This week, my Maximum Profit system flashed a cautionary signal, one I think all investors need to know about. Right now, the stock market faces an unusual amount of… Read More

Fix your mind on a pair of percentages: 73% and 27%. These two figures hold the key to why the long-term appeal of stocks remains quite bright (even if many investors would welcome a pullback in the near… Read More

We generally stand by a simple rule at StreetAuthority: Find great companies and tune out the market noise. The nation’s top companies deliver shareholder value on a consistent basis, which puts… Read More

In some ways, Bill Ackman invests like he’s riding a bicycle. In the summer of 2012, Ackman joined fellow hedge fund manager Daniel Loeb and half-dozen other cyclists on a very long bike ride. Although Ackman, a fierce competitor, was admittedly out of shape for such a ride, he pulled out to lead the pack early, only to eventually fall well behind the others. One participant noted, “I’ve never had an experience where someone has gone from being so aggressive on a bike to being so hopelessly unable to even turn the pedals… (Ackman’s)… Read More

In some ways, Bill Ackman invests like he’s riding a bicycle. In the summer of 2012, Ackman joined fellow hedge fund manager Daniel Loeb and half-dozen other cyclists on a very long bike ride. Although Ackman, a fierce competitor, was admittedly out of shape for such a ride, he pulled out to lead the pack early, only to eventually fall well behind the others. One participant noted, “I’ve never had an experience where someone has gone from being so aggressive on a bike to being so hopelessly unable to even turn the pedals… (Ackman’s) mind wrote a check that his body couldn’t cash.”#-ad_banner-# Some activist investors like to start with a small position or take a “backseat” role, but Ackman starts out in high gear: He takes on management directly and generally looks for a board seat immediately. Ackman does all his research upfront — as seen from some of his multi-hundred-slide presentations — before taking a stake, and he has a goal in mind before even approaching management. He’s come a long way over the past decade, now that… Read More

A short-term head-and-shoulders pattern is starting to look like it could have long-term and ominous significance for the stock market. SPY Turned Back by a Gap In last week’s Market Outlook, I highlighted a head-and-shoulders top that had formed in SPDR S&P 500 (NYSE: SPY). The price target for that pattern had been achieved and SPY was moving toward resistance defined by a gap. The gap is… Read More

A short-term head-and-shoulders pattern is starting to look like it could have long-term and ominous significance for the stock market. SPY Turned Back by a Gap In last week’s Market Outlook, I highlighted a head-and-shoulders top that had formed in SPDR S&P 500 (NYSE: SPY). The price target for that pattern had been achieved and SPY was moving toward resistance defined by a gap. The gap is at the neckline of the head-and-shoulders, giving it additional significance. That chart has been updated to include the most recent price action. After meeting resistance, SPY fell and ended the week down 1.78%. Small-cap stocks fared worse with iShares Russell 2000 (NYSE: IWM) falling 2.7%. Small caps often lead the market at turning points. Both indexes are more than 4% below their all-time highs reached in the first week of August.#-ad_banner-# This is still a rather shallow pullback, but… Read More

In the 1980s and ’90s, an investor theme emerged that likely played a role in a 20-year upward move for the stock market. #-ad_banner-# In that era, baby boomers reached financial maturity, spending hundreds of billions of dollars on housing, leisure, retirement savings plans, transportation and many other categories. Financial pundits sought ways to suggest profitable ways to track baby boomer… Read More

In the 1980s and ’90s, an investor theme emerged that likely played a role in a 20-year upward move for the stock market. #-ad_banner-# In that era, baby boomers reached financial maturity, spending hundreds of billions of dollars on housing, leisure, retirement savings plans, transportation and many other categories. Financial pundits sought ways to suggest profitable ways to track baby boomer spending, coining the phrase “boomer investing.” Of course, as the oldest baby boomers (born right after World War II) are now near retirement, and younger boomers pass their peak spending ages as well, it’s time to shift gears and focus on the next massive demographic trend. The “millennials” or “echo boomers,” mostly born in the ’80s and ’90s, which are set to overtake the economy. How big is this group? Demographers suggest that there are (or were) 77 million baby boomers. The millennials: 82 million. Skinflints… Read More

