I’m sure it’s no shock to hear that stocks are expensive right now. But you might be surprised to find out just how expensive they are. Goldman Sachs (NYSE: GS) recently measured the market and found that the median stock trades in the 99th percentile of its historical valuation. Stocks are near historic highs on numerous valuation metrics, including price-to-earnings growth (PEG), enterprise-to-sales and forward price-to-earnings (P/E). You can argue that rock-bottom interest rates make stocks a “relatively” better investment than bonds and other asset types, but that argument sounds a little like every other excuse investors make… Read More

I’m sure it’s no shock to hear that stocks are expensive right now. But you might be surprised to find out just how expensive they are. Goldman Sachs (NYSE: GS) recently measured the market and found that the median stock trades in the 99th percentile of its historical valuation. Stocks are near historic highs on numerous valuation metrics, including price-to-earnings growth (PEG), enterprise-to-sales and forward price-to-earnings (P/E). You can argue that rock-bottom interest rates make stocks a “relatively” better investment than bonds and other asset types, but that argument sounds a little like every other excuse investors make at the height of a market bubble. #-ad_banner-# Investors with long time horizons can shift to cash and wait until the market rolls over, snapping up stocks at better valuations. Traders and shorter-term investors don’t have that luxury. They need to capitalize on weakness and hedge their long holdings. I’ve found a company that may be a perfect candidate for one of my favorite market-hedging strategies.  Insiders and an activist hedge fund are unloading millions of this company’s shares, which are trading at a 74% premium to the five-year average… Read More

Today I’d like to dust off one of our favorite strategies for dealing with a pullback: getting paid to buy stocks at a discount. If you’ve followed along with StreetAuthority Daily for a while, then you’re probably familiar with my colleague Amber Hestla and the put-selling strategy she uses in her premium newsletter, Income Trader. For those that are unfamiliar, you can in effect get paid for the chance to buy stocks at a discount by utilizing a conservative strategy that involves selling put options contracts. And in a market making new all-time highs week after week, I don’t have… Read More

Today I’d like to dust off one of our favorite strategies for dealing with a pullback: getting paid to buy stocks at a discount. If you’ve followed along with StreetAuthority Daily for a while, then you’re probably familiar with my colleague Amber Hestla and the put-selling strategy she uses in her premium newsletter, Income Trader. For those that are unfamiliar, you can in effect get paid for the chance to buy stocks at a discount by utilizing a conservative strategy that involves selling put options contracts. And in a market making new all-time highs week after week, I don’t have to tell you that the available “discounts” on quality companies are far and few between. Here’s how it works. Let’s say you really want to buy software giant Microsoft (Nasdaq: MSFT). But at a recent price of just over $57.50 per share, you feel like the stock is a little expensive. At that price, the stock has a price-to-earnings ratio of 27.6, which is pretty rich when compared to its five-year average of 20. Consequently, that P/E is also a good deal above the broader market’s current valuation (the S&P 500’s P/E is about 20). You’d feel a lot… Read More

Growth investors are notoriously fickle when it comes to earnings reports. Unbridled enthusiasm leads them to bid up shares of rising stars, only to stampede for the exits when the company fails to meet ridiculously high expectations. Sometimes it doesn’t even take an earnings miss to send shares crashing, but merely a change in the company’s financial outlook. Lowered guidance may send analysts and shareholders fleeing, even if the company is still on a strong growth trajectory. In many cases, it’s not long before investors calm down and once again look at the company rationally. They reassess the longer-term outlook… Read More

Growth investors are notoriously fickle when it comes to earnings reports. Unbridled enthusiasm leads them to bid up shares of rising stars, only to stampede for the exits when the company fails to meet ridiculously high expectations. Sometimes it doesn’t even take an earnings miss to send shares crashing, but merely a change in the company’s financial outlook. Lowered guidance may send analysts and shareholders fleeing, even if the company is still on a strong growth trajectory. In many cases, it’s not long before investors calm down and once again look at the company rationally. They reassess the longer-term outlook — the same story that probably got them excited about the stock in the first place — and bid shares right back up. #-ad_banner-# So, when I see a best-of-breed company in one of my favorite long-term industries plummet after its earnings report, I get excited. Herd Quick To Bail On This Growth Stock… And Then Buy Again Few firms have been as innovative in information security as FireEye (Nasdaq: FEYE) with its advanced detection technology and threat intelligence feed. Security advisory firm SSP Blue estimates global spending on information… Read More

