This week I want to tell you about a strategy that could make you a lot of money. #-ad_banner-#You probably haven’t heard much about it. That’s because for the past year and a half, my colleagues and I at StreetAuthority have been quietly designing and beta-testing a new investment system with a select group of about 500 loyal StreetAuthority readers. It’s a system that we think could make you even more money in the stock market than anything we’ve ever created before. In short: it solves one of the most common… Read More

This week I want to tell you about a strategy that could make you a lot of money. #-ad_banner-#You probably haven’t heard much about it. That’s because for the past year and a half, my colleagues and I at StreetAuthority have been quietly designing and beta-testing a new investment system with a select group of about 500 loyal StreetAuthority readers. It’s a system that we think could make you even more money in the stock market than anything we’ve ever created before. In short: it solves one of the most common problems every investor faces — how to get bigger gains in a shorter amount of time. I have to admit, when we first began the project, I was a little skeptical. When we were given the task of creating an investing system that could deliver bigger gains in a shorter amount of time, my first thought was “this sounds an awful lot like trading.” And most people — including myself at first — equate trading with moving in and out of stocks in a matter of hours or days, racking up huge commissions and… Read More

Lost in all the headlines about the oil’s price plunge was an ominous comment by the energy minister of the United Arab Emirates earlier this month. Just weeks after OPEC shocked global energy markets by refusing to support crude prices with a supply cut, statements by decision makers seem to point to an oil price war.   #-ad_banner-#Oil prices have collapsed more than 40% since September. While unprofitable production will eventually need to be cut to support prices, record capital spending over the last couple of years will keep fields producing well into 2015.   The U.S. energy… Read More

Lost in all the headlines about the oil’s price plunge was an ominous comment by the energy minister of the United Arab Emirates earlier this month. Just weeks after OPEC shocked global energy markets by refusing to support crude prices with a supply cut, statements by decision makers seem to point to an oil price war.   #-ad_banner-#Oil prices have collapsed more than 40% since September. While unprofitable production will eventually need to be cut to support prices, record capital spending over the last couple of years will keep fields producing well into 2015.   The U.S. energy revolution will still be a strong investment theme over the longer-term, but can your portfolio survive several years of price wars?   Oil Prices: How Low And For How Long? Suhail Al-Mazrouei, UAE Energy Minister, said OPEC would be comfortable with crude prices as low as $40, which was followed by a nearly 5% price plunge in West Texas Intermediate — a benchmark for oil.   The statement was a shot across the bow of world oil production and a full commitment to protect market share against surging North American production.   The twelve members of OPEC produce 40% of… Read More

This time of year, market prognosticators, financial journalists and traders look back on what was hot and what was not in 2014. More importantly, all of us are trying to figure out what’s likely to work in 2015. #-ad_banner-#Now, there are two schools of thought. One is to sort through the most beaten-down sectors of the year (the most obvious being the bludgeoned energy sector) and try to find the hidden gems that have been unfairly caught up in the sell-off. The other school of thought is to look at sectors that outperformed the rest of the market. … Read More

This time of year, market prognosticators, financial journalists and traders look back on what was hot and what was not in 2014. More importantly, all of us are trying to figure out what’s likely to work in 2015. #-ad_banner-#Now, there are two schools of thought. One is to sort through the most beaten-down sectors of the year (the most obvious being the bludgeoned energy sector) and try to find the hidden gems that have been unfairly caught up in the sell-off. The other school of thought is to look at sectors that outperformed the rest of the market.  I prefer the latter tactic. Most investors are conditioned with a “buy low, sell high” mentality that can actually hurt their performance. Research has shown assets that are outperforming the market tend to continue outperforming. A screen of the major market sectors showed outstanding relative price performance year to date in two sectors that I suspect have the juice to continue delivering into 2015: biotech and tech.   For most of the year, stocks in the health care space have been on fire. Large-cap stocks in the iShares DJ US Healthcare ETF (NYSE: IYH)… Read More

It’s not easy being a CEO. Their days are filled with back-to-back meetings as they try to keep track of the many small details that comprise a company’s daily operations. Still, it’s an incredibly well-paying job, and they are expected to perform at peak levels. #-ad_banner-#So it’s a bit unconscionable when a CEO overlooks clear problems. In September, shareholders of Hertz Global Holdings, Inc. (NYSE: HTZ) learned that the rental car firm was letting its vehicles rack up too many miles before being replaced, which led to lost business with key corporate accounts. They soon demanded CEO Mark Frissora’s resignation. Read More

