Last Friday, Donald J. Trump was officially sworn in as the 45th president of the United States. As the news coverage last week focused on the inaugural festivities, demonstrations and cabinet confirmation hearings, I spent a considerable amount of time thinking about what the new administration will mean for investors — namely, what sectors will likely benefit the most? #-ad_banner-#In general, I don’t believe in starting investment research based on politics. But it is undeniable that the agendas set by any given administration sometimes have profound effects on the American economy and the companies that do business here. And so… Read More

Last Friday, Donald J. Trump was officially sworn in as the 45th president of the United States. As the news coverage last week focused on the inaugural festivities, demonstrations and cabinet confirmation hearings, I spent a considerable amount of time thinking about what the new administration will mean for investors — namely, what sectors will likely benefit the most? #-ad_banner-#In general, I don’t believe in starting investment research based on politics. But it is undeniable that the agendas set by any given administration sometimes have profound effects on the American economy and the companies that do business here. And so far, there is good reason to believe that will be especially true with the Trump administration. While you may or may not have supported President Trump when he was campaigning, one thing is clear: this administration is likely going to be very friendly to the military.  Just take a look at some of the cabinet-level officials that have been nominated and note their military experience: – Gen. James Mattis – Secretary of Defense (retired Marine Corps General, U.S. Central Command) – Gen. Michael Flynn – National Security Advisor (retired U.S. Army Lt. General, former director of Defense Intelligence Agency) –… Read More

It’s hard to argue with the claim that retail chain Victoria’s Secret brought sexy lingerie to the mainstream, out from the backwater of catalogs and specialty stores that most consumers wouldn’t be caught dead in. Ironically, however, Victoria’s Secret’s original incarnation was as a specialty catalog. #-ad_banner-#Founded in 1977, the original target customers of the brand were men who were too embarrassed to buy lingerie for their wives or girlfriends at department stores. But after struggling to the edge of bankruptcy, the business was bought in 1982 by rising mall retailer The Limited, now L Brands (NYSE: LB). The new… Read More

It’s hard to argue with the claim that retail chain Victoria’s Secret brought sexy lingerie to the mainstream, out from the backwater of catalogs and specialty stores that most consumers wouldn’t be caught dead in. Ironically, however, Victoria’s Secret’s original incarnation was as a specialty catalog. #-ad_banner-#Founded in 1977, the original target customers of the brand were men who were too embarrassed to buy lingerie for their wives or girlfriends at department stores. But after struggling to the edge of bankruptcy, the business was bought in 1982 by rising mall retailer The Limited, now L Brands (NYSE: LB). The new owner shifted the brand’s focus toward women and translated the catalog into physical stores. And this strategy worked wonders; Victoria’s Secret was off to the races with over 300 locations by 1987. Why the focus on this division of L Brands? Because Victoria’s Secret is L Brands. The chain contributes 63% of the company’s annual revenue, which has averaged nearly $11.5 billion over the last three years. And the stock is on sale. As a whole, the retail sector has had a rough go, especially recently due to lackluster holiday sales reports. The performance of the Retail Sector SPDR ETF… Read More

Advertising is timeless, which I find reassuring. Thousands of years ago, the ancient Egyptians painted sales notices on papyrus. In the middle ages, store proprietors employed town criers to help drum up business. And today’s store merchants are no different, doing whatever they can to showcase their wares and attract customers. #-ad_banner-#Why does that matter? Well, just ask anybody who invested in pocket pagers, answering machines or floppy disc drives. Technological advances can quickly render must-have products and services into obsolete relics. Even landline telephones, a revolutionary marvel in their day, are now facing slow extinction. But there will always… Read More

Advertising is timeless, which I find reassuring. Thousands of years ago, the ancient Egyptians painted sales notices on papyrus. In the middle ages, store proprietors employed town criers to help drum up business. And today’s store merchants are no different, doing whatever they can to showcase their wares and attract customers. #-ad_banner-#Why does that matter? Well, just ask anybody who invested in pocket pagers, answering machines or floppy disc drives. Technological advances can quickly render must-have products and services into obsolete relics. Even landline telephones, a revolutionary marvel in their day, are now facing slow extinction. But there will always be demand for advertising that helps connect buyers and sellers. Some of the biggest spenders include auto makers, wireless providers, drug companies and fast food chains. They are always communicating with consumers — and spending an extraordinary amount of money doing so.  This is a race — and taking your foot off the advertising pedal leaves many businesses at risk of being left in the dust by rivals.  That’s why so many spend a nickel or dime (or more) from every dollar of sales on marketing efforts. One of my favorites in the group collects steady income from big names… Read More

