A few months ago, we told you about a little-known indicator that’s making a small group of investors a lot of money. #-ad_banner-#We call this indicator the “Alpha Score,” because it consistently beats the market and often with less risk than buy-and-hold investing. It can flag exactly which stocks are about to jump double and triple digits in the coming days, weeks and months.   I’ll tell you more about the Alpha Score in a second, but just know that the indicator can range from 0 to 200. The higher the number, the more potential the stock has. Read More

A few months ago, we told you about a little-known indicator that’s making a small group of investors a lot of money. #-ad_banner-#We call this indicator the “Alpha Score,” because it consistently beats the market and often with less risk than buy-and-hold investing. It can flag exactly which stocks are about to jump double and triple digits in the coming days, weeks and months.   I’ll tell you more about the Alpha Score in a second, but just know that the indicator can range from 0 to 200. The higher the number, the more potential the stock has. For example, you may not be familiar with Westmoreland Coal (NASDAQ: WLB). It operates six surface coal mines and two power-generating units in the western United States. Westmoreland’s outlook was promising when we recommended shares just over a year ago. It had sold 95% of its future production under long-term contracts, and the market for coal looked stable. But that’s not what attracted us to the stock. What most investors didn’t know about WLB is that it had an Alpha Score of 158. Less than 1% of stocks have a score that high at any given time. Read More

  In his six years in office, President Obama has stressed his support for strict environmental regulation. He has expanded powers for the Environmental Protection Agency and has repeatedly deferred approval for the Keystone XL Pipeline System.   #-ad_banner-#One key stat: The number of oil and gas leases approved during  the first three years fell by more than 40%, compared to the final three years of President Bush’s administration. Drilling permit approvals on federal lands fell by a similar amount.   In addition to the regulatory headwind, falling oil prices are also impeding drilling permit activity. Against this one-two punch,… Read More

  In his six years in office, President Obama has stressed his support for strict environmental regulation. He has expanded powers for the Environmental Protection Agency and has repeatedly deferred approval for the Keystone XL Pipeline System.   #-ad_banner-#One key stat: The number of oil and gas leases approved during  the first three years fell by more than 40%, compared to the final three years of President Bush’s administration. Drilling permit approvals on federal lands fell by a similar amount.   In addition to the regulatory headwind, falling oil prices are also impeding drilling permit activity. Against this one-two punch, some analysts are questioning the emergent theme of U.S. energy independence and shale production.   But is an unlikely supporter about to throw the sector a lifeline?   Is the U.S. Energy Revolution Dead? Though OPEC thus far remains steadfast in its output quotas, the global energy picture still appears to be poised for long-term supply shortages. Energy firm BP Plc (NYSE: BP) forecasts a global production deficit for every period from 2015 to 2035 as global economic growth continues to require more energy. Total liquids consumption is forecast to increase at a… Read More

An old investing maxim suggests that “as goes January, so goes the year.” And when you consider that the major indices wobbled sideways in January, seemingly ending a multi-year uptrend, it is dawning on investors that the year ahead may deliver so-so gains for investors. #-ad_banner-#That should spell trouble for initial public offerings (IPOs), which tend to only flourish when markets are rallying. However, the recent 66% first-day gain for Box, Inc. (NYSE: BOX) suggests that IPOs are poised for another year of high demand and robust gains. Investors, it seems, just can’t get enough of young companies… Read More

An old investing maxim suggests that “as goes January, so goes the year.” And when you consider that the major indices wobbled sideways in January, seemingly ending a multi-year uptrend, it is dawning on investors that the year ahead may deliver so-so gains for investors. #-ad_banner-#That should spell trouble for initial public offerings (IPOs), which tend to only flourish when markets are rallying. However, the recent 66% first-day gain for Box, Inc. (NYSE: BOX) suggests that IPOs are poised for another year of high demand and robust gains. Investors, it seems, just can’t get enough of young companies with robust growth potential. Another Banner Year To be sure, 2014 was among the best years ever for IPOs. Bankers brought 275 companies public, the best showing since 2000. The $85 billion in proceeds also marks the best year since 2000. Healthcare (especially biotech) led the way, with 102 deals being successfully priced. Tech stocks were once again in vogue as well. And Alibaba Group Holding Ltd (NYSE: BABA) surely gave the market a nudge, when it raised $22 billion in September 2014. The average IPO in 2014 generated a 13% one-day pop, which explains why investors like to… Read More

When uncertainty reigns in the global economy, you can count on stocks to be even more volatile. #-ad_banner-#That has been the case recently as investors try to simultaneously get a handle on a range of complex issues: crashing oil, possible interest rate hikes in the United States, slowing growth in China and central bank stimulus in Europe, to name a few. By keeping investors so on edge, these and other worrisome signs of instability are clearly influencing the CBOE Volatility Index. This popular measure of investor expectations for stock market volatility… Read More

