Over the years I have discovered a technical buy entry signal that is highly useful in timing stock entries. While nothing is foolproof in the financial markets, this tool provides a serious edge when combined with common sense and the application of basic fundamental concepts.  The purpose of technical analysis to attempt to time trades based on movements and patterns in the price of a stock. Understanding when price trends are about to reverse is the secret to successful trades. Most investors wait for a trend to be well underway before purchasing the stock. This tactic can work in strongly… Read More

Over the years I have discovered a technical buy entry signal that is highly useful in timing stock entries. While nothing is foolproof in the financial markets, this tool provides a serious edge when combined with common sense and the application of basic fundamental concepts.  The purpose of technical analysis to attempt to time trades based on movements and patterns in the price of a stock. Understanding when price trends are about to reverse is the secret to successful trades. Most investors wait for a trend to be well underway before purchasing the stock. This tactic can work in strongly trending markets, but trends have an uncanny way of ending as soon as they are identified. Smart investors attempt to get a jump on the crowd before a significant trend starts to maximize the potential profit from the move. And the perfect technical tool for timing this type of move is called the Parabolic SAR.  #-ad_banner-#Created by Welles Wilder, the Parabolic SAR consists of a series of dots on top of and below price bars on a chart. There is no practical need to understand how the indicator is derived since most online investing platforms have Parabolic SAR built into… Read More

Muhammad Ali, Babe Ruth, Steve Jobs; Just the mention of these greats conjures immediate feelings about their professions. Every profession has its luminaries who carry the torch of public-facing goodwill.  Even the staid discipline of stock investing boasts personalities that are synonymous with the market itself. Every generation has produced a leading name representing personal investing to the public. Even today, in our investing-guru-saturated world, one names rises above all others when the public is asked about the stock market: Jim Cramer. In fact, a strong argument can be made that he is the most famous (not to mention powerful)… Read More

Muhammad Ali, Babe Ruth, Steve Jobs; Just the mention of these greats conjures immediate feelings about their professions. Every profession has its luminaries who carry the torch of public-facing goodwill.  Even the staid discipline of stock investing boasts personalities that are synonymous with the market itself. Every generation has produced a leading name representing personal investing to the public. Even today, in our investing-guru-saturated world, one names rises above all others when the public is asked about the stock market: Jim Cramer. In fact, a strong argument can be made that he is the most famous (not to mention powerful) stock market celebrity who has ever lived.  The Making Of A Market Legend It’s well known that Cramer can move stocks by just mentioning their names. I’ve seen sophisticated market screeners try to anticipate his picks in their own analyses. But he wasn’t always so revered. #-ad_banner-#Jim Cramer started his working life in a very humble fashion, but everything he did served to build a base for future fortune and fame. An early job was hocking ice cream as a Philadelphia Phillies stadium vendor. Indeed, his bombastic personality and loud voice were first trained in this hard scrabble sales… Read More

There’s something wrong in the stock market. Short-term correlations that were once reliable have been thrown into disarray. Computer-driven trading programs and massive amounts of capital are confusing even the most weathered market skippers. #-ad_banner-#However, long-term correlations remain intact. One of the most reliable market signals, known as Dow Theory, is signaling that investors should dump stocks now.  As the market continues to grind higher, investors would be wise pay attention. Dow Theory has been in use for over 100 years, and is considered to be the basis for most of technical analysis. Originally created by the father of the… Read More

There’s something wrong in the stock market. Short-term correlations that were once reliable have been thrown into disarray. Computer-driven trading programs and massive amounts of capital are confusing even the most weathered market skippers. #-ad_banner-#However, long-term correlations remain intact. One of the most reliable market signals, known as Dow Theory, is signaling that investors should dump stocks now.  As the market continues to grind higher, investors would be wise pay attention. Dow Theory has been in use for over 100 years, and is considered to be the basis for most of technical analysis. Originally created by the father of the Dow Jones Industrial Index, Charles Dow, the theory has undergone very few changes over the last century.  One of the primary tenets of the theory is that indexes must confirm each other to forecast additional upside. Right now, Dow Theory’s most critical index is showing a divergence that is incredibly bearish.  A Closer Look At Dow Theory At its core, Dow Theory is used to clarify trends in the overall direction of the market. The theory breaks down trends into three primary parts. 1. The Primary Movement This is the long-term trend. The Primary Movement can last from… Read More

The much-heralded “Trump Trade” has started to unravel. Despite our new President’s best efforts, the economic reality of implementing policies has begun to weigh on market sentiment.  Despite 2017 being a successful year for the stock market so far, investors are scrambling to locate the next hot sector and stock. It seems new highs in the major indexes are being hit on an almost daily basis without a significant pull back. At this point, professional investors are asking just how much more upside the market can offer. The small-cap sector, however, has not kept up with the rest of the… Read More

