The price of oil has jumped more than 50% since hitting a 12-year low in February, on hopes of production freezes that could reduce the global supply glut. But there is good reason to believe the market is getting ahead of itself. Little has changed in the oil supply picture to merit this price rebound. In fact, several signs suggest there could actually be even more supply over the next few months.  Another plunge in oil prices would not just drag down companies in the space, but likely the entire market, which is why I want to have… Read More

The price of oil has jumped more than 50% since hitting a 12-year low in February, on hopes of production freezes that could reduce the global supply glut. But there is good reason to believe the market is getting ahead of itself. Little has changed in the oil supply picture to merit this price rebound. In fact, several signs suggest there could actually be even more supply over the next few months.  Another plunge in oil prices would not just drag down companies in the space, but likely the entire market, which is why I want to have some protection in place.  Oil Rally Not Driven By Fundamentals The problem with the recent run in oil prices is that it hasn’t been driven by fundamentals; it’s been driven by speculation and trading. We have seen massive short covering in oil futures. Data from the Commodity Futures Trading Commission (CFTC) shows investors increased net-long positions by 17% in the week ending March 15 to the highest level since June.   But once weak fundamentals come back into focus, the market may not be so positive. #-ad_banner-# For starters, the Saudi-Russian agreement to freeze production at current levels may not… Read More

Google’s (Nasdaq: GOOG) new cloud chief Diane Greene threw down the gauntlet recently and is pushing the company to drive its data center business harder. The world’s second largest publicly-traded company is intent to focus on its enterprise cloud services with new infrastructure and staffing. The plans won’t be taken lightly by the two leaders in data center and cloud services, Amazon (Nasdaq: AMZN) and Microsoft (Nasdaq: MSFT). Amazon has already announced an infrastructure buildout for more data centers and Microsoft is focusing heavily on international centers for availability of its Azure platform. #-ad_banner-#It’s too early to call a winner… Read More

Google’s (Nasdaq: GOOG) new cloud chief Diane Greene threw down the gauntlet recently and is pushing the company to drive its data center business harder. The world’s second largest publicly-traded company is intent to focus on its enterprise cloud services with new infrastructure and staffing. The plans won’t be taken lightly by the two leaders in data center and cloud services, Amazon (Nasdaq: AMZN) and Microsoft (Nasdaq: MSFT). Amazon has already announced an infrastructure buildout for more data centers and Microsoft is focusing heavily on international centers for availability of its Azure platform. #-ad_banner-#It’s too early to call a winner in the race to build out data centers and the increased competition in cloud services. All three tech behemoths have billions available to invest and drive their expansion. There will be a more immediate winner to the buildout: an industry that has been struggling under lower growth but could be ready to surge on the increased spending. Two names emerge as leaders in the space and valuations could be about to jump. The Cloud Wars Have Begun When Diane Greene addressed employees in an internal sales meeting this month her message was clear: push harder.  In a break from… Read More

I remember watching the movie Gung Ho in 1986 and wondering along with the rest of the country if Japan was going to buy the red, white and blue in its entirety. The movie was about a Japanese acquisition of a Pennsylvania auto factory, but at the time it seemed the land of the rising sun was buying up just about every other sector as well.  It was most evident in real estate, with massive buying of commercial properties on the West Coast. According to the LA Times, Japanese buyers poured nearly $17 billion into U.S. property at the peak… Read More

I remember watching the movie Gung Ho in 1986 and wondering along with the rest of the country if Japan was going to buy the red, white and blue in its entirety. The movie was about a Japanese acquisition of a Pennsylvania auto factory, but at the time it seemed the land of the rising sun was buying up just about every other sector as well.  It was most evident in real estate, with massive buying of commercial properties on the West Coast. According to the LA Times, Japanese buyers poured nearly $17 billion into U.S. property at the peak in 1988 and owned almost half (45%) of the premium downtown office space in Los Angeles by the early 1990s. #-ad_banner-#The real estate frenzy helped the FTSE NAREIT U.S. Real Estate Index jump an annualized 15.6% over the decade through 1989, sending prices and investor sentiment higher. The index is up less than half that at an annualized pace of 7.4% over the decade through 2015 but that may be about to change.  New buyers have emerged from the east and it’s starting to look like the 1980s all over again. Commercial Real Estate Has A New Deep-Pocket Buyer… Read More

Ask most investors where the next big consumer story will be and the answer is usually China. More than 400 million shoppers went online last year in the world’s second largest economy, more than the entire U.S. population. Besides natural growth in middle-class buying power, the government is doing all it can to transition the economy to a model fueled by consumer spending.  There’s a lot to like about companies that can sell into the Chinese consumer theme — but uncertainty over the country’s economic growth is destroying sentiment even on strong long-term potential. The Global X China Consumer ETF… Read More

