When it comes right down to it, nothing is more American than the desire to achieve and to profit. In fact, buying great American companies has been a winning strategy of mine over the years. The key is to buy the right ones at the right time. With that in mind, I thought I would take a look at some great American companies and see how they stack up in today’s market. Home Depot (NYSE: HD) is one of the truly great American success stories. The company started… Read More

When it comes right down to it, nothing is more American than the desire to achieve and to profit. In fact, buying great American companies has been a winning strategy of mine over the years. The key is to buy the right ones at the right time. With that in mind, I thought I would take a look at some great American companies and see how they stack up in today’s market. Home Depot (NYSE: HD) is one of the truly great American success stories. The company started in 1978 with two stores in Atlanta and has been the fastest-growing retailer in U.S. history. Today the company has 2,257 stores in the U.S., Mexico and Canada. It’s the world’s largest home improvement retailer — and with the real estate markets starting to improve, Home Depot is in the sweet spot for future growth. As American’s situation continues to improve, they will feel more comfortable spending money to fix up their houses… Read More

In his excellent book “One Up on Wall Street,” Peter Lynch, the best mutual fund manager ever, revealed a powerful charting tool that helped him achieve an annual gain of 29.2% in his portfolios for 13 years. In this chart, Peter Lynch drew a company’s stock price and earnings per share together and aligned the value of $1 in earnings per share to $15 in stock price. He wrote… Read More

In his excellent book “One Up on Wall Street,” Peter Lynch, the best mutual fund manager ever, revealed a powerful charting tool that helped him achieve an annual gain of 29.2% in his portfolios for 13 years. In this chart, Peter Lynch drew a company’s stock price and earnings per share together and aligned the value of $1 in earnings per share to $15 in stock price. He wrote in pages 164-165 of the book: “A quick way to tell if a stock is overpriced is to compare the price line to the earnings line. If you bought familiar growth companies — such as Shoney’s, The Limited, or Marriott — when the stock price fell well below the earnings line, and sold them when the stock price rose dramatically above it, the chances are you’d do pretty well.” To see how this Peter Lynch Chart works, we applied it to the top holdings of Warren Buffett,… Read More

The Employee Benefit Research Institute (EBRI) recently released its 2013 Retirement Confidence Survey, and it looks like a lot of baby boomers are going to flunk “Retirement Planning 101.” In a nutshell, the survey concluded: — Americans are living longer. — Americans don’t have nearly enough saved for retirement. — Americans are realizing they will have to work longer, and many will never retire. First, let’s take a look at how confident workers are about whether they… Read More

The Employee Benefit Research Institute (EBRI) recently released its 2013 Retirement Confidence Survey, and it looks like a lot of baby boomers are going to flunk “Retirement Planning 101.” In a nutshell, the survey concluded: — Americans are living longer. — Americans don’t have nearly enough saved for retirement. — Americans are realizing they will have to work longer, and many will never retire. First, let’s take a look at how confident workers are about whether they have enough money for retirement: What about those who have already retired? Their confidence also appears shaky… While in 2007, 41% were “Very Confident,” the number in that category has dropped to just 18%. For some additional clarity on the changes, we made a table comparing 2002 and 2013 levels of confidence and included our corresponding grades for each level: Although it’s safe to assume those who gave themselves A’s or B’s think they will be OK, their numbers have dropped significantly. Meanwhile, there seems… Read More

The Employee Benefit Research Institute (EBRI) recently released its 2013 Retirement Confidence Survey, and it looks like a lot of baby boomers are going to flunk “Retirement Planning 101.” In a nutshell, the survey concluded: — Americans are living longer. — Americans don’t have nearly enough saved for retirement. — Americans are realizing they will have to work longer, and many will never retire. First, let’s take a look at how confident workers are about whether they have enough money for retirement: [chart 1] What about those who have already retired? Their confidence also appears shaky…… Read More

The Employee Benefit Research Institute (EBRI) recently released its 2013 Retirement Confidence Survey, and it looks like a lot of baby boomers are going to flunk “Retirement Planning 101.” In a nutshell, the survey concluded: — Americans are living longer. — Americans don’t have nearly enough saved for retirement. — Americans are realizing they will have to work longer, and many will never retire. First, let’s take a look at how confident workers are about whether they have enough money for retirement: [chart 1] What about those who have already retired? Their confidence also appears shaky… [chart 2] While in 2007, 41% were “Very Confident,” the number in that category has dropped to just 18%. For some additional clarity on the changes, we made a table comparing 2002 and 2013 levels of confidence and included our corresponding grades for each level: [table] Although it’s safe to assume those who gave themselves A’s or B’s think they will be OK, their numbers have dropped significantly. Meanwhile, there seems to be a growing gap between public-sector and private-sector employees. The percentage of U.S. workers with defined-benefit retirement plans is down to 3% as of 2011. That means that… Read More

