The size and reach of this relatively new industry is astounding. Once written off as just a passing fad for children and teenagers, this sector has become a major economic force — and its growth shows no signs of abating. #-ad_banner-# Consumers spent nearly $21 billion in this sector in 2012, and nearly 60% of Americans actively participate in this form of entertainment. I can’t think of another hobby or sport that involves so many participants.  Although this business is widely thought of as being a pastime for teenagers, the average age of its participants is 30 years old,… Read More

The size and reach of this relatively new industry is astounding. Once written off as just a passing fad for children and teenagers, this sector has become a major economic force — and its growth shows no signs of abating. #-ad_banner-# Consumers spent nearly $21 billion in this sector in 2012, and nearly 60% of Americans actively participate in this form of entertainment. I can’t think of another hobby or sport that involves so many participants.  Although this business is widely thought of as being a pastime for teenagers, the average age of its participants is 30 years old, and 45% of them are female. If you haven’t already guessed, this huge and thriving industry is electronic gaming.   Electronic gaming has grown from the video game parlors of yesterday to a multi-billion-dollar industry that touches an enormous segment of the population. There are plenty of profit opportunities across the industry for savvy investors, but I want to focus on a particular company that’s well positioned to earn long-term profits from the electronic gaming revolution.   The company is GameStop (NYSE: GME), the world’s largest multi-channel video game retailer. In addition to nearly 6,500 stores in 15 countries, GameStop… Read More

Exchange-traded funds (ETFs) have changed the face of investing.#-ad_banner-#​ First launched in 1993, the ETF industry has surged to more than $1.5 trillion in assets spread across more than 3,100 ETFs and exchange-traded notes (ETNs).  Nearly every conceivable strategy has been converted into an ETF. I can only imagine the financial mad scientists who are hard at work designing the latest ETFs. Unusual ETFs are meant to fill a niche in your portfolio while allowing you to capitalize on your investment ideas for the coming year.  Out of all the niche ETFs available in 2014, my… Read More

Exchange-traded funds (ETFs) have changed the face of investing.#-ad_banner-#​ First launched in 1993, the ETF industry has surged to more than $1.5 trillion in assets spread across more than 3,100 ETFs and exchange-traded notes (ETNs).  Nearly every conceivable strategy has been converted into an ETF. I can only imagine the financial mad scientists who are hard at work designing the latest ETFs. Unusual ETFs are meant to fill a niche in your portfolio while allowing you to capitalize on your investment ideas for the coming year.  Out of all the niche ETFs available in 2014, my favorites are those that follow the share repurchase trend and those that will benefit from a falling U.S. dollar.  Buyback programs indicate management’s strong belief in the potential of the company’s own shares. This confidence could be signaling bullish activity that is taking place behind the scenes. At the very least, buybacks are a clear sign that the company believes the best use of its cash is to buy back its own shares. Buybacks intrinsically increase the value of investors’ shares by decreasing the number of outstanding shares, thereby lifting earnings per share (EPS).  Last year alone, the 30 companies… Read More

In my look last summer at what makes for a great brand, I alerted StreetAuthority readers to a rapidly growing, dividend-paying company that happens to be steeped in American legend and lore.#-ad_banner-#​ Gonzo journalist Hunter S. Thompson, actors Dennis Hopper and Peter Fonda, and the outlaw motorcycle club Hells Angels have all had a part in building the powerful mythos around this company — one that has translated into massive profits for its investors. When that article was published Aug. 1, this stock was trading around $57. Since that time, it has surpassed my… Read More

In my look last summer at what makes for a great brand, I alerted StreetAuthority readers to a rapidly growing, dividend-paying company that happens to be steeped in American legend and lore.#-ad_banner-#​ Gonzo journalist Hunter S. Thompson, actors Dennis Hopper and Peter Fonda, and the outlaw motorcycle club Hells Angels have all had a part in building the powerful mythos around this company — one that has translated into massive profits for its investors. When that article was published Aug. 1, this stock was trading around $57. Since that time, it has surpassed my target price, soaring close to 20% to a 52-week high near $70 in less than six months. Fortunately, it’s not too late to capture additional upside in this 110-year-old company.  This company is continuing to post fantastic numbers, pays an unswerving dividend and participates in an aggressive share buyback program — not to mention the fanatical loyalty it inspires in its customers. If you haven’t guessed, I’m talking about Harley-Davidson (NYSE: HOG). The famed motorcycle company posted a blowout third quarter with a nearly 24% increase in diluted earnings per share and U.S. motorcycle sales revving up more than 20%… Read More

Imagine a company that not only filed bankruptcy in 2009, but was bounced from owner to owner as a nearly toxic asset that fateful year. Things were so bad for this once thriving American firm that it was forced to accept a $4 billion bailout.#-ad_banner-#​ Despite Uncle Sam’s helping hand, the situation was so negative that the company stopped trading on the U.S. stock exchanges. While there’s now serious talk about being relisted, this formerly downtrodden company currently trades in the U.S. only under its foreign benefactor’s ticker symbol. This company isn’t some no-name widget maker. It was… Read More

