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Investing Tips

How to Beat Wall Street at Its Own Game - April 2013

By , Executive Editor, Money Morning - • Print | Email

I'm a voracious reader. And I'm also a relentless networker.

In this business, I have to be. I need to see and hear as much as possible in order to form the opinions, forge the recommendations and assemble the market intelligence that enables us to help you pull down big profits.

Creating Private Briefing made it even easier for me to do all that for you.

Now I have direct, daily access to six of the most impressive investment gurus you're ever going to find – folks like Keith Fitz-Gerald, a globe-trotting expert and best-selling author with decades of experience in international markets … or Peter Krauth, the natural resources expert who's so serious about his work that he lives in Canada to be close to the companies he covers … or Martin Hutchinson, who has actually been hired by countries to fix their economies.

Let me tell you a quick story that shows why this matters. And after that we'll take a look at some investing strategies we think you need to consider – especially right now, with the market in record territory.

These are strategies that will allow you to keep pursuing profits on your existing holdings, to add new positions at prices that will help you extract the maximum-possible returns, and to protect all of your holdings against a possible correction.

So let's start with my story.

Top News

What is Facebook Home - And Will it Do Anything for Facebook Stock?

By , Money Morning - • Print | Email

The much anticipated announcement from Facebook today (Thursday) has left us investors with two questions.

The first, what is Facebook Home?

The second, is this finally the development that CEO Mark Zuckerberg needs to rally investors behind Facebook stock, and lift it back above its IPO price of $38?

The social-networking giant Thursday unveiled Facebook Home, a customized homescreen for Android smartphones. Facebook Home highlights all things Facebook – a dream come true for anyone who loves the social media tool.

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IPOs

IPO Calendar 2013 Heats Up With These Five New Offerings

By , Money Morning - • Print | Email

After a slow start to April with just one deal scheduled for pricing, the IPO calendar is getting crowded again in the second week of the month.

The equity markets remain fairly strong and recent IPOs have performed very well so there is strong institutional demand for equities in general, and new offerings specifically.

As long as the market is propped up by an aggressive U.S. Federal Reserve policy, stock prices should stay firm and that makes for favorable conditions for new equity offerings.

Here are five to keep on your radar.

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Wall Street

The Dirty Secret Behind Goldman Sachs' Conviction Buy List

By , Associate Editor, Money Morning • @DavidGZeiler - • Print | Email

When Goldman Sachs (NYSE: GS) kicked Apple Inc. (Nasdaq: AAPL) off its celebrated Conviction Buy List, casual observers might have seen the move as yet another blow to a battered stock.

But don't be surprised if Apple stock rallies in the months ahead.

That's because when you look at the record, most stocks that get dropped from Goldman's Conviction Buy List – a frequently updated list of equities the bank says will outperform the market – don't falter.

In fact, over the past six months, most of the stocks that Goldman has booted off the Conviction Buy List have gone up, and several have actually outperformed the market.

That might seem strange but for Goldman's checkered past.

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Energy Investing

Stocks to Buy Now: The Best Takeover Targets as Energy M&A Heats Up

By , Money Morning - • Print | Email

A wave of mergers and acquisitions is almost inevitable in the energy sector, making attractive takeover candidates among stocks to buy now.

Strategic buyers looking to maximize near-term growth opportunities, as well as private equity firms looking to capitalize on the industry's long-term potential, are making lists of possible takeover targets.

Individual investors should do the same.

Hot Stocks

The Best New Dividend Stocks of 2013

By , Contributing Writer, Money Morning - • Print | Email

Thanks to this year's booming market for initial public offerings (IPOs), there are a handful of new dividend stocks for yield-starved investors.

In the first quarter of 2013, 45% of all new offerings paid a dividend. That compares to just 16% in Q1 of 2012, according to data from Renaissance Capital.

This is the most dividend stocks to debut in a quarter since Q2 of 2008, when 69% of IPOs paid a dividend.

The trend is in direct response to investors' hunt for yield, and comes at a time when dividend stocks should be part of everyone's portfolio.

As Money Morning Global Investing Strategist Martin Hutchinson has explained, "The truly rich don't spend their days watching the financial news and trading stocks. They're too smart for that. They know that investing in steady income-producing dividend stocks is just as rewarding over the long haul."

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Stock Market

Is David Stockman's Stock Market Crash Prediction on Target?

By , Money Morning - • Print | Email

David Stockman, who had been budget director under President Ronald Reagan, created quite a stir when he predicted a stock market crash in an op-ed piece in The New York Times Sunday.

"Over the last 13 years, the stock market has twice crashed and touched off a recession: American households lost $5 trillion in the 2000 dot-com bust and more than $7 trillion in the 2007 housing crash," Stockman, now an investment banker, wrote. "Sooner or later – within a few years, I predict – this latest Wall Street bubble, inflated by an egregious flood of phony money from the Federal Reserve rather than real economic gains, will explode, too."

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Investing Tips

Why Not All Good Companies Are Among the Best Stocks to Buy

By , Money Morning - • Print | Email

Sometimes it's easy to mislabel fantastic companies as great stocks to buy, but the two attributes don't always go hand in hand.

That's because sometimes these great companies watch their share prices climb faster than the underlying fundamentals.

This is often the case with companies/brands that are a big hit with consumers, like Lululemon Athletica Inc. (Nasdaq: LULU) and Chipotle Mexican Grill Inc. (NYSE: CMG).

Since these companies are overpriced, they are usually most vulnerable to a market correction.

Investors should sweep their portfolios now to make sure they aren't holding any of these "high-risk" stocks.

To identify them, investors should look at the price/earnings ratio and price/earnings/growth ratio of the companies they hold.

High P/E and P/E/G ratios often indicate companies whose share prices have been bid up to a point that is no longer justified by fundamentals. The companies themselves might be good investments, but not at the current share price.

Here are two companies that fall into this category right now.

Stock Market

This Little-Known Indicator Says Stocks Should Double

By , Money Morning - • Print | Email

With the markets breaking all-time highs last week, it begs the question of just how high they can go.

At 1,569 points the bears would say at this point the S&P 500 is completely overdone. With a sluggish economy and a growing federal deficit, you might be prone to believe them.

But there is a little-known indicator that became very fashionable between 1982-2007 that says something else entirely. Noted for its accuracy over that period, it actually suggests that stocks should double.

It's called the "Fed Model."