Today, I want to tell you about a way you can legally skim tens of thousands of dollars a year from some of the largest firms on Wall Street that has been called safe enough for widows and orphans. It may sound fishy at first, but I promise it is 100% legal. And it is widely regarded (at least by those in the know) as one of the most conservative strategies in the market. I have taught hundreds of people — from young couples struggling to make ends meet to retirees — how to… Read More

Today, I want to tell you about a way you can legally skim tens of thousands of dollars a year from some of the largest firms on Wall Street that has been called safe enough for widows and orphans. It may sound fishy at first, but I promise it is 100% legal. And it is widely regarded (at least by those in the know) as one of the most conservative strategies in the market. I have taught hundreds of people — from young couples struggling to make ends meet to retirees — how to supplement their income with it. Last year alone, I skimmed $46,360 from some of the largest firms on Wall Street. —Recommended Link— Big Kahuna Profits in Energy Storage Tesla CEO Elon Musk is building a large battery farm in Hawaii to store energy from island sunshine. It’s just his latest move to grow his energy storage business. Here are three little-known energy companies riding Tesla’s huge 10-bagger technology wave. This report reveals the full story.   It was easy to do. The money was just sitting there. And if I hadn’t taken it, someone else would have. I just beat… Read More

Last week, I told traders to beware of one of the biggest market disconnects in history. While earnings for S&P 500 have declined for six straight quarters — the worst stretch in market history with the exception of the 2007-2009 recession — stock prices are hitting new all-time highs. It makes absolutely no sense! #-ad_banner-# This situation is cause for a bear market. At minimum, I’m looking for a near-term drop in stocks. This doesn’t mean you need to exit the markets en masse, though. As I mentioned last week, there are tools that can be used to combat volatility… Read More

Last week, I told traders to beware of one of the biggest market disconnects in history. While earnings for S&P 500 have declined for six straight quarters — the worst stretch in market history with the exception of the 2007-2009 recession — stock prices are hitting new all-time highs. It makes absolutely no sense! #-ad_banner-# This situation is cause for a bear market. At minimum, I’m looking for a near-term drop in stocks. This doesn’t mean you need to exit the markets en masse, though. As I mentioned last week, there are tools that can be used to combat volatility and the market insanity. In particular, I highlighted a strategy that not only reduces your risk, but also increases your chances of success to as high as 90% per trade. That is because you can profit whether a stock — or index — goes up, down or sideways. It’s called a bear put spread, and while it takes a bit more work on your part, I can guarantee it will be well worth the effort. Last week, I explained the ins and outs of the strategy. If you missed that article, I suggest you read it now to familiarize yourself… Read More

As a market analyst, my job is to make sense of the markets and to uncover the real reason stocks rise and fall — and then use that information to help others profit. My methods go far beyond just buying a good quality stock or shorting a pricey one, though.  Countless hours of research go into finding what I call “disconnects” between where a stock is trading and where it should be trading based on past precedents, peer values and earnings growth potential.  #-ad_banner-#An example of a disconnect is a weak stock or index that’s moving higher, or possibly even… Read More

As a market analyst, my job is to make sense of the markets and to uncover the real reason stocks rise and fall — and then use that information to help others profit. My methods go far beyond just buying a good quality stock or shorting a pricey one, though.  Countless hours of research go into finding what I call “disconnects” between where a stock is trading and where it should be trading based on past precedents, peer values and earnings growth potential.  #-ad_banner-#An example of a disconnect is a weak stock or index that’s moving higher, or possibly even moving lower, but hasn’t fallen fast enough given the data.  And what I’m seeing today is one of the biggest disconnects I’ve seen. It makes absolutely no sense!  The S&P 500 is relentlessly climbing to new highs despite the fact that we are deep into an earnings recession.  “S&P 500 companies have posted negative growth for six straight quarters, a stretch that’s been exceeded only once since 1936. That was the seven-quarter slump of the 2007-2009 recession.” — Bloomberg The chart below will help you visualize just how insane the market’s behavior… Read More

Just when things seemed calm, investors found reason to panic. In a historic referendum vote, citizens of the United Kingdom narrowly voted to exit the European Union. The fallout was immediate, as markets around the world plummeted. #-ad_banner-#The UK’s blue-chip FTSE 100 index declined about 2.5% Friday, while its currency, the pound, fell to levels not seen since 1985. Other European exchanges fared even worse. The Stoxx Europe 600 tumbled 7%, while the German DAX fell 6.8% and the French CAC 40 dropped 7%. Even the Japanese Nikkei index closed down… Read More

