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

Heading into last week’s election and the Federal Reserve’s latest stimulus efforts, the stock market looked set to pause. After all, the major indices had been in rally mode since late August and bargain prices were harder to find. Yet the market rallied even further late last week, returning stocks… Read More

For those that don’t know, in addition to being the Chief Strategist behind StreetAuthority’s Stock of the Month newsletter, I’m also an avid poker player. I first picked up poker about a decade ago, well before it was all over television. But I wasn’t after the big… Read More

I don’t want to bury the lead, so let me start with my prediction: the economy will add over 2 million jobs in the next 12 months. But before we get to that, let’s add some context. To say that the job market is weak would be like saying the Saw horror movie franchise is a little gory. In fact, I’m not sure which has seen more bloodletting. Last month, The Los Angeles Times reported that 2.3 million California workers have been axed — and that’s just in the Golden State. Read More

I don’t want to bury the lead, so let me start with my prediction: the economy will add over 2 million jobs in the next 12 months. But before we get to that, let’s add some context. To say that the job market is weak would be like saying the Saw horror movie franchise is a little gory. In fact, I’m not sure which has seen more bloodletting. Last month, The Los Angeles Times reported that 2.3 million California workers have been axed — and that’s just in the Golden State. Nationwide, the unemployment rate has remained at elevated levels above 9.5% for 15 consecutive months, the longest such drought on record. The last time we saw a “jobless recovery” of this magnitude was in the aftermath of September 11, 2001. According to Challenger, Gray & Christmas, more than 2.5 million jobs were lost in the 18 months following the terror attacks. At that point, it seemed as if the labor market would never get in gear. But by January 2004, payrolls around the country were already… Read More

Want to know how much power the Federal Reserve holds? Late Tuesday, the Fed announced it would spend $600 billion on a program of buying Treasury bonds. That’s in addition to what it will also spend by reinvesting the proceeds of other bonds it had purchased already. On Wednesday, the S&P soared nearly +2%, creating about $220 billion in market cap in a single day. I can’t say it was unexpected. You see, every year for my StreetAuthority Market Advisor readers,… Read More

Want to know how much power the Federal Reserve holds? Late Tuesday, the Fed announced it would spend $600 billion on a program of buying Treasury bonds. That’s in addition to what it will also spend by reinvesting the proceeds of other bonds it had purchased already. On Wednesday, the S&P soared nearly +2%, creating about $220 billion in market cap in a single day. I can’t say it was unexpected. You see, every year for my StreetAuthority Market Advisor readers, I put together two lists. First comes a list of my predictions for the coming year. Next is a list of my top 10 stocks for the year. About a week before the Fed’s announcement, I sent my predictions for 2011 to my subscribers. Prediction No. 9 called for this next round of quantitative easing, or as it’s more elegantly called, QE2. But that was only part of the prediction. Now that the first half came true, I also predicted exactly where I want to invest based on the news… and it’s looking good, too. Read More

In search of undervalued companies, investors seek out stocks that tend to have an earnings growth rate that is higher than the price-to-earnings (P/E) ratio. These stocks are known as low PEG stocks, or stocks with a… Read More

A very large grain of salt. That’s what economists suggest you take when digesting Chinese economic numbers. The country’s financial planners tend to massage key numbers to give the impression of an economy that is neither too hot nor too cold. To its credit, China’s decade-long growth spurt has been truly miraculous and policy planners seem to continually pull the right levers, even though those choices are often antithetical to Western economic dogma. Much of China’s success has come from its status as a low-cost provider of goods and comparatively low levels of… Read More

A very large grain of salt. That’s what economists suggest you take when digesting Chinese economic numbers. The country’s financial planners tend to massage key numbers to give the impression of an economy that is neither too hot nor too cold. To its credit, China’s decade-long growth spurt has been truly miraculous and policy planners seem to continually pull the right levers, even though those choices are often antithetical to Western economic dogma. Much of China’s success has come from its status as a low-cost provider of goods and comparatively low levels of per capita GDP, which enabled it to grow without bumping into hurdles that often come when economies achieve world-class status. But those days are over. China’s economy is now far larger — having recently surpassed Japan to occupy the No. 2 spot — and the government ‘s task of managing growth has become ever-more complex. Even as Chinese economic planners will continue to massage the numbers to give the appearance of a smooth-sailing ship, 2011 offers more potential pitfalls than ever. If… Read More

Here’s a bit of good news: states have been able to collect roughly +2.5% more in taxes in the first half of 2010 compared with a year earlier. Then again, most states are staring down the barrel of massive budget deficits for 2011 and 2012, and a few percentage points… Read More