Ben Graham’s Rules for Cheap Stocks: Four Cheap Stocks Warren Buffett’s Teacher Might Buy

  Ben Graham is considered to be the founder of the value investing philosophy. He began investing in the 1920s, just in time to suffer large losses in the 1929 stock market crash. Graham decided to learn from the crash and began studying how to buy safe stocks. Within a few years, he coauthored the first book on the subject of value investing with a former student, David Dodd. That 1934 book, Security Analysis, is still found on the bookshelf of many investment professionals. Although Graham’s work is important on its own right, it was the work of another student, Warren Buffett, that would m...
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High Income Utility Stocks to Ease Election Jitters

Under normal circumstances, elections are often followed by selloffs in the stock market. Two examples many investors may remember are the selloffs that occurred in 2000 and 2008. Stocks were already in bear markets as those elections were held, but the selloffs that occurred after the votes were counted still seemed to catch many investors by surprise.   The circumstances associated with the 2000 election may have been unique. That year, a close election required several weeks of recounts and a decision by the US Supreme Court to finalize the results.  The uncertainty associated with the r...
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The Whole Truth About Moving Averages:

We’ve all seen the analyst on CNBC explain with a sense of authority that the S&P 500 index has just crossed above or below an important moving average (MA). We are led to believe this foretells a trend reversal but we never really see data supporting that idea after the statement is made. This leads to the logical question, “are analysts talking about MAs simply to have something to say or are MAs useful?” The answer, as so many answers are in the financial world, is that “it depends.” Sometimes MAs work spectacularly well. This was the case in 2008 when proponents note they warned of ...
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Five Cheap, High Quality Stocks Poised to Beat the Market:

Cheap has several possible meanings to stock market investors. A cheap stock can be one that trades at a low price. Other investors use the word “cheap” to indicate the stock is undervalued. Under that definition, a stock selling at $1,000 a share would be considered cheap if the investor believes the fundamental value of the stock is $1,500. In that case, they would believe they were buying assets valued at $1 for one-third off and paying $1,000 a share would be a bargain. In this post, we will use the first definition and look at stocks trading below $10. Low-priced stocks are capable of ...
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Big Cap Stocks in Distress Right Now

Academic research is an often-overlooked treasure trove of information for investors. Some investors ignore the research journals because they know the academic community believes markets are efficient and since academics believe that, some investors reason that there can’t be anything about how to beat markets in the journals. This is not true. Academics do tend to believe the efficient market hypothesis (EMH). In broad terms, this idea says market participants, as a group, immediately analyze new information about companies as it becomes available and then efficiently push the price of th...
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Selling Should Be As Important As Buying:

If you’re like many investors, you spend a great deal of time deciding what to buy. While studying what to buy, you should consider when the best time to sell that stock would be. It might be surprising to learn that some successful investors tend to know when they will sell a stock even before they place their buy orders. This may seem to run counter to Warren Buffett’s advice that selling should be relatively rare. Buy and hold proponents often point to Buffett’s famous quote that “our favorite holding period is forever” as proof that long-term investing is the best strategy. This might b...
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Four Cheap Gold Miners

Investors value gold for many reasons. Some see the yellow metal as protection against economic collapse. These investors tend to accumulate physical gold as coins or bars believing they will be able to use their gold to prosper under extremely adverse economic or social conditions. Other investors believe the financial system will continue to function in the future, but acknowledge gold tends to rise under adverse conditions and maintain positions in the metal through investment accounts owning ETFs, futures or gold mining stocks. Some investors simply view gold as a trading vehicle to be bou...
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Five Stocks Under $5 Analysts Believe Could Gain At Least 50% in the Next Year

Analyst estimates are an important component of Wall Street culture. Despite their importance, many individual investors ignore estimates, perhaps because they don’t understand the importance of Wall Street research. Research is expensive to produce and large firms don’t charge customers for their research. This fact points to the value of the research Wall Street produces. Wall Street isn’t known for giving things away. Free research isn’t really free. Customers pay for research through commissions and fees and sometimes they direct business to firms because of the quality of the research....
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Two Important Questions Investors Must Ask

Successful investors spend a great deal of time analyzing what to buy. Many investors who are less than successful also spend a great deal of time analyzing what to buy. The difference between success and failure can come down to the second question, the one less successful investors often fail to consider – the question of when to buy. Successful investors consider “when” to be as important as “what” while less successful investors may believe a good company can be bought at any price. For example, Cisco Systems (Nasdaq: CSCO) is a great company which makes great products and records billi...
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Getting Ready for Taxes

Many investors think about taxes in April every year, at the time the bill comes due. This explains why we see so many ads every March and April about funding retirement accounts for the previous year. If investors didn’t complete tax planning in the old year, funding a retirement account is one of the few options for reducing taxes at the last minute. While funding a retirement account is important as a tax strategy and to provide income in the future, there is more to tax planning and now is the ideal time to look at this year’s taxes. To be honest, anytime is a good time for tax planning...
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