When money managers buy bonds offered by state and local governments, they gladly accept the tax-free interest payments that come with them. But they’re no fools. They know they can lose their investment if a state or local government goes into default. [See: “12 States in Financial Distress”] So these… Read More

Since the financial crisis in 2008, corporate executives have taken a cautious approach to making big decisions. This has been especially the case with mergers & acquisitions (M&A). But according to a recent survey from Thomson Reuters and Freeman (a consulting firm), it looks like 2011 is… Read More

I’ve always had a contrarian streak. Conventional wisdom is more a jumping off point for me than it is an anchor for my investment decisions. And I’ve found it usually pays off handsomely to follow my own research rather than… Read More

Pity the average investor. They tend to jump into and out of the stock market at precisely the wrong times. In late August, I looked at the weekly investor sentiment poll conducted by the American Association of Individual Investors (AAII) and noted that most investors feared a big market tumble. [Read that article here] Historically speaking, you want to start buying stocks when most individual investors are shunning them. And that has once again proven to be the case. Since that August swoon, the S&P 500 has risen +14%. And like clockwork, that impressive performance has turned… Read More

Pity the average investor. They tend to jump into and out of the stock market at precisely the wrong times. In late August, I looked at the weekly investor sentiment poll conducted by the American Association of Individual Investors (AAII) and noted that most investors feared a big market tumble. [Read that article here] Historically speaking, you want to start buying stocks when most individual investors are shunning them. And that has once again proven to be the case. Since that August swoon, the S&P 500 has risen +14%. And like clockwork, that impressive performance has turned individual investors from bears to bulls. In the week ending November 10th, 57.6% of retail investors were bullish, according to the latest AAII poll. That’s up +9.3 percentage points from the prior week, and the most bullish reading since January 2007. So if bearish sentiment is always good for stocks, is bullish sentiment always bad for stocks? I pored over 25 years’ worth of data to gauge the market’s subsequent returns every time investors were more than 55% bullish. The results are mixed… An unusual spike… Read More

The initial public offering (IPO) market continues to heat up with deals coming this week for GM (NYSE: GM), Booz Allen (NYSE: BAH), Caesars Entertainment (NYSE: CZR) and a half dozen other firms. The flurry of deals puts us on track for the most robust quarter for IPOs in more than two years. And looking at the pipeline of new deal registrations, the first quarter of 2011 may be even hotter. I recently looked at a strategy that uses analyst research to find stocks about to pop. [See: “The Secret… Read More

The initial public offering (IPO) market continues to heat up with deals coming this week for GM (NYSE: GM), Booz Allen (NYSE: BAH), Caesars Entertainment (NYSE: CZR) and a half dozen other firms. The flurry of deals puts us on track for the most robust quarter for IPOs in more than two years. And looking at the pipeline of new deal registrations, the first quarter of 2011 may be even hotter. I recently looked at a strategy that uses analyst research to find stocks about to pop. [See: “The Secret Way to Play IPOs”] Yet that’s not the only way to look for upside among recent new deals. You can also scan lists for “broken IPOs,” which are firms that have been public for a short while and are drifting lower while investors focus on more established companies. Last month, I took a look at top-performing IPOs, as I wrote back then, “many new IPOs take time to find their sea legs and only take off well after their debuts. In fact, every single stock [mentioned in that piece] came out of the gate… Read More

The standard healthcare pitch for investing in healthcare stocks contains a number of standard components. Among them are favorable demographics due to an aging global population and the favorable impacts of recent U.S. industry legislation that adds millions of patients into the system. These are definite positives, but there are… Read More

It’s been a tough year for Chinese stocks that trade in the United States. Many of them have sold off — and stayed cheap — even as they sport impressive growth rates and low valuations. Thanks to a sharp drop on Friday on renewed concerns about an overheating economy,… Read More

To make money in stocks, it often helps to study history’s greatest investors. Like many finance enthusiasts, I’m a fan of Peter Lynch, who’s best known for his spectacular results as manager of the Fidelity Magellan Fund from 1977 through 1990, when the fund’s total returns averaged +29% a year. Read More

We’re now in a “stock picker’s market.” The major averages are now moving sideways after a sustained two-month upward move, which means that stock selection becomes ever more crucial. In this kind of trading environment, it pays to see what’s working. Insights into why certain stocks are… Read More

You are taking part in a revolution. If you pay to drive through a toll booth, or you travel abroad, or in some cases use your credit card, you’re a willing participant. But this handful of actions is just a sliver of what’s to come. Read More