In 1998, Long-Term Capital Management (LTCM) lost $4.6 billion in less than four months. Although the hedge fund was led by Nobel Prize winners, noted professors, a Federal Reserve Vice Chairman and well-known Wall Street arbitrage experts, it made two basic, but costly, investment mistakes. Read More

Back in the mid-1980s, I was a bit of a computer nerd. I was not only fluent in basic (a programming language now deader than Latin), but also probably the only kid in school who new what DOS stood for. That would be “disk operating system” for… Read More

Editor’s Note: This story replaces an earlier article we published about the new banking reserve requirements. The original article was based on inaccurate information, which led to mistaken conclusions about the effect of the new regulations on earnings at the major banks. Wall Street cheered… Read More

Today’s market environment might be uncertain, but one thing is certain: the crowd is flocking to bonds. In 2009, investors put $375 billion into bond funds, about 14 times more than in 2008 and more than double the previous record in… Read More

Back in the 1970s, with interest rates hovering above 10%, investors could earn a lot more money by simply owning bonds instead of stocks. Now, with interest rates at all-time lows in the modern era, the bonds vs. stocks debate is getting turned on its head. With bond yields stuck at low levels, stocks are comparatively much more attractive. That point has been noted by the Chief Financial Officers (CFOs) at a wide range of blue-chip companies. These companies are increasingly realizing that they can alter their balance sheets to… Read More

Back in the 1970s, with interest rates hovering above 10%, investors could earn a lot more money by simply owning bonds instead of stocks. Now, with interest rates at all-time lows in the modern era, the bonds vs. stocks debate is getting turned on its head. With bond yields stuck at low levels, stocks are comparatively much more attractive. That point has been noted by the Chief Financial Officers (CFOs) at a wide range of blue-chip companies. These companies are increasingly realizing that they can alter their balance sheets to provide some much-needed support to their flagging stock prices. And that’s a buy signal you shouldn’t ignore. When leverage is appropriate For a long time, many companies (especially in the field of high-tech) preferred to hold lots of cash and carry no debt. High cash balances were seen as a sign of strength in case any major economic slowdowns forced companies to burn cash to keep afloat. (Memories of the imploding dot-com bubble of a decade ago die hard.) Yet as we saw in the recent economic crisis, most large tech companies such as Microsoft… Read More

Investors mine ideas from many different sources, but many investors overlook a resource that provides some of the best ideas from the greatest minds. Most people believe that the world of hedge funds is not within their grasp. In truth, some of the best stock-pickers make their choices widely… Read More

I have been warning readers of my premium Mastering the Markets service for the past few weeks that mid-September looks to get ugly unless you plan on being short the market — which is my plan. Below is my time-cycle forecast for the S&P 500 for the next few weeks: This coming week looks to be a shorting opportunity. I will be selling into an expected rally that will last only until either the end of this week or early next week. Then, as you can see, if the time-cycle… Read More

I have been warning readers of my premium Mastering the Markets service for the past few weeks that mid-September looks to get ugly unless you plan on being short the market — which is my plan. Below is my time-cycle forecast for the S&P 500 for the next few weeks: This coming week looks to be a shorting opportunity. I will be selling into an expected rally that will last only until either the end of this week or early next week. Then, as you can see, if the time-cycle forecast proves to be correct, the market could begin a stair-step move from about 1120 to near 1020 — a decent opportunity to make money if the trend holds. #-ad_banner-#I prefer to buy inverse exchange-traded funds (ETFs) in falling markets, rather than shorting individual stocks. The reason is entirely due to risk. A positive exogenous event can occur at any time with any individual company that could push it from a declining trend to a spike higher. It is the risk of these potential upward spikes that put more risk on an individual short trade than I… Read More

As the U.S. economy tries to sputter back to life, one important fact is increasingly clear: any rebound is likely to be muted as the country wrestles with persistently high unemployment and confidence-sapping budget deficits. That’s why it’s more important than ever to… Read More

The rumblings about a possible double-dip recession have begun. Investors are understandably worried about such a possibility, not only because it may happen, but because it would be unprecedented for the current generation of market participants. First, don’t panic. We aren’t there yet. What you can do,… Read More

It’s coming. You know it is. Another recession. A “correction.” A one-day meltdown. Whatever you call it, the stock market is a fickle goddess to those who hear her siren’s call. Question is, how secure do you feel about being prepared for when —… Read More