It’s not easy being a CEO. Their days are filled with back-to-back meetings as they try to keep track of the many small details that comprise a company’s daily operations. Still, it’s an incredibly well-paying job, and they are expected to perform at peak levels. #-ad_banner-#So it’s a bit unconscionable when a CEO overlooks clear problems. In September, shareholders of Hertz Global Holdings, Inc. (NYSE: HTZ) learned that the rental car firm was letting its vehicles rack up too many miles before being replaced, which led to lost business with key corporate accounts. They soon demanded CEO Mark Frissora’s resignation. Luckily, activist investors helped locate a new CEO, and the damage will likely be repaired in 2015. In another instance, the board of directors waited far too long to replace a clearly unsuccessful leader. Dov Charney, the controversial head of American Apparel, Inc. (NYSE: APP), almost drove his company into bankruptcy, as I noted in 2011, yet the board waited until 2014 to get around to replacing him. American Apparel is one of many firms that suffered from what is known as a “pocket board,” whereby by all of the company’s directors have… Read More

On Wednesday, the stock market reacted to Federal Reserve Chair Janet Yellen’s post-FOMC meeting press conference with a strong one-day rally that led into the S&P 500’s biggest two-day percentage gain since November 2011. After reading the Fed’s policy statement and watching the press conference, which included multiple attempts by Yellen to explain that nothing had materially changed from previous communications, my conclusion is that the market was intent on getting its Santa Claus Rally almost regardless of what was said. And it did, with bells on. #-ad_banner-#Last week’s rebound was atypically led by small-cap stocks as the Russell 2000… Read More

On Wednesday, the stock market reacted to Federal Reserve Chair Janet Yellen’s post-FOMC meeting press conference with a strong one-day rally that led into the S&P 500’s biggest two-day percentage gain since November 2011. After reading the Fed’s policy statement and watching the press conference, which included multiple attempts by Yellen to explain that nothing had materially changed from previous communications, my conclusion is that the market was intent on getting its Santa Claus Rally almost regardless of what was said. And it did, with bells on. #-ad_banner-#Last week’s rebound was atypically led by small-cap stocks as the Russell 2000 gained 3.8%, putting it back into positive territory for the year. On the surface this is good news for the market since small caps, which usually lead the market, have underperformed all year. The not-so-good news is that technology stocks, the other market leader, which have driven this year’s advance, underperformed. The Nasdaq 100 gained just 2% for the week. If last week’s rebound is the beginning of the stock market’s next leg higher, technology must resume its leadership role — and quickly. Without that, the sustainability of the rebound is suspect. Watch This Market Bellwether for Clues In a… Read More

  Over the course of my career as a Wall Street analyst, I had to continually pitch my best ideas to hedge fund, pension fund and mutual fund managers. And they all stressed the same constraint: “Tell me only about very liquid stocks.” #-ad_banner-#These managers often had massive sums of money available to invest in particular stocks, and any attempts to buy stocks that trade just 20,000 or 30,000 shares a day would simply push that stock price up too fast to make it worth the effort. That’s why most fund managers own stocks such as Apple, Inc. (Nasdaq: AAPL). Read More

  Over the course of my career as a Wall Street analyst, I had to continually pitch my best ideas to hedge fund, pension fund and mutual fund managers. And they all stressed the same constraint: “Tell me only about very liquid stocks.” #-ad_banner-#These managers often had massive sums of money available to invest in particular stocks, and any attempts to buy stocks that trade just 20,000 or 30,000 shares a day would simply push that stock price up too fast to make it worth the effort. That’s why most fund managers own stocks such as Apple, Inc. (Nasdaq: AAPL). When more than 50 million shares trade each day, it’s easy to get in and out of a big investment position. Over the years, I’ve tended to follow the view of these fund managers, avoiding any stocks that trade less than 100,000 shares a day. But a recent study helped me realize that these off-the-radar stocks are precisely where individual investors should be focusing. Recently, Roger Ibbotson, who has generated a long track record of ground-breaking investment analyses, has been focusing on the returns of popular stocks (ones with high trading volume) and unpopular stocks. He found an unusual performance… Read More

Every so often we like to step outside the normal mold, and give readers something different. One of the great things about StreetAuthority.com is that we can write about anything we want – well anything related to investing at least – so long as we see it as a value to our loyal subscribers. We have a variety of newsletters that specifically focused on recurring investment themes or strategies, but not this one. #-ad_banner-#​StreetAuthority.com is our main outlet to share with you what we would want to know if our roles were reversed. Fairly often our top analysts… Read More

Every so often we like to step outside the normal mold, and give readers something different. One of the great things about StreetAuthority.com is that we can write about anything we want – well anything related to investing at least – so long as we see it as a value to our loyal subscribers. We have a variety of newsletters that specifically focused on recurring investment themes or strategies, but not this one. #-ad_banner-#​StreetAuthority.com is our main outlet to share with you what we would want to know if our roles were reversed. Fairly often our top analysts will respond to reader Q&A, and the exchange proves to be a very candid look into the thought processes of our top analysts. So today I wanted to share with you a Q&A from one of our readers that addresses an important question many investors face. Where do I start and which strategies should I follow? With so many different investing strategies out there, it’s tough for investors to know where to begin or what advice to follow. A reader posed this question to Andy Obermueller,… Read More

