One of the most common discussions among investors is whether you can really beat the market and how much information is already baked into stock prices.  Technicians say they can follow historical patterns to make money on fast trades. Fundamental analysts say they can make money on careful analysis of public filings. The “indexers” say all historical and public information is already reflected in prices, so there’s nothing new to be earned from analysis.  All of these arguments are pretty hard to prove one way or another. But there is one thing they all agree on: Insiders have the information… Read More

One of the most common discussions among investors is whether you can really beat the market and how much information is already baked into stock prices.  Technicians say they can follow historical patterns to make money on fast trades. Fundamental analysts say they can make money on careful analysis of public filings. The “indexers” say all historical and public information is already reflected in prices, so there’s nothing new to be earned from analysis.  All of these arguments are pretty hard to prove one way or another. But there is one thing they all agree on: Insiders have the information that moves stocks.  #-ad_banner-#That’s why insiders must file multiple reports with the Securities and Exchange Commission (SEC) about their relationship to and ownership of the company. And that is where one of my favorite stock-picking clues comes in.  Corporate officers, directors and any beneficial owner with more than 10% of a company’s shares must file Form 3 with the SEC within 10 days of the beginning of their relationship with the company. They must then file Form 4 within two days of any change in ownership, including buying or selling shares.  When investors get their hands on these filings, it… Read More

I do not trust this market. While deals are starting to pop up in the energy space after a sell-off in crude, the rest of the market is getting expensive, and the slightest hint of weakness seems to send it down.  Take October, for example. No sooner had third-quarter earnings started than the market went into a tailspin, falling nearly 8% before starting its recent rebound.  Some nervousness and profit-taking is to be expected after more than five years of a bull run, but there was really no reason for the market to sell off. Earnings promised to surprise as… Read More

I do not trust this market. While deals are starting to pop up in the energy space after a sell-off in crude, the rest of the market is getting expensive, and the slightest hint of weakness seems to send it down.  Take October, for example. No sooner had third-quarter earnings started than the market went into a tailspin, falling nearly 8% before starting its recent rebound.  Some nervousness and profit-taking is to be expected after more than five years of a bull run, but there was really no reason for the market to sell off. Earnings promised to surprise as the U.S. economy zipped higher. Sluggish growth in Europe had been an issue for more than a year, and the Ukraine conflict was still just simmering.  When even a strong earnings season fails to keep stocks from swooning, you know market valuation is getting stretched. When this happens, I start looking to protect my portfolio from the next bout of irrational selling. #-ad_banner-#The traditional method of put option buying for protection involves a bet that the shares I hold are on their way lower. But I like the stocks I… Read More

The past month and a half has certainly been a nutty one for average investors. For many professionals, it’s been one of the most painful times I’ve ever witnessed. Interestingly enough, I think many small investors have outperformed the pros.  Why’s that?  Many large investors who saw the technical damage being done in the major indices in October pared down positions, while private investors by and large stayed in the market. With the violent V-shaped reversal mid-month, those institutional investors that sold down positions into the October lows then had to add stocks to their portfolios again at… Read More

The past month and a half has certainly been a nutty one for average investors. For many professionals, it’s been one of the most painful times I’ve ever witnessed. Interestingly enough, I think many small investors have outperformed the pros.  Why’s that?  Many large investors who saw the technical damage being done in the major indices in October pared down positions, while private investors by and large stayed in the market. With the violent V-shaped reversal mid-month, those institutional investors that sold down positions into the October lows then had to add stocks to their portfolios again at much higher levels. #-ad_banner-#​Hedge funds added to the fun by shorting into the bottom, leading to a nasty short squeeze as the market stampeded higher. While correlation among stocks rises sharply during periods of increased market volatility, the small-cap Russell 2000 is lagging and failed to follow the S&P 500 and Dow Jones Industrial Average to new highs. When looking at those two large-cap indices, it is crucial to keep in mind that the S&P 500 has a large following from a trading perspective and is used as a speculation and hedging vehicle by institutional investors.  In other… Read More

One of the best income strategies in the world involves a market some investors completely ignore. It allows individual investors to generate income from the best companies in the world without buying stocks most of the time. I’ve been recommending trades in this market for over a year. And so far, the results have been astounding — each of the 52 trades I’ve closed has been a winner. I don’t want to beat around the bush or make this sound like some super-secret investing strategy only I can tell you about. I am talking about selling options. #-ad_banner-#Now, before you… Read More