Ask most investors where the next big consumer story will be and the answer is usually China. More than 400 million shoppers went online last year in the world’s second largest economy, more than the entire U.S. population. Besides natural growth in middle-class buying power, the government is doing all it can to transition the economy to a model fueled by consumer spending.  There’s a lot to like about companies that can sell into the Chinese consumer theme — but uncertainty over the country’s economic growth is destroying sentiment even on strong long-term potential. The Global X China Consumer ETF (NYSE: CHIQ) is 35% off its 52-week high and just 13% above the all-time low. #-ad_banner-#What if there were a company that would be one of the biggest long-term beneficiaries of the China consumer story but that had hidden exposure to the developed U.S. consumer story to boot? What if that same company was becoming indispensable to its main competitor, a critical part of the supply chain for one of the competitor’s fastest growing segments? The company exists and its shares are on sale. This Pick Gets Huge Support From Amazon And The American Consumer Fulfillment by Amazon (FBA)… Read More

Warren Buffett’s 2015 Letter to Shareholders is out and all investors are talking about is the Oracle’s losing bet in IBM (NYSE: IBM) and his warning of widespread earnings manipulation in the market.  #-ad_banner-#While both of these may be interesting and important topics, most investors have completely missed one of the most important ideas in the letter. In fact, this one idea contributed to 85% of Berkshire Hathaway’s (NYSE: BRK-B) increase in net worth and it did it with just five investments. Buffett talk just briefly about his Powerhouse Five portfolio this year on page four… Read More

Warren Buffett’s 2015 Letter to Shareholders is out and all investors are talking about is the Oracle’s losing bet in IBM (NYSE: IBM) and his warning of widespread earnings manipulation in the market.  #-ad_banner-#While both of these may be interesting and important topics, most investors have completely missed one of the most important ideas in the letter. In fact, this one idea contributed to 85% of Berkshire Hathaway’s (NYSE: BRK-B) increase in net worth and it did it with just five investments. Buffett talk just briefly about his Powerhouse Five portfolio this year on page four of the letter. These are the five most profitable non-insurance businesses owned by Berkshire Hathaway and has been a focus of the legendary investor for nearly two decades.  The group is a critical component of the Berkshire portfolio and accounted for 85% of the 2015 increase in Berkshire’s net worth. The $13.1 billion earned by just five companies represented a 5.2% gain over the year before and well above the 12.5% loss the Berkshire portfolio suffered in market value during the period. How To Create Your Own Powerhouse Portfolio Buffett doesn’t talk at length about his Powerhouse Portfolio and… Read More

In addition to huge daily swings, 2016 has been characterized by a flight to safety as the markets sharply corrected in the first few weeks of the new year.  Even though stocks have regained some of those losses in the past few weeks, the only sectors to show year-to-date gains are defensive utilities and consumer staples. In fact, the stampede to safety has pushed the latter to multiyear highs and lofty valuations. If the economic landscape is not as dire as many investors think in 2016 — and I don’t think it will be — we… Read More

In addition to huge daily swings, 2016 has been characterized by a flight to safety as the markets sharply corrected in the first few weeks of the new year.  Even though stocks have regained some of those losses in the past few weeks, the only sectors to show year-to-date gains are defensive utilities and consumer staples. In fact, the stampede to safety has pushed the latter to multiyear highs and lofty valuations. If the economic landscape is not as dire as many investors think in 2016 — and I don’t think it will be — we have a chance to capitalize on our fellow investors’ irrationality with a trade that could land you 78%. #-ad_banner-# How Much Are You Willing To Pay For Safety? I compiled the weekly returns of the Consumer Staples Select Sector SPDR ETF (NYSE: XLP) going back to its launch in 1998. Between Nov. 16 and Feb. 8, XLP outperformed the S&P 500 for 12 consecutive weeks, which has never happened before in the history of the fund. In addition to the recent rush to safety, the sector has benefited for years from yield-seeking investors leaving lower payouts in… Read More

The 2016 general election looks to be a close one, with no presidential candidates claiming an insurmountable lead and the Democrats within just five seats of regaining control of the Senate. Political spending during presidential election years has consistently smashed total spending in previous years and it looks like this year could top the $6.3 billion mark set in 2012. #-ad_banner-#And that spending could be heading into overdrive with the Super Tuesday primaries in 14 states on March 1. Both sides of the aisle have seen multiple candidates come out on top in other state races. Clinton and Cruz topped… Read More