Can Nvidia Corporation (Nasdaq: NVDA) stock, which could do no wrong last year, be trusted in 2017? And by “trust” I mean can the company live up to all of the hype investors have created? Notice that I didn’t say Nvidia itself has created the hype. Living Inside The Nvidia Bubble While the company’s entry into the realm of virtual and augmented reality, data centers, self-driving cars, and other growth markets were well-timed moves, the shares have approached bubble territory. And some investors still believe the stock — even after more than 200% returns — has room to run… Read More

Can Nvidia Corporation (Nasdaq: NVDA) stock, which could do no wrong last year, be trusted in 2017? And by “trust” I mean can the company live up to all of the hype investors have created? Notice that I didn’t say Nvidia itself has created the hype. Living Inside The Nvidia Bubble While the company’s entry into the realm of virtual and augmented reality, data centers, self-driving cars, and other growth markets were well-timed moves, the shares have approached bubble territory. And some investors still believe the stock — even after more than 200% returns — has room to run while ignoring the attractive short thesis the Nvidia story has created. #-ad_banner-#After crushing the Nasdaq 100 Index (NDX) with some 222% returns in 2016, the semiconductor company has a tough act to follow. That, however, hasn’t stopped retail investors from wanting to chase the returns they feel they’ve missed out on last year. Notably, on the heels of the stock soaring almost 35% in one month, analysts at Goldman Sachs added Nvidia to the Conviction Buy list. Who’s Left To Buy The Stock? But here’s the question Goldman — or any other long investor — must ask: Who’s left… Read More

The pharmaceutical sector is well known as one of the most volatile and lucrative stock market sectors. It can also be the most emotionally rewarding, as you invest in companies that are creating innovative, life-saving treatments for various illnesses. #-ad_banner-#But with high returns come high risk, and the pharmaceutical sector’s reputation as one of the riskiest is well deserved. In fact, pharma’s inherent volatility can make it downright dangerous for investors. Share prices can quickly gain 100% on the back of the positive news or lose 50% or more in a short time when negative news hits the wire. The… Read More

The pharmaceutical sector is well known as one of the most volatile and lucrative stock market sectors. It can also be the most emotionally rewarding, as you invest in companies that are creating innovative, life-saving treatments for various illnesses. #-ad_banner-#But with high returns come high risk, and the pharmaceutical sector’s reputation as one of the riskiest is well deserved. In fact, pharma’s inherent volatility can make it downright dangerous for investors. Share prices can quickly gain 100% on the back of the positive news or lose 50% or more in a short time when negative news hits the wire. The key to success in pharmaceutical investing is to locate firms that are on the cutting edge of novel research and have multiple products in their pipeline. Ideally, you also want a company whose shares have recently taken a hit due to a short-term negative event that caused an investor overreaction. With these points in mind, I have located an ideal pharmaceutical stock that has been recently been pushed down, creating massive upside potential. The company, Alnylam (Nasdaq: ALNY), was founded in 2002 with a mandate to advance RNA interference (RNAi) as an entirely new class of medicines. RNAi is a… Read More

The old saying that every dog has its day is particularly applicable on Wall Street. In this case, the dogs are reliable companies that have underperformed over a one-year period that then outperform over the next year. In many instances, the opposite is also true; outperformers one year can be… Read More

Freedom, opportunity, rock ‘n’ roll, baseball, apple pie, and a cultural melting pot are commonly associated with American culture. #-ad_banner-#But perhaps even more ubiquitous are our mega-corporations. Giants like Coca-Cola (NYSE: KO), Ford (NYSE: F), and Microsoft (Nasdaq: MSFT) are on the forefront of American corporate identity. Digging deeper, names like McDonald’s (NYSE: MCD), Walt Disney (NYSE: DIS), and Goldman Sachs (NYSE: GS) come to mind. I cannot help but think of all the stock market fortunes these seven American icons have built over the years. It’s truly staggering to realize all the family fortunes that have been made with… Read More

Freedom, opportunity, rock ‘n’ roll, baseball, apple pie, and a cultural melting pot are commonly associated with American culture. #-ad_banner-#But perhaps even more ubiquitous are our mega-corporations. Giants like Coca-Cola (NYSE: KO), Ford (NYSE: F), and Microsoft (Nasdaq: MSFT) are on the forefront of American corporate identity. Digging deeper, names like McDonald’s (NYSE: MCD), Walt Disney (NYSE: DIS), and Goldman Sachs (NYSE: GS) come to mind. I cannot help but think of all the stock market fortunes these seven American icons have built over the years. It’s truly staggering to realize all the family fortunes that have been made with only one or two of these iconic American corporations as the core component. And there’s another one of these American icons that is a great buy right now. This company is 118 years old and has a logo that is globally recognizable by nearly everyone. Despite boasting a market cap of over $8 billion and revenue of more than $15 billion, this company has been widely disregarded by investors over the last several years. Shares are just below breaking even on the year, down 2.2% to date. That makes Goodyear Tire & Rubber (Nasdaq: GT) a great buy at its… Read More

