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Article Index

The Power of the Loophole Trade

By , America's No. 1 Pattern Trader, Money Morning • @powerproftrades -

amazon stock price

Today we're going to examine in granular detail a moneymaking tool called the loophole trade. And we're going to drill down and comprehensibly discuss why certain market conditions would compel us to recommend this tactic.

Remember: Through familiarity that's gained by the proper application of financial knowledge, you can overcome fear of volatility and risk.

We want you to confidently embrace the power of the loophole trade...

The Short Attack on Ekso Bionics (OTC: EKSO) Stock and How to Handle It

By , Chief Investment Strategist, Money Map Report -

EKSO stock

On June 2, Ekso Bionics Holdings Inc. (OTC: EKSO) stock dropped 24. 28% -- thanks to an anonymous individual writing under the name "The Pump Stopper" who launched a vicious attack on the stock.

But if you've been in this game long enough, you know what to look for and why stuff like this isn't a big deal in the grand scheme of things.

Here's why you shouldn't be worried...

Four Tech Industry Terms That Will Make You Money

By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

tech industry

Cutting through the tech industry jargon can be difficult - there are so many new terms surfacing every other day. And everything seems to progress so fast it's almost futile to try to understand.

We get that. It's our job to get that. We're here to sift through all the technobabble to bring you the pertinent information on how to profit.

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Your Best Investing Questions

By , Chief Investment Strategist, Money Map Report -

investing questions

Today we're taking a look at four of your most perceptive investing questions. We also answer an inquiry from Stuart Varney.

After all, we know it's far more profitable to learn from each other than it is to go down the road alone. Chances if you're thinking about something, another investor is, too.

So let's get rolling...

Don't Make This Fatal Investment Mistake

By , Executive Editor, Money Morning -

best stocks to buy now

As I wrote this for you folks last week, my part of the country was bracing for Winter Storm Juno, a blizzard that could bring wind gusts of 65 miles per hour while dumping as much as three feet of snow on some of the biggest cities in the Northeast. (We were spared its brunt, but New England could claim no such good fortune.)

With the early warning systems we have today - giving us the ability to prepare - the human toll from Juno was held to a minimum.

But the proliferation of headlines made me think of another winter storm - one that took place 169 years ago...

And as an investor, it's one that clearly teaches a valuable lesson...

The Best Play for a Scary Market

By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

U.S. blue chips suffered their biggest drop in five weeks recently because the latest round of economic reports are fostering a lot of uncertainty about the prospects for continued global growth.
For most investors, it's been that kind of year.
But I continue to believe that the tech sector - especially here in the U.S. - still has a lot of fuel left in its tank.
Because I know a lot of you folks are concerned, I thought we'd take the time to alleviate some of those fears... and make some money along the way.
And the best way to alleviate fears is to initiate a plan of action.
So that's just what we're going to do.
Today I'm going to show you a strategy that will help you put the odds in your corner.
And I'm even going to give you a tech stock that will get you started.
When you're done reading this, you'll be ready to laugh at the next sell-off. Full Story

Double Your Opportunities for Profit

By , Chief Investment Strategist, Money Map Report -

In their effort to capture all the profit they can, many investors focus exclusively on buying stocks. That's too bad because it means they're missing out on half the profits - literally.

I say that because the markets move in two directions - up and down - which means there's plenty of profits to be had in both directions.

George Soros, for example, made a cool $1 billion in a single trade that famously almost broke The Bank of England in 1992.

John Paulson made billions off the housing crisis when it hit by going against the grain.

Doug Kass of Seabreeze Partners is known for betting against the herd and laughing all the way to the bank.

Obviously, shorting stocks isn't for everybody - it takes a lot of guts and more than a little conviction to do it profitably. Not to mention a healthy dose of discipline.

But done right, it can really boost your profits...

The Six Questions that Can Make You Rich (Part Six)

By , Money Morning -

What is it that investors don't understand about innovation?

Sometimes they believe that some technologies are just a fad, a temporary trend that will ultimately lead to a lot of hype and a lot of losses. Investors have been burned before on solar companies, alternative wind projects, 3D video, and water desalination. There's a lot of hype and not a lot of return.

But we've found a way to determine whether or not a potential innovation is here to stay, something that will become widely adopted, and best of all, profitable to our readers.

We asked six questions that can make you rich. And by answering "yes" to all six of them, you can increase the probability that your investments will provide long-term security and returns.

The final question is this: Are there significant barriers to entry for competition?

Barriers to entry in the technology space is absolutely vital, as we want to ensure that competitors and new innovators are unable to displace this technology, and effectively establish itself as the most reliable and profitable source of innovation.

