Fallen Angels Report

Keep Your Party Hat ~ But Don’t Lose your Head

by Gabriel Wisdom March 19, 2012
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The market years 2007, 2002-2000, 1998, 1987, and 1973 have a common theme. These were years where skeptical and reluctant investors felt they could not longer sit on the sideline while everyone else made money. In each of these periods, late-comers to the party were comforted by a familiar pattern. With stocks trending higher for several years, it began to look easy, even fun to make money. Caution gave way to complacency, and within months prices reversed course.

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Dow 15,000? Let’s Hope So…

by Gabriel Wisdom February 22, 2012
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Be wary of predictions, both because they are everywhere, and because they are usually wrong. In today’s hyper-connected, information-driven world, we are bombarded with predictions of every color and stripe. They come at us from all angles, from sports to Oscar nominees and projections and polls on political races. The world of finance is no exception in this breathless dash to proclaim what is going to happen long before it actually occurs. I’ve made many market forecasts over the years, and I’m grateful when people recall only the good ones.

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Big Picture Bets for 2012-2020

by Gabriel Wisdom January 31, 2012
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There are over 90 million of them. Their sheer size has made it difficult to find the jobs they want and need. Reminiscent of their parents in the 1960’s, they’re angry, disenchanted, and intend to “occupy” Wall Street, main street, and those other places they’ll eventually be running. The largest generation in U.S. history will be coming of age during this decade. To successfully play this big picture bet, you’ll want to own industries and service providers they will need to raise families, build a secure future, and “live the dream.”

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Dare to be a Great Investor

by Gabriel Wisdom January 9, 2012
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Logic suggests following these three simple guidelines should lead us to the new 5 and 10 baggers of this decade. So what gets in the way? Why are so few people able to buy low when no one is interested, be patient, and then sell high when everyone is willing to over pay? Investors have trouble making rational decisions when real money is at stake. Psychological stress impairs logic, distorts our reasoning, and keeps us from buying true bargains.

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The Magic of Market Anomalies

by Gabriel Wisdom December 19, 2011
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The “earnings revision anomaly” is a favorite of Leonard Zacks. Here’s why. Brokerage firm analysts try to forecast future earnings of the stocks they cover. The complex valuation models they create are intended to help them predict future share prices based on a company’s expected earnings. As the companies they follow report on day to day business conditions, these models get frequently adjusted and tweaked. Therefore, the most frequently repeated activity of analysts is their earnings forecast reports, and consequently, revisions of earlier earnings forecasts, either up or down.

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Fallen Angels Report: Catch Them on the Way Up

by Gabriel Wisdom December 2, 2011
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When you own shares in a company, its underlying business fundamentals are far more important than its current quoted stock price. You want to own companies that are going to be more valuable and larger in the future. If the company is growing by 15 to 20 percent each year, you don’t have to stress out if the share price is temporarily depressed. In fact, you might be confronting a wonderful opportunity to acquire more shares of a great company at a discount.

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Market Volatility Raises Risk of Heart Attacks

by Gabriel Wisdom November 8, 2011
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We’ve known for years that volatility makes people crazy. The great majority can’t endure severe market turbulence long enough to take advantage of it. They bolt when they should be buying. Now there’s additional evidence to suggest that worrying about market volatility can shorten your life span. A Duke University study published in the Journal of the American College of Cardiology last year reported that the rolling average rate of heart attacks in the U.S. was inversely linked with the level of the NASDAQ.

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Fallen Angels Report: Tilting the Odds in Your Favor

by Gabriel Wisdom October 24, 2011

Over time, the market rises more than it falls. It’s a wonderful feeling when you’re making money and you don’t have to show up for work to earn it. Protecting profits can be just as satisfying, especially if the market continues to fall after you’ve pulled out. But it’s far easier said than done, so fortunately the odds for appreciation have tilted in favor of long term investors. Assuming you own high quality companies or even a broadly diversified index like the DOW or S&P 500, favorable odds increase with time.

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How Low Can the Stock Market Go?

by Gabriel Wisdom October 6, 2011
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Since 1946, there have been 12 bear markets (declines of 20% or more). On average, it has taken 9 months for the S&P 500 to fall 20%. According to S&P Chief Equity Strategist Sam Stoval, if the current decline were to become another bear market (number 13) and follow the historical pattern, the S&P 500 will cross the 20% decline threshold by January 2012 (closing below 1091) and ultimately bottom in the low-900s by mid-2012 (WSJ.com’s inside look at the markets). Before you sell all your stocks based on this bit of data or, more commonly, because markets have performed so badly over the last year, read on.

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Fallen Angels Report: Under the Radar ~ People Over 60 are Buying Stocks Again

by Gabriel Wisdom September 19, 2011
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Attempting to buy low, then hoping to sell high is less desirable than it once was. Additionally, these days dividends are given preferential tax treatment over short-term capital gains, so public companies are again responding by placing greater importance on increasing dividend payouts to attract loyal long-term shareholders.

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