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Tim Melvin

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Trading Strategies

Get "Whacked" and Let the Market Party Begin

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Ah, the classic "Whac-A-Mole" game.

We can all undoubtedly recall a time when we went to the arcade and played it. And it serves as the perfect analogy for the current market.

Recently, every time we felt like it might be safe to stick our heads up and look around – WHAM! – down came the hammer, and the selling began again.

It has been a while since we have seen this type of selling persistence, and some folks I talked with during the past week were getting a bit edgy about owning or buying stocks.

"Straight up" has been the path for the better part of the decade and "buy the dip" has been an infallible trading strategy. So, naturally, the latest turn of events has left a mark on some people.

If you bought big on the first dip back in September, you have been hammered a couple of times now as prices just continued to fall. Every rally attempt was met with still more selling, and it stings a bit.

I'm sure a lot of people experienced a first in their lifetime, even in the past month, as those who were long with leverage received their very first margin call.

But if you're one of those people, let me explain why you should actually celebrate these recent lows...

Stocks

This One-of-a-Kind Technology Has the Power to Make You a Millionaire in a Year’s Time

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Everyone knows Tom Gentile is a legendary trader.

It's helped make him a millionaire.

And now, we're going to share all the details about what he's just uncovered...

Stocks

These Tiny Devices Are Your Pick-and-Shovel Ticket to the Hottest Market Trends

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You may ask whether I'm missing out on the big trends because I'm such a fanatic about the prices I pay for the businesses I own.

After all, using rigid pricing requirements such as those used in Heatseekers means that we will avoid investing directly in significant trends like artificial intelligence, big data, driverless cars, e-commerce, hypersonic weapons, cybersecurity, and even cannabis.

These are all super exciting investment themes that fetch high multiples of revenues and often elusive profits.

But just because we avoid investing in these themes directly doesn't mean we can't take advantage of them indirectly.

So what's one example of how we can do that?

Simple...

Economic Data

This Fed Document Is the Closest Thing Investors Have to a Crystal Ball

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Today we are going to talk about the Federal Reserve.

While I am aware that a certain percentage of you have now clenched your fists in rage and are mumbling about the vast global conspiracy, the Illuminati, and the trilateral commission, and another segment of you are yelling about gold standards and the evils of fiat currency, let's table all those conversations for another day.

The Federal Reserve may not be the best way to manage our nation's money supply, but it's what we have and what we will have for a very long time to come.

Whatever you think of the Fed and their policies, you cannot debate this one thing: When it comes to collecting and distributing economic information, they are unsurpassed by anything on the planet. They have tremendous resources, and they do not hesitate to share all that data with taxpayers.

I pay very close attention to reports from the Fed for the simple reason that they have more data than anyone else. Reading the Beige Book and other informative releases from the central bank gives a much better picture of the U.S. economy than all the talking heads and pen-wielding experts combined.

We can listen to the chorus of doom and gloom or the cheerleaders who predict easy money and vast fortunes ahead, or we can pay attention to what the actual data is telling us. 

The data is giving us a crystal clear overview of how banks, as well as individual and business loans, are faring.  

So let's take a look at how we should divvy our finances, given the banking data from this important document the Fed just released...

Trading Strategies

My Boring Old Stocks Will Beat the Pants off Wall Street's Favorites Every Single Time

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You don't have to look far to find someone mourning the death of value investing; it dominates headlines in investing circles.

It seems, the obituary goes, that the growth indexes have handily beaten the value indexes over the past few years… and, why, you'd have to have rocks in your head to use value investing techniques.

Nevermind that it's crazy to use an index to track the value investors' performance. This approach is all about using rigorous quantitative or fundamental research techniques – or some combination of the two – to uncover opportunities that the market has overlooked.

By definition, there just are not that many opportunities (or good ones, at any rate) except at market extremes. There sure as hell are not anywhere near the – good grief – 2,000 or so stocks that FTSE Russell uses to form its value index.

Value investors hunt with a rifle, not a shotgun.

I'll be blunt: That argument against value investing may well be the dumbest argument of all time. And if you buy into it, it's costing you money...

Stocks

How to Spot Crowded Trades – and Avoid Them Like the Plague

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If you have followed me at all over the years, you know I pay pretty close attention to the quarterly filings of leading hedge fund managers and institutional investors.

Back in the Stone Age when I began doing this, we didn't get immediate access to the filings. You had to write into the SEC and have them mailed.

Eventually, Henry Emerson, the publisher of the Outstanding Investor Digest, began producing a report each quarter that would come a few weeks after the filings deadline, so we all signed up for it.

