Many analysts point to the fact that, as a group, hedge funds tend to deliver average to below average performance. That is true, but that is also not really a relevant fact to most investors. To begin with, remember that there is no requirement to be a hedge fund. Anyone can claim to be a hedge fund and self report performance to the indexing agencies. Regulation is required for larger funds but if an investment manager has few investors, regulations may not apply. That alone explains some of the performance. To some degree, for some participants, starting a hedge fund is like buying a ...

Wall Street analysts often focus their research on up and coming companies. They do this for a couple of reasons. One reason is that they hope to generate new business. Another reason is that they hope to have some big winners to enhance their records. In focusing on cheap companies, analysts are exploiting an attribute that many individual investors already understand, which is that low priced stocks are the most likely ones to produce large gains. Individual investors that low priced stocks could be appealing for two reasons. One reason is that the low price means they have little down...

Recently Walmart announced plans to acquire a 77% stake in India’s Flipkart for $16 billion. Flipkart is an Indian eCommerce company that was initially focused on book sales, but soon expanded into other product categories such as consumer electronics and fashion. The story sounds similar to Amazon and the company has been able to fend off challenges from Amazon, a company that also started with a focus on books and then moved into all areas of commerce. Given that Walmart is now positioned to capture significant sales in India and bring Flipkart’s technology to other markets, it could b...

Large cap stocks can be among the safest stock market investments. These are large companies and are known as blue chip investments. A blue chip company is defined as “a nationally recognized, well-established, and financially sound company. Blue chips generally sell high-quality, widely accepted products and services.” Analysts note that “blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth.” And, as a matter of interest, the name "blue chip" come...

In general, we like to see stocks going up and dread extended declines. Although individual investors will all have different time frames they consider, they tend to define an up trend as a series of rising prices in their preferred time frame. Likewise, a down trend will consist of a series of lower prices. Technical analysts generally define a down trend as a series of lower highs and lower lows. The chart pattern is generally clear when a down trend develops as the chart below demonstrates. Arrows demonstrate that for the majority of the time period shown, the stock has been making lo...

Technical analysis is the study of prices. Proponents of the discipline argue that history has a tendency to repeat and a study of market action in the past can be a useful tool for forecasting the likely direction of price trends in the future. This article will provide you information about Best technical trading strategies. Technicians use price charts and various indicators to develop their forecasts. Price charts are studied to determine if there are any significant visual cues that can be used to identify potential trends. This is a subjective form of analysis because each analyst wil...

One of the greatest investment books ever published was written by a professional dancer. The 1960 book, How I Made $2,000,000 in the Stock Market, was written by Nicolas Darvas. Other than his books, little is known about Darvas. His Wikipedia page provides a brief biography of his early years: Hungarian by birth, Darvas trained as an economist at the University of Budapest. Reluctant to remain in Hungary until either the Nazis or the Soviet Union took over, he fled in June 1943 at the age of 23 with a forged exit visa and fifty pounds sterling to Istanbul, Turkey. Sometime later, he met u...

As investors we hear it all the time. The analyst comes on CNBC and tells us a stock is soaring because the company beat earnings estimates. Or, we notice a stock is falling sharply and when we search the news we discover that the company missed analysts’ expectations. These are common explanations for a stock’s market action. But, what do those words really mean? In other words, what are estimates, where do they come from, how often do companies meet the estimates and how do stocks fare, on average after an earnings announcement? We will answer each of these questions today. What Are E...

One big story keeps coming up in the stock market. It’s tax reform. Analysts are still sorting through the implications of the new rules but there is a general agreement that changes to the tax code are bullish for most companies. This week, we searched for individual companies that analysts believe could be winners under tax reform. We searched our database for companies that are followed by at least four different Wall Street analysts and are priced below $20 a share. Then, we looked for companies where at least one analyst raised their earnings per share (EPS) estimate by at least 5% ...