One of the best income strategies in the world involves a market some investors completely ignore. It allows individual investors to generate income from the best companies in the world without buying stocks most of the time. I’ve been recommending trades in this market for over a year. And so far, the results have been astounding — each of the 52 trades I’ve closed has been a winner. I don’t want to beat around the bush or make this sound like some super-secret investing strategy only I can tell you about. I am talking about selling options. #-ad_banner-#Now, before you decide that you never want to try options trading, let me show you what a recent subscriber to my Income Trader newsletter, which focuses on selling options, had to say about my strategy: “When I first started using [Amber’s] picks, my goal was to earn $500. Then I quickly realized I can earn at least $1,000 per month. I use the profits to buy more… Not only are your picks excellent with low risk, it teaches you to look for other options on your own, which I have done.” — Nathan S., West Long Branch… Read More

The bull market may not be over quite yet, but there are strong signals that an extended pullback is imminent as volatility and geopolitical concerns mount. One way to play an upcoming correction is to find a large-cap, low-volatility stock that’s risen along with the overall market. When the market reverses down, that stock should follow suite. And when it does, using the strategy I’ll discus today could make outsized gains that will help offset any losses. #-ad_banner-#Intel (NASDAQ: INTC) is a good representative of the long-term bull market. This blue-chip… Read More

The bull market may not be over quite yet, but there are strong signals that an extended pullback is imminent as volatility and geopolitical concerns mount. One way to play an upcoming correction is to find a large-cap, low-volatility stock that’s risen along with the overall market. When the market reverses down, that stock should follow suite. And when it does, using the strategy I’ll discus today could make outsized gains that will help offset any losses. #-ad_banner-#Intel (NASDAQ: INTC) is a good representative of the long-term bull market. This blue-chip stock has a market cap close to $170 billion and has profited from the revival in the tech sector. The chipmaker is globally known for its PC hardware and has outperformed so far in 2014, up 32% year to date compared with 6% for the S&P 500. But the good times may be ending. The explosive popularity of smartphones and tablets has led to a global slump in PC sales. IDC said it expects worldwide PC shipments to fall 6% this year, following last year’s drop of 10%, and it predicts continuing difficulty through 2018. … Read More

As an active income investor, I’m always jumping around between financial websites. While I peruse these sites, I run across many investment ads promising all sorts of results. Sadly, more often than not what I see is outright misleading advertising lining the pages. For every one method of income generation or investing that is legitimate and factually-based — there are ten others that are questionable. #-ad_banner-#So when I tell potential subscribers of my premium newsletter, Income Multiplier, that my readers and I have been able to generate returns of 7.6%, 8.5% and 8.9% in… Read More

As an active income investor, I’m always jumping around between financial websites. While I peruse these sites, I run across many investment ads promising all sorts of results. Sadly, more often than not what I see is outright misleading advertising lining the pages. For every one method of income generation or investing that is legitimate and factually-based — there are ten others that are questionable. #-ad_banner-#So when I tell potential subscribers of my premium newsletter, Income Multiplier, that my readers and I have been able to generate returns of 7.6%, 8.5% and 8.9% in as little as 53 days, it’s understandable that such claims might be received with a little bit of skepticism. So that’s why in today’s essay I want to explain how my Income Multiplier system works. No fluff — just facts. To put it simply, we sell options on high-quality stocks to generate income. I’ll explain more about how we do this in a moment, but first let me begin by showing you my track record. These are all of my closed trades since inception.   Income Multiplier Closed… Read More

Rumors of the Ebola virus in the United States are spreading like an epidemic across the news and social media. As scary as the virus is, the likelihood of an outbreak here has been grossly exaggerated, and the “Chicken Little” effect is spawning opportunities in the market.  To be clear, I’m not making light of this very serious situation. My goal is to show you how a logical, rational investor can profit from an irrational reaction by the masses.  The bravest and smartest investors look for opportunity when others are panicking. Warren Buffett is one of… Read More

Rumors of the Ebola virus in the United States are spreading like an epidemic across the news and social media. As scary as the virus is, the likelihood of an outbreak here has been grossly exaggerated, and the “Chicken Little” effect is spawning opportunities in the market.  To be clear, I’m not making light of this very serious situation. My goal is to show you how a logical, rational investor can profit from an irrational reaction by the masses.  The bravest and smartest investors look for opportunity when others are panicking. Warren Buffett is one of the greatest investors of all time, and he is also a known contrarian. During the throes of the financial crisis in 2008, he said, “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.” Buffett famously made a bullish bet on Goldman Sachs (NYSE: GS) in 2008, when most people wouldn’t go near a bank stock. The trade netted him $2 billion over a four-year period. This 40% return was far from his most successful trade, but it is a great example of a well thought out investment… Read More

