It’s the feel-good story of 2013 that nobody is talking about. The nation’s budget deficit, which had been spiraling out of control, is finally returning to manageable levels. Thanks to higher government revenues and lower government spending, this… Read More

You’ve probably heard his popular catchphrase, “You’re fired!” The Donald has long been a bombastic figure on the American financial scene. He is a well-known real estate magnate, and he is almost as famous for his companies’ bankruptcies as he is for his companies’ lavish real estate projects.#-ad_banner-#   Through it all, however, Donald Trump has shown that he knows what he’s doing. He’s been a wily businessman, and his real estate development projects have been, overall, fairly successful. Read More

You’ve probably heard his popular catchphrase, “You’re fired!” The Donald has long been a bombastic figure on the American financial scene. He is a well-known real estate magnate, and he is almost as famous for his companies’ bankruptcies as he is for his companies’ lavish real estate projects.#-ad_banner-#   Through it all, however, Donald Trump has shown that he knows what he’s doing. He’s been a wily businessman, and his real estate development projects have been, overall, fairly successful. But how did he get his start? And what does he think would make a great investment right now? The Trump Secret We hear a lot about Donald Trump’s real estate empire. Yes, he’s built it up to something truly lucrative. (Forbes puts his worth at $3.2 billion.) However, he didn’t get his start from nothing. So what’s his secret? Like so many successful and… Read More

Nobody ever believes me when I tell them this is probably the best way to find great stocks. My trick is to use Wall Street‘s army of thousands of analysts. They’ve led to relative easy gains as high as 810% in the past few years. Honestly. And best of all, they’re continuing to do it even as the markets are showing the greatest signs of weakness in years. It’s not the way you’re probably thinking,… Read More

Nobody ever believes me when I tell them this is probably the best way to find great stocks. My trick is to use Wall Street‘s army of thousands of analysts. They’ve led to relative easy gains as high as 810% in the past few years. Honestly. And best of all, they’re continuing to do it even as the markets are showing the greatest signs of weakness in years. It’s not the way you’re probably thinking, though. Here’s how to do it. Wall Street’s Best-Kept Secret Exposed You see, most Wall Street analysts are truly awful at their jobs. And I mean awful. A recent analysis of Wall Street analysts’ “buy” and “sell” recommendations shows how you can turn these high-priced suits into safe, consistent gains. The research found that between 2008 and 2012 investors could have made a fortune by doing one simple thing — the exact opposite of what Wall Street says. Let me explain… Had you bought the 10 stocks Wall Street rated the highest… Read More

Described as “a vulture, albeit a well-dressed one,” Wilbur Ross is also “one of the best bottom feeders in the business,” according to no less an authority than a fellow billionaire, real estate magnate Leonard Stern. These comparisons may seem unflattering,… 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 longstanding 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 fiscal 2012 (ended July 30, 2012), Kohl’s unsold inventory of… 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 longstanding 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 fiscal 2012 (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 is that the company had more inventory than… Read More

Stock prices are definitely overbought. Overbought markets occur when prices move up sharply, and based on current charts, prices appear to be too high. This situation actually occurs fairly often. Traders might be tempted to enter a short trade expecting the gains to be at least partially reversed. But that idea has led to large losses for many traders over the years. Prices might be irrational, but as traders, we need to remember that irrational behavior is irrelevant. Economist John Maynard… Read More

Stock prices are definitely overbought. Overbought markets occur when prices move up sharply, and based on current charts, prices appear to be too high. This situation actually occurs fairly often. Traders might be tempted to enter a short trade expecting the gains to be at least partially reversed. But that idea has led to large losses for many traders over the years. Prices might be irrational, but as traders, we need to remember that irrational behavior is irrelevant. Economist John Maynard Keynes supposedly said, “Markets can remain irrational longer than you can remain solvent.” Traders use momentum indicators like the stochastics to decide when prices are overbought. The monthly chart of SPDR Dow Jones Industrial Average (NYSE: DIA) is shown below, and we can see that stochastics has been overbought for more than a year. Based on the stochastics indicator, we can see that… Read More

To paraphrase an old Wall Street advertisement, when Seth Klarman speaks, people listen. He tends to shy away from most investment conferences, but when he does hold court, it’s standing room only. And for good reason. His book, “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor,” is considered to be a classic of the modern era, fetching more than $1,000 on Amazon.com, now that it is out of print.  And he backs up… Read More

To paraphrase an old Wall Street advertisement, when Seth Klarman speaks, people listen. He tends to shy away from most investment conferences, but when he does hold court, it’s standing room only. And for good reason. His book, “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor,” is considered to be a classic of the modern era, fetching more than $1,000 on Amazon.com, now that it is out of print.  And he backs up his words with numbers. The hedge fund manager has racked up 20% annualized gains for nearly three decades. Outside of the Oracle of Omaha, Warren Buffett, such sustained greatness is hard to find. What is Klarman’s secret? Identifying value investments that have a built in margin of safety. He will only make an investment if he is extremely confident that the investment won’t lose much value, even if his initial… Read More

So far this year, stock market gains have been driven by price-to-earnings (P/E) ratio expansion. That could change in the second half of the year. Earnings Growth Could Add To Market Gains Second-quarter earnings have been coming in slightly better than expected. Nearly two-thirds of companies reporting so far have beaten expectations. Earnings per… Read More

So far this year, stock market gains have been driven by price-to-earnings (P/E) ratio expansion. That could change in the second half of the year. Earnings Growth Could Add To Market Gains Second-quarter earnings have been coming in slightly better than expected. Nearly two-thirds of companies reporting so far have beaten expectations. Earnings per share (EPS) for the S&P 500 index are on track for 3.9% growth compared with a year ago. With growth being so slow, many analysts are worried about a potential market decline. As usual, concern grew when major indexes dropped from all-time highs last week.#-ad_banner-# After losing 1% last week, SPDR S&P 500 (NYSE: SPY) is still up about 23.5% on a total return basis in the past 12 months. Total return has come from earnings… Read More

Mario Gabelli is the value investor’s value investor.  Using a powerful value plus a catalyst stock-picking methodology that has been described as “Benjamin Graham and David Dodd plus Warren Buffett,” his GAMCO… Read More

In any given year, Standard & Poor’s must find a dozen or so new companies to include in its vaunted S&P 500 index.#-ad_banner-# Existing components invariably get acquired, or stumble so badly that they are disinvited from this select group. Getting a tap on the shoulder from S&P is great news, simply because the billion-dollar S&P 500 index funds must immediately buy their shares to give them a proper weighting. Read More

In any given year, Standard & Poor’s must find a dozen or so new companies to include in its vaunted S&P 500 index.#-ad_banner-# Existing components invariably get acquired, or stumble so badly that they are disinvited from this select group. Getting a tap on the shoulder from S&P is great news, simply because the billion-dollar S&P 500 index funds must immediately buy their shares to give them a proper weighting. Analysts at Credit Suisse recently gave the topic some thought, highlighting 10 strong candidates. Later on, I’m going to add another eight of my own in a moment. And in part two of this series, I’ll cite the three most appealing stocks in the group on a purely fundamental basis.  What’s In The S&P 500? Many might suspect that Standard & Poor’s simply chooses companies with the largest market values for inclusion in the index. But… Read More