Conviction. It’s a concept that is rarely heard in investment circles these days, but is still one of the key traits of top investors. When they have conviction, they stick with an investment idea for the long haul, undeterred by any near-term concerns that may shake their faith. Indeed, many investors will book profits if a stock has had a strong run. It’s human nature — for most of us. Microsoft (Nasdaq: MSFT) co-founder Bill Gates does the opposite. He continues to buy into his favorite ideas even after they’ve been powering higher. Case in point: AutoNation… Read More

Conviction. It’s a concept that is rarely heard in investment circles these days, but is still one of the key traits of top investors. When they have conviction, they stick with an investment idea for the long haul, undeterred by any near-term concerns that may shake their faith. Indeed, many investors will book profits if a stock has had a strong run. It’s human nature — for most of us. Microsoft (Nasdaq: MSFT) co-founder Bill Gates does the opposite. He continues to buy into his favorite ideas even after they’ve been powering higher. Case in point: AutoNation (NYSE: AN). I told you about his interest in the company three months ago when shares traded for about $26. His bullishness came at a time when many analysts thought that shares were fully-valued on the basis of near-term operating metrics. With shares up about 42% to almost $34 since then, you’d think Gates might be content to book his profit.  But he’s buying even more. In fact he’s made three huge purchases, boosting his holdings by roughly 1.7 million shares… Read More

This iconic brand has a chequered history. Invented in the late 19th century, it was a marketed as a medicine that contained wine and cocaine. When prohibition set in, a non-alcoholic alternative had to be created. Later, the cocaine was replaced by a non-narcotic… Read More

It’s one of the rarest metals on the planet… 30 times more rare than gold. It takes anywhere from 7 to 12 million tons of raw ore to produce a single ounce of the metal. In 2009, miners extracted 64 million ounces of gold; stockpiles of this metal grew by just 6 million ounces. And I use the word stockpile figuratively, because unlike other metals there are typically little to no above-ground supplies of this rare and valuable metal. That’s because demand often outpaces supply. In 2008, the world consumed 7.3… Read More

It’s one of the rarest metals on the planet… 30 times more rare than gold. It takes anywhere from 7 to 12 million tons of raw ore to produce a single ounce of the metal. In 2009, miners extracted 64 million ounces of gold; stockpiles of this metal grew by just 6 million ounces. And I use the word stockpile figuratively, because unlike other metals there are typically little to no above-ground supplies of this rare and valuable metal. That’s because demand often outpaces supply. In 2008, the world consumed 7.3 million ounces of the stuff, compared to production of just 7.0 million ounces. We need every ounce available and then some. So why is this metal needed at all when it’s expensive, rare, and hard to mine? Above all, platinum owes its popularity to chemistry. You’ve probably heard of catalytic converters. Internal combustion engines would spew tons of noxious pollutants without these miraculous devices, which convert hydrocarbon exhaust into carbon dioxide and water vapor. Well, platinum group metals (PGMs) are the catalyzing agent — and try as they might, automakers have never found a… Read More

Perhaps the easiest way to profit from higher oil prices is to buy shares of the largest energy firms in the world. These companies are referred to as “integrated” oil and gas firms, which stems from the fact that they are involved in just about every facet of… Read More

Dear Investor, On Sept. 30, 2010, I told you about what could be the biggest profit opportunity of the next few years. The investments I recommended have already started moving: they’re up 25%, 34% and 56% in just four months. Read More

I look forward to every earnings season. It’s a time when companies on my watch list may stumble, placing them squarely into value territory. As long as the long-term investment thesis is intact, you’ve got a rare chance to step in when shares are 20%, 30% or even… Read More

Inflation fears and rising interest rates are riling the fixed-income market. I’ve got a solution. But before I go into too much detail about this idea, it’s important to see exactly what’s going on. Treasury yields, which can serve as a… Read More

Five weeks into 2011, and investors are looking at their first bona fide bubble of 2011. All that money sloshing around global markets, led by the Federal Reserve’s massive easing policy, was bound to start igniting various speculative asset classes. Gold surely looked frothy in 2010, and in 2011, it’s copper that’s looking bubble-icious.     You have to take a 15-year look at copper prices to understand just how crazy the current market looks. For a decade up until 2005, copper usually traded for $75 to $100 a pound. That price reflected a nice equilibrium… Read More

Five weeks into 2011, and investors are looking at their first bona fide bubble of 2011. All that money sloshing around global markets, led by the Federal Reserve’s massive easing policy, was bound to start igniting various speculative asset classes. Gold surely looked frothy in 2010, and in 2011, it’s copper that’s looking bubble-icious.     You have to take a 15-year look at copper prices to understand just how crazy the current market looks. For a decade up until 2005, copper usually traded for $75 to $100 a pound. That price reflected a nice equilibrium between supply and demand. It was also a period of steadily declining output of copper, as second-tier and third-tier mines were hard-pressed to make money. China changed the whole dynamic. As its economy started to take off during the past decade, demand for copper, which is used in many industrial and construction applications, soared, pushing prices up above the $300 mark in 2006, 2007 and 2008. Although copper prices eventually cooled, China learned its lesson. The next time copper prices took off, China would have ample supplies on hand to draw upon… Read More

When I recommended this stock nearly two years ago it was paying a 14.4% yield. In most cases, yields this high aren’t safe. But this company is different. In short, it borrows money at very low interest rates, invests… Read More

Another day, another gain. That’s been the story for the S&P 500 lately, which has rallied higher in 12 of the last 15 trading sessions since January 20. As they say, “this bull has legs.” A rising market is surely enjoyable, but the higher it moves, the greater the chance that profit-taking will be just around the corner. That may happen when market strategists begin to talk about stocks becoming expensive when measured by traditional metrics. So here are four items I watch to see if the bull can keep running… 1. Money pouring… Read More

Another day, another gain. That’s been the story for the S&P 500 lately, which has rallied higher in 12 of the last 15 trading sessions since January 20. As they say, “this bull has legs.” A rising market is surely enjoyable, but the higher it moves, the greater the chance that profit-taking will be just around the corner. That may happen when market strategists begin to talk about stocks becoming expensive when measured by traditional metrics. So here are four items I watch to see if the bull can keep running… 1. Money pouring into domestic stock funds — POSITIVE The direction of the stock market is simply a function of supply and demand. When fund managers are given more money to work with, they put it into stocks, pushing share prices up. And they got plenty of firepower last quarter, bringing $45.5 billion, according to Lipper Fund Services. (90% of that went to actively-managed funds and the rest went to exchange-traded funds, or ETFs.) That was more than funds took in for the first three quarters of 2010. And the spigot keeps flowing. In the past two weeks (ended… Read More