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Are You Prepared For a Market Drop?

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The stock market has experienced the perfect storm of bullishness in 2013.

The Dow Jones Industrial Average is making new all-time highs, surging more than 9% within the first three months of the year. Meanwhile, the broad market barometer known as the SP 500 has pushed within 20 points of the all-time high of 1,565 reached back on Oct. 9, 2007.

The market rally is being fueled by an ideal combination of the Federal Reserve's quantitative easing measures mixed with improved housing numbers and employment data. Continue reading "Are You Prepared For a Market Drop?" →

Malcolm Shaw Likes Under-Covered, Unloved Energy Stocks

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The Energy Report: As a retired sell-side analyst and hedge fund VP, what do you look for in selecting and analyzing investment situations?

Malcolm Shaw: My background is actually geology, but over time I got pulled into finance. There was an advantage to having geological or technical knowledge, particularly in evaluating small- and mid-cap companies. Technical knowledge aside, the key for me is good management, and I've met hundreds of management teams over the years. Good management with sector expertise is always my first screening tool. After that I like companies that are under covered or generally unloved by the street because they tend to be where the market is less efficient. I'm not really going to add any value talking about names like Exxon Mobil Corp. (XOM:NYSE) or Encana Corp. (ECA:TSX; ECA:NYSE) simply because the information is so well distributed and the market is more efficient in larger caps, but not in smaller caps. Continue reading "Malcolm Shaw Likes Under-Covered, Unloved Energy Stocks" →

Forget Ford and GM, Buy These 6 Stocks Instead

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Americans still have a healthy obsession with cars. That was on display last week, with February car sales beating the most optimistic projections for the second month in a row, while rising to their best level in more than four years. According to research firm Autodata, annual sales, a closely followed industry benchmark, rose to 15 million units in 2012, the best pace since 2008, before the financial crisis crushed demand and threw the industry into turmoil.

Clearly, in spite of rising gasoline prices and the payroll tax increase from the "fiscal cliff," cars are still quite popular, taking priority over debt payment or vacation for most Americans.

And this passion for cars is creating an opportunity for investors to profit in a big way. Continue reading "Forget Ford and GM, Buy These 6 Stocks Instead" →

Why Apple Should Follow IBM's Successful Turnaround Story

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In recent months, Apple's (Nasdaq: AAPL) CEO Tim Cook has repeatedly stressed that the company still has a number of aces up its sleeve. Cook has dropped coy hints that bold new products are in the pipeline, so Apple could still surprise investors with better-than-expected growth.

But even if Cook is right and Apple is on the cusp of an impressive product release cycle, then he's wrong on one key point: Apple will never again be a great growth story it once was.

The company's annual revenue base is fast-approaching the $200 billion mark, so even if the company is layered in tens of billions of dollars in new revenue, that would only offset some of the revenue declines the Apple will experience from maturing key products and competitive pressure, which could lead to more price cuts.

Make no mistake, it is Cook's job to focus on product development and technology leadership. But Apple's board of directors now has a completely different task: Boost a stock price that remains in a free fall. Continue reading "Why Apple Should Follow IBM's Successful Turnaround Story" →

Leonard Melman: Are You Prepared for Hyperinflation?

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The Gold Report: You recently told a crowd of investors at Prospectors Developer Association of Canada (PDAC) that precious metals are the best place to invest in an inflationary period. Why is that?

Leonard Melman: When prices are going up, you wouldn't want to be in housing stocks or auto financing, but you would certainly want to be in precious metals. You also might want to short the bond market. That is why you have to be aware of the direction of inflation. It is important to the concept of precious metals pricing. If you've been around for a few years, as I've been lucky enough to be, then you can easily recall a time when high inflation was the absolute key ingredient in massive previous bull markets. That is why I thoroughly look at what has led to past inflation and hyperinflation. I use four examples: the Roman Empire, the French Revolution in the late 1700s, the German hyperinflation in the 1920s and the recent catastrophe of hyperinflation in Zimbabwe. I examine whether America and other countries in the world are perhaps following the same paths that led to those previous hyperinflations.

TGR: Do you think investors are going to see hyperinflation in the foreseeable future? Continue reading "Leonard Melman: Are You Prepared for Hyperinflation?" →