The much-heralded “Trump Trade” has started to unravel. Despite our new President’s best efforts, the economic reality of implementing policies has begun to weigh on market sentiment.  Despite 2017 being a successful year for the stock market so far, investors are scrambling to locate the next hot sector and stock. It seems new highs in the major indexes are being hit on an almost daily basis without a significant pull back. At this point, professional investors are asking just how much more upside the market can offer. The small-cap sector, however, has not kept up with the rest of the market this year. While the S&P 500 is higher by 9%, the small-cap-based Russell 2000 is only higher by about 1%. Small caps with solid fundamentals riding on developing trends may represent an untapped bastion of upside potential. 5 Small-Caps Poised For Gains 1. MACOM Technology Solutions (Nasdaq: MTSI) Shares of this analog semiconductor company plunged into the deep value zone on a third-quarter miss, setting up an ideal buying opportunity for forward-looking investors. Boasting a market cap of just under $3 billion, this Lowell, Massachusetts-based technology company specializes in telecom optical components and data centers. MACOM’s primary… Read More

When it comes to stock picking, there are two primary schools of thought. The first, and by far most popular, school believes in selecting stocks based on strength. These investors buy breakouts, bullish signals, and uptrends. The second school teaches to look for price weakness when selecting stocks. Following the age-old mantra of buying weakness and selling strength, these investors love finding stable stocks that have been pushed lower.  Both these strategies have their place in a successful investor’s quiver of tactics. However, one beats the other when it comes to stock selection for the long term.  Buying weakness, not… Read More

When it comes to stock picking, there are two primary schools of thought. The first, and by far most popular, school believes in selecting stocks based on strength. These investors buy breakouts, bullish signals, and uptrends. The second school teaches to look for price weakness when selecting stocks. Following the age-old mantra of buying weakness and selling strength, these investors love finding stable stocks that have been pushed lower.  Both these strategies have their place in a successful investor’s quiver of tactics. However, one beats the other when it comes to stock selection for the long term.  Buying weakness, not strength, is the key to success for long-term investors. It all goes back to buying long-term value that is created when a solid stock dips in price. Remember, value and price are two different things, and when the price falls, it can create an opportunity to buy value at a discount. A Winning Value-Finding Tactic My favorite way to buy weakness is to scan for stocks with “gap downs” on the daily chart.  #-ad_banner-#Gap downs, which occur in a stock’s price chart when the price jumps down with no trading between, are usually caused by investors dumping shares on… Read More

Stock market investors are a very fickle bunch. Once-wildly popular stocks can quickly be relegated to the dustbin of history. Other times, barely-known companies can trigger an investor stampede, sending share prices into the stratosphere.  Most investors like to own stocks while they are in this viral phase. It’s exciting and can be very profitable to follow the hype. However, popular-stock chasing can have a dark side.  Investors who buy stocks on the upswing, called momentum buyers, always run the risk that they are late to the party. This can sometimes leave them facing a selloff as soon as they… Read More

Stock market investors are a very fickle bunch. Once-wildly popular stocks can quickly be relegated to the dustbin of history. Other times, barely-known companies can trigger an investor stampede, sending share prices into the stratosphere.  Most investors like to own stocks while they are in this viral phase. It’s exciting and can be very profitable to follow the hype. However, popular-stock chasing can have a dark side.  Investors who buy stocks on the upswing, called momentum buyers, always run the risk that they are late to the party. This can sometimes leave them facing a selloff as soon as they buy in to the stock.  I prefer to take the opposite tact by investing in stocks that have fallen out of favor with the masses. These forgotten stocks can often provide outsized returns with barely any attention.  My theory is that despite being forgotten, investors are still familiar with these companies from their glory days. Therefore, just a tiny bit of good news will instantly attract investors on name recognition. In other words, investors are already psychologically “sold” on the stock, making the buy decision much easier than for an unknown company.  Today, I’ve found three forgotten stocks that have… Read More

I am a confirmed contrarian when it comes to the stock market. Investment contrarians take the opposite position of the prevailing wisdom when it comes to choosing stocks, buying picks that no one else seems to want.  Bad news is a contrarian’s best friend, as it pushes prices lower into the deep-value zone. But even better is good news that results in a selloff. Many times, positive earnings or other good news is not quite good enough to satisfy investors who expected more. Shares are dumped despite the seemingly positive news, depressing prices. Savvy contrarian investors wait for these selloffs… Read More

I am a confirmed contrarian when it comes to the stock market. Investment contrarians take the opposite position of the prevailing wisdom when it comes to choosing stocks, buying picks that no one else seems to want.  Bad news is a contrarian’s best friend, as it pushes prices lower into the deep-value zone. But even better is good news that results in a selloff. Many times, positive earnings or other good news is not quite good enough to satisfy investors who expected more. Shares are dumped despite the seemingly positive news, depressing prices. Savvy contrarian investors wait for these selloffs in the face of improving fundamentals to build long term positions.  The iconic American automobile company Ford (NYSE: F) is set up to be such an ideal contrarian buy right now. The overall bearish sentiment combined with bullish fundamental and technical metrics has skewed the risk/reward ratio solidly to the reward side.   Why Ford Should Be Your Next Buy 1. Solid Fundamentals And Performance Ford has just hit its highest free cash flow level in the last 10 years at just under $13 billion. Free cash flow is a very critical fundamental metric. In fact, as I argued in… Read More

