Growing up in Philly, I developed an appreciation for the “little guy.” My father, uncle and grandmother were all small business owners, and some of my fondest memories were the times I spent working with them and the people I met along the way. I vividly remember our neighborhoods lined with small row homes, many with businesses on the bottom floor where you could get anything from a good cheesesteak to a loan from one of the many regional banks.  Back in the day, small businesses were the soul of the city (and America), and banks often supplied the capital… Read More

Growing up in Philly, I developed an appreciation for the “little guy.” My father, uncle and grandmother were all small business owners, and some of my fondest memories were the times I spent working with them and the people I met along the way. I vividly remember our neighborhoods lined with small row homes, many with businesses on the bottom floor where you could get anything from a good cheesesteak to a loan from one of the many regional banks.  Back in the day, small businesses were the soul of the city (and America), and banks often supplied the capital to keep them going. At the time, the business landscape wasn’t dominated by gigantic banks, big-box stores or mega chains. It was a menagerie of boutique business owners from every background, all with the same vision: to make their version of the American dream come true. Small business is still at the core of our economy and accounts for 54% of all sales in the United States. But one key component of small business commerce in America is dying. —Sponsored Link— Revealed: The Investing Secret That Turned Amateur Investors Into Millionaires How did a group of amateur investors crush… Read More

Last week, I told traders to beware of one of the biggest market disconnects in history. While earnings for S&P 500 have declined for six straight quarters — the worst stretch in market history with the exception of the 2007-2009 recession — stock prices are hitting new all-time highs. It makes absolutely no sense! #-ad_banner-# This situation is cause for a bear market. At minimum, I’m looking for a near-term drop in stocks. This doesn’t mean you need to exit the markets en masse, though. As I mentioned last week, there are tools that can be used to combat volatility… Read More

Last week, I told traders to beware of one of the biggest market disconnects in history. While earnings for S&P 500 have declined for six straight quarters — the worst stretch in market history with the exception of the 2007-2009 recession — stock prices are hitting new all-time highs. It makes absolutely no sense! #-ad_banner-# This situation is cause for a bear market. At minimum, I’m looking for a near-term drop in stocks. This doesn’t mean you need to exit the markets en masse, though. As I mentioned last week, there are tools that can be used to combat volatility and the market insanity. In particular, I highlighted a strategy that not only reduces your risk, but also increases your chances of success to as high as 90% per trade. That is because you can profit whether a stock — or index — goes up, down or sideways. It’s called a bear put spread, and while it takes a bit more work on your part, I can guarantee it will be well worth the effort. Last week, I explained the ins and outs of the strategy. If you missed that article, I suggest you read it now to familiarize yourself… Read More

As a market analyst, my job is to make sense of the markets and to uncover the real reason stocks rise and fall — and then use that information to help others profit. My methods go far beyond just buying a good quality stock or shorting a pricey one, though.  Countless hours of research go into finding what I call “disconnects” between where a stock is trading and where it should be trading based on past precedents, peer values and earnings growth potential.  #-ad_banner-#An example of a disconnect is a weak stock or index that’s moving higher, or possibly even… Read More

As a market analyst, my job is to make sense of the markets and to uncover the real reason stocks rise and fall — and then use that information to help others profit. My methods go far beyond just buying a good quality stock or shorting a pricey one, though.  Countless hours of research go into finding what I call “disconnects” between where a stock is trading and where it should be trading based on past precedents, peer values and earnings growth potential.  #-ad_banner-#An example of a disconnect is a weak stock or index that’s moving higher, or possibly even moving lower, but hasn’t fallen fast enough given the data.  And what I’m seeing today is one of the biggest disconnects I’ve seen. It makes absolutely no sense!  The S&P 500 is relentlessly climbing to new highs despite the fact that we are deep into an earnings recession.  “S&P 500 companies have posted negative growth for six straight quarters, a stretch that’s been exceeded only once since 1936. That was the seven-quarter slump of the 2007-2009 recession.” — Bloomberg The chart below will help you visualize just how insane the market’s behavior… Read More

Longtime readers know I’ve been bearish on China for a while now. Last summer, I warned that China’s currency was poised for a sharp devaluation. In February, I warned that the economic situation in that country was much, much worse than we were being led to believe. #-ad_banner-#In each instance, I offered up a simple way to profit from the turmoil, thanks to the power of options. This time around, I’ve got my eye on a specific company in China — one of its largest and most well-known, in fact. I’ve… Read More

