You don’t have to be a contrarian to have investment success, but it certainly helps. #-ad_banner-#From 2005 through 2007 — when it was fashionable to invest in real estate — the reality was that real estate was the last place you should have been putting your money. Then after housing bubble popped in 2009 — when it was terrifying to invest in real estate — investors should have been betting their life savings on residential properties. You can’t expect to reach your full investment potential by merely following the majority. In fact, going against the crowd is often the best… Read More

You don’t have to be a contrarian to have investment success, but it certainly helps. #-ad_banner-#From 2005 through 2007 — when it was fashionable to invest in real estate — the reality was that real estate was the last place you should have been putting your money. Then after housing bubble popped in 2009 — when it was terrifying to invest in real estate — investors should have been betting their life savings on residential properties. You can’t expect to reach your full investment potential by merely following the majority. In fact, going against the crowd is often the best place to look for investment ideas. Today there isn’t much that is more out favor than Russian stocks. It’s well-known that Russia has a problem with corruption making it a frightening place to invest in already. Now with the developing Ukraine crisis and the U.S. imposed sanctions — many investors find it even more unnerving. But as Warren Buffett says “you pay a rich price for a cheery consensus.” In fact, the doom and gloom that surrounds Russian stocks makes them extraordinarily inexpensive. Now could be the perfect time for a contrarian move — here’s why. After several months of… Read More

In a world where the “experts” on the financial TV shows are willing to predict where the stock market will move in the next two hours, there is a great opportunity for patient investors to profit. While everyone else tries to frantically trade in and out of stocks, patient investors can invest in the best long-term opportunities… and relax. #-ad_banner-#My approach to investing is based on Warren Buffett’s famous dictum: Be fearful when others are greedy, and greedy when others are fearful. Today I see an opportunity that I think fits the bill. That opportunity is in uranium producers. I… Read More

In a world where the “experts” on the financial TV shows are willing to predict where the stock market will move in the next two hours, there is a great opportunity for patient investors to profit. While everyone else tries to frantically trade in and out of stocks, patient investors can invest in the best long-term opportunities… and relax. #-ad_banner-#My approach to investing is based on Warren Buffett’s famous dictum: Be fearful when others are greedy, and greedy when others are fearful. Today I see an opportunity that I think fits the bill. That opportunity is in uranium producers. I don’t have the faintest idea whether uranium stocks will be higher or lower in a month or even a year. I do however expect the stock prices of uranium producers to go much higher over the next decade. My thesis isn’t apparent from the sector’s recent performance: Uranium stocks are down 70% from the start of 2011 while the overall market is up 60%. Yet I would argue that the uranium sector has better long-term fundamentals than most companies in the overall market. I think investors are focusing on the sector’s short-term challenges and missing the big picture. Read More

American oil production is surging. Yet oil prices remain near $100 a barrel.  You may be wondering: When will all of this additional production finally overtake demand and push the price of oil down? You can find one answer in the price of oil futures — which say we can expect oil to fall to closer to $80 in the coming few years and stay there. #-ad_banner-#Is the market correct? Are oil prices heading south? I think that the answer is no, for several reasons — especially after I listened to a… Read More

American oil production is surging. Yet oil prices remain near $100 a barrel.  You may be wondering: When will all of this additional production finally overtake demand and push the price of oil down? You can find one answer in the price of oil futures — which say we can expect oil to fall to closer to $80 in the coming few years and stay there. #-ad_banner-#Is the market correct? Are oil prices heading south? I think that the answer is no, for several reasons — especially after I listened to a recent presentation by Bill Thomas, the CEO and chairman of EOG Resources (NYSE: EOG).   EOG is, by a considerable margin, the largest horizontal oil producer in the world. That means the company has access to the best data available on horizontal oil production and resources. Put simply, EOG and Thomas believe that the futures market is all wrong about oil prices. The company is bullish on oil and focused on producing more of it. What EOG sees — and the market doesn’t seem to grasp — is that for all intents and purposes, the horizontal oil boom is coming… Read More

Personally, I’m long-term bullish on the price of oil — and because I’m bullish, I’m interested in companies that control massive deposits of crude. #-ad_banner-#I like to compare an investment in companies sitting on large stores of oil to owning land that lies beyond city limits. That land might not be worth much today — but once the city’s expanding borders reach that land, it could be worth a fortune. Similarly, rising oil prices and technological advances in oil recovery are like the city borders moving to where my land is. Higher prices and improving technology make recovering… Read More