After a 25%-plus move higher this year, many investors are starting to get nervous about the odds of additional upside in emerging-market equities. The market, however, is sending far different signals. The upward surge is far from over. In fact, it may still be in its infancy. There are seven important factors telling me to hold on to my bullish expectations for the sector.  Why I Think Emerging Markets Are Only Going Up 1. Economic Growth Developed markets are experiencing a growth slowdown while emerging markets are in a long-term expansion phase.  While developed markets are forecasted… Read More

After a 25%-plus move higher this year, many investors are starting to get nervous about the odds of additional upside in emerging-market equities. The market, however, is sending far different signals. The upward surge is far from over. In fact, it may still be in its infancy. There are seven important factors telling me to hold on to my bullish expectations for the sector.  Why I Think Emerging Markets Are Only Going Up 1. Economic Growth Developed markets are experiencing a growth slowdown while emerging markets are in a long-term expansion phase.  While developed markets are forecasted to grow by just 2% in 2017, emerging markets are projected to hit 4.5% growth this year. The growth is predicted to climb nearly 5% in 2018.  #-ad_banner-#The BRIC nations (Brazil, Russia, India, and China) create 22% of the global GDP, a figure that continues to climb. An expected 80% of total world GDP growth will come from emerging markets over the next five years, according to the International Monetary Fund (IMF).  India and China’s portion of world GDP has grown by six times since 1970. The G7 nations’ share of world trade has declined from 50% to 30% during… Read More

Cash is the lifeblood of every company. It is the core ingredient that enables corporations to enrich their shareholders and thrive as a business. Without cash flow, a business will wither on the vine even faster than a plant without water.  #-ad_banner-#However, many fail to consider a company’s cash position when evaluating investments. Cash-rich stocks not only often boast higher dividends but can allow a company to support its own stock price through buybacks. Cash can also build a strong moat that provides the strength needed to make it through economic downturns. Finding a company with a cash-heavy balance sheet… Read More

Cash is the lifeblood of every company. It is the core ingredient that enables corporations to enrich their shareholders and thrive as a business. Without cash flow, a business will wither on the vine even faster than a plant without water.  #-ad_banner-#However, many fail to consider a company’s cash position when evaluating investments. Cash-rich stocks not only often boast higher dividends but can allow a company to support its own stock price through buybacks. Cash can also build a strong moat that provides the strength needed to make it through economic downturns. Finding a company with a cash-heavy balance sheet in a defensive sector is a powerful way to protect your wealth from market downturns. My favorite defensive sector is consumer staples. Consumers will always spend on necessities like food and beverages regardless of economic conditions. In fact, the sector is up over 10% this year and is poised to continue its solid performance, even as the “Trump trade” starts to unwind.  That’s why I expect these five stocks to be productive investments well into the future.  1. Coca Cola (NYSE: KO) This lynchpin stock in the American economy has suffered lackluster performance recently, with losing 1.5%  over the… Read More

After many years in the trenches conducting investment research, I rarely get excited about mainstream public companies. However, every once in a while I’m surprised by an amazing success story and investment opportunity. And today I’ve found one such little-known, niche company.  With metrics revealing true longevity, like the steady 5% growth per year over the last half century, 16% compounded sales, and earnings growth since 1990, this company is a shocking find. Even better, it’s part of a growing $700 billion-plus market.  Add in the facts of the company being family run and that it only boasts around a… Read More

After many years in the trenches conducting investment research, I rarely get excited about mainstream public companies. However, every once in a while I’m surprised by an amazing success story and investment opportunity. And today I’ve found one such little-known, niche company.  With metrics revealing true longevity, like the steady 5% growth per year over the last half century, 16% compounded sales, and earnings growth since 1990, this company is a shocking find. Even better, it’s part of a growing $700 billion-plus market.  Add in the facts of the company being family run and that it only boasts around a 2% share of its market, and it paints a powerfully attractive long-term growth picture.  The company, Heico (NYSE: HEI), is a manufacturer based in Hollywood, Florida. It creates original equipment manufacturer (OEM) parts for the $700 billion plus aerospace sector.  According to Deloitte LLP’s 2017 Global Aerospace and Defense Sector Outlook, there is currently a backlog of 13,500 commercial aircraft, marking an all-time high. Deloitte analysts have forecasted commercial aerospace subsector operating earnings to grow 20.6%, while defense subsector’s operating earnings will likely rise 7.0%. Even defense returns are expected to increase at just over 3%… Read More