I love stories of people rising up out of harsh or even ordinary, middle class lives to ones of great influence, wealth and power. Individuals who have experienced life, as most of us have, are generally better suited for having a complete understanding of how markets and economies really work. This is due to the fact that they have firsthand experience making it to the top. Unlike those who are born with a silver spoon in their mouths, this personal experience of making dreams real can teach everyone crucial lessons for any endeavor. These rags-to-riches stories are perhaps best personified… Read More

I love stories of people rising up out of harsh or even ordinary, middle class lives to ones of great influence, wealth and power. Individuals who have experienced life, as most of us have, are generally better suited for having a complete understanding of how markets and economies really work. This is due to the fact that they have firsthand experience making it to the top. Unlike those who are born with a silver spoon in their mouths, this personal experience of making dreams real can teach everyone crucial lessons for any endeavor. These rags-to-riches stories are perhaps best personified by Ray Dalio, founder of Bridgewater Associates — the largest hedge fund in the world. Dalio was born in Queens, NY in 1949 to a jazz musician and stay-at-home mom. He was never very good at early schooling, wanting to understand the “whys” behind everything. Rout memorization just wasn’t his thing. He caddied in summers to earn spending money and would listen keenly to the golfers talking about stocks and other investments. Those conversations sparked a lifelong obsession with the financial markets. Taking the few dollars he managed to save from his caddie… Read More

I couldn’t believe my eyes when I walked into the store. There were literally dozens of smartly-dressed women excitedly seeking out their sizes in a variety of clothing items. The shoppers were completely undeterred by the relatively high prices but rather focused on just how good their purchases would make them look at the gym, yoga class or just as casual wear. I quickly remembered Fidelity Investments’ Peter Lynch and his investing rule, “buy what you know,” as my wife came out of the dressing room modeling her latest tennis/workout skirt for my approval. Not only did… Read More

I couldn’t believe my eyes when I walked into the store. There were literally dozens of smartly-dressed women excitedly seeking out their sizes in a variety of clothing items. The shoppers were completely undeterred by the relatively high prices but rather focused on just how good their purchases would make them look at the gym, yoga class or just as casual wear. I quickly remembered Fidelity Investments’ Peter Lynch and his investing rule, “buy what you know,” as my wife came out of the dressing room modeling her latest tennis/workout skirt for my approval. Not only did the outfit look great, but the craftsmanship and unique fabric sealed the deal — despite the very high price point. If you haven’t guessed it, then the store we were in was lululemon athletica (Nasdaq: LULU). Riding on the resurgence of the fitness/yoga craze that started in the 1970s, lululemon has built a powerhouse fashion empire on women’s desire for quality, looks, comfort and functionality. It’s also been one of the hottest stocks on Wall Street in recent memory… Interestingly, half the women in the store didn’t… Read More

The stock market is a temperamental beast. Every year, month, week, day and even hour is different than the one preceding it. Long-term 100-year charts clearly show a substantial upward drift in stock prices, however, there are multi-year periods of very little change and even times of bearish, downward movement. If you begin investing in stocks during the start of one of these down cycles, it can take years just to get back to even, and that’s if you had the luck to buy the right stocks. … Read More

The stock market is a temperamental beast. Every year, month, week, day and even hour is different than the one preceding it. Long-term 100-year charts clearly show a substantial upward drift in stock prices, however, there are multi-year periods of very little change and even times of bearish, downward movement. If you begin investing in stocks during the start of one of these down cycles, it can take years just to get back to even, and that’s if you had the luck to buy the right stocks.  The market is littered with the financial corpses of those who went “all-in” during a bearish cycle or bubble burst of a particular sector. One only has to look back as far as the banking crisis of 2007-2008 or the Internet bubble burst at the turn of the century to find stocks of companies that never recovered. Even the broad indexes are well off their all time highs. Plenty of long term investors bought near the top and are still negative overall in their stock portfolios.  One way to prevent being caught at the wrong time and in the wrong… Read More

During uncertain economic times, true value becomes the consumer’s guiding mantra. Getting your money’s worth on whatever it’s spent on is the definition of true value in this sense. Whether it’s a great meal at a discount, a good deal on a luxury car or going on a first-class vacation at a fraction of the expected price, true value for one’s discretionary income has become a driving force in consumer culture.  Evidence of the consumer seeking his money’s worth is made clear in the success of discount coupon… Read More

During uncertain economic times, true value becomes the consumer’s guiding mantra. Getting your money’s worth on whatever it’s spent on is the definition of true value in this sense. Whether it’s a great meal at a discount, a good deal on a luxury car or going on a first-class vacation at a fraction of the expected price, true value for one’s discretionary income has become a driving force in consumer culture.  Evidence of the consumer seeking his money’s worth is made clear in the success of discount coupon websites like Groupon (Nasdaq: GRPN) and Living Social as well as the proliferation of peer-to-peer deal/auction businesses like eBay (Nasdaq: EBAY). But nowhere is the pursuit of true value followed as strongly as in the leisure/travel business. Limited resources and uncertain economic times force consumers to seek out the most bang for their buck as possible.  And I think I smell an opportunity for investors in this space… The growth in the cruise line business is proof of this search for true value. Once reserved strictly for the wealthy, cruising has become the go-to vacation choice for the masses.  Not… Read More