Imagine a company that not only filed bankruptcy in 2009, but was bounced from owner to owner as a nearly toxic asset that fateful year. Things were so bad for this once thriving American firm that it was forced to accept a $4 billion bailout.#-ad_banner-#​ Despite Uncle Sam’s helping hand, the situation was so negative that the company stopped trading on the U.S. stock exchanges. While there’s now serious talk about being relisted, this formerly downtrodden company currently trades in the U.S. only under its foreign benefactor’s ticker symbol. This company isn’t some no-name widget maker. It was once a leading American manufacturer whose brands have remained respected and international household names despite its fall from grace. Today, an unexpected resurgence of consumer demand for some of its leading products has enabled the company to post dramatically improved numbers as well as create a unique, profitable opportunity for investors. I am talking about Chrysler Group, maker of the iconic Jeep SUV and Ram pickup models. Decimated by the financial crisis combined with soaring gasoline prices, it looked like sales of SUVs and light trucks would never recover to their pre-crisis levels. Now that the worst of the downturn… Read More

A huge electronics company is teetering on the edge of a sharp decline. The company is so large that it accounts for 17% of its home country’s entire GDP. Recently surpassing Apple (Nasdaq: AAPL) as the world’s largest smartphone manufacturer, the company is constructing the world’s biggest mobile phone factory in Vietnam.#-ad_banner-# However, this leading company is starting to show signs of being overvalued. In fact, it has warned about its upcoming earnings release, and the company’s shares are down about 7% since the end of December. If you haven’t guessed, I’m talking about Samsung (OTC: SSNLF). While Samsung is… Read More

A huge electronics company is teetering on the edge of a sharp decline. The company is so large that it accounts for 17% of its home country’s entire GDP. Recently surpassing Apple (Nasdaq: AAPL) as the world’s largest smartphone manufacturer, the company is constructing the world’s biggest mobile phone factory in Vietnam.#-ad_banner-# However, this leading company is starting to show signs of being overvalued. In fact, it has warned about its upcoming earnings release, and the company’s shares are down about 7% since the end of December. If you haven’t guessed, I’m talking about Samsung (OTC: SSNLF). While Samsung is primarily traded on the Korea Exchange, there are ways for U.S.-based investors to capture profits from its decline.   One of the most compelling things about stocks is that profits can be made regardless of which direction the price moves. Although the majority of investors profit only when shares are rising, there is a subset of investors who specialize in trading the downward moves. I am not talking about waiting for a stock’s pullback and buying the dip (as I have written about several times) — I mean actually making money when shares decline in value.   This tactic is… Read More

I don’t understand some investors. The first several days of 2014 were a down note — and in the eyes of many investors, that signaled the end of the bull market. This kind of thinking is ridiculous in my book. What we have witnessed is profit-taking, pure and simple. Every new high is always greeted the same way — with investors taking their profits before buying back into the market. It happens again and again, but each time — particularly at an arbitrary milestone like the first of the year — it brings fear to investors. Every bullish… Read More

I don’t understand some investors. The first several days of 2014 were a down note — and in the eyes of many investors, that signaled the end of the bull market. This kind of thinking is ridiculous in my book. What we have witnessed is profit-taking, pure and simple. Every new high is always greeted the same way — with investors taking their profits before buying back into the market. It happens again and again, but each time — particularly at an arbitrary milestone like the first of the year — it brings fear to investors. Every bullish stock market has periods of selling. A glance at the weekly chart of the Dow Jones Industrial Average shows a dozen down weeks during the super-bull market of 2013.   #-ad_banner-#Fueled by strong corporate earnings and unconditional support from the Federal Reserve, the Dow surged more than 3,000 points higher last year. Stocks amply rewarded patient long-term investors with the foresight to stick to their investment plan. It was not just stocks that surged in 2013, as private equity firms also posted a record-breaking year. I expect this bullish trend to continue into 2014. Once reserved for the… Read More

Active trading is a never-ending educational process. No matter how long one has participated in the endeavor, there is always something new to learn. I have actively invested in the financial markets since 1990, and I am still constantly fascinated by new ideas and even sectors.#-ad_banner-# This is how the markets have captivated me for over two decades. They are never boring and are constantly offering up new ways to capture profits. My stock screener recently alerted me to a low-priced stock that could easily double in the next 90 days. This company is part of an industry… Read More

