I’m in the process of increasing my life insurance. I’m taking advantage of my firm’s group life benefit to shore up my total face value to a number that will make my wife even happier should I head to the happy hunting ground sooner than expected.  #-ad_banner-#As I’ve been navigating the underwriting odyssey, I’ve realized that I haven’t looked at some of the bigger life insurance stocks in a while. So I set out to correct that — and I was intrigued by what I found.  Many investors have fallen out of love with large insurance company stocks over the… Read More

I’m in the process of increasing my life insurance. I’m taking advantage of my firm’s group life benefit to shore up my total face value to a number that will make my wife even happier should I head to the happy hunting ground sooner than expected.  #-ad_banner-#As I’ve been navigating the underwriting odyssey, I’ve realized that I haven’t looked at some of the bigger life insurance stocks in a while. So I set out to correct that — and I was intrigued by what I found.  Many investors have fallen out of love with large insurance company stocks over the past five years (if they were ever in love to begin with). The two main reasons are the two motivations that drive almost all behavior in financial markets: fear and greed.  From 2008 to 2011, fear drove the bus mainly due to the fallout from the global financial crises in U.S and European markets. Investors worried that the investment portfolios of the big insurers contained huge quantities of securities that were in danger of deep devaluation or even default due to the turmoil and depressive economic environment. The natural reaction was to sell and then avoid. This chart of MetLife… Read More

I never thought I’d get an investment idea from the movie “Wayne’s World.” I didn’t at first. It took me about 20 years to realize it. #-ad_banner-#A while ago, I was kibitzing with a money manager friend of mine about some of the names he was picking up. Tim Hortons (NYSE: THI), the Canadian coffee and doughnut shop chain, was at the top of his list. “Oh!” I said. “There was a scene there in ‘Wayne’s World.’ ” My friend smiled and corrected me: The scene I was thinking of was actually set at Stan Mikita’s Doughnuts, a fictional shop… Read More

I never thought I’d get an investment idea from the movie “Wayne’s World.” I didn’t at first. It took me about 20 years to realize it. #-ad_banner-#A while ago, I was kibitzing with a money manager friend of mine about some of the names he was picking up. Tim Hortons (NYSE: THI), the Canadian coffee and doughnut shop chain, was at the top of his list. “Oh!” I said. “There was a scene there in ‘Wayne’s World.’ ” My friend smiled and corrected me: The scene I was thinking of was actually set at Stan Mikita’s Doughnuts, a fictional shop based on Tim Hortons. An iconic brand in Canada, the real Tim Hortons was founded in Ontario in 1964 by pro hockey star Tim Horton and a retired police officer, Ron Joyce. Sadly, Horton died in a car crash in 1974 — before he could witness the chain’s unlikely rise. The company now boasts over 4,300 restaurants throughout Canada, the U.S. and the Middle East. The menu has stretched beyond doughnuts and coffee — to specialty coffee drinks, teas, homestyle lunches and other baked goods. And the stock has satisfied return-hungry investors: The stock has gained an average… Read More

One claim that scientists make is that part of what distinguishes humans from animals is that humans have the ability to recognize patterns.  The reason I call it a claim is that my 8-year-old yellow lab knows when things are out of order — mainly at feeding time (especially if the cat’s food dish has been moved) and when it’s time to come in to go to bed. If things are askew, she’ll let you know (as only labs can). In my research for an article on value-priced utility stocks, I recognized an undeniable historical pattern: #-ad_banner-#In every… Read More

One claim that scientists make is that part of what distinguishes humans from animals is that humans have the ability to recognize patterns.  The reason I call it a claim is that my 8-year-old yellow lab knows when things are out of order — mainly at feeding time (especially if the cat’s food dish has been moved) and when it’s time to come in to go to bed. If things are askew, she’ll let you know (as only labs can). In my research for an article on value-priced utility stocks, I recognized an undeniable historical pattern: #-ad_banner-#In every instance, a sideways pattern, or underperformance of that particular group of stocks, in the Dow Jones Utility Average Total Return index occurred during a relatively strong, broader equity market period was followed by a flat broader market or even a correction. Now, in times of uncertainty in the economy and the markets, nervous investors will gravitate toward utility company stocks for their large and reliable dividends. So far this year, that scenario seems to be playing out. Utility stocks are outperforming the S&P 500 Index handily: DJUTR is up 15% compared with a meager 1.8% gain for the broader average. Read More

With its constant ups and downs, investing in stocks is like a roller-coaster ride. Investing in bonds, on the other hand, usually isn’t — especially during the bond bull market of the past 15 years.  While bond investors love to complain about the pitifully small income stream bonds provide these days, they’ve grown accustomed to growing and stable principal values. But that era of good feelings is probably over. Bull markets ALWAYS come to an end — and it appears this time is no different.  As the Federal Reserve telegraphed its “tapering” plans and even hinted at higher… Read More

