On average, they’re yielding 7.5%. That’s more than three times the yield of the S&P 500. Try getting that amount from a money market or savings account.   But that’s not the half of it. In tandem with those high yields, the capital gains have… Read More

The direction of the stock market in 2011 could well be determined in the next few months, as I noted last week. At the time, I suggested you tune in to Tuesday’s economic reports for the next read on the economy‘s pulse. With these reports hitting the tape, let’s see what the economy is telling us: Manufacturing heats up A monthly survey of business activity in Chicago (PMI) is flashing green. The index came in at 62.5, nicely ahead of forecasts of 60.0. (Any reading above 50.0 signals expansion in… Read More

The direction of the stock market in 2011 could well be determined in the next few months, as I noted last week. At the time, I suggested you tune in to Tuesday’s economic reports for the next read on the economy‘s pulse. With these reports hitting the tape, let’s see what the economy is telling us: Manufacturing heats up A monthly survey of business activity in Chicago (PMI) is flashing green. The index came in at 62.5, nicely ahead of forecasts of 60.0. (Any reading above 50.0 signals expansion in the factory sector). And the numbers behind the big number look even better. A gauge of new orders rose from 65.0 in October to 67.2 in November, and inventories fell sequentially from 54.9 to 48.4. That sub-50 reading means that inventories may be getting too lean, so we may be on the cusp of another inventory rebuilding cycle. It also means that economists are likely to raise their PMI forecasts for the next few months. Investors may want to see this level sustained for a few more months before calling it a trend. The… Read More

I’ve never worked a day on Wall Street. I’ve never worked at Goldman Sachs (NYSE: GS) or a hedge fund, either. I’m not what you call an insider by any means.   But that hasn’t stopped me from being a successful investor. Read More

When business school professors look back on this era, they’ll likely talk to their students about one of the greatest turnarounds in the history of enterprise. Few companies have gone from near-death to industry titan in such a short time as Ford Motor (NYSE: F). And investors have showed their respect, with shares rising from under $2 in early 2009 to $17 just 20 months later. That’s an +850% gain! But signs are emerging that the party may be over for now. Shares made a quick move from $12 since mid-September… Read More

When business school professors look back on this era, they’ll likely talk to their students about one of the greatest turnarounds in the history of enterprise. Few companies have gone from near-death to industry titan in such a short time as Ford Motor (NYSE: F). And investors have showed their respect, with shares rising from under $2 in early 2009 to $17 just 20 months later. That’s an +850% gain! But signs are emerging that the party may be over for now. Shares made a quick move from $12 since mid-September (a +40% jump in two months), yet now appear to be hit by some profit-taking since last Monday. There’s no doubt that shares have plenty more upside: the stock trades for just eight times projected 2010 profits, and the auto industry is likely to see higher volume down the road. But the coming year still holds real challenges for this auto maker. Here are five key issues you’ll need to track if you own shares of Ford. If these items come to pass and shares slip back to the lower teens, it would create a fresh compelling… Read More

The ranks of “super-investors” are few, highlighted by the likes of Warren Buffett, George Soros and Carl Icahn. Investors like to track their every move. Smart investors should also watch the moves of David Einhorn, who runs Greenlight Capital. He started with just $1 million in 1996,… Read More

Since the financial crisis in 2008, corporate executives have taken a cautious approach to making big decisions. This has been especially the case with mergers & acquisitions (M&A). But according to a recent survey from Thomson Reuters and Freeman (a consulting firm), it looks like 2011 is… Read More

I’ve always had a contrarian streak. Conventional wisdom is more a jumping off point for me than it is an anchor for my investment decisions. And I’ve found it usually pays off handsomely to follow my own research rather than… Read More

Pity the average investor. They tend to jump into and out of the stock market at precisely the wrong times. In late August, I looked at the weekly investor sentiment poll conducted by the American Association of Individual Investors (AAII) and noted that most investors feared a big market tumble. [Read that article here] Historically speaking, you want to start buying stocks when most individual investors are shunning them. And that has once again proven to be the case. Since that August swoon, the S&P 500 has risen +14%. And like clockwork, that impressive performance has turned… Read More

Pity the average investor. They tend to jump into and out of the stock market at precisely the wrong times. In late August, I looked at the weekly investor sentiment poll conducted by the American Association of Individual Investors (AAII) and noted that most investors feared a big market tumble. [Read that article here] Historically speaking, you want to start buying stocks when most individual investors are shunning them. And that has once again proven to be the case. Since that August swoon, the S&P 500 has risen +14%. And like clockwork, that impressive performance has turned individual investors from bears to bulls. In the week ending November 10th, 57.6% of retail investors were bullish, according to the latest AAII poll. That’s up +9.3 percentage points from the prior week, and the most bullish reading since January 2007. So if bearish sentiment is always good for stocks, is bullish sentiment always bad for stocks? I pored over 25 years’ worth of data to gauge the market’s subsequent returns every time investors were more than 55% bullish. The results are mixed… An unusual spike… Read More

Back in the late 1990s, there was a raft of books calling for the Dow to reach 30,000 or even 100,000. Looking back on it, it seems crazy. But such things are natural during bull markets. Interestingly enough, book titles can be an indicator that a bubble is about to burst. When it comes to gold, we are starting to see something similar. For example, a recent book called Hard Money makes the bold prediction that gold will eventually hit $10,000 per ounce. It’s inevitable that we will see other titles hit the market soon. Read More

Back in the late 1990s, there was a raft of books calling for the Dow to reach 30,000 or even 100,000. Looking back on it, it seems crazy. But such things are natural during bull markets. Interestingly enough, book titles can be an indicator that a bubble is about to burst. When it comes to gold, we are starting to see something similar. For example, a recent book called Hard Money makes the bold prediction that gold will eventually hit $10,000 per ounce. It’s inevitable that we will see other titles hit the market soon. But in the case of Hard Money, the author is not a crackpot. He actually manages the GBI Gold Fund and is the head of Global Research at the Teacher Retirement System of Texas. He even convinced the pension fund to take a major stake in gold in 2007. #-ad_banner-#True, there are many top-notch analysts who have made bad calls. Not many saw the collapse of 2008, right? But in the case of gold, there are certainly strong arguments why the price can go higher. However, there will need to be some key drivers. Read More

As earnings season winds down, insider activity heats up. That’s because insiders (classified as company executives, directors and beneficial owners) get the green light to buy or sell their company’s stock on the open market once earnings… Read More