Some sectors are just naturally prone to multi-year, boom-and-bust cycles. Higher demand boosts prices and sets forth a rush in exploration or production. Profits soar and investors book market-beating gains until supply starts to overwhelm demand. #-ad_banner-#When the bust begins, prices sink and weaker stock prices can persist for years. Companies all but stop spending on capital investments in their haste to protect cash flows. The years of underperformance can end abruptly when the cycle resets. It’s easy to miss out on the initial rebound as stock prices surge. Industrial metals and miners are currently in the middle of such… Read More

Some sectors are just naturally prone to multi-year, boom-and-bust cycles. Higher demand boosts prices and sets forth a rush in exploration or production. Profits soar and investors book market-beating gains until supply starts to overwhelm demand. #-ad_banner-#When the bust begins, prices sink and weaker stock prices can persist for years. Companies all but stop spending on capital investments in their haste to protect cash flows. The years of underperformance can end abruptly when the cycle resets. It’s easy to miss out on the initial rebound as stock prices surge. Industrial metals and miners are currently in the middle of such a comeback, staging what could be part of a multi-year boom in 2016. And many players have already zoomed higher. Stocks are being priced on the continued rebound in profits and it’s becoming difficult to find value left in the space. But one market leader hasn’t participated in the rally. It benefits from some of the lowest production costs in its industry and could soon be getting a boost from government policy. Are Miners Due For A Multi-Year Run? Metals and mining stocks have been one of the best performers this year after trailing for nearly five years. The… Read More

In November 1906, Teddy Roosevelt found himself working the controls of a large steam shovel. Crowds of press members, natives and curious onlookers watched as flash bulbs went off, preserving the peculiar image for posterity.  Beneath the President’s handshakes and famous toothy grin was a sense of worry. After all, his legacy was on the line. Nearly two years in, workers had little to show in the way of progress. The inhospitable jungles and swamps, combined with sweltering temperatures, snakes, mosquitoes, smallpox, yellow fever and malaria meant that the work was not only back-breaking, but treacherous. Roosevelt was hoping his… Read More

In November 1906, Teddy Roosevelt found himself working the controls of a large steam shovel. Crowds of press members, natives and curious onlookers watched as flash bulbs went off, preserving the peculiar image for posterity.  Beneath the President’s handshakes and famous toothy grin was a sense of worry. After all, his legacy was on the line. Nearly two years in, workers had little to show in the way of progress. The inhospitable jungles and swamps, combined with sweltering temperatures, snakes, mosquitoes, smallpox, yellow fever and malaria meant that the work was not only back-breaking, but treacherous. Roosevelt was hoping his visit would boost morale. He was no stranger to hardship — and he had insisted that “No single great material work which remains to be undertaken on this continent is as of such consequence to the American people.”  —Sponsored Link— Here’s A Rare Chance To Build Unbelievable Wealth! When the stock market crashed in 1929, millions were devastated. But a savvy few used the crisis to catapult themselves into unprecedented wealth and fortune. How?  Inheritance? Business ventures? A deal with the devil?  No, they became some of the richest, most influential Americans in history by… Read More

Benjamin Graham, the father of value investing, is quoted as saying, “in the short term, the market is a voting machine, but in the long term, it is a weighing machine.” Now, the quote doesn’t appear in Graham’s famous book, The Intelligent Investor. But according to Graham’s star pupil, Warren Buffet, Graham taught the concept to students at Columbia University. And given Buffet’s unimpeachable character, the statement stands on its own. But even if the quote isn’t exact, the principle is… #-ad_banner-#You see, the voting machine is a popularity contest based on beliefs that may or may not be true. Read More

Benjamin Graham, the father of value investing, is quoted as saying, “in the short term, the market is a voting machine, but in the long term, it is a weighing machine.” Now, the quote doesn’t appear in Graham’s famous book, The Intelligent Investor. But according to Graham’s star pupil, Warren Buffet, Graham taught the concept to students at Columbia University. And given Buffet’s unimpeachable character, the statement stands on its own. But even if the quote isn’t exact, the principle is… #-ad_banner-#You see, the voting machine is a popularity contest based on beliefs that may or may not be true. Our recent presidential election is a great example of how other people’s perceptions influence our decisions. But at the end of the day, they’re mostly a set of opinions and expectations. This makes them untrustworthy. In contrast, Graham’s weighing machine implies that investment decisions are objective decisions — based solely on data gleaned from company reports and financials. This leads investors to use things like earnings reports to make decisions. And earnings are the single best predictor of stock performance. Today, we’re going to heed Graham’s advice and go against the perceptions of the crowd with generic drugmaker TEVA Pharmaceuticals… Read More