Just like most of the rest of the stock market, September was a surprisingly strong month for small caps. And October started out with a bang, but ended in a whimper. Together, however, it was an impressive two-month rise in stocks with market capitalizations under $2 billion,… Read More

You may think stocks are still attractively priced after the recent rebound — but that doesn’t matter. Instead, it’s more important what your peers think and do. Because if you’re buying while they’re selling, you’ll lose. And right now, many of your peers have a solid excuse for selling: year-end profits. The S&P 500 has risen nearly +15% since early September, and many individual stocks are up +40% or even +50% from the summer swoon. With a hike in the capital gains tax expected next year, many investors will look to secure profits now instead of later. Read More

You may think stocks are still attractively priced after the recent rebound — but that doesn’t matter. Instead, it’s more important what your peers think and do. Because if you’re buying while they’re selling, you’ll lose. And right now, many of your peers have a solid excuse for selling: year-end profits. The S&P 500 has risen nearly +15% since early September, and many individual stocks are up +40% or even +50% from the summer swoon. With a hike in the capital gains tax expected next year, many investors will look to secure profits now instead of later. As my colleague Ryan Fuhrmann noted back in September, the capital gains tax rate will rise from 15% to 20% in 2011. Investors can avoid capital gains by generating offsetting capital losses, but after the market’s massive 20-month surge, there are fewer losers to be culled from investors’ portfolios. #-ad_banner-#If investors start to tiptoe toward the exits, it could quickly morph into a larger move. Just like we’re seeing in the current rally where success begets success, failure also begets failure. The market seems to be locked into mini-cycles characterized by broadening rallies (March… Read More

A surging stock market has brought a smile to the face of investment bankers. They’ve suddenly found a much more receptive environment for new initial public offerings (IPOs), with 16 deals of at least $100 million being pulled off in October — the best month for IPOs this year. And… Read More

All eyes will be on Ben Bernanke this Wednesday as the Federal Reserve finally spells out the details of its much-anticipated second round of Quantitative Easing, known as “QE2.” [For more on QE2 and how it works, read this InvestingAnswers.com article] The Fed‘s efforts to stimulate the economy through bond buybacks have led investors to already open the champagne. As I noted recently, the S&P 500 has already appreciated by more than $1 trillion simply in anticipation of any presumed benefits. But in recent days, economists… Read More

All eyes will be on Ben Bernanke this Wednesday as the Federal Reserve finally spells out the details of its much-anticipated second round of Quantitative Easing, known as “QE2.” [For more on QE2 and how it works, read this InvestingAnswers.com article] The Fed‘s efforts to stimulate the economy through bond buybacks have led investors to already open the champagne. As I noted recently, the S&P 500 has already appreciated by more than $1 trillion simply in anticipation of any presumed benefits. But in recent days, economists are beginning to doubt whether Mr. Bernanke is going to bring out the large cannons, or simply a set of pea-shooters. More specifically, will QE2 be large enough to get the economy going, buying back up to $1 trillion in bonds, or will the Fed believe that a few hundred billion dollars will be sufficient? #-ad_banner-#A pair of fresh economic data points point to the latter. Last week, we saw a moderate drop in weekly jobless claims that makes it clear that unemployment is at least not getting worse at this point. And then on Monday… Read More

An historic Federal Open Market Committee (FOMC) meeting is being held this week. The results of that meeting could have a significant impact on what the market does for the month of November and beyond. We get the results of… Read More

$17 billion. That’s how much stock market value has been wiped out at Bank of America (NYSE: BAC) in the latest foreclosure mess. JP Morgan Chase (NYSE: JPM) has seen its value shrink by several billion dollars, while Citigroup (NYSE: C) and Wells Fargo… Read More

As Americans were heading back to work from the long Memorial Day weekend, Europeans were fretting about a looming banking crisis that threatened to take down major banks in Ireland and Spain. Europe went on to dodge that bullet, and its equity markets have rebounded +30% in the last five… Read More

Commodity prices are surging. But rather than recommending a pure commodity play for this week’s trade, I’m intrigued by a stock that not only benefits from strong commodity prices, but also more profits for farmers. And with farmers seeing fatter… Read More

Four years ago this week, the Dow Jones Industrial Average hit an important milestone: 12,000. A year later, in October 2007, the venerable index moved past 14,000. But by October 2008, headlines blared “Dow 8,000” before eventually bottoming at 7,200 in March of 2009. A furious rebound has the Dow back on the rise, surging +54% in the past 19 months to a recent 11,100. A continued march back to 12,000 is no sure thing, as serious headwinds remain, leading some to expect we’ll see “Dow 10,000” before “Dow 12,000.”… Read More

Four years ago this week, the Dow Jones Industrial Average hit an important milestone: 12,000. A year later, in October 2007, the venerable index moved past 14,000. But by October 2008, headlines blared “Dow 8,000” before eventually bottoming at 7,200 in March of 2009. A furious rebound has the Dow back on the rise, surging +54% in the past 19 months to a recent 11,100. A continued march back to 12,000 is no sure thing, as serious headwinds remain, leading some to expect we’ll see “Dow 10,000” before “Dow 12,000.” One thing’s for sure: recent history tells us that the Dow is unlikely to stay put where it is right now. Volatility is the name of the game these days, so let’s look at three positive and three negative catalysts that could push or pull the Dow to the next milestone. Any of these factors may play out over the next six months. The positive catalysts: 1. Sustained profit growth. Earnings season is off to a robust start. Thus far, more than 80%… Read More

I spend the vast majority of my time hunting down securities I believe are significantly undervalued and investigating those in great detail I believe have considerable upside potential. However, it’s also a valuable exercise to spend some time on the opposite end of the spectrum and analyze what I find… Read More