As clearly evidenced by the recent underperformance of many retail stocks, retail is not a great place to be right now.
US retail sales fell flat on their faces last month. It was their worst reading in six months. I have been steering clear of retail stocks for some time now.
The market continues to be very volatile thanks to the rising tensions around the globe. The situation in the Ukraine has escalated again, the U.S. started bombing ISIL in Iraq, and the peace talks between Israel and Gaza are breaking down.
Magellan Midstream Partners owns the longest refined petroleum products pipeline system in the country. As a result it can tap into nearly 50% of the nation’s refining capacity and store more than 90 billion barrels of petroleum products.
Propped up by the Fed, post the financial crisis, the market has nearly tripled. Other markets, not on “performance enhancement drugs” outside the U.S. have been left in the dust.
The current bull market cycle has been going on for five years and four months and it is not going to last forever. But as of right now, the bull market is still intact.
A lot of risk came off the table last week as investors reacted to a multitude of geopolitical events. There were flare ups around the globe, from Israel and Hamas, to the Ukraine, and the situation in Iraq continues to be a cause for concern.
Step One is the investor fresh from one of the big wire houses. The kind that runs big ads on TV. These portfolios are full of well known stocks that ran out of gas years ago. Maybe they are still good companies. But good stocks? No.
The most fun part of managing money is getting to learn about the different and crazy ways that people earn a living. Often a very good living.
It was only after my long career as a pharmacological scientist that I decided to pick the biotech and pharmaceutical stocks as the hottest industries of the year. That, of course, is not true – the part about my career as a scientist, that is.
From companies with drugs in their pipeline to companies still developing them, this has been the garden spot in the market this year – a year desperate for garden spots.
From a valuation point of view, PNR passes the test. It is currently trading at 17.7 times forward earnings. It is expected to grow these earnings by 14.3% per year over the next five years. It has a PEG ratio of 1.24.
As human beings we hedge all of the time. Even though I live in one of the sunniest cities in the world, I usually have a jacket ready, just in case. When I go holiday shopping I keep the tags, just in case I have to take everything back.
Some readers might remember a few years ago, I said: Sell everything under the sun – talking about solar stocks.
The great ones don’t stay great forever. Look at Microsoft (MSFT), Johnson & Johnson (JNJ), Merck (MRK), Cisco (CSCO), General Electric (GE). They are still good companies, no doubt, but these once mighty titans are not the engines of growth and prosperity they once were.
On Thursday of last week, the Dow closed above 16,000 for the first time in its history. I will never forget where I was on that day.
I am not a believer in the traditional asset allocation models that are built on the Model Portfolio Theory that says investors need so much money in stocks – often for growth -- and so much in bonds – often for income. And often so much in gold for security.
I cannot help but compare this company to Priceline.com (PCLN). I wrote about Priceline in my book a few years ago and I continue to own the stock. It has been one of the best performing stock in the entire market over the last one, three, five, and ten years!
I believe in being focused in the best areas of the market at any given point in time. Currently, the leading sectors in the market continue to be, internet, biotech, and pharmaceuticals. And recently a new leadership sector has entered into the fray: Oil and Gas Exploration stocks.
Every day I do my best to prepare for what the market will bring next. But let’s talk about the present and what is out there today because the money is made TODAY.
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