It is often said that value investing requires patience. Unlike most investment-related generalizations, this statement is actually 100% correct. While value investing is often viewed as more of a long-term venture than “growth” investing, the fact is that any investing requires patience and discipline. Not every position works out immediately. Moreover, because nobody can time the market, some of the best-researched ideas and strategies might require time — and patience — to begin paying off. #-ad_banner-#Over the past decade, however, value investors — ones who seek cheaper stocks selected on the basis of more attractive valuations — needed a bit… Read More

It is often said that value investing requires patience. Unlike most investment-related generalizations, this statement is actually 100% correct. While value investing is often viewed as more of a long-term venture than “growth” investing, the fact is that any investing requires patience and discipline. Not every position works out immediately. Moreover, because nobody can time the market, some of the best-researched ideas and strategies might require time — and patience — to begin paying off. #-ad_banner-#Over the past decade, however, value investors — ones who seek cheaper stocks selected on the basis of more attractive valuations — needed a bit more patience than usual. That’s because value investors have been waiting, largely in vain, for their investment style to outperform the market. The chart below illustrates this conundrum: over the last 10 years, the value index, represented on the chart below by the iShares S&P 500 Value exchange-traded fund (NYSE: IVE), has returned significantly less than its faster-growing counterpart, iShares S&P 500 Growth ETF (NYSE: IVW): 57% vs 143%, respectively. (The S&P 500 Value and the S&P 500 Growth indices don’t overlap and, combined, they comprise the better-known S&P 500.) Wait a minute, you might say, this is… Read More

First quarter earnings were a mixed bag for stocks. While companies in the S&P 500 reported a 24.6% increase in earnings from last year, the highest growth since 2010, the index is less than 2% higher since reporting began in March. —Recommended Link— The Secure Way To Add $19,632 To Your Bankroll This Year This “Daily Paycheck Retirement Solution” is so powerful, it’s generating more than $1,600 in income each month. Plus, this strategy is 37% less risky than the S&P. Click here right away to start collecting one or more “paychecks” each day from this high-yield, low-risk strategy…… Read More

First quarter earnings were a mixed bag for stocks. While companies in the S&P 500 reported a 24.6% increase in earnings from last year, the highest growth since 2010, the index is less than 2% higher since reporting began in March. —Recommended Link— The Secure Way To Add $19,632 To Your Bankroll This Year This “Daily Paycheck Retirement Solution” is so powerful, it’s generating more than $1,600 in income each month. Plus, this strategy is 37% less risky than the S&P. Click here right away to start collecting one or more “paychecks” each day from this high-yield, low-risk strategy… and rest easy every night. Not only did companies report record earnings growth but management has been relatively optimistic on the second quarter with far fewer S&P 500 companies issuing negative guidance than is usually the case. With analysts estimating nearly 20% earnings growth for the index through 2018, the market’s mood seems surprisingly pessimistic on share prices. This isn’t just “climbing a wall of worry,” it’s a larger failure to price stocks on fundamentals rather than on pure emotion. #-ad_banner-#And that market failure could help calmer investors snap up some value plays primed for a rebound. Investors Throw the… Read More

Value investors face a myriad of obstacles in the hunt for value stocks. These obstacles range from which valuation metric to use in finding stocks trading below their fair value to finding a catalyst that will propel an oversold stock higher. #-ad_banner-#But perhaps the biggest obstacle for value investors is… Read More

From a demographic trend standpoint, the 20th century in the United States was the “Century of the Named Generations”. Ok, cut me some slack. It’s hard to come up with catchphrases sometimes. The second decade of the 20th Century saw the rise of the post-World War I Lost Generation, so named because of the horror of the world’s first, truly modern war inflicted on those who served and returned forever scarred. Then, from the Great Depression and World War II came the Greatest Generation, who persevered through two enormous global crises and emerged victorious. #-ad_banner-#Their prosperity begat the Baby Boom… Read More

From a demographic trend standpoint, the 20th century in the United States was the “Century of the Named Generations”. Ok, cut me some slack. It’s hard to come up with catchphrases sometimes. The second decade of the 20th Century saw the rise of the post-World War I Lost Generation, so named because of the horror of the world’s first, truly modern war inflicted on those who served and returned forever scarred. Then, from the Great Depression and World War II came the Greatest Generation, who persevered through two enormous global crises and emerged victorious. #-ad_banner-#Their prosperity begat the Baby Boom Generation. The 1990s typified the so-called Generation X (also the name of Billy Idol’s punk rock band) of which I am a member. Originally referred to as “slackers” due to the tight job market we found ourselves in during the Bush 41 recession when most of us graduated from college. Most of us are 50 years old now, sending our own children to college and doing quite fine, thank you. Then Came The Millennials Despite the Civil War-sized beards, skinny jeans, and craft beer, this generation is the largest consumer force the American economy has ever seen. According to… Read More

