When a company is in deep distress, its board of directors is willing to take big chances. Acknowledging that its legacy Internet access business would soon stop throwing off gobs of cash, AOL (NYSE: AOL) handed the reins to Tim Armstrong, a thirty-something Google (Nasdaq: GOOG) veteran. He pitched a radical vision to the board: amass a broad roster of experienced journalists, develop a wide range of segment-leading websites, and watch the ad dollars roll in. That plan surely carries risk at a time when online ad rates continue to badly lag ad rates found in other… Read More

When a company is in deep distress, its board of directors is willing to take big chances. Acknowledging that its legacy Internet access business would soon stop throwing off gobs of cash, AOL (NYSE: AOL) handed the reins to Tim Armstrong, a thirty-something Google (Nasdaq: GOOG) veteran. He pitched a radical vision to the board: amass a broad roster of experienced journalists, develop a wide range of segment-leading websites, and watch the ad dollars roll in. That plan surely carries risk at a time when online ad rates continue to badly lag ad rates found in other forms of media. Indeed, the results of Armstrong’s turnaround plan have been unimpressive, but he’s sticking to his guns with a newly-announced acquisition of The Huffington Post. Armstrong is now approaching his two-year anniversary with AOL, and two years hence, the deal to acquire Huffington Post will be looked back as a make-or-break moment for the company. Let’s peer into the future to see how it will play out. No choice Doing nothing was not an option for AOL’s board. Sales had fallen 47% in the two years before Armstrong arrived, though they… Read More

If you read the headlines, Americans are still afraid to spend a dime. Today’s chart says that’s a bunch of bull. Starbucks (NASDAQ: SBUX) is one of the best gauges I’ve found for how the “man on the street” is feeling. No one needs to buy $4 coffee, but it is a nice little luxury if you can afford it. And with 11,000 stores in the United States, every American has easy access to the product. That gives the measure a nationwide scope. Not surprisingly, Starbucks’ business fell sharply during the recession. Read More

If you read the headlines, Americans are still afraid to spend a dime. Today’s chart says that’s a bunch of bull. Starbucks (NASDAQ: SBUX) is one of the best gauges I’ve found for how the “man on the street” is feeling. No one needs to buy $4 coffee, but it is a nice little luxury if you can afford it. And with 11,000 stores in the United States, every American has easy access to the product. That gives the measure a nationwide scope. Not surprisingly, Starbucks’ business fell sharply during the recession. Its share price followed suit. But what is our “Starbucks indicator” saying now? Evidently, the man on the street is feeling much better these days… Now Starbucks stores aren’t found just in the United States, but the lion’s share (75%) of sales and profit come from America. That means the move higher is based largely on its performance at home (sales hit a record-high last quarter). That’s great news for an economy built on consumer spending. Be sure to look for… Read More

Policy planners in Washington just caught a big break. They’ve been repeatedly trying to prod China to strengthen its currency — to no avail — but larger economic forces may yield the same benefit. Prices are starting to bubble up in China and, if you connect the dots, you can start to see myriad benefits for the U.S. economy and U.S. stocks. A slow build The Chinese economy has been able to grow at a rapid clip for more than a decade without any price pressures — a feat that is… Read More

Policy planners in Washington just caught a big break. They’ve been repeatedly trying to prod China to strengthen its currency — to no avail — but larger economic forces may yield the same benefit. Prices are starting to bubble up in China and, if you connect the dots, you can start to see myriad benefits for the U.S. economy and U.S. stocks. A slow build The Chinese economy has been able to grow at a rapid clip for more than a decade without any price pressures — a feat that is largely unparalleled in the modern era. Not anymore. Inflation in China started to perk up in 2010 and finished the year at a peak, with inflation now running close to 5%. (The official figure released by the Chinese government is a bit lower, while analysts at HSBC in Hong Kong think it’s a bit higher than that rate). The reasons for rising inflation are pretty straightforward and can be explained by the notion of “capacity utilization.” As is the case with any industry, prices remain stable as long as producers have excess production capacity. Read More

If you are an income investor, you may think overseas investing is best left to the pros. But you’d be wrong. A bit of research shows plenty of low-risk opportunities for U.S. investors seeking high yields in the global market. Investing globally is a good idea because it provides a chance to participate in the faster-growing economies of emerging markets like Brazil, which International Monetary Fund (IMF) forecasts will grow 4.5% this year – much faster than the U.S. growth rate of 3%. Looking abroad also provides more choices and the ability to… Read More

