Warren Buffett is the 2nd richest person in the world in Forbes’s 2017 annual ranking, with a net worth of $76 billion. Buffett has accumulated his riches from investing in almost every sector — everything from candy companies to insurance companies. One notable exception from amassing his fortune? Technology stocks. Buffett is notorious for avoiding the technology sector altogether because he loves investing in companies that are easy to understand. #-ad_banner-#Buffett once commented on his distaste for tech, saying “I know about as much about semiconductors or integrated circuits as I do of the mating habits of the chrzaszcz (the… Read More

Warren Buffett is the 2nd richest person in the world in Forbes’s 2017 annual ranking, with a net worth of $76 billion. Buffett has accumulated his riches from investing in almost every sector — everything from candy companies to insurance companies. One notable exception from amassing his fortune? Technology stocks. Buffett is notorious for avoiding the technology sector altogether because he loves investing in companies that are easy to understand. #-ad_banner-#Buffett once commented on his distaste for tech, saying “I know about as much about semiconductors or integrated circuits as I do of the mating habits of the chrzaszcz (the polish word for Beetle). We will not go into businesses where technology which is way over my head is crucial to the investment decision.” However, this view came to a screeching halt in May of 2016. That’s when Buffett broke with tradition and bought 9.8 million shares of Apple. Since then, he’s kept on buying. In January Buffett bought another 72 million shares. Today, Buffett owns 2.5% of Apple, making it his 2nd largest holding. These moves have a lot of investors asking an important question. Is Apple stock a good buy? Absolutely. Let me explain why Buffett couldn’t resist… Read More

Biotech and pharmaceutical stocks have been in the political crosshairs for more than a year. The threat of government controls left the group attractively valued into 2017 but the potential for headline risks has kept most investors on the sidelines.  That is, until last week. Biotech shares jumped last week on rumors of the President’s executive order supporting industry-friendly measures that address drug prices. Prices were also boosted by the industry escaping targeted pricing measures in the Senate’s draft healthcare bill. With the headline risk of regulatory action against pricing all but off the table, shares of drug makers can… Read More

Biotech and pharmaceutical stocks have been in the political crosshairs for more than a year. The threat of government controls left the group attractively valued into 2017 but the potential for headline risks has kept most investors on the sidelines.  That is, until last week. Biotech shares jumped last week on rumors of the President’s executive order supporting industry-friendly measures that address drug prices. Prices were also boosted by the industry escaping targeted pricing measures in the Senate’s draft healthcare bill. With the headline risk of regulatory action against pricing all but off the table, shares of drug makers can finally get back to trading at fair values.  While investors have already started to come back to the group, the market still isn’t fully pricing in leadership or drug pipeline potential.  Biotech Steps Up To Lead The Market The Biotech industry got hammered last year, with several companies spotlighted for triple-digit price increases on drugs and non-stop rhetoric against the industry from both sides of the race for president.  #-ad_banner-#Shares of the SPDR S&P Biotech ETF (NYSE: XBI) plunged 25%, even with the late-year rally after the November election. Investors have been cautiously optimistic this year, noting low valuations… Read More

Not too long ago, I took a cross-country trip to Florida. I had to pick up a few items before departing, and it just so happened that a “Super” Target was right on my way. So, in the name of research and curiosity, I decided to check out the store. It was Thursday, around 6 p.m., a time when my neighborhood supermarket is slammed and the mall is usually busy. (I only know this because I might have a small shopping addiction.) As I walked through the cavernous store, I passed 25 checkout stations that were almost completely devoid of… Read More

Not too long ago, I took a cross-country trip to Florida. I had to pick up a few items before departing, and it just so happened that a “Super” Target was right on my way. So, in the name of research and curiosity, I decided to check out the store. It was Thursday, around 6 p.m., a time when my neighborhood supermarket is slammed and the mall is usually busy. (I only know this because I might have a small shopping addiction.) As I walked through the cavernous store, I passed 25 checkout stations that were almost completely devoid of activity. It felt a little like that Twilight Zone episode where a man finds himself completely alone in a normally bustling town. The lights were on… the music was playing… but there were no shoppers (or employees, for that matter) in sight.  After 15 minutes of strolling along aisles packed with goods designed by B-list TV stars, one thought nagged at my brain.  How is this company still in business? I know that may sound a bit dramatic, but I’ve been following Target (NYSE: TGT) for more than a decade and this has always amazed me.  And not in a… Read More

“Three dollars for a cup of coffee, I would short that stock now!” said the grizzled old stock trader at the 1992 IPO of the coffee chain.  Believing that high-priced coffee and a company that encourages customers to hang out in a relaxed atmosphere was nothing but a fad, the market veteran, like many investors of his time, saw only a bleak future for Starbucks (Nasdaq: SBUX).   As we all know, the shorts were crushed as SBUX exceeded all expectations. A $100,000 investment at the IPO price of $17.00 per share would have grown to over $10… Read More