I read a lot of research. It’s my job. I don’t mind. Comes with the territory. Most of it just involves gathering data and checking the pulse of what’s going on. There are only a handful of analysts, though, whose work I follow consistently. One of those is Stifel Nicolaus equity strategist Barry Bannister. #-ad_banner-#Bannister predicted the violent pullback the market enjoyed in February, and, in a recent report, the outlook is rather gloomy. “Our models for the S&P 500 point to minimal price upside in 2018 and a bear market (-20%) in the coming year,” Bannister writes. “What matters… Read More

I read a lot of research. It’s my job. I don’t mind. Comes with the territory. Most of it just involves gathering data and checking the pulse of what’s going on. There are only a handful of analysts, though, whose work I follow consistently. One of those is Stifel Nicolaus equity strategist Barry Bannister. #-ad_banner-#Bannister predicted the violent pullback the market enjoyed in February, and, in a recent report, the outlook is rather gloomy. “Our models for the S&P 500 point to minimal price upside in 2018 and a bear market (-20%) in the coming year,” Bannister writes. “What matters for investors,” he continues. “is that any decline is likely to be unusually rapid…” Gulp. The culprit, according to the analyst, was and will be the Fed and other central banks around the world. Bannister believes that central bankers are tightening monetary policy too aggressively and markets are reacting negatively to the action. He recommends that investors start moving to more defensive positions in consumer staples and utility stocks. His timing may be dead on. This chart is a good indicator. The thin line is the Dow Jones Industrial Average with the thicker line representing the Dow Utilities. Read More

This stock’s low price isn’t going to last forever — it’s time to get in while the getting’s good. —Sponsored Link— Motley Fool Issues Rare Triple-Buy Alert This three-time recommendation from the Motley Fool looks a lot like Berkshire in 1992. Click here to learn more. One of the main goals of my premium newsletter High-Yield Investing is stability. I like industries that don’t go through unpredictable hot and cold cycles. Student Transportation (NYSE: STB) is a textbook example. Millions of kids must travel to and from school each day, rain… Read More

This stock’s low price isn’t going to last forever — it’s time to get in while the getting’s good. —Sponsored Link— Motley Fool Issues Rare Triple-Buy Alert This three-time recommendation from the Motley Fool looks a lot like Berkshire in 1992. Click here to learn more. One of the main goals of my premium newsletter High-Yield Investing is stability. I like industries that don’t go through unpredictable hot and cold cycles. Student Transportation (NYSE: STB) is a textbook example. Millions of kids must travel to and from school each day, rain or shine. With a national fleet of school buses and a stack of contracts with various school districts, the company generates consistent, recurring income to share with its stockholders. That, along with its current yield of 5.9%, is why STB remains one of my readers’ favorite stocks. #-ad_banner-#My next recommendation enjoys similar stability thanks to another fact of life — babies. In the unpredictable financial world, there are few things as guaranteed as birth rates. There were approximately 4 million births in the U.S. last year, 4 million give or take in 2016, 4 million in 2015, 4 million in… Read More

There are many investment strategies available for investors to find actionable stocks. And as you might expect, some are better than others. But there are two strategies that vie for the title of best strategy. And while the winner is undisputed, the debate still sparks strong opinion between investors and academics. On the one hand, we have growth investing. Growth investing is a strategy whereby an investor seeks out companies with greater potential for capital appreciation. These companies rarely pay dividends. Instead, every dollar of profit goes back into the company in an attempt to generate even more profits. #-ad_banner-#Paradoxically,… Read More

There are many investment strategies available for investors to find actionable stocks. And as you might expect, some are better than others. But there are two strategies that vie for the title of best strategy. And while the winner is undisputed, the debate still sparks strong opinion between investors and academics. On the one hand, we have growth investing. Growth investing is a strategy whereby an investor seeks out companies with greater potential for capital appreciation. These companies rarely pay dividends. Instead, every dollar of profit goes back into the company in an attempt to generate even more profits. #-ad_banner-#Paradoxically, growth stocks outperform most other strategies when the underlying economy is struggling. This is because during times of economic stagnation, interest rates are usually quite low — and growth companies need access to cheap capital. This explains why growth stocks have outperformed other strategies since the Great Recession. On the other hand, value investors seek to find actionable stocks that are trading at a discount to their intrinsic value. These companies usually have mature business models looking to maintain strong pricing power and modest growth. And they typically pay dividends to reward shareholders. Interestingly, value stocks outperform other strategies when… Read More