The 2016 general election looks to be a close one, with no presidential candidates claiming an insurmountable lead and the Democrats within just five seats of regaining control of the Senate. Political spending during presidential election years has consistently smashed total spending in previous years and it looks like this year could top the $6.3 billion mark set in 2012. #-ad_banner-#And that spending could be heading into overdrive with the Super Tuesday primaries in 14 states on March 1. Both sides of the aisle have seen multiple candidates come out on top in other state races. Clinton and Cruz topped the Iowa caucuses while Trump and Sanders ran away with the New Hampshire primary.  Candidates and political action committees (PACs) will be opening their pockets to get their candidate nominated and sent to Washington. Rather than picking the winners of each race, investors should be focusing on picking the winners in the election spending race. Super Spending Ahead Of Super Tuesday Political spending has surged ever since the 2010 Supreme Court decision that campaign spending by independent groups, i.e. PACs, was protected by the First Amendment. The 2012 election hit an historic $6.3 billion with the cost of the… Read More

Earlier this month, Russian Prime Minister Dmitry Medvedev said his country was in a new Cold War with the United States and its allies in a speech at the Munich Security Conference. Tensions have been building since the beginning of Syrian civil war in 2011 but came to a boil when Russia supported Ukrainian separatists in 2014. Conflict in hot spots around the world have meant a resurgence of U.S. military involvement and even the Obama Administration is talking about an increased military role around the globe. In the five years through 2015, President Obama has overseen a nearly 20%… Read More

Earlier this month, Russian Prime Minister Dmitry Medvedev said his country was in a new Cold War with the United States and its allies in a speech at the Munich Security Conference. Tensions have been building since the beginning of Syrian civil war in 2011 but came to a boil when Russia supported Ukrainian separatists in 2014. Conflict in hot spots around the world have meant a resurgence of U.S. military involvement and even the Obama Administration is talking about an increased military role around the globe. In the five years through 2015, President Obama has overseen a nearly 20% reduction in the defense budget — but escalating tensions look to ignite another era of military build-up.  #-ad_banner-#Is the United States entering another arms race? Are you ready for the windfall for companies in the Aerospace & Defense industry? Global Hot Spots Mean Military Spending Is Heating Up PM Medvedev’s comments stirred memories of the arms race as it and the United States spar over joint-cooperation to end the five-year Syrian conflict. Russia has blamed the United States and NATO for fueling regional conflicts while the United States and allies contend that Russia is focusing its bombing runs on… Read More

The mini-rally in stocks at the end of January has turned back into a full-blown selloff and investors are once again wondering if the seven-year bull market has run its course. Oil prices continue to crash lower and few are left touting the future of America’s revolution in energy production.  Stocks in the S&P 500 have fallen more than 14% from their 52-week high — now well past a correction and approaching the 20% bear market signal as fourth quarter earnings give investors little to cheer.  #-ad_banner-#But we’ve been here before. Several times in fact. There have been three other… Read More

The mini-rally in stocks at the end of January has turned back into a full-blown selloff and investors are once again wondering if the seven-year bull market has run its course. Oil prices continue to crash lower and few are left touting the future of America’s revolution in energy production.  Stocks in the S&P 500 have fallen more than 14% from their 52-week high — now well past a correction and approaching the 20% bear market signal as fourth quarter earnings give investors little to cheer.  #-ad_banner-#But we’ve been here before. Several times in fact. There have been three other corrections of 10% or more since 2009. And in their despair, investors are overlooking some powerful catalysts that could take shares back up and beyond old highs.  And I think it looks especially likely that this will happen in two of the hardest-hit sectors. Is The Bull Market Stampede Officially Over? Corporate earnings are set to decline for three consecutive quarters, a trend not seen since 2009, and reported sales are down for four straight quarters according to FactSet Research. Slowing growth from China and the near collapse of the energy sector have got investors worried that the bull… Read More

There is blood in the streets in the energy sector.  Oil- and gas-related stocks have been pummeled for the better part of the past year and a half. Yet, economists and analysts continue to lower their forecasts for energy prices and downgrade stocks in the group.  The latest rout came this week on bankruptcy rumors surrounding Chesapeake Energy (NYSE: CHK) — once one of the world’s largest natural gas producers — which seemed to call into question the survival of some companies in the space. However, there is little question regarding long-term demand in the sector. Natural gas… Read More

There is blood in the streets in the energy sector.  Oil- and gas-related stocks have been pummeled for the better part of the past year and a half. Yet, economists and analysts continue to lower their forecasts for energy prices and downgrade stocks in the group.  The latest rout came this week on bankruptcy rumors surrounding Chesapeake Energy (NYSE: CHK) — once one of the world’s largest natural gas producers — which seemed to call into question the survival of some companies in the space. However, there is little question regarding long-term demand in the sector. Natural gas accounted for 35% of U.S. power generation last year, up from just 20% in 2010. And BP (NYSE: BP) estimates natural gas consumption will grow 13.4% through 2020. #-ad_banner-# Energy companies that can survive the current storm could thrive when the clouds clear. In the current market, though, one natural gas heavyweight could offer traders a chance to book a 174% annualized return. Why I’m Bullish On A Sector The Market Loves To Hate With oil and gas producers burdened by huge debt loads thanks to years of heavy capital investment and falling energy prices, it’s not surprising that… Read More