When uncertainty reigns in the global economy, you can count on stocks to be even more volatile. #-ad_banner-#That has been the case recently as investors try to simultaneously get a handle on a range of complex issues: crashing oil, possible interest rate hikes in the United States, slowing growth in China and central bank stimulus in Europe, to name a few. By keeping investors so on edge, these and other worrisome signs of instability are clearly influencing the CBOE Volatility Index. This popular measure of investor expectations for stock market volatility during the next 30 days is often referred to as the fear index or VIX, after its ticker symbol. As you can see, the VIX has been elevated since early December. And it’s now regularly topping the historical norm of 20, suggesting investors think rougher-than-usual times are ahead. That doesn’t necessarily mean it’s time to bail on the market, but a thorough portfolio review is wise at this point. Depending on your risk tolerance, consider reducing more speculative positions and make room for safer, dividend-paying stocks. A stable favorite:  Automatic… Read More

I would bet few investors really understand what’s behind the success of technology behemoth, Apple, Inc. (Nasdaq: AAPL). #-ad_banner-#The rags to riches story of Steve Jobs and Steve Wozniak building the first Apple computer in a garage is widely known. And of course, it’s products like the iPod, iPhone and Macbook that first come to mind when you think of the company’s biggest hits. But today I want to share with you the secret that’s led Apple to become the world’s largest company by market capitalization and helped its share price sky… Read More

I would bet few investors really understand what’s behind the success of technology behemoth, Apple, Inc. (Nasdaq: AAPL). #-ad_banner-#The rags to riches story of Steve Jobs and Steve Wozniak building the first Apple computer in a garage is widely known. And of course, it’s products like the iPod, iPhone and Macbook that first come to mind when you think of the company’s biggest hits. But today I want to share with you the secret that’s led Apple to become the world’s largest company by market capitalization and helped its share price sky rocket more than 9,000% since 2001. You see, it’s not the company’s revolutionary products that drive its success… The key to understanding the company’s success can be seen in a simple pattern. Once you identify this pattern, the catalyst to future growth for Apple — and the way investors can make money from the company today — will be apparent. After Apple sold the first iPod in October 2001, it was not received well by critics, consumers and investors. Just look at this chart showing Apple’s share price in the… Read More

  Flea markets crack me up.    Most of the vendors seem like they cleaned the junk from their garage and assigned an arbitrary, often overvalued, price to it.   There are times when financial markets resemble a flea market. And lately that’s exactly how it seems.     The U.S stock market has been on a tear over the last five years.   Since the market bottom during the 2008 financial crisis, the S&P 500 has turned in an average annual total return of close to 15%. Not bad for a market everyone… Read More

  Flea markets crack me up.    Most of the vendors seem like they cleaned the junk from their garage and assigned an arbitrary, often overvalued, price to it.   There are times when financial markets resemble a flea market. And lately that’s exactly how it seems.     The U.S stock market has been on a tear over the last five years.   Since the market bottom during the 2008 financial crisis, the S&P 500 has turned in an average annual total return of close to 15%. Not bad for a market everyone thought was going out of business.   But as we’ve discovered, trees never grow to the sky. If you’re familiar with my work, you’d know that paying close attention to valuations is a core tenet of my investment philosophy.   I wrote about my concerns with broader market valuations recently. This week, I want to drill down to valuations in a few specific sectors and stocks.     Utilities 2014 was a banner year for utility stocks. Fear of volatility and attractive yields pushed the Dow Jones Utility Index up 28% for the year, trumping the S&P… Read More

  From Lehman Brothers to Worldcom to the Soviet Union, many seemingly robust institutions can disappear in a flash.   #-ad_banner-#Other institutions can gradually fade away, which appears to be happening with meat, which has also been an institution itself.   Though people have relied on meat for centuries, as it played a central role in many cultures, meat’s predominance has begun to fade. Here at home, Americans are eating less meat, particularly red varieties like beef and pork.   The reasons for declining meat consumption aren’t a mystery. Doctors have been warning about greater cancer and other health… Read More

  From Lehman Brothers to Worldcom to the Soviet Union, many seemingly robust institutions can disappear in a flash.   #-ad_banner-#Other institutions can gradually fade away, which appears to be happening with meat, which has also been an institution itself.   Though people have relied on meat for centuries, as it played a central role in many cultures, meat’s predominance has begun to fade. Here at home, Americans are eating less meat, particularly red varieties like beef and pork.   The reasons for declining meat consumption aren’t a mystery. Doctors have been warning about greater cancer and other health risks from eating too much red meat for quite some time, and people finally got the message and have started cutting back.   What’s shocking, though, is the extent of the change.   Annual per capita red meat consumption in the U.S. fell 15% to 101 pounds in the past 10 years, according to the U.S. Department of Agriculture. It’s down by a third since the early 1970s, when per capita consumption was pushing 150 pounds per year. And the downward consumption trend could soon accelerate, with major negative implications for the meat industry.   The potential catalyst: the release… Read More