And we can look at one company right now that is at the pinnacle of success, and could soon face a lot of problems as it begins to see new competition from its rivals.

To continue reading, please click here...

How to Protect Your Portfolio Against One of Wall Street's Greatest, Best Kept Secrets

By , Chief Investment Strategist, Money Map Report -

"Can't anybody tell the truth anymore?" an exasperated Bob J. asked me at a recent cocktail reception.

"Evidently not" I told him.

Bob had seen me earlier that afternoon on Fox News. I appeared on the show to respond to a new study on corporate earnings by Professors Ilia Dichev, Shiva Rajgopal of Emory University and John Graham of Duke.

The study found that a full 20% of publicly traded companies lie about their earnings.

The shocking thing is that the figure wasn't much higher. Twenty percent strikes me as abnormally low. Earnings manipulation is one of Wall Street's greatest, best-kept secrets and has been for years.

In fact, CFOs I've met over the years have told me they could routinely swing things within 5-10% of the target earnings per share (EPS) if needed - a figure in line with the one cited in the study.

But lie is a big word.

As I noted during my interview, there are all kinds of reasons why companies manipulate the numbers, beginning with the terribly flawed system itself.

As appalling as this thought may be, the system actually encourages this kind of behavior.

Under the current system, the law requires quarterly performance reports when many publicly traded companies actually operate in business cycles that are 1, 3, 5, or even 7 years long.

This creates a disincentive to report what's actually happening and an incentive to "lie" about the numbers or at least "fudge" them, depending on your perspective. And, the longer the business cycle, the more a company must make estimates about quarterly results with the risk, of course, that things don't turn out as management expects.

So while some companies may have lost their ethical and moral compasses, what they are doing is entirely legal.

Why Companies Lie About Earnings

Having spent more than 20 years in the markets, I believe the reason for this comes down to three biggies, for lack of a better term. Companies may "lie" to boost stock prices, smooth earnings and jack up compensation packages.

Virtually every publicly traded company draws on reserves and engages in all kinds of financial hocus-pocus in an effort smooth things out.

Take Boeing Co. (NYSE: BA), for instance.

To continue reading, please click here...

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Don't Let Wall Street Play You For a "Fool"

By , Executive Editor, Money Morning -

If you're like me when you go out shopping, you look for deals. You watch for sales. And you search out bargains. Why pay full price when you can get the same item at a hefty markdown?

That's an economic concept known as "price elasticity." This "rule" essentially says (and I'm dramatically oversimplifying this) that when the price of a product rises, demand for it falls.

But here's the part of this "law" that I really find fascinating: When it comes to the "real-world" products and services that you and I purchase, there are no exceptions.

Except for the stock market.

Time and again during my 30-year career as a financial journalist, I've watched this play out.

When stocks are cheap, nobody wants them (by "nobody," I'm referring to individual investors). But once stocks move, and the higher they go, the more individual investors want to buy them.

Need an example? Think back to the dot-com madness of 1999 and 2000; the higher they soared, the more investors had to have them.

Economists refer to this exception to the law of price elasticity of demand as the "bandwagon effect." But there's a better term: The "Greater Fool Theory," which demonstrates how Wall Street uses the retail investor.

That's right ... uses. Those experts have labeled this as the Greater Fool Theory because there's always some other ("greater") fool to unload the stock on - at least until the retail investor decides not to play.

You see, the retail investor is the designated loser - the ultimate "Greater Fool."

Think of it as a game of musical chairs - but one in which the outcome is predetermined: Wall Street investment banks set this game up so the retail investor gets left holding the bag.

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If You Want to Be a Winner, Follow These Four Rules

By , Money Morning -

Last month, our in-house metals-and-commodities expert Peter Krauth hosted one of his regular conference calls for his Real Asset Returns advisory service subscribers.

Peter's guest was Rick Rule, founder of Sprott Asset Management's Global Companies unit - a real heavy-hitter and one of the sharpest resource investors you'll find.

Rick is always engaging and provocative, and his presentation to Real Asset subscribers was no exception.

He capped off predictions for gold, energy and other commodities with four rules successful resource investors must follow.

And they're so good I had to share them with you.

Rule No. 1: Use Common Sense: "If it something sounds too good to be true, it is too good to be true," Rick told the conference call audience.

The Takeaway: Like all of Rick Rule's Rules, this one applies to all investments, not just commodities. For maximum gains and minimum heartache, be realistic about your expectations, thoroughly understand what you're getting into, manage your risk and don't succumb to hype.

To continue reading, please click here...