Wall Street

Trading Strategies

How to Defeat Wall Street's Secret Weapon

For most investors, the relationship between investing and profits seems simple enough. You buy low, sell high, and your portfolio grows – or so goes the story.

In reality, success ultimately comes down to defeating Wall Street's secret weapon: something called "Gambler's Ruin."

Understanding what it is and how to beat it will give you an edge other investors would pay dearly to have. Not one in 250,000 understands it.

The difference between heartache and success comes down to this concept, so here's what you need to know...

Trading Strategies

How We Crushed Wall Street's Biggest Hedge Funds in 2015

It's possible that there is no such thing as a truly bad year for a hedge fund manager; Wall Street's "Masters of the Universe" enjoy a unique prestige, along with the best that New York and London have to offer.

Their performance doesn't warrant that mystique, though.

You see, in 2015 the hedge fund investors who entrusted their money to the "Masters" saw their worst returns in four years, according to BarclayHedge Alternative Investment Databases' Hedge Fund Index.

They saved a fortune in capital gains taxes, it's true, but those investors booked a paltry 0.31% on average. An investor placing $1 million under management with the "average" fund would have earned just $3,100 on that money.

That's $3,100 before fees, of course. In practice, investors pay the fund 2% of their principal for the privilege of having their money "managed" by one of those Masters of the Universe, along with a 20% performance fee that's typically over some hurdle rate or return on investment.

On Wall Street they call that the "Two and Twenty." We call it bad money after good. There's just no other polite way to describe paying $20,000 for the privilege of booking $3,100.

But… in that same year, we showed that research-driven, independent investment can bring returns that crush the "Masters of the Universe," many times over. In any market, too.

Here's how it's done...

Wall Street

Warren Buffett Subsidiary's "Disturbing Business Model" Under Federal Investigation

On Tuesday, Warren Buffett's "disturbing business model" regarding his subsidiary companies' business practices was brought to Federal authorities' attention.

A handful of Democrats in the House Financial Services Committee are concerned that Clayton Homes in Tennessee is exploiting certain members of society.

Here's more on the investigation into how Buffett's mobile-home company does business...

Wall Street

Why This "Expert" Advice from Wall Street Is Dead Wrong

In a fitting end to what was a disastrous 2015, The Wall Street Journal ran two articles on its "Opinion" page on the last day of the year that epitomize everything that is wrong with financial journalism in the "Age of Obama."

In short, both articles were an insult to independent thinking that demonstrate how far the mighty Wall Street Journal has fallen under the ownership of Rupert Murdoch.

Here's why these Wall Street "experts" are so far off the mark...

Wall Street

I Warned You About "P2P Lending"… and I Was Right

Investors are better off borrowing from a P2P lending site than investing in any of them.

If you want to get an online loan, go for it – but don't waste your money betting on any of the sites being a home-run investment.

For now, you should keep your capital away from marketplace lenders. Here's why...

Wall Street

The Evil Genius Behind the General Motors Streetcar Conspiracy

General Motors streetcar conspiracy theorists believe that the electric tram didn't die a natural death; rather, it was murdered by GM and the savviness of one innovative businessman.

This evil entrepreneur had one thing on his mind: monopolizing American surface transportation.

Here's the story of how he went about getting his way and the questionable tactics he and GM purportedly used...

Wall Street

Will These Wall Street Criminals Finally Be Punished?

Seven years have passed since the peak of the 2008 financial crisis, and still, not a single too-big-to-fail chief executive officer (CEO) is in jail.

Sure, civil suits have been filed against the guilty Wall Street firms – civil suits that result in settlements that barely touch these global financial institutions' balance sheets.

As for the Wall Street criminals behind the toxic loans that tanked the economy in 2008 – the actual people, not the institutions they hide behind – there has never been so much as a wrist slap, let alone a criminal conviction.

That's why we were pleasantly surprised when The Wall Street Journal reported last week that U.S. officials are finally pursuing criminal charges against three Royal Bank of Scotland and JPMorgan execs...

Great News, Wall Street: The Economy Is Coming Unglued

Commodity prices are plunging, the dollar is powering higher, Obamacare is collapsing, economies everywhere are faltering and terrorism is spreading across the globe.

That's bad news. Unless you happen to be among the stock market investors who in the U.S. spent the last week bidding up stock prices like there is no tomorrow. They are playing with fire and are likely to get burned.

The Dow Jones Industrial Average rallied 3.5% or 579 points to 17,823.81 while the S&P 500 jumped 3.3% or 66 points back to 2089.17. The Nasdaq Composite Index added 3.6% to reach 5104.92.

Below the surface, however, market internals were horrible with anything energy related getting "schmeissed" in the words of legendary market guru Doug Kass.

And the high yield bond market, which we will get to in a minute, is even worse...


The Hillary Clinton/Wall Street Relationship Has Never Been More Obvious

Hillary Clinton/Wall Street ties became an unintended highlight of Saturday night's Democratic debate.

It all began when rival presidential hopeful Vermont Sen. Bernie Sanders took an opportunity to criticize the former secretary of state about her campaign contribution affiliations.

He might as well have handed Clinton her own shovel at that point and told her start digging...

Wall street

5 of the Biggest Corporate Scandals in U.S. History

There are approximately 30 million businesses operating in the U.S. today, according to the most recent U.S. Census Bureau data.

You can bet some of those 30 million have got corporates scandals baking behind the scenes…

We found out last week that Valeant Pharmaceuticals International Inc. (NYSE: VRX) is almost certainly one of them. On Oct. 21, short seller Citron Research accused Valeant of fraud. It said the firm was used Philidor Rx Services to create phantom sales by storing inventory and recording it as transactions.

But Valeant is just the latest discovery of corporate fraud in America.

Here are some of the biggest five fraud scandals in U.S. history...