back in December, I wrote about why the major cruise lines are compelling investment candidates right now. One of our loyal readers, Jim C., wrote in to point out that anyone who owns at least 100 shares of Carnival Cruise Lines (NYSE: CCL) is entitled to a unique fringe benefit — up to $250 in complimentary onboard spending credits per cruise.  This isn’t one of those promotional offers you see advertised to the general public. It’s a special perk reserved strictly for Carnival shareholders. Put another way, this $250 offer is equivalent to $2.50 per share for an investor who holds 100 shares. That represents a bonus payout of 5.1% on the $48 stock — on top of the 4.3% dividend yield. Double that if you happen to book two cruises. After Jim wrote in to us, my staff and I got to talking… And after doing a little research, it turns out a whole host of companies offers little-known “perks” like this. So I thought it would be fun to take a break from our regular format and focus on four companies that offer special shareholder benefits.  Of course, these enticements alone aren’t necessarily reasons to invest. But since these are all… Read More