Personally, I’m long-term bullish on the price of oil — and because I’m bullish, I’m interested in companies that control massive deposits of crude. #-ad_banner-#I like to compare an investment in companies sitting on large stores of oil to owning land that lies beyond city limits. That land might not be worth much today — but once the city’s expanding borders reach that land, it could be worth a fortune. Similarly, rising oil prices and technological advances in oil recovery are like the city borders moving to where my land is. Higher prices and improving technology make recovering more of the oil that producers are sitting on economically feasible. However, I wouldn’t invest in a producer solely because it has a big accumulation of oil in the ground. The company also has to be inexpensively priced relative to the value of its proven reserves and cash flow. Now, I’ve turned over quite a few rocks over the past couple of years looking for undervalued opportunities in the oil sector. I don’t know that I’ve come across many companies — if any — that trade at as large a discount to proven reserves and have the balance sheet that… Read More

One thing that I have grown to appreciate about investing is that it is a pursuit that you get better at over time.    #-ad_banner-#This is a game in which experience counts. And there is no experience that provides a better source of investment lessons than the mistakes you’ve made yourself. Mistakes aren’t always those of commission (although I’ve made plenty of those). There are also errors of omission, as in things that you didn’t do but should have. For example, in 2004, when Google (Nasdaq: GOOG) had its IPO, a friend of mine pounded the table and told me… Read More

One thing that I have grown to appreciate about investing is that it is a pursuit that you get better at over time.    #-ad_banner-#This is a game in which experience counts. And there is no experience that provides a better source of investment lessons than the mistakes you’ve made yourself. Mistakes aren’t always those of commission (although I’ve made plenty of those). There are also errors of omission, as in things that you didn’t do but should have. For example, in 2004, when Google (Nasdaq: GOOG) had its IPO, a friend of mine pounded the table and told me that I “had to own” the company. I thought he was crazy because to me Google looked very expensive on both a price-to-earnings (P/E) and price-to-cash flow basis. I was wrong. While Google did look expensive relative to other companies, it was not even close to being expensive relative to its future earning power. What I didn’t appreciate was that Google had a tremendous moat around its business and massive growth in front of it. Google’s share price went from $50 in 2004 to well over $500 today. The lesson I learned is that it is worth paying up (within… Read More

Several years ago, when I was looking for exposure to rising oil prices, I spent quite a bit of time searching for bargains in the energy sector. After examining the various investment options available, I developed a game plan for the next couple of decades. #-ad_banner-#I call it my unconventional plan, because it involves investing in oil producers focused almost exclusively on unconventional (horizontal) production. The plan looks like this: 1.) Find unconventional producers that appear reasonably (or cheaply) valued based on current reserves and production. 2.) Focus on those that have the biggest land positions in… Read More

Several years ago, when I was looking for exposure to rising oil prices, I spent quite a bit of time searching for bargains in the energy sector. After examining the various investment options available, I developed a game plan for the next couple of decades. #-ad_banner-#I call it my unconventional plan, because it involves investing in oil producers focused almost exclusively on unconventional (horizontal) production. The plan looks like this: 1.) Find unconventional producers that appear reasonably (or cheaply) valued based on current reserves and production. 2.) Focus on those that have the biggest land positions in these horizontal oil plays relative to their enterprise value. 3.) Sit back and wait as the technology and techniques being used by these unconventional producers continue to evolve. Horizontal drilling with multi-stage fracturing is still in its infancy, and I expect future improvements on current techniques will allow for a lot more oil to be recovered than anyone expects. 4.) Enjoy the added benefit of rising oil prices making all of the oil that these companies sit on top of more valuable. Crescent Point Energy (NYSE: CPG) is the premier horizontal oil producer in… Read More

By 2030, the global middle class is expected to more than double in size from 2 billion to 4.9 billion. That demographic change is going to have a huge impact around the world. #-ad_banner-#For the people who join the middle class, it’s going to mean a significant amount of disposable income for the first time in their lives — allowing them to purchase the luxuries that Westerners have long taken for granted. For investors, it’s important to be aware of not only the fact that the ranks of the middle class are going to swell… but where. Today, half of… Read More

By 2030, the global middle class is expected to more than double in size from 2 billion to 4.9 billion. That demographic change is going to have a huge impact around the world. #-ad_banner-#For the people who join the middle class, it’s going to mean a significant amount of disposable income for the first time in their lives — allowing them to purchase the luxuries that Westerners have long taken for granted. For investors, it’s important to be aware of not only the fact that the ranks of the middle class are going to swell… but where. Today, half of the 2 billion people in the global middle class are from North America and Europe. By 2030, that share is expected to shrink to 22%. On the other hand, Asia is expected to have 64% of the planet’s middle class by 2030. As an investor, I want to make sure that the companies I’m investing in are going to have the wind at their backs for a long time to come. I like companies that benefit from the fact that people are living longer. I like companies that benefit from rising oil prices. And I like companies that are exposed… Read More