If you are an income investor, you may think overseas investing is best left to the pros. But you’d be wrong. A bit of research shows plenty of low-risk opportunities for U.S. investors seeking high yields in the global market. Investing globally is a good idea because it provides a chance to participate in the faster-growing economies of emerging markets like Brazil, which International Monetary Fund (IMF) forecasts will grow 4.5% this year – much faster than the U.S. growth rate of 3%. Looking abroad also provides more choices and the ability to diversify risk across multiple economies and geographies. #-ad_banner-#In addition, investing overseas often earns better returns. For example, the S&P gained 23.5% last year, but returns for emerging markets in Brazil, India and China were 80% or higher. The developed markets of Australia and Canada returned more than 30%. Foreign stocks also tend to have better yields because overseas companies typically distribute more of their cash flow back to investors. The yield on the S&P 500 currently averages less than 2%, but stocks in the developed markets of Europe and… Read More

To make money in stocks, you need to tie together various threads of information to see what it might mean for your investments. Right now, a pair of disparate data points has caught my attention: rising oil prices and a trio of unloved stocks that may really benefit from it. Read More

While it’s unlikely that anything will unseat Wal-Mart (NYSE: WMT) as the king of retail in our lifetime, that doesn’t mean there aren’t major opportunities to meaningfully penetrate the discount-store space. Take Target (NYSE: TGT), for instance. Despite Wal-Mart’s annoying domination, Target has capitalized on the inherent… Read More

The world is undergoing a frantic search for new sources of oil. The reason is simple: World-wide oil supply is dwindling while demand is soaring. The planet is estimated to have 1.3 trillion barrels of proven reserves — only enough for 40 years at current consumption rates. Read More

When Intel (Nasdaq: INTC) announced plans in mid-January to spend an eye-popping $9 billion on capital spending, tech analysts sat up and took notice. Many of them have been lukewarm on chip stocks for so long that they simply didn’t see it coming. And when Samsung and Taiwan Semiconductor (NYSE: TSM) followed up with similarly aggressive plans for 2011, it became apparent that the entire chip industry was now in full-growth mode. The prime beneficiary of the newfound momentum in capital equipment spending: Applied Materials (Nasdaq: AMAT). I told readers to buy shares two months ago,… Read More

When Intel (Nasdaq: INTC) announced plans in mid-January to spend an eye-popping $9 billion on capital spending, tech analysts sat up and took notice. Many of them have been lukewarm on chip stocks for so long that they simply didn’t see it coming. And when Samsung and Taiwan Semiconductor (NYSE: TSM) followed up with similarly aggressive plans for 2011, it became apparent that the entire chip industry was now in full-growth mode. The prime beneficiary of the newfound momentum in capital equipment spending: Applied Materials (Nasdaq: AMAT). I told readers to buy shares two months ago, as there was simply too much pessimism around the world’s largest semiconductor capital equipment firm. And it looks as if The Street is still underestimating this tech powerhouse. The recent 28% spike in the stock was impressive, but I see another 25% or so move coming this spring.     On its way to $20? As I’ve noted in the past, analysts tend to move very slowly, judging stocks by how the next quarter will fare. Price targets are raised and lowered based on updated 90-day forecasts. But when… Read More

While there are many high-growth tech companies, these can be tough investments to own. It’s often the case that they are one-hit wonders and competition will eat away at the core business. Yet there are some tech companies that are “built to last,” such as Microsoft Corp. (Nasdaq: MSFT), IBM… Read More

If a CEO oversaw this sort of performance, they’d be ridden out on a rail. A fund manager? You better expect a Securities and Exchange Commission investigation and prison time. But there’s something different about this investment. It’s lost 99% in the past two years, yet it’s rarely in the news and it hasn’t been shut down. In fact, it still trades 30 million shares a day. Meet the Direxion Daily Financial Bear 3X Shares (NYSE: FAZ). It takes the crown as the worst investment we at StreetAuthority have… Read More

If a CEO oversaw this sort of performance, they’d be ridden out on a rail. A fund manager? You better expect a Securities and Exchange Commission investigation and prison time. But there’s something different about this investment. It’s lost 99% in the past two years, yet it’s rarely in the news and it hasn’t been shut down. In fact, it still trades 30 million shares a day. Meet the Direxion Daily Financial Bear 3X Shares (NYSE: FAZ). It takes the crown as the worst investment we at StreetAuthority have ever seen. The fund is built to triple the Russell 1000 Financial Services Index… in the opposite direction. So if the index is down 1 point, FAZ rises three points. During the financial crisis, buying a few shares would have actually been a nice hedge for your portfolio. But these highly leveraged short funds are time bombs if you hold them too long. Once the rebound took hold, owning FAZ meant disaster…   FAZ has its place — if you’re a trader or if… Read More