• 18 Dec
    Sunday Edition: Looking For Value – Market Heavyweight Or Scrappy Underdog?

    Sunday Edition: Looking For Value – Market Heavyweight Or Scrappy Underdog?

    In sports, there is something incredibly compelling about the underdog that nobody expects to win, but does it anyway. It’s even better when it happens against an opponent that is obviously superior in practically any measurable way. As a fan of sports like football and basketball, I like the playoff after-season, when the best handful of teams battle it out for ultimate supremacy. In particular, I get a kick out of trying to pick out the team that I think everybody is dismissing but could be in just the right place, at the right time to prove them all wrong. True, Cinderella doesn’t often actually get to wear the glass slipper, but boy, is it fun when she does! More →

  • 16 Dec
    Why You Might Want To Start Dollar Cost Averaging Precious Metals

    Why You Might Want To Start Dollar Cost Averaging Precious Metals

    • Central banks’ balance sheets have quadrupled in the last decade.
    • Balance sheets will continue to balloon as there isn’t another option for economic growth in developed countries.
    • You should start to think about protecting yourself from inflationary pressures now, when such fears seem distant and unlikely. It’s the cheapest time to do it.

    Introduction

    Yesterday we discussed the three drivers that could push markets higher if all other factors like interest rates, risk perceptions, and global political issues stay as they are now. However, we didn’t discuss what happens if the underlying pillars that have been holding up global financial markets since the Great Recession change. Today we’ll discuss what could change and how to properly diversify. More →

  • 15 Dec
    This Could Push The S&P Even Higher

    This Could Push The S&P Even Higher

    • The market looks overvalued but there are three main factors that could push it even higher.
    • A repatriation tax holiday could make $2.1 trillion available for dividends, buybacks, and M&As.
    • Economic growth and inflation could push earnings higher, further inflating stock prices.

    Introduction

    It seems that everyone agrees on the fact that this market is overvalued and borderline irrational. However, there is no correction in sight and the only question to be asked is “how high can this market go?”

    The S&P 500 has jumped 5.4% since Trump won the elections, and is 12.1% higher year-to-date. By adding in the 2% dividend yield, we arrive at an excellent 14% return for 2016. This year’s positive return will make it number eight in a row for the S&P 500 as it has been rewarding investors since 2009. More →

  • 14 Dec
    How To Make 50% On Your Investments

    How To Make 50% On Your Investments

    • To know a small cap stock in detail and its business environment, you’ll have to invest more of your time than anyone else.
    • Investing while following the 20-punch card rule is extremely difficult, even Buffett didn’t follow it.

    Introduction

    In a 1999 Businessweek interview, Warren Buffett said the following:

    “If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”

    Most investors invest peanuts, Buffett’s measure for $1 million, so they should all be able to make 50% a year. As in life you mostly get what you ask for, why not ask for 50% yearly returns? You might get it.

    In this article, we’ll discuss what Buffett meant when he said that, as well as a few strategies you could implement to reach 50% returns. More →

  • 13 Dec
    The Crowd Loves Index Investing. Should You?

    The Crowd Loves Index Investing. Should You?

    • Index investing really means buying high and selling low. The latest NASDAQ 100 inclusions and exclusions are a perfect example.
    • If you invest in an index, you are bound to receive market returns which will be in line with market earnings. However, history shows that market returns won’t be that great from today onward.
    • Even if index investing is still the most popular thing to do, it’s time to switch to smarter investment vehicles.

    Buying High & Selling Low

    Last week, NASDAQ announced the results of the annual re-ranking of the NASDAQ-100 Index® (Nasdaq: NDX). The following four companies will be added to the Index, Cintas Corporation (Nasdaq: CTAS), Hasbro, Inc. (Nasdaq: HAS), Hologic, Inc. (Nasdaq: HOLX), and KLA-Tencor Corporation (Nasdaq: KLAC), while the following four companies will be removed from the Index: Bed Bath & Beyond Inc. (Nasdaq: BBBY), NetApp, Inc. (Nasdaq: NTAP), Stericycle, Inc. (Nasdaq: SRCL), and Whole Foods Market, Inc. (Nasdaq: WFM). More →

  • 12 Dec
    Hold On To Your Cash

    Hold On To Your Cash

    • A market crash will come, likely sooner than later, as this bull market isn’t based on fundamentals.
    • However, it’s equally important to seize the upside as well as protect yourself from the downside.
    • A cash cushion and knowledge about fundamentals is what will give you the best risk reward scenario for your portfolio.

    Introduction

    You might find this strange: talking about a stock market crash while the Dow is above 19,000, the S&P 500 above 2,241, and the Nasdaq largely above 5,300, and revised economic growth at 3.2% all in the midst of a seemingly never-ending bull market. On top of that, 610 Nasdaq and NYSE companies are currently at their 52-week highs while only 14 are at their 52-week lows.

    Nobody can know when this bull market is going to end, but it will end eventually as the fundamentals fueling it aren’t all that strong. More →

  • 11 Dec
    Sunday Edition: Pigs Get Fat – Hogs Get Slaughtered

    Sunday Edition: Pigs Get Fat – Hogs Get Slaughtered

    The saying I’m using for today’s headline gets used in a lot of different settings, so the odds are pretty good that just about everybody has heard it at one time or another. When I started to learn about directional, short-term trading strategies like swing and trend trading, I had this idea drilled into my head to reinforce the mindset that acting quickly on exit signals, especially if I was profitable, was far better than waiting on the mere hope the stock might keep moving in my favor and give me a bigger profit. It was useful to me then because it helped me start to learn and develop the discipline to disconnect my emotions as much as possible from the investments I made. More →

  • 09 Dec
    Check Your Dividend Yielders Before It’s Too Late

    Check Your Dividend Yielders Before It’s Too Late

    • Higher interest rates will increase required returns while higher debt costs will lower available cash for dividends.
    • However, things vary extremely among sectors so check your portfolio stock by stock.
    • The current 5% shareholder yield is unsustainable with aggregate earnings yielding 3.93%.

    Introduction

    Things are changing!

    We have been enjoying a period where yielders were in high demand as interest rates declined. However, there are two things that will have a severe impact on dividends and asset prices. The first is that low interest rates enabled companies to take on more debt and increase their return to shareholders while keeping their interest expenses low. The second is that with the Fed about to increase interest rates and the yield on the 10-year treasury note up 75% from its July low, the value of your dividend yielders is also about to collapse because stocks simply carry more risk than treasuries. More →

  • 08 Dec
    Brazilian Investment Opportunities

    Brazilian Investment Opportunities

    • Many stocks in Brazil have the potential to double in 2017, but they also have the potential to lose 50%.
    • We’ll briefly describe investment opportunities and our approach to the research.
    • Emerging market volatility should be considered a great thing, not a risk.

    Investing Rationale

    Monday we discussed the current situation in South America. Reading the article, available here, will give you a good intro into what we’ll discuss today.

    The source of our long-term investment ideas comes from constant research on macro trends. These ideas are bound to benefit from positive economic, demographic, and political environments. More →

  • 07 Dec
    Want To Be A Better Than Average Investor? Sven Tells You How

    Want To Be A Better Than Average Investor? Sven Tells You How

    • Average investors don’t even make 50% of the market’s return.
    • The stock market looks simple in hindsight, but behavioral issues stop us from doing the right thing. We’ll see how by looking at an example with Wal-Mart.
    • To make market returns you have to do nothing. But to make above market returns, you have to do what others aren’t willing to do.

    Introduction

    According to Dalbar, average investors don’t do as well as the general stock market. In fact, they don’t come even close. More →

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