Longtime readers know I’ve been bearish on China for a while now. Last summer, I warned that China’s currency was poised for a sharp devaluation. In February, I warned that the economic situation in that country was much, much worse than we were being led to believe. #-ad_banner-#In each instance, I offered up a simple way to profit from the turmoil, thanks to the power of options. This time around, I’ve got my eye on a specific company in China — one of its largest and most well-known, in fact. I’ve made money betting against it before, and now it’s time to do it again… For those who are unfamiliar with the situation in China, let me briefly explain. Key economic data issued by the government is unreliable at best. The government is desperately trying to create a consumer-driven economy, while simultaneously propping up its real estate sector, stock market and imports. You can read what I’ve written before about this situation (as well as in other media outlets), so I won’t get into the details in today’s essay. But suffice it… Read More

My favorite scene in Martin Scorsese’s hit movie “Casino” is when Nicky (Joe Pesci) expounds on Ace’s (Robert De Niro) uncanny knack for picking winners. Ace’s secret to picking the winning team was finding out all the “inside stuff that nobody else knew,” like whether the quarterback was doing drugs, how the wind velocity was going to affect field goals… all the way down to figuring out the different ways basketballs bounced off the various kinds of wood used on college basketball courts. #-ad_banner-#Ace’s story was based on the true life of Frank “Lefty” Rosenthal, who was arguably the top… Read More

My favorite scene in Martin Scorsese’s hit movie “Casino” is when Nicky (Joe Pesci) expounds on Ace’s (Robert De Niro) uncanny knack for picking winners. Ace’s secret to picking the winning team was finding out all the “inside stuff that nobody else knew,” like whether the quarterback was doing drugs, how the wind velocity was going to affect field goals… all the way down to figuring out the different ways basketballs bounced off the various kinds of wood used on college basketball courts. #-ad_banner-#Ace’s story was based on the true life of Frank “Lefty” Rosenthal, who was arguably the top bookmaker in America for decades. In fact, I admired Rosenthal, not because of his illegal dealings (of which he had many), but because he had the utmost confidence in odds and understood the importance of stacking them in his favor. In a sense, I often borrow from his playbook. While I don’t lie, cheat or steal, I do go the extra length to stack the odds in my favor by layering on as much “edge” as I can in every trade. Where I Found My First Edge I got my first taste of the market was when I was… Read More

Every now and then, someone comes along who changes the way we see the world and how we live in it. Some of these people give us hope when we need it most, others offer guidance through difficult times, and some create new technologies that affect our daily lives. From the great mathematician Euclid to visionary philosopher Socrates and even the modern technologist Steve Jobs, our world is molded by these people’s ability to influence, inspire and steer the masses for good.  We often don’t see their genius until after they’ve passed on. Fortunately, there’s a modern, living… Read More

Every now and then, someone comes along who changes the way we see the world and how we live in it. Some of these people give us hope when we need it most, others offer guidance through difficult times, and some create new technologies that affect our daily lives. From the great mathematician Euclid to visionary philosopher Socrates and even the modern technologist Steve Jobs, our world is molded by these people’s ability to influence, inspire and steer the masses for good.  We often don’t see their genius until after they’ve passed on. Fortunately, there’s a modern, living maestro whose name is synonymous with success around the world. He’s already been dubbed the “Oracle of Omaha” for his skill at interpreting the economy and social trends to inform his investing choices. His talents have made him the third-wealthiest man in America, and his words soothe even the most fragile investor’s mind. #-ad_banner-# Warren Buffett may be 85 years old, but he is sharp as a tack and has built a $360 billion empire around his company, Berkshire Hathaway (NYSE: BRK-B). This… Read More

I have an urgent message for all traders: We are about to enter a short-term bull market. Over the next six weeks, hundreds of stocks — both large and small — are going to deliver rapid-fire gains. #-ad_banner-#Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), even typically slow-moving companies like General Electric (NYSE: GE) and Coca-Cola (NYSE: KO) could all see huge double-digit and even triple-digit gains practically overnight. Financial writer Kurtis Hemmerling said it’s going to be “one of the most exciting times for an investor,” adding that there’s “massive upside potential.”… Read More

