One of my favorite scenes from the brilliant Steve Martin film The Jerk was when the deranged sniper played by C. Emmett Walsh is firing at Martin’s character, the hapless gas station attendant Navin Johnson, yelling “Die milk face!” The sniper’s aim is poor and as the bullets whiz past him, Martin yells, “He hates these cans!” Having been a long-time bull on the seven-million-pound networking gorilla Cisco Systems (Nasdaq: CSCO) and for quite a while, I’ve felt a little like Navin Johnson where the market is the sniper and I’m running around yelling “It hates this stock!” What am… Read More

One of my favorite scenes from the brilliant Steve Martin film The Jerk was when the deranged sniper played by C. Emmett Walsh is firing at Martin’s character, the hapless gas station attendant Navin Johnson, yelling “Die milk face!” The sniper’s aim is poor and as the bullets whiz past him, Martin yells, “He hates these cans!” Having been a long-time bull on the seven-million-pound networking gorilla Cisco Systems (Nasdaq: CSCO) and for quite a while, I’ve felt a little like Navin Johnson where the market is the sniper and I’m running around yelling “It hates this stock!” What am I missing? Big Tech, Low Price On average, the company has grown earnings per share at an 11% annual rate over the last four years. The common dividend per share has grown at a 13% annual rate for the same time period. Total cash per share is a staggering $14.12, representing 45% of Cisco’s current share price. #-ad_banner-#Rationally, this is a stock investors looking for high quality, blue-chip brand names should own. But investors and markets are rarely, if ever, rational. The biggest concern the herd has is revenue weakness. For fiscal year 2017 (Cisco’s ends in… Read More

Fidelity recently released its annual study of retirement health care costs. The news, as it has been for the last decade, is not good.  A newly-retired, 65-year old couple will need an estimated $275,000 in savings just to pay for healthcare. That’s a 6% jump from last year’s estimate and more than three times the general rate of consumer inflation. If that sounds like a hard pill to swallow for those trying to retire, it’s only going to get worse. At the rate of expected increases in health care costs, a 45-year old couple could need… Read More

Fidelity recently released its annual study of retirement health care costs. The news, as it has been for the last decade, is not good.  A newly-retired, 65-year old couple will need an estimated $275,000 in savings just to pay for healthcare. That’s a 6% jump from last year’s estimate and more than three times the general rate of consumer inflation. If that sounds like a hard pill to swallow for those trying to retire, it’s only going to get worse. At the rate of expected increases in health care costs, a 45-year old couple could need as much as $800,000 just to pay for medical expenses when they prepare to retire in 20 years! Health Care Costs Are Doubling Every Decade While health care cost inflation has slowed from an 11.9% surge in 2007, costs have increased at a compound rate of 7.85% annually over the last decade. In another report, HealthView Services estimated health care expenses could rise at an annual average rate of 5.5% over the next decade, more than double the 2.6% annual projected cost-of-living adjustment (COLA) on Social Security benefits.  That gap between cost-of-living adjustments and health… Read More

Over the years I have discovered a technical buy entry signal that is highly useful in timing stock entries. While nothing is foolproof in the financial markets, this tool provides a serious edge when combined with common sense and the application of basic fundamental concepts.  The purpose of technical analysis to attempt to time trades based on movements and patterns in the price of a stock. Understanding when price trends are about to reverse is the secret to successful trades. Most investors wait for a trend to be well underway before purchasing the stock. This tactic can work in strongly… Read More

Over the years I have discovered a technical buy entry signal that is highly useful in timing stock entries. While nothing is foolproof in the financial markets, this tool provides a serious edge when combined with common sense and the application of basic fundamental concepts.  The purpose of technical analysis to attempt to time trades based on movements and patterns in the price of a stock. Understanding when price trends are about to reverse is the secret to successful trades. Most investors wait for a trend to be well underway before purchasing the stock. This tactic can work in strongly trending markets, but trends have an uncanny way of ending as soon as they are identified. Smart investors attempt to get a jump on the crowd before a significant trend starts to maximize the potential profit from the move. And the perfect technical tool for timing this type of move is called the Parabolic SAR.  #-ad_banner-#Created by Welles Wilder, the Parabolic SAR consists of a series of dots on top of and below price bars on a chart. There is no practical need to understand how the indicator is derived since most online investing platforms have Parabolic SAR built into… Read More

Muhammad Ali, Babe Ruth, Steve Jobs; Just the mention of these greats conjures immediate feelings about their professions. Every profession has its luminaries who carry the torch of public-facing goodwill.  Even the staid discipline of stock investing boasts personalities that are synonymous with the market itself. Every generation has produced a leading name representing personal investing to the public. Even today, in our investing-guru-saturated world, one names rises above all others when the public is asked about the stock market: Jim Cramer. In fact, a strong argument can be made that he is the most famous (not to mention powerful)… Read More