“Three dollars for a cup of coffee, I would short that stock now!” said the grizzled old stock trader at the 1992 IPO of the coffee chain.  Believing that high-priced coffee and a company that encourages customers to hang out in a relaxed atmosphere was nothing but a fad, the market veteran, like many investors of his time, saw only a bleak future for Starbucks (Nasdaq: SBUX).   As we all know, the shorts were crushed as SBUX exceeded all expectations. A $100,000 investment at the IPO price of $17.00 per share would have grown to over $10 million when splits and dividends are taken into consideration. That’s an amazing return no matter how you look at it.  But the question on every investor’s mind is what does the future hold for the stock? Has the company reached its potential or will the outsized performance continue long into the future?  The World’s Coffee Shop As I sit here in Starbucks writing this article, I can’t help but marvel at the steady stream of customers that has fueled an incredible growth story.  #-ad_banner-#The coffee chain has become a behemoth, with 26,000 stores spread across 75 countries that employ… Read More

2017 will go down in history as a very unusual year for the stock market. Traditional rules appear to have been discarded, with the major indexes pushing higher in the face of macro-bearish pressure. The search for reliable investments that can carry a portfolio through the rest of 2017 has many investors scratching their heads. Time-tested market wisdom has been tossed out the window as the world changes at breakneck speed.  Finding the best stocks to buy and hold for the rest of 2017 requires identifying the major themes of the year. Then, you’ll need to locate stocks that are… Read More

2017 will go down in history as a very unusual year for the stock market. Traditional rules appear to have been discarded, with the major indexes pushing higher in the face of macro-bearish pressure. The search for reliable investments that can carry a portfolio through the rest of 2017 has many investors scratching their heads. Time-tested market wisdom has been tossed out the window as the world changes at breakneck speed.  Finding the best stocks to buy and hold for the rest of 2017 requires identifying the major themes of the year. Then, you’ll need to locate stocks that are most likely to benefit from these themes. Obviously, there will be multiple stocks that will profit from each theme, helping you to  diversify your portfolio while still hitching your boat to these all-important market movers. The 3 Leading Themes Of 2017 1. Donald Trump There is very little middle ground when it comes to our new president. People seem to either love him or hate him, and it is this dichotomy that’s signaling significant changes in our country.  So far, Trump’s largest contribution to the economy is his focus on deregulation. In his first 100 days in office, he… Read More

If you only read the headlines on Friday, June 9, you might have thought that financial Armageddon was upon us. Major tech companies like Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT) and Google parent Alphabet (Nasdaq: GOOGL) fell as much as 6% in intraday trading. Meanwhile, the technology sector fell 1.53% and dragged the Nasdaq Composite Index down 113 points, or about 1.8% for the day. The selloff in tech stocks continued into Monday. Headlines screamed that this could be the start of the next major selloff and warned that this major bull market could be nearing its end.  I hope you… Read More

If you only read the headlines on Friday, June 9, you might have thought that financial Armageddon was upon us. Major tech companies like Apple (Nasdaq: AAPL), Microsoft (Nasdaq: MSFT) and Google parent Alphabet (Nasdaq: GOOGL) fell as much as 6% in intraday trading. Meanwhile, the technology sector fell 1.53% and dragged the Nasdaq Composite Index down 113 points, or about 1.8% for the day. The selloff in tech stocks continued into Monday. Headlines screamed that this could be the start of the next major selloff and warned that this major bull market could be nearing its end.  I hope you didn’t listen. Since June 8 — the day before the selloff — the Nasdaq Composite Index is down only 2.5%. Meanwhile, its counterparts the S&P 500 and Dow Jones Industrial Average have fared much better, with the S&P 500 up 0.52% and the Dow Jones up 1.57%.  But what’s perhaps more interesting is the fact that just a handful of stocks caused Nasdaq to slide. The companies I mentioned above — Apple, Microsoft and Alphabet — plus Amazon (Nasdaq: AMZN) and Facebook (Nasdaq: FB) account for nearly 75% of the index’s weighting.  Just consider, the Nasdaq Composite Index is comprised… Read More

The Trump trade has been delivering blackjacks to bullish players since the election. But if you’ve played the game, you know all too well that hitting blackjack after blackjack means the face cards and aces are disappearing with each hand, leaving players with continually lower chances for success. As I write this, the market has now risen for 22 weeks without a pullback, which is akin to players getting 22 blackjacks at a six-deck table with no shuffle. With only two more aces in the shoe, the chances of striking another big win decrease. After a massive string… Read More

