We’re coming up on the five-year anniversary of an epic global economic meltdown. And while many major European companies are still struggling with weak demand, U.S. rivals have fared better, thanks to a slightly perkier U.S. economy. Yet you won’t find the executives… Read More

When it comes right down to it, nothing is more American than the desire to achieve and to profit. In fact, buying great American companies has been a winning strategy of mine over the years. The key is to buy the right ones at the right time. With that in mind, I thought I would take a look at some great American companies and see how they stack up in today’s market. Home Depot (NYSE: HD) is one of the truly great American success stories. The company started… Read More

When it comes right down to it, nothing is more American than the desire to achieve and to profit. In fact, buying great American companies has been a winning strategy of mine over the years. The key is to buy the right ones at the right time. With that in mind, I thought I would take a look at some great American companies and see how they stack up in today’s market. Home Depot (NYSE: HD) is one of the truly great American success stories. The company started in 1978 with two stores in Atlanta and has been the fastest-growing retailer in U.S. history. Today the company has 2,257 stores in the U.S., Mexico and Canada. It’s the world’s largest home improvement retailer — and with the real estate markets starting to improve, Home Depot is in the sweet spot for future growth. As American’s situation continues to improve, they will feel more comfortable spending money to fix up their houses… Read More

Personal, business, class and even international – this trend crosses all boundaries. While it is built upon the basic principles of human collaboration and friendship, this trend has been supercharged by the connective power of the Internet. I am talking about networking. Before the Internet, individuals had no choice but… Read More

Hidden inflation is an insidious devourer of profit. Forget what the Consumer Price Index is telling us — higher costs don’t always get passed on to the consumer. Sometimes quality is reduced instead. Whether it’s the bag of potato chips that’s half-filled with air, the controversy of “pink slime,” or the shrinking amounts of cake mix in packages that used to hold more — whether we admit it or not, the inflation we’ve been worried about is already here. Read More

Hidden inflation is an insidious devourer of profit. Forget what the Consumer Price Index is telling us — higher costs don’t always get passed on to the consumer. Sometimes quality is reduced instead. Whether it’s the bag of potato chips that’s half-filled with air, the controversy of “pink slime,” or the shrinking amounts of cake mix in packages that used to hold more — whether we admit it or not, the inflation we’ve been worried about is already here. It’s the kind of environment where we see “Forever Stocks” shine. These are companies that have businesses built to last through bear markets, rising interest rates and, yes, inflation. This “Forever Stock” has an operating margin of 44%, which gives it plenty of wiggle room to withstand economic hardships. Expected earnings growth is 11.8%, and its business model has started to turn the heads of some of the biggest… Read More

The Wall Street crowd is starting to get the picture. On the cover of a recent issue of Fortune magazine: “The Death of Cash,” there was an article examining an impending transition that I’ve been talking about for some time. The magazine examined some large companies as the drivers in this new technological push, which hinges largely on the continued adoption of portable devices, like cellphones, that can be used much like a credit or… Read More

The Wall Street crowd is starting to get the picture. On the cover of a recent issue of Fortune magazine: “The Death of Cash,” there was an article examining an impending transition that I’ve been talking about for some time. The magazine examined some large companies as the drivers in this new technological push, which hinges largely on the continued adoption of portable devices, like cellphones, that can be used much like a credit or debit card. Its winners are Google (Nasdaq: GOOG) because of its Google Wallet initiative, which I was among the first to cover; eBay’s (Nasdaq: EBAY) PayPal; Visa (NYSE: V); MasterCard (NYSE: MA); Apple (Nasdaq: AAPL) and Facebook (Nasdaq: FB). Those are great companies that will lead the trend. But while everyone else is looking at the obvious “winners,” it will take some time for this macro trend to move the needle for companies as big as these. Instead, I’ve got my eye on a small company that’s at the forefront of this game-changing trend. I first told… Read More

Second-quarter earnings season was a bit of a bust. Although earnings remain at an all-time high, the pace of earnings growth continues to look weak. Earnings growth is up just 3% from last year, a small improvement from the first quarter’s 2.6% gain and the 2.8% average for the past four quarters. The headlines reflected that disappointment, with stories about the biggest… Read More

Second-quarter earnings season was a bit of a bust. Although earnings remain at an all-time high, the pace of earnings growth continues to look weak. Earnings growth is up just 3% from last year, a small improvement from the first quarter’s 2.6% gain and the 2.8% average for the past four quarters. The headlines reflected that disappointment, with stories about the biggest blue chips struggling with the weak global economy and falling short of expectations. That includes misses from bellwethers like IBM (NYSE: IBM), Google (Nasdaq: GOOG) and Microsoft (Nasdaq: MSFT). But in spite of some earnings headwinds, there were a number of companies that bucked the trend and delivered big earnings surprises. For instance, take Facebook (Nasdaq: FB), which delivered a 44% earnings surprise last month that sent the company’s share price soaring. But if you missed out on that first… Read More

Small companies typically outperform over time because they have greater growth prospects than the market leaders.  Between 1927 and 2012, for instance, small caps produced annual returns of 12.9%, compared with 9.9% for large companies. Even now, when many indices have hit highs, the S&P 600 Small Cap Index has gained 31%, in the past year compared with a 23% gain for the S&P 500 over the same period. #-ad_banner-#But most… Read More

Small companies typically outperform over time because they have greater growth prospects than the market leaders.  Between 1927 and 2012, for instance, small caps produced annual returns of 12.9%, compared with 9.9% for large companies. Even now, when many indices have hit highs, the S&P 600 Small Cap Index has gained 31%, in the past year compared with a 23% gain for the S&P 500 over the same period. #-ad_banner-#But most retail investors shy away from small caps mainly because they perceive them to be part of the seedy underbelly of investing, the world of pump-and-dump boiler rooms. That reputation is not entirely undeserved. Many illiquid companies exist whose financials are at best an educated guess.  So to find small-cap stocks that could be assumed to be reasonably safe investments, I used a several-step screening process, starting with solid fundamentals and substantial… Read More

It is an oversimplification to summarize George Soros’ investment philosophy based on the theory of reflexivity into a single sentence, but it is useful to think of the theory as telling us that a trend will continue until it reverses. Reflexivity also points out the direction of the trend can be influenced by underlying economic factors and the perception of traders and policymakers about the trend. That makes analyzing trends more complicated because we need to… Read More

It is an oversimplification to summarize George Soros’ investment philosophy based on the theory of reflexivity into a single sentence, but it is useful to think of the theory as telling us that a trend will continue until it reverses. Reflexivity also points out the direction of the trend can be influenced by underlying economic factors and the perception of traders and policymakers about the trend. That makes analyzing trends more complicated because we need to consider what policymakers might do and how traders will react in addition to prices.#-ad_banner-# The entire global economy might be thought of as a group of trends under the theory of reflexivity. What happens in the U.S. affects Japan, for example, just as policies in Japan have an impact on the U.S. These effects can be seen in exchange rates, a market in which Soros has demonstrated mastery. His most famous trade — a bet against the Bank of England — made him $1 billion in one day. Read More

The first rule of business is customer diversification. You should never have just one major customer, just in case that relationship sours. But what happens if you have only one key customer — and that customer steals… Read More

What do Warren Buffett and Sir John Templeton have in common? They both made billions by following one simple maxim: Find stocks or industries that are absolutely loathed. These are the only areas you… Read More