There is a saying in the media that “content is king,” meaning if you produce entertaining and useful material for your audience, then the money will follow.   Yet, if a company is not actively engaged in making money, then all the content in the world will not make it a success.  Case in point: King Digital Entertainment (NYSE: KING) plummeted 23% on Aug. 13, when the social game maker reported disappointing second-quarter results and cut its 2014 outlook. Despite having some of the most popular games on the Internet, including the Candy Crush Saga, the company is struggling to… Read More

There is a saying in the media that “content is king,” meaning if you produce entertaining and useful material for your audience, then the money will follow.   Yet, if a company is not actively engaged in making money, then all the content in the world will not make it a success.  Case in point: King Digital Entertainment (NYSE: KING) plummeted 23% on Aug. 13, when the social game maker reported disappointing second-quarter results and cut its 2014 outlook. Despite having some of the most popular games on the Internet, including the Candy Crush Saga, the company is struggling to generate revenues. Or consider Yahoo (NASDAQ: YHOO), which was the leader in quality content but could not figure out a way to monetize it. The shares went nowhere for more than two years until Marissa Mayer took over as CEO in July 2012. #-ad_banner-#Mayer led the charge to monetize mobile through targeted advertising and strategic acquisitions. Investors liked the new emphasis on making money, and the shares have surged more than 160% since she took over. Monetization of content is especially important for the old-guard media companies. In particular, the broadcast television industry has… Read More

The covered call strategy is a reliable way to generate income in your investment account on a monthly basis. Basically, this investment approach captures income by selling call option contracts, which speculators purchase in hopes that they will generate outsized returns as stock prices advance. By selling call options, we allow these speculators the chance to make large profits, while we collect high-probability income payments. Here’s how the covered call process works: We purchase shares of stock the same way a traditional investor would. We then sell call option contracts against these… Read More

The covered call strategy is a reliable way to generate income in your investment account on a monthly basis. Basically, this investment approach captures income by selling call option contracts, which speculators purchase in hopes that they will generate outsized returns as stock prices advance. By selling call options, we allow these speculators the chance to make large profits, while we collect high-probability income payments. Here’s how the covered call process works: We purchase shares of stock the same way a traditional investor would. We then sell call option contracts against these shares (one for every 100 shares that we own). Selling these contracts obligates us to sell our stock at the option’s strike price, provided the market price is above this level before the option expires. #-ad_banner-#This approach puts a cap on our potential return because regardless of how high the stock trades, we will still be obligated to sell at the strike price. However, since we are receiving a payment from selling the call contract, known as a premium, this income is very reliable and… Read More

For more than five years, the mantra for investing has been, “Don’t fight the Fed.” Despite weak revenue growth and geopolitical crises, continuous calls for a correction have proven foolish and the market has surged 200% since its 2009 bottom.  The reason is simple. As the chart below shows, the injection of nearly $3.5 trillion by the Federal Reserve has made all other issues of little importance. You simply cannot pump that much money into the system without putting a huge driver behind asset prices.  But now the Federal Reserve is talking about increasing rates and… Read More

For more than five years, the mantra for investing has been, “Don’t fight the Fed.” Despite weak revenue growth and geopolitical crises, continuous calls for a correction have proven foolish and the market has surged 200% since its 2009 bottom.  The reason is simple. As the chart below shows, the injection of nearly $3.5 trillion by the Federal Reserve has made all other issues of little importance. You simply cannot pump that much money into the system without putting a huge driver behind asset prices.  But now the Federal Reserve is talking about increasing rates and has already reduced its bond-buying program to just $15 billion a month from $85 billion last year. The flow of free money into the system could soon reverse and investors are getting anxious.  If you sell your stocks and wait it out in cash you’ll lose upward of 2% to inflation every year. Holing up in bonds doesn’t look much better with rising rates threatening prices and yields hovering around all-time lows. Fortunately, the game hasn’t changed, but it may be in a different language.  Don’t Fight the Fed, European Style Europe has yet to see the economic rebound we have… Read More