Many investors spend their time trying to find a dark horse stock that will come out of nowhere to provide monster gains. While this can yield spectacular results for a lucky few, the majority of investors fail most of the time. I take the exact opposite approach to investing. In my premium newsletter, Maximum Profit, I look for stocks that have already proven themselves to be winners, waiting till they have a big lead before placing my bet. To most investors, especially those considered value investors, this probably sounds ludicrous. We have all been taught we need to… Read More

Many investors spend their time trying to find a dark horse stock that will come out of nowhere to provide monster gains. While this can yield spectacular results for a lucky few, the majority of investors fail most of the time. I take the exact opposite approach to investing. In my premium newsletter, Maximum Profit, I look for stocks that have already proven themselves to be winners, waiting till they have a big lead before placing my bet. To most investors, especially those considered value investors, this probably sounds ludicrous. We have all been taught we need to “buy low, sell high.” So how can buying “high” possibly make for a sound investing strategy? #-ad_banner-#Well, I’ve never been a big gambler, but I do know a thing or two about odds. And I’d like to explain my strategy using a horse racing analogy.  Imagine you’re at a horse race, and while everyone else is placing their bets before the race, you get to bet after the race has already begun. In fact, you get to place your bet when there’s already a clear leader who looks likely to win the race. After all, experienced bettors know horses that… Read More

This may sound obvious (or not), but my Maximum Profit system profits from what’s working in the market at any given time — stocks that are already winning. After all, who would you rather pick in a straight-up contest, the hot team with the 10-game winning streak or the opponent who hasn’t won a game in the last four tries? The two picks I’m about to reveal come from the S&P 500’s strongest sector year-to-date: technology. Now, there’s a lot that goes into the system and its algorithms, but in simplest terms it finds winning trades by using two of… Read More

This may sound obvious (or not), but my Maximum Profit system profits from what’s working in the market at any given time — stocks that are already winning. After all, who would you rather pick in a straight-up contest, the hot team with the 10-game winning streak or the opponent who hasn’t won a game in the last four tries? The two picks I’m about to reveal come from the S&P 500’s strongest sector year-to-date: technology. Now, there’s a lot that goes into the system and its algorithms, but in simplest terms it finds winning trades by using two of the most powerful indicators from the worlds of technical and fundamental analysis. The first of these is known as relative strength. Relative strength (RS) — not to be confused with the relative strength index (RSI) — forms the foundation of my system. Relative strength is one of the few true edges available in the investing world. Even Eugene Fama, father of the Efficient Market Hypothesis (EMH) — which says that markets efficiently price stocks using all available information — called relative strength an “anomaly” (in a good way!). It’s been proven that stocks with high RS scores — stocks that… Read More

It’s hard to believe, but the first quarter of 2017 is nearly in the books. And so far the market has continued its torrid pace. In fact, ever since the November election, the investing landscape has gone through a dramatic change of expectations with respect to economic growth, market valuations and inflation. And those expectations seem to be coming to fruition… #-ad_banner-#On March 10, the U.S. Bureau of Labor Statistics released employment data. Total nonfarm payroll employment increased by 235,000 in February, and the unemployment rate remained about the same at 4.7%. The consumer price index, which measures inflation, came… Read More

It’s hard to believe, but the first quarter of 2017 is nearly in the books. And so far the market has continued its torrid pace. In fact, ever since the November election, the investing landscape has gone through a dramatic change of expectations with respect to economic growth, market valuations and inflation. And those expectations seem to be coming to fruition… #-ad_banner-#On March 10, the U.S. Bureau of Labor Statistics released employment data. Total nonfarm payroll employment increased by 235,000 in February, and the unemployment rate remained about the same at 4.7%. The consumer price index, which measures inflation, came in at 2.74% last month, compared with 1.02% in February 2016. And residential housing starts jumped 6.2% in February over the same time last year. All these economic factors gave the Federal Reserve the green light to tighten the money supply by bumping interest rates up 25 basis points on March 15. Right now everything seems to be firing on all cylinders. Consumer confidence is at the highest level it’s been in 17 years. Unemployment is low, inflation is on target, housing is continuing to recover and the stock market is reaching new highs. As I’ve said many times before,… Read More

