Investors are making a big bet on oil prices. Collectively, they’ve bet hundreds of millions of dollars on oil prices. Some of your editor’s research shows they’re likely in for a big surprise. A surprise that, if it plays out the way the odds and history tell us it will, that will end in tears,…
DetailsWhole Foods (WFM) is one of the biggest investment successes of the past few decades. What Whole Foods did was make the grocery business profitable. Historically, the big grocery store chains post net profit margins around 1%. Even the best-managed ones were rarely ever able to eek out net margins as high as 2%. It…
DetailsThe most recent correction was like an earthquake. It was scary during it. No one knew when it would end. And now, weeks after it has passed, the aftershocks are still being felt. One of the biggest aftershocks is in interest rates. What happened is going have a big (and likely negative) impact on one…
DetailsThe last correction was a big test for the stocks you hold. If the stocks you hold were the big winners over the last few years (like oil stocks) and were hit hard in the correction, that doesn’t bode well for their future performance. Odds are they were the expensive stocks. The cheapest stocks in…
DetailsImagine you live in a town with two coin dealers. One of them is having a “bear market sale” on gold. They poorly forecasted demand and now have to unload some inventory. So they have offered up gold at $1200 an ounce. The other coin store in town is paying market price for gold at…
DetailsAfter a move too high, too fast, the markets were doomed to crater, we argued in early October 2014. Greed ran too high, as market participants thought the Fed’s loose policy-party could go on forever. But, as we all know, the party was coming to an end in late October 2014. Economic realities, global tensions…
DetailsAs we near the end of QE3, be on guard, we noted October 6, 2014. Once this round of easing ends, $15 billion of monthly purchases go up in smoke, we also pointed out. “The hope is that we only test the 200-day moving average 600 points lower. Worst-case scenario, the Dow loses 20% of…
DetailsSuccess is not always a guarantee. But if you have a plan in place, you increase your odds significantly. You see it’s not about having the “perfect” strategy. It’s about the rule you abide by with each trade. Any one can invest in a stock. But it’s takes a disciplined investor to invest well. One…
DetailsWarren Buffett hates dividends… Paying them. He has no problem collecting dividends, though. As he learned from Benjamin Graham, dividends are a sign a company is profitable. Graham thought dividends were very important and that investors should consider companies that have paid a dividend each year for 20 years. Graham knew dividends are an investor’s…
DetailsAs we near the end of QE3, be on guard. Once this round of easing ends, $15 billion of monthly purchases go up in smoke. The hope is that we only test the 200-day moving average 600 points lower. Worst-case scenario, the Dow loses 20% of its value, as some are calling for. QE1 lasted…
DetailsWhen trading a market as volatile as this, it is absolutely critical that you control emotion. Remove it from your trade. Toss it aside. Choose your entry points carefully, as we do in The Cheap Investor. Never allow your emotion or the herd to control when you buy and sell. Once emotion begins to dictate…
DetailsIn late August 2014, we were asked if we would go long copper. Our answer was a quick, resounding, “no.” Copper at $322 –we would note- was up too much, too soon. “It’s ready to reverse on the realization that housing isn’t as strong as hoped.” “A recent miss on home prices per the S&P…
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