The Trump trade has been delivering blackjacks to bullish players since the election. But if you’ve played the game, you know all too well that hitting blackjack after blackjack means the face cards and aces are disappearing with each hand, leaving players with continually lower chances for success. As I write this, the market has now risen for 22 weeks without a pullback, which is akin to players getting 22 blackjacks at a six-deck table with no shuffle. With only two more aces in the shoe, the chances of striking another big win decrease. After a massive string of wins, it’s sometimes a good idea to pull your bets off the table and await a reshuffle, especially if the dealer is holding an ace.  The market is the house in this metaphor, and its ace is a combination of overstretched valuations, economic inconsistencies, presidential risks and a technical warning signal in small caps. If these factors continue, it could mean a nasty loss for you and the other players. —Sponsored Link— U.S. Mint Reports Gold Coin Sales Collapsing In a strange twist, money is flooding out of physical gold into a different corner… Read More

Small-cap stocks have been a reliable way for investors to outperform the S&P 500 for a long time. In the last 17 years the iShares Core S&P Small Cap (NYSE: IJR) has gained 335%. That’s more than a 300% premium to the 74% return of the SPDR S&P 500 ETF (NYSE: SPY) over the same period. This huge discrepancy is shown below. However, over the last three years this performance gap has evaporated. With investors fearful of another big stock market crash and huge waves of retirees piling into dividend stocks in search of yield, small-caps have temporarily… Read More

Small-cap stocks have been a reliable way for investors to outperform the S&P 500 for a long time. In the last 17 years the iShares Core S&P Small Cap (NYSE: IJR) has gained 335%. That’s more than a 300% premium to the 74% return of the SPDR S&P 500 ETF (NYSE: SPY) over the same period. This huge discrepancy is shown below. However, over the last three years this performance gap has evaporated. With investors fearful of another big stock market crash and huge waves of retirees piling into dividend stocks in search of yield, small-caps have temporarily fallen out of favor. As you can see in the chart below, small caps have only fared slightly better than the S&P 500 over the last three years. Take a look below. In the short run, this has been frustrating for small cap investors. They took the risk of higher volatility without the reward of outsized returns. However, it has also created a rare value opportunity. Right now there are an abnormal number of small cap stocks that are trading with historically low valuations while still offering huge growth potential. I put together a screen of… Read More

You’ve no doubt heard of the company that’s bringing electric vehicles to the masses. Founded in 2003 and based in Palo Alto, California, the company was co-founded by entrepreneur Elon Musk — founder of Space-X and co-founder of PayPal, SolarCity and Zip2. Of course, I’m talking about Tesla (Nasdaq: TSLA). The company sells solar panels and solar roofs for energy generation, plus batteries for stationary storage for residential and commercial properties — and, of course, Tesla makes electric vehicles. With the Tesla Roadster debuting in 2008, the S in 2012 and the X in 2015, the company is working on… Read More

You’ve no doubt heard of the company that’s bringing electric vehicles to the masses. Founded in 2003 and based in Palo Alto, California, the company was co-founded by entrepreneur Elon Musk — founder of Space-X and co-founder of PayPal, SolarCity and Zip2. Of course, I’m talking about Tesla (Nasdaq: TSLA). The company sells solar panels and solar roofs for energy generation, plus batteries for stationary storage for residential and commercial properties — and, of course, Tesla makes electric vehicles. With the Tesla Roadster debuting in 2008, the S in 2012 and the X in 2015, the company is working on the Model 3, a vehicle developed for the masses with a starting price of about $35,000, compared with the base price of $68,000 for the Model S. Tesla is one of the most controversial stocks in the market. Bring it up and you’ll hear arguments from both sides: there are loyal admirers of Tesla and Musk, and there are those that haven’t yet been sold on either. Tesla fans argue that it’s the vehicle of the future and you’re paying for earnings that are quite possibly still five-to-10 years out. Many will argue that it’s following in similar footsteps as… Read More

Bill Miller is back on a winning streak. Once a hero of Wall Street with an enviable record of 15 straight years of beating the S&P 500, he suffered the same fate as everyday investors during the financial crisis, and has since failed to return to his former level of success.  But today, Bill Miller’s stock picks are earning back their stellar reputation for market outperformance.  A Truly Exceptional Track Record Most funds have difficulty just beating the S&P 500 in any given year. To do so for multiple years in a row is even more impressive. So it’s… Read More

Bill Miller is back on a winning streak. Once a hero of Wall Street with an enviable record of 15 straight years of beating the S&P 500, he suffered the same fate as everyday investors during the financial crisis, and has since failed to return to his former level of success.  But today, Bill Miller’s stock picks are earning back their stellar reputation for market outperformance.  A Truly Exceptional Track Record Most funds have difficulty just beating the S&P 500 in any given year. To do so for multiple years in a row is even more impressive. So it’s crazy to think that Bill Miller beat the index for 15 years straight while working at Legg Mason. These returns are simply unparalleled in the mutual fund world. His track record even outperformed Fidelity’s legendary Peter Lynch.  However, his well-tested value investing strategy of buying stocks at a discount was no match for the crashing stock market. Convinced his holdings would bounce back, Mr. Miller kept averaging into positions and the market kept proving him wrong.  From 2007 to 2011, his Legg Mason Opportunity Fund plunged over 50% as large bets on troubled financial stocks failed to turn a profit. Read More