Newstar Financial

Trading Strategies

How to Turn Bad News into Great Profits

Traders can be a rough crowd when it comes to stocks that challenge convention…

… especially for a company like Tesla Inc.

Team Musk is under severe pressure, and as a result, I think there's a great trade brewing.

Tesla has never turned an annual profit, has never paid a dividend, and has racked up cumulative losses of nearly $6 billion since 2010.

Which, of course, begs the question… why is the company trading at nearly $300 a share?

Because CEO Elon Musk is a genius, a visionary, and a pied piper.

He is capable of rallying investors around his vision of the future.  Just this morning, for example, Tesla "leaked" a memo outlining plans to boost Model 3 production, to add a third shift at the company's Fremont assembly plant, and to hire roughly 400 folks a week for several weeks running. And, not surprisingly, the stock jumped in early trading.

Here's the thing. Like many investors, I believe he is the single most innovative and visionary executive on the planet. Even the smallest rumor that he's interested in an idea is enough to send competitors packing.

It doesn't matter whether you're talking about solar power, rocket ships, or tunneling machines. If Musk is interested, you can take that to the bank. Earlier this year he stopped taking orders for a $500 flamethrower after selling 20,000 units… a flamethrower!

To call Musk a provocateur would be an understatement.

Still, the first rule of investing is never, ever, fall in love with an asset...

Dow Jones

Here’s the News Investors and Traders Really Have to Watch Out For

We all woke up last Monday to news that former Trump campaign manager Paul Manafort and his associate, Rick Gates, were indicted for money laundering, conspiracy, and lying to investigators.

At right around the same time, we got word that former Trump campaign policy advisor George Papadopoulos had been indicted nearly a month.

This, of course, is all part of the wide-ranging Mueller investigation into the 2016 election – an election that could still rock the highest levels of American politics before it's all said and done.

The markets… barely registered a blip at the news. The Dow slipped less than 1%, and the Nasdaq even went up to another record.

So, naturally, cable was full of questions like, "Are markets totally immune to news these days?"

The answer: well, a little. It depends.

The "events" you've really got to watch out for - and prepare for if you want to make some cash - won't necessarily make the front page...

Stock Market Today

Dow Jones Today Sheds 17 Points on Fed News

The Dow Jones today slipped 17 points. The cause? The U.S. Federal Reserve released minutes from its January Federal Open Market Committee meeting.

The verdict: The central bank is unlikely to raise interest rates in the near future. Gold prices ticked up from a seven-week low after the release of the minutes. Brent crude oil prices slumped nearly 4%, while WTI fell 3.5%.

Here are the other top market stories from today - plus our new profit tip for investors...