The past few years have been a great time to be an investor. Federal Reserve Chairman Ben Bernanke’s zero interest rate policy has fueled large gains in just about every market sector since 2009. There’s little question that his policies are bullish in the short term, but what happens when the Fed’s easy money stops? For an answer to this, we can take a page out of baseball history. In 1998, Mark McGwire set a record by hitting 70 home runs during the season, while Sammy Sosa hit 66. The previous record of 61 home runs had been set in… Read More

The past few years have been a great time to be an investor. Federal Reserve Chairman Ben Bernanke’s zero interest rate policy has fueled large gains in just about every market sector since 2009. There’s little question that his policies are bullish in the short term, but what happens when the Fed’s easy money stops? For an answer to this, we can take a page out of baseball history. In 1998, Mark McGwire set a record by hitting 70 home runs during the season, while Sammy Sosa hit 66. The previous record of 61 home runs had been set in 1961 by Roger Maris. In 2001, Barry Bonds broke McGwire’s record by hitting 73 home runs. At the time, baseball was an exciting sport to watch as home run records captured headlines. Later, fans learned that the hitters were abusing steroids. Home run outputs returned to normal after leaguewide steroid testing became the norm in 2003. Fed policy is acting like a performance-enhancing drug for the market. When it stops easing, I believe the markets will be unable to continue climbing at the frantic pace seen during the past year. Returns will be below average for some time, and stock… Read More

For today’s essay, it would be wise to remember the old investing adage: “The trend is your friend.”  As most investors already know, investing in trends is one of surest ways to success in the stock market. But while the phrase itself is simple enough to understand, we often find that most investors don’t know which trends to follow… or even worse, invest in the wrong ones.  Specifically, we generally find that investors want to focus on economic trends… things like interest rates and global debt/GDP ratios. Some investors go so far as to follow the cover model for the… Read More

For today’s essay, it would be wise to remember the old investing adage: “The trend is your friend.”  As most investors already know, investing in trends is one of surest ways to success in the stock market. But while the phrase itself is simple enough to understand, we often find that most investors don’t know which trends to follow… or even worse, invest in the wrong ones.  Specifically, we generally find that investors want to focus on economic trends… things like interest rates and global debt/GDP ratios. Some investors go so far as to follow the cover model for the current year’s issue of the Sports Illustrated Swimsuit Edition, believing that when the model comes from the U.S., the S&P 500 is likely to outperform.  Not to berate the homemade economists of the day, but these investors are most likely wasting their time. The truth is, economic trends can (and should) be mostly ignored by investors.  Even economists — people who have dedicated their entire lives to following macroeconomics — can’t accurately predict when a major economic event has (or will) occur. It took the National Bureau of Economic Research (NBER) 15 months to announce that the recession ended in… Read More

One of the most exciting and lucrative avenues of stock investing is in the biotech arena. It can also be one of the most dangerous.#-ad_banner-# The sector focuses on developing and marketing lifesaving drugs and other medical breakthroughs. These products can have profound constructive effects on the world. Not only have many investors built fortunes by investing in biotech, but it feels good to know you’re helping to fund such positive research and development. Tiny biotech companies can make their investors a fortune when they’re acquired by their larger brethren or bring a revolutionary product to market. Short-term… Read More

One of the most exciting and lucrative avenues of stock investing is in the biotech arena. It can also be one of the most dangerous.#-ad_banner-# The sector focuses on developing and marketing lifesaving drugs and other medical breakthroughs. These products can have profound constructive effects on the world. Not only have many investors built fortunes by investing in biotech, but it feels good to know you’re helping to fund such positive research and development. Tiny biotech companies can make their investors a fortune when they’re acquired by their larger brethren or bring a revolutionary product to market. Short-term profits can abound when these companies make bullish product announcements or pass Food and Drug Administration (FDA) requirements, as well as for a host of other reasons. The Dangerous Side  However, biotech companies are among the market’s most inherently volatile stocks. Many of these companies don’t generate revenue and are burning cash like crazy on research and development. It’s a race between this burn rate and the company’s ability to get its products to market (or raise more cash to continue operations).  In other words, early stage biotechs are highly speculative. As products are brought to market, the company… Read More

Weekend headlines focused on new highs in the major market indexes. New highs in the fourth quarter are bullish, and any pullback should be treated as a buying opportunity. Tech Stocks At 13-Year Highs SPDR S&P 500 (NYSE: SPY) gained 2.43% last week and reached a new all-time high. PowerShares QQQ (Nasdaq: QQQ) gained 3.69% and closed at its highest price since November 2000. The monthly chart is shown below. Traders often focus on daily or weekly charts. Monthly charts also offer valuable insights, and the chart of QQQ shows an uptrend and… Read More

Weekend headlines focused on new highs in the major market indexes. New highs in the fourth quarter are bullish, and any pullback should be treated as a buying opportunity. Tech Stocks At 13-Year Highs SPDR S&P 500 (NYSE: SPY) gained 2.43% last week and reached a new all-time high. PowerShares QQQ (Nasdaq: QQQ) gained 3.69% and closed at its highest price since November 2000. The monthly chart is shown below. Traders often focus on daily or weekly charts. Monthly charts also offer valuable insights, and the chart of QQQ shows an uptrend and an upside breakout. I’ve added a few notations to the chart that support the argument for higher prices.#-ad_banner-# Going back to the 2000 high, I have added Fibonacci retracement levels. Common Fibonacci numbers are 38.2% and 61.8%. Once prices retrace 61.8% of the decline, a bullish trend is confirmed. Friday’s close of $82.15 is just above that level. In 2008, the bear market formed a pattern that could be called a rounding bottom. The name of the pattern is less significant than what a price pattern tells us. In general, technical analysts look at patterns because they expect… Read More

