Even as the broader stock market shows signs of a clear pullback, some of the hottest stocks in the market remain near their 52-week highs — and they still carry very high valuations to boot. But if history is any guide, then these are now among the most vulnerable stocks in the market. Any further big drops in the broader market could prove especially painful for these highflyers. Richly-valued stocks can stay aloft at the beginning of a big market pullback, but as we saw in 2001 and again in 2008, they eventually can suffer massive corrections… Read More

Even as the broader stock market shows signs of a clear pullback, some of the hottest stocks in the market remain near their 52-week highs — and they still carry very high valuations to boot. But if history is any guide, then these are now among the most vulnerable stocks in the market. Any further big drops in the broader market could prove especially painful for these highflyers. Richly-valued stocks can stay aloft at the beginning of a big market pullback, but as we saw in 2001 and again in 2008, they eventually can suffer massive corrections as investors shift to defense and start to focus on value instead of growth. If you own highflying names like Salesforce.com (NYSE: CRM) or VMWare (NYSE: VMW), for example, then you need to seriously reconsider just how vulnerable stocks like these can be.   Salesforce.com As the economy emerged from the recession of 2008, this provider of customer-management software became a key focus area for investment technology (IT) managers. Sales grew 21% in fiscal (January) 2010 and another 27% in fiscal 2011. Look for similar results in the current… Read More

In the 1990s, not owning a Janus mutual fund in any of your investment accounts was tantamount to having to carry a Waltons lunch box at an all boys school in fourth grade. Believe me, I know what the word “ostracized” means and I… Read More

#-ad_banner-#This past Wednesday (June 1), the Dow Jones Industrial Average (DJIA) dropped nearly 300 points in just one day, causing investors to feel a bit shaken. Tempting as it may be to load up on names that now seem like bargains, further market… Read More

The S&P 500 Index has been up nearly 92% since March 6, 2009. This impressive run has many market participants cheering for the rally to continue indefinitely. But as exciting as it may be to reference that 92% return, it is not very important, except for investors who bought… Read More

The frenzy over the recent initial public offering (IPO) (Nasdaq: LNKD) made one thing clear: Investors are desperate to get a piece of companies that look destined to be thriving long-term businesses. Yet many new IPOs don’t really have an extended shelf life. They… Read More

If you’re a skeptic, then you probably get a little nervous when you see lots of headlines about a stock or industry that are all positive. To the skeptical investor, this suggests an investment has peaked and is set to drop. Well, it’s like that right now in one popular… Read More

Just because I’m an income investor doesn’t mean I don’t like a good bargain. However, with the S&P 500 Index up about 22% year-to-date, finding bargain stocks has become more of a challenge. If you look at price-to-earnings (… Read More

#-ad_banner-#Back in February, I took a close look at Warren Buffett’s $12 billion stake in Wells Fargo (NYSE: WFC). Well, it’s now more like a $10 billion position. He hasn’t sold shares, but the bank’s stock has been steadily dropping, giving the Oracle of Omaha a rare black eye. To understand Buffett’s next move with this massive banking concern, you need to understand why shares are marching backward. The long-term view Buffett didn’t simply start acquiring shares in recent quarters. He’s been doing so for a… Read More

#-ad_banner-#Back in February, I took a close look at Warren Buffett’s $12 billion stake in Wells Fargo (NYSE: WFC). Well, it’s now more like a $10 billion position. He hasn’t sold shares, but the bank’s stock has been steadily dropping, giving the Oracle of Omaha a rare black eye. To understand Buffett’s next move with this massive banking concern, you need to understand why shares are marching backward. The long-term view Buffett didn’t simply start acquiring shares in recent quarters. He’s been doing so for a number of years. But you could argue that his long-term bullishness has been a bit misplaced, or at least a bit premature. He steadily bought Wells Fargo shares in the middle of the last decade, despite signs the housing sector was starting to overheat. More recently, he bought a lot of stock last fall and winter on hopes the U.S. economy was on the cusp of a broad-based upturn. As a result, his buying binges in 2007 and again in late 2010 took place in the low $30s, above the current price.   The appeal to… Read More

This stock is a survivor. In fact, one can argue that in 2007 to 2008, it suffered a near-death experience. As the overall market fell precipitously, Crocs (Nasdaq: CROX) absolutely plummeted. From a peak of $75.21 in October 2007, it fell well more than 99% to a low of $0.79… Read More

#-ad_banner-#Economists love to run a series of experiments based on “Game Theory,” testing whether individuals rationally account for the actions of others before making their own moves. When it comes to companies in the dry-bulk shipping industry, only one player has been acting rationally. Read More