Just when things seemed calm, investors found reason to panic. In a historic referendum vote, citizens of the United Kingdom narrowly voted to exit the European Union. The fallout was immediate, as markets around the world plummeted. #-ad_banner-#The UK’s blue-chip FTSE 100 index declined about 2.5% Friday, while its currency, the pound, fell to levels not seen since 1985. Other European exchanges fared even worse. The Stoxx Europe 600 tumbled 7%, while the German DAX fell 6.8% and the French CAC 40 dropped 7%. Even the Japanese Nikkei index closed down 7.9%. U.S. markets felt the pain, too, with the Dow falling more than 600 points, or 3.4%, while the S&P 500 lost 3.6%. But it was fear that had the biggest day of all. As I’ve discussed before, the Volatility S&P 500 (VIX) index is a measure of how much volatility premium is factored into the price of options, but it’s also commonly used as a gauge of investors’ level of fear. A low VIX signals traders expect a slow, steady rise in stocks. A high VIX means investors expect rough waters ahead. Read More

The table is set. After hitting all-time highs this month, markets are poised for a pullback. I’ll have more on that in a moment. First, it’s important to remember that pullbacks, corrections — and yes, even recessions — are normal occurrences for healthy, functioning markets. Legendary investor Warren Buffett reminded us of this when, during the darkest days of the financial crisis in 2008, he wrote in an op-ed for the New York Times:         “Over the long term, the stock market… Read More

The table is set. After hitting all-time highs this month, markets are poised for a pullback. I’ll have more on that in a moment. First, it’s important to remember that pullbacks, corrections — and yes, even recessions — are normal occurrences for healthy, functioning markets. Legendary investor Warren Buffett reminded us of this when, during the darkest days of the financial crisis in 2008, he wrote in an op-ed for the New York Times:         “Over the long term, the stock market news will be good,” he said. “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.” That long-term bullish sentiment is still as valid today as it was then. Few investors, if any, have made money betting against the United States over the long arc of time. But that doesn’t mean we can’t protect ourselves — or… Read More

There’s a saying on Wall Street: If you get into a cab and the driver begins talking to you about the market or a supposedly “hot” stock tip, it’s time to sell. #-ad_banner-#I remember during the dot-com bubble, when it seemed like everyone and their dog was playing the market, nearly every dinner conversation with acquaintances and friends would inevitably turn from sports or politics to the market. We all know how that turned out… Recently, my colleague Jared Levy had a similar experience. I’ll let him share the story with… Read More

There’s a saying on Wall Street: If you get into a cab and the driver begins talking to you about the market or a supposedly “hot” stock tip, it’s time to sell. #-ad_banner-#I remember during the dot-com bubble, when it seemed like everyone and their dog was playing the market, nearly every dinner conversation with acquaintances and friends would inevitably turn from sports or politics to the market. We all know how that turned out… Recently, my colleague Jared Levy had a similar experience. I’ll let him share the story with you…       After a nice dinner last week, a friend and I were enjoying a couple mezcal margaritas when a 21-year-old bar back overheard our market-centric conversation and excitedly told us that he had just bought his first shares of stock after hearing how strong the market was from a friend. Nothing against the 21-year-old bar backs of the world, but after five minutes of chatting, I realized he was mostly clueless as to how stocks derive their value. Worse still was his extraordinary confidence. But his behavior is quite common among… Read More

I think it was philosopher George Santayana’s cousin who said, “Those who do not learn from history are doomed to lose money in the stock market.”  It’s amazing how quickly we forget the mistakes of the past, and now one of the biggest factors that led to the Great Recession is building up again. #-ad_banner-# A booming housing market and relaxing loan standards led to the worst economic collapse in nearly 80 years. And looking at some recent loan data gave me a… Read More

I think it was philosopher George Santayana’s cousin who said, “Those who do not learn from history are doomed to lose money in the stock market.”  It’s amazing how quickly we forget the mistakes of the past, and now one of the biggest factors that led to the Great Recession is building up again. #-ad_banner-# A booming housing market and relaxing loan standards led to the worst economic collapse in nearly 80 years. And looking at some recent loan data gave me a serious sense of deja vu. But rather than home loans, this time it is the auto loans market that’s headed for trouble. Auto Loans Headed For A Crash? Just as larger economic drivers sparked the housing boom, super-low interest rates and falling gasoline prices have caused a spike in car sales over the past five years. New car sales hit a record in 2015, while the average transaction price reached an all-time high of $34,428. Yet, sluggish wage growth and a stalling economic recovery have threatened the good times. Not wanting to see the party end, car makers and dealers have… Read More