I have an urgent message for all traders: We are about to enter a short-term bull market. Over the next six weeks, hundreds of stocks — both large and small — are going to deliver rapid-fire gains. #-ad_banner-#Apple (Nasdaq: AAPL), Amazon.com (Nasdaq: AMZN), even typically slow-moving companies like General Electric (NYSE: GE) and Coca-Cola (NYSE: KO) could all see huge double-digit and even triple-digit gains practically overnight. Financial writer Kurtis Hemmerling said it’s going to be “one of the most exciting times for an investor,” adding that there’s “massive upside potential.” The profit potential is unlimited. You could make well over 80% or 100% in a matter of days, as I’ve done many times when we’ve entered one of these short-term bull markets before. Now, just to be clear, this isn’t your typical bull market. It has several major differences that separate it from most. First, it’s inevitable. Not even the SEC can stop it. In fact, in a unique twist, the SEC inadvertently created it, as I’ll explain in a moment. Second, it’s not the kind of bull… Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have ever played the market. Many generously revealed their favorite metrics and secret tips for finding market trends and picking the best stocks. #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was… Read More

If there’s one lesson that stands out among all those I’ve learned in my 20 years of trading, it’s that even the best research, resources and skills can’t guarantee success. When I was coming up as a pit trader, I was fortunate enough to work alongside and learn from some of the best traders that have ever played the market. Many generously revealed their favorite metrics and secret tips for finding market trends and picking the best stocks. #-ad_banner-#But the thing we never talked about was how often or how badly they lost on trades. Unbeknownst to me, this was a critical part of the equation, and one that most market gurus never address. I remember feeling inadequate because, as hard as I tried, I still couldn’t pick winners 100% of the time. It wasn’t until I became an options market maker that I learned how to add real odds to my trading. As a market marker, I was required to trade hundreds of contracts on a daily basis. For every trade I took, I was trying desperately to time the market so I could gain a sliver of an advantage. One of my competitors, a trader named Brett, noticed… Read More

Over the years, I’ve observed a myriad of financial experts try to beat the S&P 500 and reduce volatility in their portfolios. There are literally hundreds of methodologies traders and investors use to this end — everything from basic diversification to proprietary, complex mathematical algorithms that select the best stocks to buy. #-ad_banner-#But reality and theory are different beasts, especially when markets aren’t trending smoothly. When the market trades in a volatile, sideways pattern, which has been the case since the start of 2015, many investing tactics are rendered all but useless. Read More

Over the years, I’ve observed a myriad of financial experts try to beat the S&P 500 and reduce volatility in their portfolios. There are literally hundreds of methodologies traders and investors use to this end — everything from basic diversification to proprietary, complex mathematical algorithms that select the best stocks to buy. #-ad_banner-#But reality and theory are different beasts, especially when markets aren’t trending smoothly. When the market trades in a volatile, sideways pattern, which has been the case since the start of 2015, many investing tactics are rendered all but useless. However, there is one uncommon yet simple strategy that reduces volatility and allows you to make money whether a stock goes up, sideways or even down. Think about that for a moment. When you buy a stock, you have a 50/50 shot at winning. But the little-known strategy I’ll introduce you to today increases your odds to 70%, 80%, even 90% per trade. And it usually costs under $1,000 no matter what stock you’re trading. So even expensive stocks like Apple (Nasdaq: AAPL), Alphabet (Nasdaq: GOOGL) and Amazon.com (Nasdaq:… Read More

Short sellers get a bad rap. They are often villainized by the media for “ganging up” on troubled companies or even causing market crashes.  There is little evidence to support the latter, though, and the truth is short sellers are a necessary part of the market. They help provide liquidity and keep overpriced stocks in check.  #-ad_banner-#I don’t know about you, but I’m not content only making profits on the upside. There is an extraordinary amount of money to be made on the downside, especially in a market like this. But when you short a stock, you risk an unlimited… Read More

Short sellers get a bad rap. They are often villainized by the media for “ganging up” on troubled companies or even causing market crashes.  There is little evidence to support the latter, though, and the truth is short sellers are a necessary part of the market. They help provide liquidity and keep overpriced stocks in check.  #-ad_banner-#I don’t know about you, but I’m not content only making profits on the upside. There is an extraordinary amount of money to be made on the downside, especially in a market like this. But when you short a stock, you risk an unlimited loss for a limited gain. I’m a probability guy, and I don’t like those odds.  Plus, there is a strategy for profiting when stocks fall that offers limited risk and substantial (though not quite unlimited) gains. Given that, I’m not sure why anyone would choose to short stocks.  Now, my strategy involves options, another area of the market that gets a bad rap. But unlike short selling, options — when used properly — can actually help limit your risk.  Today, I want to cover how to use basic put options to profit as stocks fall. To do so, I’m going… Read More