Paradoxically, the trying economic conditions over the past several years have been perfect for super-rich and connected investors — the top 1% of the 1% — to exponentially increase their wealth. #-ad_banner-#One of the more popular but seldom talked-about tactics is known as IPO flipping. This refers to the practice of buying IPO shares at the initial offered price then quickly reselling them once the shares start trading — and profiting from the initial pop. However, only institutions, hedge funds and very wealthy investors are allocated shares by the underwriting broker before the IPO. Even though most regular investors are… Read More

Paradoxically, the trying economic conditions over the past several years have been perfect for super-rich and connected investors — the top 1% of the 1% — to exponentially increase their wealth. #-ad_banner-#One of the more popular but seldom talked-about tactics is known as IPO flipping. This refers to the practice of buying IPO shares at the initial offered price then quickly reselling them once the shares start trading — and profiting from the initial pop. However, only institutions, hedge funds and very wealthy investors are allocated shares by the underwriting broker before the IPO. Even though most regular investors are precluded from IPO flipping, they can still learn a profitable lesson — never purchase an IPO on the first day of trading. Sure, it’s tempting to buy a newly issued stock as prices rocket higher that first day — but share prices often retreat just as quickly. This is because the flippers are dumping their often substantial allocations as the public is trying to scoop up shares. Last year saw the most IPOs since the height of the dot-com bubble in 2000, and the surge in IPOs is showing no signs of abating this year. As of February, IPO filings… Read More

Have you ever received emails promising quick returns of 1,000% or more from stock investing?  I know I have. Most of these emails tout high-risk, hugely volatile micro-cap stocks.   #-ad_banner-#The majority of investors simply discard these emails as nonsense — but the funny thing is, returns of 1,000% or more are indeed possible in the micro-cap sector. What’s important to keep in mind is that these huge gains are accompanied by equally gigantic risk — the kind that can quickly wipe out your entire investment. Fortunately, there’s a way to profit from this market while greatly reducing… Read More

Have you ever received emails promising quick returns of 1,000% or more from stock investing?  I know I have. Most of these emails tout high-risk, hugely volatile micro-cap stocks.   #-ad_banner-#The majority of investors simply discard these emails as nonsense — but the funny thing is, returns of 1,000% or more are indeed possible in the micro-cap sector. What’s important to keep in mind is that these huge gains are accompanied by equally gigantic risk — the kind that can quickly wipe out your entire investment. Fortunately, there’s a way to profit from this market while greatly reducing the risk. To be sure, this technique does not allow for outrageous returns, but it did return over 50% during the past year and has a history of market-beating results.  Before I get into the specifics of this low-risk method of investing in the micro-cap market, let’s look at what exactly a micro-cap stock is. The SEC’s definition of a micro-cap stock is one issued by a company with less than $300 million in market capitalization.   These tiny firms often do not file financial reports with regulators, making research and due diligence very difficult. This lack of freely available… Read More

Choosing the right stocks to invest in can be a difficult proposition for even the most sophisticated investor. Today’s market participants are faced with an overwhelming amount of information about every public company.  #-ad_banner-#This means that the key for investment success is the ability to filter this data and focus on the most pertinent information. The big-money players cumulatively spend billions of dollars every year to filter this monstrous data stream.   Fortunately, for the rest of us, it doesn’t need to be that expensive. In fact, one of the keys to successful stock picking is readily available for… Read More

Choosing the right stocks to invest in can be a difficult proposition for even the most sophisticated investor. Today’s market participants are faced with an overwhelming amount of information about every public company.  #-ad_banner-#This means that the key for investment success is the ability to filter this data and focus on the most pertinent information. The big-money players cumulatively spend billions of dollars every year to filter this monstrous data stream.   Fortunately, for the rest of us, it doesn’t need to be that expensive. In fact, one of the keys to successful stock picking is readily available for free on www.nasdaq.com and several other websites. I’m referring to information on insider trading. You see, every insider transaction needs to be reported to the SEC on Forms 3 and 4. This means every investor can easily access this crucial information for making investment decisions.  When I find a stock with an appealing technical and fundamental picture, I look at what the insiders are doing and use that information to help me make my decision. If I am bullish and recent insider buying greatly outweighs insider selling, this is a strong confirmation of my bullish bias.   On the other… Read More

“The times, they are a-changing.”  #-ad_banner-#Watching the stock market closely over the last week brought Bob Dylan’s words to mind. The Dow Jones Industrial Average plunged over 600 points in six trading sessions, and the high-flying Nasdaq Composite Index sustained its largest drop in over two years. What’s more, five of the 14 IPOs slated for the past two weeks postponed their launches due to the sell-off. The majority of this selling was by hedge funds slashing their risk exposure, according to The Wall Street Journal, sending shivers of fear into even the most hardened of stock market… Read More