Buying beat down stocks is a time-honored way to earn significant returns in the stock market. However, the question is always the same: Which stocks are worth buying and which aren’t? #-ad_banner-#Here are five of the most prominent losing stocks of 2018, along with my thoughts on which ones to buy and which to avoid or short. 1. L Brands (NYSE: LB) This female-focused retailer is leading the retail apocalypse. Shares have been crushed this year by plunging over 40% in the last four months.  Already suffering from the overall retail malaise, L Brands exasperated the downside by issuing… Read More

Buying beat down stocks is a time-honored way to earn significant returns in the stock market. However, the question is always the same: Which stocks are worth buying and which aren’t? #-ad_banner-#Here are five of the most prominent losing stocks of 2018, along with my thoughts on which ones to buy and which to avoid or short. 1. L Brands (NYSE: LB) This female-focused retailer is leading the retail apocalypse. Shares have been crushed this year by plunging over 40% in the last four months.  Already suffering from the overall retail malaise, L Brands exasperated the downside by issuing weak guidance at the end of 2017. Combined with analyst downgrades, the stock only collapsed under the pressure.   However, it appears that the worst is over for the $10 billion market cap company. Here’s why: Best known via its consumer-facing brand stores Victoria’s Secret, PINK, Bath & Body Works, La Senza and Henri Bendel, the company operates 3,067 specialty stores in the United States, Canada, the United Kingdom and Greater China, and its brands are sold in more than 800 additional franchised locations worldwide.   Boasting nearly $13 billion in annual revenue, bullish signals are starting to emerge. In… Read More

Of all the basic tenets of modern financial theory, the Efficient Market Hypothesis (EMH) is one of the most controversial and disputed theories. For the uninitiated, the EMH posits that stock prices reflect all relevant price information, which means stocks always trade at fair value. But if EMH were always true, investors would be wasting their time searching for undervalued stocks or stocks with potential to benefit from some market trend. It would also mean that no investor could outperform the market consistently. Sure, an investor might beat the market occasionally, but never on a consistent basis. #-ad_banner-#Unfortunately, EMH fails… Read More

Of all the basic tenets of modern financial theory, the Efficient Market Hypothesis (EMH) is one of the most controversial and disputed theories. For the uninitiated, the EMH posits that stock prices reflect all relevant price information, which means stocks always trade at fair value. But if EMH were always true, investors would be wasting their time searching for undervalued stocks or stocks with potential to benefit from some market trend. It would also mean that no investor could outperform the market consistently. Sure, an investor might beat the market occasionally, but never on a consistent basis. #-ad_banner-#Unfortunately, EMH fails on this point. You see, Warren Buffet has beaten the market consistently over long periods. And Buffet isn’t the only investor achieving these “impossible” results. There is a long list of investors who outperform market benchmarks consistently. So while the hypothesis may not hold water, that doesn’t mean investors can’t benefit from EMH in a different way. You see, if a stock’s current price is based on all available known information, an investor could profit from front running future information about a company. In other words, identifying some future piece of information that isn’t currently priced into the stock. And… Read More

In a recent Bank of America Merrill Lynch (NYSE: BAC) research report highlighted on Business Insider, analysts suggest that, despite the perceived current expensiveness of the stock market, opportunities to buy stocks at decent prices are as ripe as they have been since 2009 when markets began recovering from the financial crisis. They refer to a concept known as “dispersion.” #-ad_banner-#Put simply, “dispersion” reflects how widely market returns are distributed between  “cheap” and “expensive” stocks. Or, paraphrasing half of the oldest of Wall Street maxims, investors have plenty of opportunities to buy low. With this in mind,… Read More

In a recent Bank of America Merrill Lynch (NYSE: BAC) research report highlighted on Business Insider, analysts suggest that, despite the perceived current expensiveness of the stock market, opportunities to buy stocks at decent prices are as ripe as they have been since 2009 when markets began recovering from the financial crisis. They refer to a concept known as “dispersion.” #-ad_banner-#Put simply, “dispersion” reflects how widely market returns are distributed between  “cheap” and “expensive” stocks. Or, paraphrasing half of the oldest of Wall Street maxims, investors have plenty of opportunities to buy low. With this in mind, I screened for stocks with forward price to earnings ratios (P/E) lower than that of the S&P 500 (currently 17), a dividend yield one hundred basis points or higher than that of the index (1.83%), and operating in a growth industry or market. Here are three solid names I found. AT&T (NYSE: T) AT&T has made the jump from phone company to an integrated media company, and is determined to not only provide a means for content delivery but to own the content as well. In the media business, at the end of the day, it’s ALWAYS about content. Read More