With its constant ups and downs, investing in stocks is like a roller-coaster ride. Investing in bonds, on the other hand, usually isn’t — especially during the bond bull market of the past 15 years.  While bond investors love to complain about the pitifully small income stream bonds provide these days, they’ve grown accustomed to growing and stable principal values. But that era of good feelings is probably over. Bull markets ALWAYS come to an end — and it appears this time is no different.  As the Federal Reserve telegraphed its “tapering” plans and even hinted at higher federal funds rates, the bond market responded accordingly: It went down. This price chart of the iShares Barclays 20+ Year Treasury Bond Fund ETF (NYSE: TLT) paints a clear picture. #-ad_banner-#At the height of “Taper terror,” shares plunged over 15%. Prices have recovered, but don’t expect a quick return to the bond glory days. If anything, investors should prepare for more volatility. The challenge that investors face daily is the need for income and some type of bond or bondlike allocation to a portfolio. For example, as an investment professional, I manage a handful of different investment strategies… Read More

My grandmother, a schoolteacher, was widowed at a relatively early age. She inherited a relatively small nest egg my grandfather, a rabbi, had built that included a couple of municipal bonds and 90 shares of stock in a small local bank started by a handful of his congregants.  #-ad_banner-#At the time of her death 40 years later, the bank had grown into one of the largest regional players in the business. Those 90 shares had grown through mergers, splits and stock dividends to over 12,000 shares, with a value of close to $300,000. Not a fortune… Read More

My grandmother, a schoolteacher, was widowed at a relatively early age. She inherited a relatively small nest egg my grandfather, a rabbi, had built that included a couple of municipal bonds and 90 shares of stock in a small local bank started by a handful of his congregants.  #-ad_banner-#At the time of her death 40 years later, the bank had grown into one of the largest regional players in the business. Those 90 shares had grown through mergers, splits and stock dividends to over 12,000 shares, with a value of close to $300,000. Not a fortune — but not too shabby.  Was she some kind of investing genius? She was a smart cookie, but no. She held the stock for what seemed like forever. She banked there forever. She knew the business inside and out. She liked the 5% rain or shine dividend.  The bank she owned evolved into Regions Financial (NYSE: RF). Investors had two glaring opportunities to take handsome profits before 93% of the stock’s value was wiped during the financial crisis. The stock has recovered significantly since its panic lows — but it is still far from its high and will… Read More

I hope I’m not dating myself too much, but I remember when the neighborhood chain drugstore was almost a one-stop shop for human needs.  #-ad_banner-#For example, you dropped off your film to get developed. You could get the ointment for that embarrassing itch. You could even get a BLT and some fries. (Not necessarily in that order.) The BLTs and fries are long gone, but the chain drugstore on the neighborhood corner has continued to evolve and embed itself into our daily lives. And it will continue to do so in an even bigger way going forward. By… Read More

I hope I’m not dating myself too much, but I remember when the neighborhood chain drugstore was almost a one-stop shop for human needs.  #-ad_banner-#For example, you dropped off your film to get developed. You could get the ointment for that embarrassing itch. You could even get a BLT and some fries. (Not necessarily in that order.) The BLTs and fries are long gone, but the chain drugstore on the neighborhood corner has continued to evolve and embed itself into our daily lives. And it will continue to do so in an even bigger way going forward. By far, the two biggest players in the drugstore space are Walgreen Co. (NYSE: WAG) and CVS Caremark (NYSE: CVS). If two-thirds of the Earth is covered by water, the remaining third is covered by these two companies. But which stock makes the most sense for your portfolio?  Side by side, there doesn’t seem to be much difference between the two. Both have massive retail presence nationwide. Both are adapting to the rising tide of change brought on by the Affordable Care Act (aka Obamacare).       One area both chains are exploring thanks to the health care evolution… Read More

In one classic “Seinfeld” episode, Kramer and Newman are embroiled in an epic game of Risk — in which they actually carry the board with them everywhere.  #-ad_banner-#In one scene they’re playing it on the subway. As Kramer rolls the dice, he threatens Newman: “Ukraine is weak!” A Ukrainian national overhears Kramer’s taunt, and things go hilariously south.  Although it’s no laughing matter, I pictured Russian leader Vladimir Putin delivering Kramer’s line as he decided to annex Crimea. All kidding aside, the tensions in Russia have the potential to create some of the most substantial geopolitical risk investors… Read More

In one classic “Seinfeld” episode, Kramer and Newman are embroiled in an epic game of Risk — in which they actually carry the board with them everywhere.  #-ad_banner-#In one scene they’re playing it on the subway. As Kramer rolls the dice, he threatens Newman: “Ukraine is weak!” A Ukrainian national overhears Kramer’s taunt, and things go hilariously south.  Although it’s no laughing matter, I pictured Russian leader Vladimir Putin delivering Kramer’s line as he decided to annex Crimea. All kidding aside, the tensions in Russia have the potential to create some of the most substantial geopolitical risk investors have seen in a decade. Markets are nervously awaiting Putin’s next moves. Aside from the obvious risk to Russia-themed exchange-traded funds (ETFs) — such as iShares MSCI Russia Capped Index Fund (NYSE: ERUS) or the Market Vectors Russia ETF (NYSE: RSX), both of which are off more than 20% this year — many widely held multinationals have substantial downside risk due to large Russian exposure. Exxon Mobil (NYSE: XOM ) This oil supermajor is developing a Siberian drilling project worth a reported potential $500 billion in revenue. Naturally, if conditions worsen, this venture’s future will be jeopardized.   JPMorgan Chase (NYSE: JPM ) The… Read More