“The times, they are a-changing.”  #-ad_banner-#Watching the stock market closely over the last week brought Bob Dylan’s words to mind. The Dow Jones Industrial Average plunged over 600 points in six trading sessions, and the high-flying Nasdaq Composite Index sustained its largest drop in over two years. What’s more, five of the 14 IPOs slated for the past two weeks postponed their launches due to the sell-off. The majority of this selling was by hedge funds slashing their risk exposure, according to The Wall Street Journal, sending shivers of fear into even the most hardened of stock market players. This selling is different than what we witnessed in January. The January selling was triggered by the fear of a change in Federal Reserve policy and simple profit-taking. Last year’s bull market prompted many investors to simply wait until January to cash in so they could delay paying taxes on their fat gains for another year. In contrast, the current selling appears to be a shift from high-flying growth stocks to defensive stocks. I think this selling is signaling that the smart money is starting to position itself for a flat to down stock market in 2014. Read More

In investing, it’s easy to get carried away with chasing the latest trends and the newest companies. I’ve found another (and often more lucrative) way to go about finding the next big stock investment.  #-ad_banner-#I call this method “the view from 50,000 feet.” In it, I mentally take a huge step backward and look at the economy as though I’ve never seen it before. This exercise enables me to see the big picture from the top down. My primary question: What themes have been consistent for more than a century? After the obvious — food, water, shelter —… Read More

In investing, it’s easy to get carried away with chasing the latest trends and the newest companies. I’ve found another (and often more lucrative) way to go about finding the next big stock investment.  #-ad_banner-#I call this method “the view from 50,000 feet.” In it, I mentally take a huge step backward and look at the economy as though I’ve never seen it before. This exercise enables me to see the big picture from the top down. My primary question: What themes have been consistent for more than a century? After the obvious — food, water, shelter — what other overriding theme has been at the forefront of economic growth? The answer is energy — electrical energy, to be exact. Without electricity, the modern world as we know it would not exist. More importantly, the use of electricity is becoming more prevalent as the world grows more technological. (I know this is very obvious, but it’s easy to overlook when it comes to investing.) Continuing to look down from 50,000 feet, I asked: What is the source of the electricity? Surely there must be great investment opportunities there.  A large part of the answer is coal. Coal generates… Read More

“This is the coolest store I have ever seen,” said my pre-teen son as we left a discount retailer recently. We were loading up on summertime sports gear, and the store was packed with consumers purchasing all sorts of products. #-ad_banner-#I was struck by how bright and clean the store was — and particularly by its prices for well-made backyard sporting gear. I was able to purchase an entire suite of gear for what two basketballs would cost at the local chain sporting goods store.  Sure, the basketballs and backyard gear from the sporting goods chain may have… Read More

“This is the coolest store I have ever seen,” said my pre-teen son as we left a discount retailer recently. We were loading up on summertime sports gear, and the store was packed with consumers purchasing all sorts of products. #-ad_banner-#I was struck by how bright and clean the store was — and particularly by its prices for well-made backyard sporting gear. I was able to purchase an entire suite of gear for what two basketballs would cost at the local chain sporting goods store.  Sure, the basketballs and backyard gear from the sporting goods chain may have the endorsements of professional athletes and nice packaging, and perhaps be made from slightly better materials — but who cares? Most of this stuff will probably be worn out or lost in a year or two anyway.  The discount retail store was also stocked with a wide assortment of toys, snacks and portable electronic accessories. Everything was reasonably priced, and the shopping experience was enjoyable. This company looked to me like it could be a great investment, so I took a closer look. This company is in the same category as other discount retailers such as Dollar General (NYSE: DG),… Read More

Nothing has had such a profound effect on the history of mankind as technology. From Gutenberg’s printing press to the Big Data and Internet of Things today, technology has improved our lives in immeasurable ways.  #-ad_banner-#However, there is a dark side to our technological society, and a backlash is building around the world. Big Data and the Internet of Things have begun to chip away at the privacy of individuals and small groups. Individuals are starting to demand tools to protect what’s left of their privacy. Investors who act upon this trend by investing in companies already profiting… Read More

Nothing has had such a profound effect on the history of mankind as technology. From Gutenberg’s printing press to the Big Data and Internet of Things today, technology has improved our lives in immeasurable ways.  #-ad_banner-#However, there is a dark side to our technological society, and a backlash is building around the world. Big Data and the Internet of Things have begun to chip away at the privacy of individuals and small groups. Individuals are starting to demand tools to protect what’s left of their privacy. Investors who act upon this trend by investing in companies already profiting from the technological backlash stand to reap great rewards.  The Internet of Things (which I wrote about last year) refers to the widespread connection of machines and devices to the Internet. Although the Internet of Things is now in its infancy, it’s growing exponentially, and it’s estimated that over 30 billion devices will be connected to the Internet by 2020. Within the next five years, the average family is projected to have 10 Internet-connected devices in their home. The orange juice pitcher in your refrigerator may be able to alert you when it’s nearly empty and automatically place an order… Read More