These days, any time a big-name company (most often a “hot tech stock”) files its initial registration to become a publicly traded company, I field inquiries from friends, family and readers on what my thoughts are regarding said company — even though I already know that the majority of these folks have already made up their minds and will likely ignore my advice… That’s because what I tell them isn’t what they want to hear. So they’ll disregard and seek opinions that match their own. This is called confirmation bias. This scenario played out when popular social-media company Snapchat (NYSE:… Read More

These days, any time a big-name company (most often a “hot tech stock”) files its initial registration to become a publicly traded company, I field inquiries from friends, family and readers on what my thoughts are regarding said company — even though I already know that the majority of these folks have already made up their minds and will likely ignore my advice… That’s because what I tell them isn’t what they want to hear. So they’ll disregard and seek opinions that match their own. This is called confirmation bias. This scenario played out when popular social-media company Snapchat (NYSE: SNAP) went public March 2. For the uninitiated, Snapchat is basically a platform that allows you to use the camera on your phone to send pictures or short videos (aka “snaps”) to your friends or the public at large, along with a host of animations and effects that allow the user to enhance their image or story. Then, once a friend views the snap, it will disappear. (For more information, ask a kid.) The video-messaging app raised $3.4 billion in its initial public offering (IPO), making it the biggest social-media IPO since Twitter (NYSE: TWTR) went public in early 2014. Read More

To most investors, what we do here at Maximum Profit doesn’t make sense… That’s because our investing strategy goes against nearly everything you’ve been told about becoming a successful investor: diversify your portfolio and buy low, sell high. That strategy simply doesn’t work for the vast majority of investors. How do I know? Market research from Dalbar — a company that’s been looking into investors’ buy and sell decisions since 1994 — found that investors have averaged a paltry 2.1% annualized return over the last 20 years… greatly lagging the broader market’s 8.2% return over that same time period. So… Read More

To most investors, what we do here at Maximum Profit doesn’t make sense… That’s because our investing strategy goes against nearly everything you’ve been told about becoming a successful investor: diversify your portfolio and buy low, sell high. That strategy simply doesn’t work for the vast majority of investors. How do I know? Market research from Dalbar — a company that’s been looking into investors’ buy and sell decisions since 1994 — found that investors have averaged a paltry 2.1% annualized return over the last 20 years… greatly lagging the broader market’s 8.2% return over that same time period. So it’s clear that beating the same old investing drum hasn’t worked for investors. So what does work? Buy high and sell higher… That’s the basic premise of momentum investing. Contrary to conventional wisdom, we want to be buying stocks that are near their 52-week highs, and selling them when the upward momentum runs out of steam. As I told my subscribers in an past issue: Often, new highs create uncertainty among investors. They tend to think that when a stock or the overall market reaches new highs, it’s time to take money off the table. Similarly, most investors would scoff… Read More

For the last few years, there’s been lots of talk about how this bull market is getting long in the tooth and is ripe for a major correction. After all, this run began in 2009 — eight long years ago. But the truth is stock-market booms don’t die of old age. And the bull market in the 1990s is proof of this. #-ad_banner-#Stocks went up — without a losing year — for nearly the entire decade of the 1990s. As the bull market got older, it didn’t waver or falter. Instead, it ramped up… the S&P 500 returned 33%, 28%… Read More

For the last few years, there’s been lots of talk about how this bull market is getting long in the tooth and is ripe for a major correction. After all, this run began in 2009 — eight long years ago. But the truth is stock-market booms don’t die of old age. And the bull market in the 1990s is proof of this. #-ad_banner-#Stocks went up — without a losing year — for nearly the entire decade of the 1990s. As the bull market got older, it didn’t waver or falter. Instead, it ramped up… the S&P 500 returned 33%, 28% and 21% in 1997, 1998 and 1999, respectively. The Nasdaq went up 40% in 1998 and then 86% in 1999. If you got out of the market in 1997, or even earlier, on the simple premise that the boom was getting long in the tooth… you missed out on the best profits. I’m sure there are people thinking this bull market is getting old and that it is therefore a good time to start avoiding stocks. Of course, they could be correct. But the simple fact is that there’s always a reason to avoid the stock market. Pick your favorite:… Read More