In last week’s Market Outlook, I cautioned readers that a 57-year pattern of seasonal weakness in the S&P 500 warned of a near-term decline in equity prices. That is exactly what we got with the S&P 500 down 3.5% for the week. The Dow Jones Industrial Average was hit with its biggest one-week decline since 2011, losing 3.8%. Meanwhile, the Russell 2000 lost 2.5%, pushing the beleaguered small-cap index back into negative territory for the year. #-ad_banner-#Bigger picture, however, as I said last week, “any short-term weakness that emerges this month is likely to lead to… Read More

In last week’s Market Outlook, I cautioned readers that a 57-year pattern of seasonal weakness in the S&P 500 warned of a near-term decline in equity prices. That is exactly what we got with the S&P 500 down 3.5% for the week. The Dow Jones Industrial Average was hit with its biggest one-week decline since 2011, losing 3.8%. Meanwhile, the Russell 2000 lost 2.5%, pushing the beleaguered small-cap index back into negative territory for the year. #-ad_banner-#Bigger picture, however, as I said last week, “any short-term weakness that emerges this month is likely to lead to a better buying opportunity as the economy continues to strengthen into early next year.” The defensive utilities sector was the only sector of the S&P 500 to post a gain last week, which supports my bullish bias in the Utilities Select Sector SPDR ETF (NYSE: XLU) first mentioned in the Oct. 27 Market Outlook. XLU rose 5.1% to a high of $46.79 last week, just below my upside target of $47. Last week’s weakest sectors were energy, materials and industrials. Dow Theory Warns of More Near-Term Pain In addition to the weak seasonality, another early sign… Read More

Over the past few weeks, I’ve been revealing to StreetAuthority.com readers how my research team and I honed in on “The 10 Stocks to Own For the Rest of Your Life.” #-ad_banner-#I explained how “Irreplaceable Assets” can shower investors with increased wealth for the long haul here and how we use a very unique set of criteria to find the “World’s Greatest Businesses” here. But there’s still one more vital trait that we used to find our elite group of “Forever Stocks.” See, perhaps more than anything, my Forever Stocks have an obsession with… Read More

Over the past few weeks, I’ve been revealing to StreetAuthority.com readers how my research team and I honed in on “The 10 Stocks to Own For the Rest of Your Life.” #-ad_banner-#I explained how “Irreplaceable Assets” can shower investors with increased wealth for the long haul here and how we use a very unique set of criteria to find the “World’s Greatest Businesses” here. But there’s still one more vital trait that we used to find our elite group of “Forever Stocks.” See, perhaps more than anything, my Forever Stocks have an obsession with paying shareholders rich, growing dividends. As an investor, this makes perfect sense. Since 1926 nearly half of the market’s total return came from dividends, according to Standard & Poor’s research.   In other words, if you ignore dividends, then your potential for long-term growth is cut in half. You’d also be ignoring some of the market’s best performers. From January 1972 through March 2014, dividend-paying stocks in the S&P 500 returned 9.3% on average annually, according to Ned Davis Research. That far exceeds the 2.4% annual return for S&P stocks that… Read More

All major U.S. stock indices finished in positive territory last week except for the Nasdaq 100, which lost 0.6%. Technology stocks must resume their leadership role quickly, ideally with some help from small caps, to power this year’s broad market advance into 2015. If they cannot, the market could stumble into next year. From a sector standpoint, last week’s modest advance was led by financials, health care and materials. Globally, the aggressive recovery by European equities is a good sign for U.S. stocks into the early to middle part of 2015. #-ad_banner-#Seasonality, Congress Could Hurt Stocks This Week Our first… Read More

All major U.S. stock indices finished in positive territory last week except for the Nasdaq 100, which lost 0.6%. Technology stocks must resume their leadership role quickly, ideally with some help from small caps, to power this year’s broad market advance into 2015. If they cannot, the market could stumble into next year. From a sector standpoint, last week’s modest advance was led by financials, health care and materials. Globally, the aggressive recovery by European equities is a good sign for U.S. stocks into the early to middle part of 2015. #-ad_banner-#Seasonality, Congress Could Hurt Stocks This Week Our first chart displays the weekly seasonal pattern for the fourth quarter in the S&P 500 based on data since 1957. Historically, the second week of December, which is this week, is the second seasonally weakest of the entire quarter. On average, it closed 0.21% lower while posting a negative close 56% of the time. This chart is of particular interest to me this week because, despite the fact that it has received little coverage in the financial press, Congress has until midnight on Thursday to pass legislation to keep the government from shutting down. For perspective, last year’s government shutdown… Read More