Imagine living in a world with stocks creating dividend yields of 20%, 30% or even over 40% on an annual basis. For income investors, that sounds like a dream come true — but the truth is, these yields exist right now.    I recently searched for the highest-yielding stocks on the U.S. stock markets. I found 10 actively traded stocks that yield between 20% and close to 50% annually. My first reaction is that there must be something wrong with the data — but these stocks actually exist. Here are three examples: #-ad_banner-#It may seem like… Read More

Imagine living in a world with stocks creating dividend yields of 20%, 30% or even over 40% on an annual basis. For income investors, that sounds like a dream come true — but the truth is, these yields exist right now.    I recently searched for the highest-yielding stocks on the U.S. stock markets. I found 10 actively traded stocks that yield between 20% and close to 50% annually. My first reaction is that there must be something wrong with the data — but these stocks actually exist. Here are three examples: #-ad_banner-#It may seem like all an investor needs to do is invest in one or more of these names and their portfolio will grow like wildfire. However, nothing is further from the truth.  Sure, several of the top 10 names will continue to pay ultra-high dividends for a while, but the dangers inherent in them are simply too high for prudent, risk-averse portfolios. Remember, a high dividend does not always indicate a successful company. Often, a high dividend yield is indicative of a plunging stock price or a failing company’s last-ditch effort to attract interest.   What’s the best way to avoid… Read More

Right now, the entrepreneurial spirit is in the public spotlight. You can see evidence of this trend in popular television shows like “Shark Tank” — where uber-entrepreneur Mark Cuban fields pitches from wanna-be startups — “The Profit” and even the “Real Housewives” series. #-ad_banner-#Of course, the entrepreneurial spirit is especially evident in the business world — ranging from crowdfunding platforms on the Web to the IPO market for companies ready to take their stock public. Last year was a blockbuster year for IPOs, and the trend can be expected to continue in 2014. There were 222 initial public offerings in… Read More

Right now, the entrepreneurial spirit is in the public spotlight. You can see evidence of this trend in popular television shows like “Shark Tank” — where uber-entrepreneur Mark Cuban fields pitches from wanna-be startups — “The Profit” and even the “Real Housewives” series. #-ad_banner-#Of course, the entrepreneurial spirit is especially evident in the business world — ranging from crowdfunding platforms on the Web to the IPO market for companies ready to take their stock public. Last year was a blockbuster year for IPOs, and the trend can be expected to continue in 2014. There were 222 initial public offerings in in the U.S. last year, which raised a total of $54.9 billion — the most in the IPO space since 2000. Most excitingly for investors is that the average return for IPOs in 2013 has been an incredible 36%. When you consider that dozens of additional IPOs are on tap in 2014 — which Virgin Group founder Richard Branson recently predicted would be “the year of the entrepreneur” — you can see the great investment potential in the business of business. One way to ride this trend is to run your own business, as I’m sure… Read More

It’s difficult to admit that I was too early with a market call. It’s even harder to accept when I realize I was riding the coattails of a billion-dollar bet made by a renowned activist investor. #-ad_banner-#While I can take comfort in the fact that I judiciously used a stop-loss order and stuck to my investing rules despite being very confident, it’s still not a good feeling. On a positive note, things are finally happening that may vindicate the investor’s billion-dollar bet and my own bias. Here’s the story. Multi-level marketing (or MLM, as it’s commonly called) has long fascinated… Read More

It’s difficult to admit that I was too early with a market call. It’s even harder to accept when I realize I was riding the coattails of a billion-dollar bet made by a renowned activist investor. #-ad_banner-#While I can take comfort in the fact that I judiciously used a stop-loss order and stuck to my investing rules despite being very confident, it’s still not a good feeling. On a positive note, things are finally happening that may vindicate the investor’s billion-dollar bet and my own bias. Here’s the story. Multi-level marketing (or MLM, as it’s commonly called) has long fascinated me from a distance. Hearing rags-to-riches stories and attending presentations is a sure way to get excited about the wealth-building power of the MLM concept — until you look past the hype and realize that many MLM firms are thinly disguised pyramid schemes. With that said, the MLM health products company Herbalife (NYSE: HLF) has been under fire since December 2012, when activist investor Bill Ackman announced a $1 billion short position in HLF. Ackman asserts that Herbalife is an illegal pyramid scheme that sells dubious products to naive buyers/distributors. To support his argument, Ackman launched a full-scale informational war… Read More