Knowing what the very best and brightest of America's investors were buying and selling was a substantial informational advantage back then.

Of course, the advantage that comes from tracking these leading investors is gone now. The filings are live online seconds after being received at the SEC, and some paid sites have the analysis up in minutes. At worst case, the Nasdaq site has all the info up within 24 hours.

The advantage of having information no one else does, like so many stock market advantages, has been eliminated by the widespread availability of information.

Rather than providing an advantage, this widespread availability of information leads to crowded trades.

That's why we have to rely upon a totally different approach nowadays...

Technology

The Tech Sell-Off? Wake Me When Amazon Hits $200

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As some of the tech darlings have fallen rather sharply over the past couple of months, I begin to get the inevitable questions about the wisdom of buying these market darlings.

Everyone just assumes that because I am an investor, I care about these stocks. After all, they're the ones on the news and in the papers – the stock market equivalent of "must-see TV." The truth is that I don't give a rat's furry behind about the "growth and glamour" stocks.

Why? I could never justify paying the multiples of asset value and cash flow that these stocks fetch at any given moment in time… except in the aftermath of a precipitous decline.

But are they on sale "enough" to suit my tastes or, since you're here, move me to recommend that you spend your hard-earned ducats on them?

Let's have a look...

Trading Strategies

Bring Home Great Profits by Ignoring Predictions on Hot Trends

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It's the season at last.

We put away the tools and fixings of Thanksgiving and its onslaught of people and food. Black Friday and Cyber Monday, which you are lucky if you were able to avoid, are now also behind us. Next up are the Christmas decorations and festivities.

But this also marks the beginning of another season that is much less fun.

Perhaps like me, you also received your first business magazine with bold predictions about 2019 this past weekend. This is just the first of many such publications and broadcasts we will have to endure for the next eight weeks. Prediction season starts at Thanksgiving and runs through the final edition of Barron's Market Roundtable in early February, so it's a long battle.

There will be talk about the cannabis revolution, the rise of the artificial intelligence, the opportunities in cryptocurrency, the increase in driverless electric cars, the emerging dominance of wind and solar power, the promise of big data, and all the glitz and glam of wearable technology – as well as a host of other hot trend predictions.

That's why today, I want to give you my best advice so that you can more easily navigate these dangerously alluring times.

Let me explain...

Trading Strategies

This Millionaire-Minting Strategy Is Made for Bear Markets

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If you have been paying any attention to the markets – I really hope you haven't been because it's usually a waste of time – you know that stocks have been pretty volatile of late.

There are fears the economy is growing slower than we all think and earnings growth will slow or maybe even decline. There are fears that it's growing faster than we all think and the Fed will be quick to raise interest rates. And there are fears about what the California wildfires will do to the California electric utility companies' balance sheet (Hint: It's not pretty). If you can dream it, some breathless prognosticator has blamed it for the recent stock declines.

Right now, we are seeing some very dire forecasts from some very smart people suggesting that stocks have a lot lower to fall. Goldman Sachs reported two weeks ago that its bear market indicator is at the highest level since the 1970s.

But even amid these dire forecasts, we have reason not to fear. One strategy returned 42.32% and 79.81% even during the most worrisome of times.

Let's take a look...

Trading Strategies

Trust Me, Dude: This Millennial Trend Could Make or Break a Portfolio

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I was talking to an old friend on the West Coast the other day. His business is located in Sacramento, but most of his customer base is in the Bay Area, so he was looking for an apartment and a small office space in San Francisco.

His search turned up rents that were, as he put it, "more than the cost of [his] first three cars combined, each month."

Office space was even worse. The deciding factor for him was that his price range put him soundly in the middle of what can charitably be called "urban war zones," where a trip around the corner for a bite to eat could turn into something like a bad day in Baghdad – a real bullet festival.

So there was no way my friend wanted to – regularly, each month – fork over exorbitant sums for digs like this. He said he'll continue to make the drive in and stay in a nicer, less hectic, and far more reasonably priced smaller city.

It is the same story I am hearing about other hot spots like New York, Los Angeles, Washington, D.C., and other big-city markets.

The economy is booming for the moment, and with a red-hot labor market in play, pricing in markets like Washington and New York, already on the steep side, is probably going quickly worsen (or "improve," depending on how you're invested).

There's no way around it: If you want to live downtown in the big city today, you will have to pay through the nose.

Increasingly, we are finding there are a lot of people who do not wish to do so - and that's the key to the shares I'm going to tell you about right now...

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