#-ad_banner-#Texas is the nation’s largest oil-producing state. In fact, it is the world’s sixth-largest oil market, dwarfing many countries. So when the price of oil is cut in half (or more) in a matter of months, it has an enormous impact on the state’s economy and the companies that operate within it. Take 1985 for example. The price of West Texas Intermediate (WTI) Crude — the country’s oil benchmark — dropped more than 70% in less than six months. This was due to increased output from the Organization of the Petroleum Exporting Countries (OPEC), which produces about 40%… Read More

#-ad_banner-#Texas is the nation’s largest oil-producing state. In fact, it is the world’s sixth-largest oil market, dwarfing many countries. So when the price of oil is cut in half (or more) in a matter of months, it has an enormous impact on the state’s economy and the companies that operate within it. Take 1985 for example. The price of West Texas Intermediate (WTI) Crude — the country’s oil benchmark — dropped more than 70% in less than six months. This was due to increased output from the Organization of the Petroleum Exporting Countries (OPEC), which produces about 40% of the world’s crude oil, and led to an eventual supply glut. This resulted in industry-wide layoffs and the collapse of major regional banks. In Texas alone, the supply glut led to the destruction of the state’s housing market and ultimately a recession for the state’s economy that continued through the early 1990s. Fast forward a few decades and the same situation looks to be playing out again. From a June 2014 high of nearly $107 per barrel, the spot price of WTI has fallen more than 50% to less than $50 a barrel currently. Much like the… Read More

As we kicked off the fourth-quarter earnings season this week, one sector got rocked on disappointing results.  #-ad_banner-#The market knew that earnings would be weak for banks, but it looks like investors were underestimating just how bad they’d be.  Citigroup (NYSE: C) reported an unbelievable 86% drop in profits to $0.06 per share, missing analyst estimates by 40% and sending the stock tumbling for a 12% loss for the year.  Citigroup isn’t alone. JP Morgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC) both reported results that sent their shares lower. The Financial Select Sector SPDR ETF… Read More

As we kicked off the fourth-quarter earnings season this week, one sector got rocked on disappointing results.  #-ad_banner-#The market knew that earnings would be weak for banks, but it looks like investors were underestimating just how bad they’d be.  Citigroup (NYSE: C) reported an unbelievable 86% drop in profits to $0.06 per share, missing analyst estimates by 40% and sending the stock tumbling for a 12% loss for the year.  Citigroup isn’t alone. JP Morgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC) both reported results that sent their shares lower. The Financial Select Sector SPDR ETF (NYSE: XLF) fell as much as 4% this week, partly in anticipation of what the market knew would be a tough month. But is there a silver lining to weak earnings? And are there other catalysts that may send bank shares higher from here?   Betting on the Forest Despite the Trees Lower profits from trading activities were a major culprit for the earnings disappointments. Implementation of the Volker Rule meant that banks could no longer bet their own money in proprietary trading, a lucrative business in previous years. Further, high volatility in December kept many investors from… Read More

An old trader once told me, “Trading is the hardest easy money you’ll ever make.”  #-ad_banner-#In theory, trading is easy enough — all you have to do is buy low and sell high, right? After all, there are thousands of books claiming to tell us everything we need to know.  In practice, however, trading is among the most difficult activities in the financial world. Despite the availability of a wealth of information, few do it well. To understand why it is so easy for investors to fail, I always remember the advice of another old trader who told me: “To… Read More

An old trader once told me, “Trading is the hardest easy money you’ll ever make.”  #-ad_banner-#In theory, trading is easy enough — all you have to do is buy low and sell high, right? After all, there are thousands of books claiming to tell us everything we need to know.  In practice, however, trading is among the most difficult activities in the financial world. Despite the availability of a wealth of information, few do it well. To understand why it is so easy for investors to fail, I always remember the advice of another old trader who told me: “To know what everyone knows is to know nothing.” In other words, investors who are using the tools everyone knows about shouldn’t expect to be successful.   Think about that for a moment.  If you could really win in the markets by simply buying stocks with low price-to-earnings (P/E) ratios, then we would all be successful. The secret to beating the market — and your fellow investors — is to use little-known indicators. Personally, I’ve been successful using tools you likely have not heard of, like the Income Trader Volatility (ITV) indicator.  ITV is similar to the Volatility S&P… Read More