Active trading is a never-ending educational process. No matter how long one has participated in the endeavor, there is always something new to learn. I have actively invested in the financial markets since 1990, and I am still constantly fascinated by new ideas and even sectors.#-ad_banner-# This is how the markets have captivated me for over two decades. They are never boring and are constantly offering up new ways to capture profits. My stock screener recently alerted me to a low-priced stock that could easily double in the next 90 days. This company is part of an industry that I knew very little about, so I set out to learn all I could prior to investing. What I learned got me very excited about this company’s potential.  If you have ever spent time on the beach, you may have noticed several large cargo ships traveling along the horizon. These ships transport products around the world from their country of manufacture.  Shipping rates are determined by supply and demand for ships. Obviously, the supply of ships in this business is fixed or inelastic, as economists would call it. However, demand is variable (elastic), leading to shipping rates increasing as… Read More

We all remember the subprime mortgage crisis. The financial system was thrown into chaos, and many homeowners lost their overleveraged homes during those dark days.#-ad_banner-#​ Fortunately, the vast powers of the Federal Reserve were summoned to help stabilize the housing market, and along with it, the entire economy. The Fed worked its monetary magic, and the housing market is finally returning to normal. However, there is another crisis brewing just under the surface.  The sector this potential crisis is in isn’t as large as the subprime mortgage sector, but it’s still a $27 billion sector,… Read More

We all remember the subprime mortgage crisis. The financial system was thrown into chaos, and many homeowners lost their overleveraged homes during those dark days.#-ad_banner-#​ Fortunately, the vast powers of the Federal Reserve were summoned to help stabilize the housing market, and along with it, the entire economy. The Fed worked its monetary magic, and the housing market is finally returning to normal. However, there is another crisis brewing just under the surface.  The sector this potential crisis is in isn’t as large as the subprime mortgage sector, but it’s still a $27 billion sector, according to Forbes magazine. In fact, Forbes reports that 1 in 4 Americans may be participants in this potential crisis. I became aware of this potential time bomb last year. A close friend was financially destroyed by the subprime mortgage crisis. He is an investor and was overleveraged on more than a dozen investment properties. He was finally forced to declare bankruptcy to get out from under the mountain of debt.  Within a week of the bankruptcy filing, he started getting letters from companies like Wells Fargo (NYSE: WFC) and General Motors (NYSE: GM). While my friend was used to… Read More

Working with hedge funds and money managers has made me aware of certain similarities between nearly all long-term, market-beating professional investors. It doesn’t matter how large (or small) their asset base is, what stocks or other financial instruments they trade, or even their particular strategy. #-ad_banner-#​ This one thing is constant across all successful money managers. It is the most basic tenet of successful portfolio construction. In fact, it’s the most basic concept underlying success in nearly every field. I’m talking about the necessity of having foundational or core holdings in every financial portfolio. It’s a simple concept, once… Read More

Working with hedge funds and money managers has made me aware of certain similarities between nearly all long-term, market-beating professional investors. It doesn’t matter how large (or small) their asset base is, what stocks or other financial instruments they trade, or even their particular strategy. #-ad_banner-#​ This one thing is constant across all successful money managers. It is the most basic tenet of successful portfolio construction. In fact, it’s the most basic concept underlying success in nearly every field. I’m talking about the necessity of having foundational or core holdings in every financial portfolio. It’s a simple concept, once you understand what I mean by “core” or “foundational” holdings. Achievement in any endeavor demands a solid foundation. Everything requires an underlying base to ensure stability and continued successful growth. Two everyday examples are mathematics and construction. It’s impossible to understand advanced mathematics without knowledge of core concepts like arithmetic. The same can be said for construction: All tall buildings designed to withstand the test of time share the same common element of a solid foundation.  This concept can be applied to building a successful long-term investment portfolio: Every successful long-term portfolio is built upon foundational, or core, holdings. These… Read More

I recently noticed an interesting disconnect in the world’s stock markets, one that could mean profits in 2014 for those investors who take advantage. This forecast is based on one of the first short-term investing rules I learned in my initial training class with a proprietary trading firm.#-ad_banner-# The rule is that of correlation. Many stocks and markets appear to be correlated with one another. Simply stated, this means that if one stock out of a correlated pair makes a move, the other generally follows. If the other doesn’t follow, this spells opportunity for the trader. Buying or… Read More

I recently noticed an interesting disconnect in the world’s stock markets, one that could mean profits in 2014 for those investors who take advantage. This forecast is based on one of the first short-term investing rules I learned in my initial training class with a proprietary trading firm.#-ad_banner-# The rule is that of correlation. Many stocks and markets appear to be correlated with one another. Simply stated, this means that if one stock out of a correlated pair makes a move, the other generally follows. If the other doesn’t follow, this spells opportunity for the trader. Buying or selling the stock that disconnects from its historical correlated pattern with its match provides strong odds of profits.  Why is this? Well, based on past behavior, the stock that disconnects from the historical correlation generally will migrate back toward the correlation, producing profits for the investor who acts upon this disconnect.   That said, I am not implying that this is a sure thing. After all, there are no sure things in the stock market. Sometimes, previously correlated stocks become uncorrelated and never fall back in line with each other. But even so, this method can provide a statistical edge… Read More