Muhammad Ali, Babe Ruth, Steve Jobs; Just the mention of these greats conjures immediate feelings about their professions. Every profession has its luminaries who carry the torch of public-facing goodwill.  Even the staid discipline of stock investing boasts personalities that are synonymous with the market itself. Every generation has produced a leading name representing personal investing to the public. Even today, in our investing-guru-saturated world, one names rises above all others when the public is asked about the stock market: Jim Cramer. In fact, a strong argument can be made that he is the most famous (not to mention powerful) stock market celebrity who has ever lived.  The Making Of A Market Legend It’s well known that Cramer can move stocks by just mentioning their names. I’ve seen sophisticated market screeners try to anticipate his picks in their own analyses. But he wasn’t always so revered. #-ad_banner-#Jim Cramer started his working life in a very humble fashion, but everything he did served to build a base for future fortune and fame. An early job was hocking ice cream as a Philadelphia Phillies stadium vendor. Indeed, his bombastic personality and loud voice were first trained in this hard scrabble sales… Read More

The president’s call for a $1 trillion increase in infrastructure spending seems to have been put on hold, depressing investor sentiment for construction and infrastructure stocks this year.  While we wait for the legislative agenda to clear the way for increased fiscal stimulus, Mother Nature may soon be sending a natural force to boost spending. The National Oceanic and Atmospheric Administration (NOAA) recently upgraded its forecast for this year’s hurricane season — and it could be one of the worst in more than a decade. Weather patterns in the Atlantic continue to build, and all the… Read More

The president’s call for a $1 trillion increase in infrastructure spending seems to have been put on hold, depressing investor sentiment for construction and infrastructure stocks this year.  While we wait for the legislative agenda to clear the way for increased fiscal stimulus, Mother Nature may soon be sending a natural force to boost spending. The National Oceanic and Atmospheric Administration (NOAA) recently upgraded its forecast for this year’s hurricane season — and it could be one of the worst in more than a decade. Weather patterns in the Atlantic continue to build, and all the ingredients are there for another superstorm. #-ad_banner-#When Superstorm Sandy hit the east coast in October 2012, the S&P 500 tumbled 4% over two weeks and it took the rest of the year to recover as the nation assessed the damage. But I’ve found five infrastructure and power companies that have continuously outperformed the market during high-activity hurricane years. Not only have these five stocks outperformed the S&P 500 by an average of 18% during the worst four hurricane seasons of the past decade, but they also outperformed during the six-weeks after hurricane season when higher sales started showing through in… Read More

When it comes to stock picking, there are two primary schools of thought. The first, and by far most popular, school believes in selecting stocks based on strength. These investors buy breakouts, bullish signals, and uptrends. The second school teaches to look for price weakness when selecting stocks. Following the age-old mantra of buying weakness and selling strength, these investors love finding stable stocks that have been pushed lower.  Both these strategies have their place in a successful investor’s quiver of tactics. However, one beats the other when it comes to stock selection for the long term.  Buying weakness, not… Read More

When it comes to stock picking, there are two primary schools of thought. The first, and by far most popular, school believes in selecting stocks based on strength. These investors buy breakouts, bullish signals, and uptrends. The second school teaches to look for price weakness when selecting stocks. Following the age-old mantra of buying weakness and selling strength, these investors love finding stable stocks that have been pushed lower.  Both these strategies have their place in a successful investor’s quiver of tactics. However, one beats the other when it comes to stock selection for the long term.  Buying weakness, not strength, is the key to success for long-term investors. It all goes back to buying long-term value that is created when a solid stock dips in price. Remember, value and price are two different things, and when the price falls, it can create an opportunity to buy value at a discount. A Winning Value-Finding Tactic My favorite way to buy weakness is to scan for stocks with “gap downs” on the daily chart.  #-ad_banner-#Gap downs, which occur in a stock’s price chart when the price jumps down with no trading between, are usually caused by investors dumping shares on… Read More

Stock market investors are a very fickle bunch. Once-wildly popular stocks can quickly be relegated to the dustbin of history. Other times, barely-known companies can trigger an investor stampede, sending share prices into the stratosphere.  Most investors like to own stocks while they are in this viral phase. It’s exciting and can be very profitable to follow the hype. However, popular-stock chasing can have a dark side.  Investors who buy stocks on the upswing, called momentum buyers, always run the risk that they are late to the party. This can sometimes leave them facing a selloff as soon as they… Read More

Stock market investors are a very fickle bunch. Once-wildly popular stocks can quickly be relegated to the dustbin of history. Other times, barely-known companies can trigger an investor stampede, sending share prices into the stratosphere.  Most investors like to own stocks while they are in this viral phase. It’s exciting and can be very profitable to follow the hype. However, popular-stock chasing can have a dark side.  Investors who buy stocks on the upswing, called momentum buyers, always run the risk that they are late to the party. This can sometimes leave them facing a selloff as soon as they buy in to the stock.  I prefer to take the opposite tact by investing in stocks that have fallen out of favor with the masses. These forgotten stocks can often provide outsized returns with barely any attention.  My theory is that despite being forgotten, investors are still familiar with these companies from their glory days. Therefore, just a tiny bit of good news will instantly attract investors on name recognition. In other words, investors are already psychologically “sold” on the stock, making the buy decision much easier than for an unknown company.  Today, I’ve found three forgotten stocks that have… Read More