About a year ago, short sellers were loading up on shares of online music service Pandora (NYSE: P). Rising competition in streaming radio was expected to keep a lid on growth, but short sellers, which controlled more than half the float in November 2012, clearly missed the mark. Pandora has… Read More

Investing in momentum and growth stocks has been a profitable strategy so far in 2013, and judging by recent action, that doesn’t appear to be something that will change in the near future despite a somewhat bumpier trading environment.  The bullish price action in performance sports apparel maker Under Armour… Read More

I have a love/hate relationship with social media. Social media destroyed my business, but now I find it indispensible. Let me explain…  Starting from scratch as a newly minted college graduate with a business degree, lots of nerve and very little money, I launched my venture with a $15 investment… Read More

The semiconductor industry has been around since the 1960s and has grown to be a nearly $300 billion global business. Basically, semiconductors control the flow of electricity by forming the basis of integrated circuits, transistors, solid-state electronics and solar cells, among many other functions. In other words, semiconductors form the base of our modern electronics-driven society.  Over the years, investors have made trillions of dollars investing in this sector. Most everyone is familiar with major semiconductor companies like Intel (Nasdaq: INTC), Micron Technology (Nasdaq: MU) and… Read More

The semiconductor industry has been around since the 1960s and has grown to be a nearly $300 billion global business. Basically, semiconductors control the flow of electricity by forming the basis of integrated circuits, transistors, solid-state electronics and solar cells, among many other functions. In other words, semiconductors form the base of our modern electronics-driven society.  Over the years, investors have made trillions of dollars investing in this sector. Most everyone is familiar with major semiconductor companies like Intel (Nasdaq: INTC), Micron Technology (Nasdaq: MU) and Texas Instruments (NYSE: TXN).  However, there are dozens of smaller companies that don’t have the market share of the top names, but are masters of their particular niches. My stock scanning recently discovered one of these under-the-radar semiconductor companies is setting up to be a great investment. The company is Skyworks Solutions (Nasdaq: SWKS). This Massachusetts-based semiconductor company was founded in 1962. It provides products for the GPS, broadband, cellular infrastructure, smartphone and tablet markets, among other applications. The company… Read More

The semiconductor industry has been around since the 1960s and has grown to be a nearly $300 billion global business. Basically, semiconductors control the flow of electricity by forming the basis of integrated circuits, transistors, solid-state electronics and solar cells, among many other functions. In other words, semiconductors form the base of our modern electronics-driven society.  Over the years, investors have made trillions of dollars investing in this sector. Most everyone is familiar with major semiconductor companies like Intel (Nasdaq: INTC), Micron Technology (Nasdaq: MU) and… Read More

The semiconductor industry has been around since the 1960s and has grown to be a nearly $300 billion global business. Basically, semiconductors control the flow of electricity by forming the basis of integrated circuits, transistors, solid-state electronics and solar cells, among many other functions. In other words, semiconductors form the base of our modern electronics-driven society.  Over the years, investors have made trillions of dollars investing in this sector. Most everyone is familiar with major semiconductor companies like Intel (Nasdaq: INTC), Micron Technology (Nasdaq: MU) and Texas Instruments (NYSE: TXN).  However, there are dozens of smaller companies that don’t have the market share of the top names, but are masters of their particular niches. My stock scanning recently discovered one of these under-the-radar semiconductor companies is setting up to be a great investment. The company is Skyworks Solutions (Nasdaq: SWKS). This Massachusetts-based semiconductor company was founded in 1962. It provides products for the GPS, broadband, cellular infrastructure, smartphone and tablet markets, among other applications. The company… Read More

The semiconductor industry has been around since the 1960s and has grown to be a nearly $300 billion global business. Basically, semiconductors control the flow of electricity by forming the basis of integrated circuits, transistors, solid-state electronics and solar cells, among many other functions. In other words, semiconductors form the base of our modern electronics-driven society.  Over the years, investors have made trillions of dollars investing in this sector. Most everyone is familiar with major semiconductor companies like Intel (Nasdaq: INTC), Micron Technology (Nasdaq: MU) and… Read More

The semiconductor industry has been around since the 1960s and has grown to be a nearly $300 billion global business. Basically, semiconductors control the flow of electricity by forming the basis of integrated circuits, transistors, solid-state electronics and solar cells, among many other functions. In other words, semiconductors form the base of our modern electronics-driven society.  Over the years, investors have made trillions of dollars investing in this sector. Most everyone is familiar with major semiconductor companies like Intel (Nasdaq: INTC), Micron Technology (Nasdaq: MU) and Texas Instruments (NYSE: TXN).  However, there are dozens of smaller companies that don’t have the market share of the top names, but are masters of their particular niches. My stock scanning recently discovered one of these under-the-radar semiconductor companies is setting up to be a great investment. The company is Skyworks Solutions (Nasdaq: SWKS). This Massachusetts-based semiconductor company was founded in 1962. It provides products for the GPS, broadband, cellular infrastructure, smartphone and tablet markets, among other applications. The company… Read More