Reckless actions will get you punished. That’s what JP Morgan’s (NYSE: JPM) CEO, Jamie Dimon, was surely thinking after he learned that a key employee at his firm had lost roughly $2 billion on an ill-conceived trading strategy. In fact, his firm’s losses from this debacle could easily reach twice or three times as much as that initial amount, causing Dimon more sleepless nights ahead. But was this misstep really worth $30 billion? That’s the stunning amount of market value that this venerable bank… Read More

Reckless actions will get you punished. That’s what JP Morgan’s (NYSE: JPM) CEO, Jamie Dimon, was surely thinking after he learned that a key employee at his firm had lost roughly $2 billion on an ill-conceived trading strategy. In fact, his firm’s losses from this debacle could easily reach twice or three times as much as that initial amount, causing Dimon more sleepless nights ahead. But was this misstep really worth $30 billion? That’s the stunning amount of market value that this venerable bank has lost in recent weeks since the trading scandal was announced. Shares have been tarred and feathered so badly that they now trade below tangible book value. Twin pressures That steep drop in shareholder value also likely stems from a pair of other factors. First, the trading losses make it more likely that the entire banking sector will be put in handcuffs when it comes to risky trading for the firms’ own accounts. The Volcker Rule, banking legislation which was likely to be… Read More

With all of the headwinds swirling around stocks today, many investors are seeking the safety of cash. It’s a wise move, but not for the reasons you may think. Cash is not just “safe,” but it is also firepower for the next major upward move in the stock market. Read More

The business world is full of examples of innovators being left in the dust by imitators. Think Apple (Nasdaq: AAPL) was the first company to think of the tablet PC? Microsoft (Nasdaq: MSFT) first developed the idea a decade prior to the advent of the iPad. Think Mark Zuckerberg came… Read More

It’s that time of year again, when investment managers are required to disclose their fund’s holdings to the SEC, and by extension, to all investors. And for most investment companies and hedge funds, it’s a pretty straight-forward process… just make a list of all the stocks you own, and how much of them you own. If you’re Greenlight Capital’s David Einhorn, however, it’s not quite that simple. With Einhorn’s willingness to hold short as well as long positions (not to mention his willingness to speak out about them) in the $7 billion hedge fund,… Read More

It’s that time of year again, when investment managers are required to disclose their fund’s holdings to the SEC, and by extension, to all investors. And for most investment companies and hedge funds, it’s a pretty straight-forward process… just make a list of all the stocks you own, and how much of them you own. If you’re Greenlight Capital’s David Einhorn, however, it’s not quite that simple. With Einhorn’s willingness to hold short as well as long positions (not to mention his willingness to speak out about them) in the $7 billion hedge fund, it’s a bit of a process to truly figure out what he’s thinking, or trading. On the other hand, considering his fund has returned an average of 21% per year for the past 15 years, sifting through the data is worth the effort. What Einhorn likes Of course, closed trades are history and don’t offer investors any new specific coattails to ride. The best clues traders can glean from Greenlight’s exits last quarter are to look at what he bought. There were only three new positions added in the first quarter, in addition to only three existing… Read More

Stocks are on a major losing streak. The S&P 500 has fallen for five straight sessions and has risen on only three occasions this month. The lift from a solid earnings season has passed, scary headlines from Europe are splashed across the front pages… Read More

I’ve discovered a way to earn the equivalent of a second Social Security check every month. Now, I don’t want to mislead you. This check isn’t from Uncle Sam. In fact, the government doesn’t have anything to do with it. (I think that’s good news considering all… Read More

If you’re a fan of investment genius Warren Buffett or a shareholder of Berkshire Hathaway (NYSE: BRK-B), then by now you’ve certainly heard his investment management company started accumulating stakes in General Motors (NYSE: GM) and Viacom (Nasdaq: VIAB) last quarter. And it makes sense. One is an old-school auto manufacturer getting back on its feet, while the other owns some of TV viewers’ favorite cable channels. Both businesses are easy to understand and both are based on relatively reliable business models. These qualities are right up… Read More

If you’re a fan of investment genius Warren Buffett or a shareholder of Berkshire Hathaway (NYSE: BRK-B), then by now you’ve certainly heard his investment management company started accumulating stakes in General Motors (NYSE: GM) and Viacom (Nasdaq: VIAB) last quarter. And it makes sense. One is an old-school auto manufacturer getting back on its feet, while the other owns some of TV viewers’ favorite cable channels. Both businesses are easy to understand and both are based on relatively reliable business models. These qualities are right up Buffett’s alley, even though one or both of the two new illustrious members of his investment team — Todd Combs or Ted Weschler — likely made the picks. Yet, for investors looking to glean a stock pick, GM and Viacom may not be the best Berkshire coat-tails to ride — they’re just the highest-profile names being added to the $75 billion equity portfolio. Your best Buffett-based picks may actually be a trio of companies whose stakes he increased during the first quarter of the year. Here’s a closer look at them…… Read More

Trading is in my blood. I vividly remember, as an elementary school student, trading baseball cards with my classmates. My trading interest blossomed as I learned how to buy low and sell high via various part-time business endeavors. These businesses included selling produce I got for free from my grandparent’s… Read More

Quite often in the stock market, the share price of a hot company can suddenly fall out of favor, causing investors to dump the stock. The trick is to find out whether the negative sentiment is in fact warranted. If not, then this oversold stock can represent a compelling buying opportunity. In the energy industry, sudden price changes in commodities can change the underlying economics of companies that operate in the space. When prices of oil, coal or natural gas are too low, exploration activities… Read More

Quite often in the stock market, the share price of a hot company can suddenly fall out of favor, causing investors to dump the stock. The trick is to find out whether the negative sentiment is in fact warranted. If not, then this oversold stock can represent a compelling buying opportunity. In the energy industry, sudden price changes in commodities can change the underlying economics of companies that operate in the space. When prices of oil, coal or natural gas are too low, exploration activities can become uneconomical. Alternatively, rapidly-rising prices can cause a frenzy for extracting as much supply out of the ground to quickly bring it to market. And lately, one commodity in particular perfectly fits this out-of-favor vs. buying opportunity scenario: natural gas, whose prices have plummeted by more than 50% in recent months. To put things into perspective, a little more than a year ago, gas prices hovered closer to $5 per million British thermal units (BTUs) and touched below $2 BTUs just a few weeks ago. Seeing… Read More

Here at StreetAuthority, we often talk about “catalyst investing.” Simply put, it’s not enough to find stocks that are inexpensive — hundreds of stocks can bubble up on various value screens. This often leads to the question “Why now?” After all, will this stock… Read More