Some of the most successful companies have taken iconic American brands and rolled them out internationally to generate incredible growth. Take Starbucks (Nasdaq: SBUX), for example. Starbucks first built its powerful brand in the United States, then famously rolled it out everywhere in the world. Investors who jumped on the Starbucks wagon in 1992 and held on for the long term have made 70 times their original investment. #-ad_banner-#When Starbucks went public in June 1992, the company had 140 outlets and revenue of $73 million. All of those 140 locations were in North America. The first Starbucks location… Read More

Some of the most successful companies have taken iconic American brands and rolled them out internationally to generate incredible growth. Take Starbucks (Nasdaq: SBUX), for example. Starbucks first built its powerful brand in the United States, then famously rolled it out everywhere in the world. Investors who jumped on the Starbucks wagon in 1992 and held on for the long term have made 70 times their original investment. #-ad_banner-#When Starbucks went public in June 1992, the company had 140 outlets and revenue of $73 million. All of those 140 locations were in North America. The first Starbucks location outside of North America didn’t even open until 1996, when the company opened a store in Tokyo. Today Starbucks covers much of the globe, operating in 63 countries with over 5,500 international stores. Since going international, shares of Starbucks have returned more than 2,500%. And even with thousands of international locations, Starbucks still has significant long-term expansion plans. There clearly is huge potential for companies that own highly recognizable American brands to compound their profits by going international. And I’ve found a company that I think is just about to start what could be a similarly long and lucrative growth… Read More

Ten years ago, I don’t know how seriously I would have taken the bitcoin phenomenon. Today, though, I’m taking it very seriously. #-ad_banner-#I’ve learned my lesson the hard way. I used to regularly miss the boat on stocks, while other early adopters got ahead of the curve. In the mid-’90s, I paid very little attention to the developments surrounding the Internet. My parents did the same thing with personal computers in the 1970s. So with bitcoin I’ve been paying attention. And what I’ve learned is that there is real merit to this digital currency. I’m not guaranteeing anything, but I… Read More

Ten years ago, I don’t know how seriously I would have taken the bitcoin phenomenon. Today, though, I’m taking it very seriously. #-ad_banner-#I’ve learned my lesson the hard way. I used to regularly miss the boat on stocks, while other early adopters got ahead of the curve. In the mid-’90s, I paid very little attention to the developments surrounding the Internet. My parents did the same thing with personal computers in the 1970s. So with bitcoin I’ve been paying attention. And what I’ve learned is that there is real merit to this digital currency. I’m not guaranteeing anything, but I do think bitcoin has a fighting chance. And there’s one virtually unknown company that could soar if bitcoin gains acceptance. It could even be known as the “Amazon.com of Bitcoin” in the near future. There are some strong economic forces supporting the acceptance of bitcoin. These are the primary reasons why I predict some of the world’s most successful businesses are going to be very motivated to embrace the digital currency. The first big advantage that bitcoin provides over other electronic transactions is cost. Bitcoin transactions involve no fees. When I first read that, I didn’t think it was a… Read More

Going “short” a company involves selling shares that you have borrowed from another investor (for a fee) with the expectation that you can buy them back at a lower price in the future. #-ad_banner-#People who short shares of a company are betting that those shares are going to drop in price.   Short selling is a much riskier business than owning shares of companies.   If you buy shares of a company, the most you can lose is the full amount you have invested.  If you invest $5,000, the worst thing that can happen is that the stock… Read More

Going “short” a company involves selling shares that you have borrowed from another investor (for a fee) with the expectation that you can buy them back at a lower price in the future. #-ad_banner-#People who short shares of a company are betting that those shares are going to drop in price.   Short selling is a much riskier business than owning shares of companies.   If you buy shares of a company, the most you can lose is the full amount you have invested.  If you invest $5,000, the worst thing that can happen is that the stock goes to zero and you lose your investment. Meanwhile, if you were to short $5,000 worth of shares of the same company, your potential for loss is much greater. A stock price can double, triple — or go up 10 times in price. In fact, there is no limit to what your potential loss could be. Because short selling is such a risky business, the people who practice it are generally some of the smartest people in the market. They have to be, because if they don’t do their homework, they usually get taken to the cleaners — quickly. For… Read More