If you regularly shop at department store chain Kohl’s (NYSE: KSS), you may have spotted an unusual merchandising misstep in the spring of 2012. The retailer, which had built a long-standing reputation for solid designs, good quality and reasonable prices, started to carry less appealing merchandise that spring. Many shoppers browsed but went home empty-handed.#-ad_banner-# Just a few months later, you would have seen this problem appear on Kohl’s financial statements. In the second quarter of its 2012 fiscal year (which ended July 30, 2012), Kohl’s unsold… Read More

If you regularly shop at department store chain Kohl’s (NYSE: KSS), you may have spotted an unusual merchandising misstep in the spring of 2012. The retailer, which had built a long-standing reputation for solid designs, good quality and reasonable prices, started to carry less appealing merchandise that spring. Many shoppers browsed but went home empty-handed.#-ad_banner-# Just a few months later, you would have seen this problem appear on Kohl’s financial statements. In the second quarter of its 2012 fiscal year (which ended July 30, 2012), Kohl’s unsold inventory of goods stood at $3.5 billion, or 83% of that company’s quarterly sales base. Just a year earlier, that percentage stood at 73%. Investors willing to take the time to track this retailer’s inventory levels (as a percentage of sales) were the first ones to realize that Kohl’s was in trouble. By the time the next quarter’s results came out, this balance sheet ratio had swelled to a company record 107%. (What that means… Read More

“This time, it will be different.”  This phrase is perhaps the most overused and dangerous phrase in the world of finance. It usually means to get ready for a repeat of the same old market pattern or occurrence. As an example, I remember back during the dot-com boom, many investors believed the stock market was going to continue skyward forever. They pointed to things like the unlimited potential of the Internet, the new economic paradigm and a variety of other… Read More

“This time, it will be different.”  This phrase is perhaps the most overused and dangerous phrase in the world of finance. It usually means to get ready for a repeat of the same old market pattern or occurrence. As an example, I remember back during the dot-com boom, many investors believed the stock market was going to continue skyward forever. They pointed to things like the unlimited potential of the Internet, the new economic paradigm and a variety of other factors that supported their bullishness. Well, despite the raging bullish fever and the “new” reasons for why it would never end, we all know what happened. The dot-com bubble burst in the same fashion as all other speculative bubbles during human history.#-ad_banner-# This year, we have experienced a huge bull market. Many pundits are calling for the bullish move to end in a sharp downward correction. These… Read More

The leveraged buyout was one of the great financial inventions of the 1980s. Buying companies with little money down and stuffing them with debt before exiting with a massive… Read More

When the employees of Florida-based Fairholme Capital came into work on Jan. 11, 2010, they were greeted with great news. Rating firm Morningstar had just selected Fairholme’s Bruce Berkowitz as the “Domestic-Stock Fund Manager of the Decade.” That’s quite an accolade, considering the heady competition. Morningstar chose him because “his aptitude for picking stocks sets him apart from his peers, and Fairholme’s portfolio is filled with attractively priced firms that generate high… Read More

When the employees of Florida-based Fairholme Capital came into work on Jan. 11, 2010, they were greeted with great news. Rating firm Morningstar had just selected Fairholme’s Bruce Berkowitz as the “Domestic-Stock Fund Manager of the Decade.” That’s quite an accolade, considering the heady competition. Morningstar chose him because “his aptitude for picking stocks sets him apart from his peers, and Fairholme’s portfolio is filled with attractively priced firms that generate high free cash flow.” In the just-completed decade — a decade in which the S&P 500 delivered slightly negative returns — Berkowitz’s Fairholme generated a 10-year annualized total return of 13%. The accolades are still pouring in. GuruFocus.com anointed Berkowitz as its “Investing Guru of the Year 2012.” These days, Berkowitz is still seeking out stocks with solid value and cash flow characteristics. According to recent filings, Berkowitz is loading up on shares of four insurers that are the epitome of… Read More