I’ve long been an Apple (Nasdaq: AAPL) bear. But we’re all capable of change.  #-ad_banner-#When AAPL fell more than 40% to just under $400, the forward price-to-earnings (P/E) ratio fell to barely 10 and the dividend grew to just over 3%. The stock suddenly made sense from an investment standpoint, and I began including it in client portfolios.  Similarly, I was the lone Android user in a house full of iPhone users. But when my contract expired a few weeks ago and my carrier offered me a free iPhone 4S, I became an adopter (if not… Read More

I’ve long been an Apple (Nasdaq: AAPL) bear. But we’re all capable of change.  #-ad_banner-#When AAPL fell more than 40% to just under $400, the forward price-to-earnings (P/E) ratio fell to barely 10 and the dividend grew to just over 3%. The stock suddenly made sense from an investment standpoint, and I began including it in client portfolios.  Similarly, I was the lone Android user in a house full of iPhone users. But when my contract expired a few weeks ago and my carrier offered me a free iPhone 4S, I became an adopter (if not a fanboy).  Having used an Android device for a few years, I used Amazon.com’s (Nasdaq: AMZN) cloud music player and built a decent cloud library. When I switched to the iPhone and downloaded the Amazon cloud app, I was immediately bombarded by offers from Amazon to buy MP3 albums from my favorite artists at $5 a pop.  Amazon knew I had switched devices and wanted to keep me from straying to iTunes. So far, I’m still loyal.  But as an investor, I would buy Apple’s stock before Amazon’s. A few numbers explain why.   For the life of me,… Read More

I’ve always preferred the view that the market is a “market of stocks” rather than a “stock market.” Let me explain… The market is a store like any other. Some merchandise is priced at a premium because of demand. Some merchandise is discounted due to lack of interest. That doesn’t necessarily mean it’s not needed or useful. Since imploding in 2008 and 2009, the S&P 500 is up over 130% over the past five years. #-ad_banner-#Some higher-beta names (so called due to the likeliness of greater volatility in the stock price), such as Tesla Motors (Nasdaq: TSLA) and… Read More

I’ve always preferred the view that the market is a “market of stocks” rather than a “stock market.” Let me explain… The market is a store like any other. Some merchandise is priced at a premium because of demand. Some merchandise is discounted due to lack of interest. That doesn’t necessarily mean it’s not needed or useful. Since imploding in 2008 and 2009, the S&P 500 is up over 130% over the past five years. #-ad_banner-#Some higher-beta names (so called due to the likeliness of greater volatility in the stock price), such as Tesla Motors (Nasdaq: TSLA) and Netflix (Nasdaq: NFLX), are up five or 10 times that. Needless to say, the valuations of those stocks, as measured by their forward price-to-equity (P/E) ratios have been lifted to the stratosphere. Tesla (which I profiled earlier this month) sports a forward P/E of 119, while Netflix has a forward P/E of around 93. This means that investors are all too eager to pay way too much for the earnings streams those companies may be able to deliver. It’s no surprise that as the market nervously digested the most recent comments from new Federal Reserve Chairman Janet Yellen concerning the… Read More

Last summer, I wrote about an odd disconnect between rising oil prices and a strong U.S. dollar. Since then, that disconnect has dissipated. The dollar has appreciated about 6% to 7%, and inversely, the price of West Texas Intermediate crude (WTI) has fallen at about the same rate. Two of my recommendations, Valero (NYSE: VLO) and Phillips 66 (NYSE: PSX), have gone up an average of 32%. The third recommendation was integrated Brazilian oil producer Petroleo Brasilero (NYSE: PBR),aka Petrobras. Since then, the stock has fallen 26%. Do I still like it? More than ever. Another BRIC Faces… Read More

Last summer, I wrote about an odd disconnect between rising oil prices and a strong U.S. dollar. Since then, that disconnect has dissipated. The dollar has appreciated about 6% to 7%, and inversely, the price of West Texas Intermediate crude (WTI) has fallen at about the same rate. Two of my recommendations, Valero (NYSE: VLO) and Phillips 66 (NYSE: PSX), have gone up an average of 32%. The third recommendation was integrated Brazilian oil producer Petroleo Brasilero (NYSE: PBR),aka Petrobras. Since then, the stock has fallen 26%. Do I still like it? More than ever. Another BRIC Faces Adversity Not long ago, Brazil and its fellow BRIC nations were the world’s fastest-growing emerging-market economies. Now? Not so much. Each country has its own challenges. Brazil, in particular, is facing unemployment, a weak currency, inflation, and pockets of social unrest. The currency weakness is one factor affecting Petrobras’ stock price. Others include below-forecast oil production and low domestic fuel prices. But the low stock price doesn’t tell the whole story. Petrobras is one of the world’s largest oil and gas companies in all aspects of exploration, production, refining, transportation and marketing (thus the moniker “vertically integrated” oil company). Read More