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As we head into Christmas, I wanted to go through some of my best stock picking systems and present a few holiday gift ideas for everyone.
I'm going to go through the very best models and give you an idea or two that could help drive your investment profits much higher in 2020.
Nothing says "Happy Holidays" like ideas that can produce double and triple-digit returns over the next year.
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This week I'm spending some time testing the theory from a recent paper on how insider buying and selling affects different bearish and bullish factors.
I'm finding that adding insider data to our stable of numbers-driven market strategies really boosts returns, and more importantly, it does so by avoiding potential problems.
While insider buying does magnify gains somewhat overall, where portfolio returns go into the stratosphere is using insider selling to cancel signals that would otherwise be a buy.
This helps us avoid the big mistakes and keeps the focus of the portfolio on those companies where insiders have been buying.
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I have talked about ways to make money in tech stocks in spite of being a value-conscious investor.
Much of the time, the leading tech stocks trade at nosebleed multiples, making it very difficult for those who can add and subtract correctly – with maybe a little multiplication thrown in – to find and own a company that's worth anything close to the price of its shares.
It's been an issue for every value-oriented investor I've ever met and continues to be one today.
I've shown you that tech stocks at less than 12 times free cash flow and tech stocks that have high dividends can be winning strategies.
The problem is that there are not very many at any given moment of time to fill a portfolio.
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Most investors who focus on valuation have a hard time figuring out what to do with technology stocks.
Tech companies rarely trade for the low measures of earnings and asset value that are the traditional hallmarks of value-oriented investors.
The average PE ratio of a tech stock going back 40 years is an eye-popping 32, so that's not really going to pop up on a value-oriented screen.
To complicate things further, many tech stocks (including leading companies in the sector) don't show a profit, so traditional value and even some growth investors pass on what turns out to be a monster of a stock.
But you know I'm not your traditional investor.
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The United Kingdom's decision to leave the European Union – "Brexit" – is a red-hot vortex of uncertainty. British politics, society, and of course, business are all up in the air right now – and have been since the referendum in June 2016.
The UK has a general election next month that may very well determine how or even if Brexit happens. Beyond Brexit, all parties are making big promises to the electorate, to boot, the cost of which could be an additional drag on the world's sixth largest economy.
Investors, as we all know, hate uncertainty. Personally, I could never figure out why. All that chaos is like catnip for me; the bargains can be unbelievable.
Right now, for instance, some of the most prestigious, expensive real estate on Earth is trading at unthinkably cheap prices; double-digit gains are practically built in.
Here's where I think the best value is… Full Story
Here's where I think the best value is... Full Story
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Are you rooting for the Red Sox or the Yankees? Do you like the Florida Gators or Georgia Bulldogs? "Star Wars" or "Star Trek"? Do you prefer the Beatles or the Rolling Stones?
We hear these kinds of arguments all time.
And if you thought the simple pursuit of profit was some kind of common denominator, well, we have these kinds of arguments in investing, too. "Are you a momentum investor or a value investor?" is a question I hear way too often.
It's depressing how the loudest, shrillest voices, obsessed with a fanatical need for purity, insist we take one side or the other, like two choices are all we've ever got.
It's stupid. It's horse hockey, frankly.
I don't care whether you're into momentum, value, or whether you're a closet indexer: If you keep an open mind and use the approach that'll make you the absolute maximum amount of money possible in a given situation, you'll enjoy returns that the value and momentum puritans out there can only dream about.
Leave the endless arguing for the fanatics. Let's go make some serious money… Full Story
Leave the endless arguing for the fanatics. Let's go make some serious money... Full Story
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I haven't uncorked the champagne yet, but the mood is noticeably better here in the comfortable confines of Chez Melvin.
Why? The market, of course – what else? It's trying to sell off, but it's not quite there yet.
Over the years, I have learned to love bear markets – the bigger and badder the bear, the better. While everyone else is panicking and selling their stock, exchange-traded funds, and mutual fund positions for pennies on the dollar, I'm the one buying those positions for even fewer pennies on the dollar. When the bears are running, you'll find me paying bargain prices for great companies with wild abandon.
I've spent a lot of time studying what does and does not work in the stock market. When it comes to getting rich, the one thing that works – better than anything, pretty much guaranteed – is buying good companies when the stock market has fallen by 20% or more.
Here's how to do that in style… Full Story
Here's how to do that in style... Full Story
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Let's face it. This is not your father's fixed-income market.
Despite a recent rise, yields have been down for the most part, and those in control of such things want to keep them that way for as long as possible.
The economies of the world are still trying to gain traction, and while the United States is doing better than much of the world, it isn't exactly shooting the lights out.
There are also signs that global weakness and the ongoing trade disputes could slow things down even further.
That's not an environment that'll inspire interest rate hikes.
So we need to continue to find high-yielding opportunities outside of the mainstream, and I have just the one… Full Story
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We might as well get used to it; rates are likely to stay lower for longer.
All around the world, there are around $17 trillion in assets "offering" negative yield, which is to say whatever government you're financing promises to give most of your money back at maturity.
Investors are seeking the return of their money rather than return on their money.
Here in the United States, the president is pounding the table for lower interest rates to boost the economy; the Fed is speculating openly about a global slowdown and a protracted trade war.
Same old, same old.
The only ones that even hint of something different are the "permabears" – you know, the folks who always talk about doom, gloom, and the end of the world.
So, oddly enough, I find myself asking: "Hmm... What if they're right?"...
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Government finances are in a perpetually sorry state. That's not news; everywhere you turn, you'll hear all about it.
But what doesn't grab many headlines is the crisis in Americans' personal finances – problems that make the Treasury seem tightly squared away in comparison.
There's the retirement crisis, where one in five American adults have nothing socked away for retirement. You've got the cash crisis, in which nearly 40% of American adults can't meet a surprise $400 expense, like a mid-range hot water heater repair or doctor bill.
And then there's the "un-banking crisis." A stunning 7 million homes in the United States don't use a bank for anything at all; 18% have "minimal interaction" with the banking system.
It's grim, no doubt, but it's a fairly easy problem to solve; however, it won't be a traditional banker type that does the solving.
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