To say retailers have had a tough time this year is an understatement. The SPDR S&P Retail ETF (NYSE: XRT) is down more than 6%, underperforming the S&P 500 by almost 17% to date. The weakness across the group doesn’t begin to illustrate the pain felt by brands like Under Armor (NYSE: UA), down 31% this year, and Ralph Lauren (NYSE: RL), down 17%. The meme has been that apparel stocks and other traditional retailers are facing a difficult road simply on the shift from department stores to online shopping. Many investors have stuck with branded retailers and analysts continue… Read More

To say retailers have had a tough time this year is an understatement. The SPDR S&P Retail ETF (NYSE: XRT) is down more than 6%, underperforming the S&P 500 by almost 17% to date. The weakness across the group doesn’t begin to illustrate the pain felt by brands like Under Armor (NYSE: UA), down 31% this year, and Ralph Lauren (NYSE: RL), down 17%. The meme has been that apparel stocks and other traditional retailers are facing a difficult road simply on the shift from department stores to online shopping. Many investors have stuck with branded retailers and analysts continue to talk up the power of brand recognition to rationalize a target price.  While the shift to online shopping means incremental losses in sales, it’s masking a larger trend. Many of these once-valued brands may not have a shot even if they can execute on an online strategy. The Retail Nightmare Isn’t Just Online Vs. The Mall Scott Galloway has been studying the evolution of consumer brands and the digital revolution for decades, first as the founder of Prophet Brand Strategy and Red Envelope and now as a marketing professor at the NYU Stern School of Business.  #-ad_banner-#He’s been… Read More

Since the idea of “wearables” and trackers was introduced to the public, any hope of these devices becoming the next major consumer craze has faded, despite their limited popularity. This has caused more than a few competitors in this space to pull products and cut their losses. Shares of Garmin (Nasdaq: GRMN) have been basically flat this year. Apple, meanwhile, refuses to issue details for sales for its smartwatch. In an anticipated filing, San Francisco-based Jawbone went into liquidation last week. Chief Executive Hosain Rahman has already moved on, founding a new company in the health space. The liquidation is… Read More

Since the idea of “wearables” and trackers was introduced to the public, any hope of these devices becoming the next major consumer craze has faded, despite their limited popularity. This has caused more than a few competitors in this space to pull products and cut their losses. Shares of Garmin (Nasdaq: GRMN) have been basically flat this year. Apple, meanwhile, refuses to issue details for sales for its smartwatch. In an anticipated filing, San Francisco-based Jawbone went into liquidation last week. Chief Executive Hosain Rahman has already moved on, founding a new company in the health space. The liquidation is a far cry from the company’s 2014 valuation of $3.2 billion. While the market is facing obvious challenges, the death of the wearables market may be greatly exaggerated. CCS Insight forecasts 2020 sales of $34 billion — more than double last year’s $14 billion. Fitbit Inc. (NYSE: FIT), the one-time leader in the space, has seen its shares plunge 82% since its 2015 IPO. Most investors have written the company off as a has-been with little chance to recover. But I’ve found three reasons that the device maker surge by as much as 52% through this… Read More

His portfolio is built on the largest companies in America. Giants like Apple, Deere, and Walmart dominate his holdings. Thanks to his long-term oriented, value-seeking investment method, Warren Buffett’s wealth has catapulted from a mere $6,000 when he was 15 years old to an astounding $73 billion-plus today.  While Buffett’s concentration is on the largest of the large-caps, he has a love for the potential of small-caps, defined as companies with market capitalizations between$300 million to $2 billion.  A little while ago he told Fortune Magazine, “It’s one thing to own stock in a Coca-Cola or… Read More

His portfolio is built on the largest companies in America. Giants like Apple, Deere, and Walmart dominate his holdings. Thanks to his long-term oriented, value-seeking investment method, Warren Buffett’s wealth has catapulted from a mere $6,000 when he was 15 years old to an astounding $73 billion-plus today.  While Buffett’s concentration is on the largest of the large-caps, he has a love for the potential of small-caps, defined as companies with market capitalizations between$300 million to $2 billion.  A little while ago he told Fortune Magazine, “It’s one thing to own stock in a Coca-Cola or something, but when you are actually in the business of making determinations about opening stores and pricing decisions, you learn from it. We have made a lot more money out of See’s than shows from the earnings of See’s, just by the fact that it has educated me.”  How Buffett Picks His Winners It’s safe to say Warren’s consultation fee is among the most expensive of all time. People routinely spend a million plus dollars just to have an informal lunch with the guru. Astoundingly, the latest bid posted at $2.7 million for an hour… Read More