While I will occasionally mention individual stocks, I purposely try not to add my voice to the cacophony of Buy-Buy-Buy-Sell-Sell-Sell hysteria. Nonetheless, as an individual investor and as an investment advisor to a wide range of clients, I do have strong feelings about specific securities. So here, for all to share and benefit from, are ten stocks that I believe will be at least 20% higher on December 25, 2010 than they are today. Follow or ignore the advice based on your own financial situation. There are no guarantees in life -- and even fewer in investing:
Apple
Bank of America
Best Buy
Broadcom
CVS
Fluor
JP Morgan
Morgan Stanley
Nucor
Seagate
Have a wonderful holiday season. And for a wide range of investing insights please check out my newest book, co-authored with Prof. Craig Israelsen of BYU: Your Nest Egg Game Plan: How to Get Your Finances Back on Track and Create a Lifetime Income Stream and visit my website www.HardWorkingMoney.com
Thursday, December 24, 2009
Friday, December 18, 2009
Don’t Be Conflicted About Your Broker’s Conflicts of Interest
Wall Street is a breeding ground for conflicts of interest. That’s a given. But what most investors do not realize is that their advisors often have conflicts of interest in the recommendations they make to clients.
Here’s a direct quote from a client proposal from Smith Barney. Note that the references to “CGM” are for Citigroup Global Markets, Smith Barney’s parent company: “CGM and its affiliates may give advice and take action in the performance of their duties to clients which differs from advice given, or the timing and nature of advice given, with respects to other clients’ plans. Moreover, CGM or any of its affiliates may advise or take action with respect to itself or themselves differently than with respect to clients.”
Take a moment to read that quote again. The message is scary-funny. In essence, your Smith Barney broker can recommend that you buy a stock while recommending that another client sell the same stock. Or he/she might urge a more important (i.e., wealthier) client to buy a stock on Monday, and then urge his/her less important clients to buy the same stock on Tuesday, helping to push up the price and making the important client marvel at his broker’s expertise. And worst of all, the last sentence makes it clear that the broker may sell a stock in his personal portfolio even while he’s recommending it to you.
The current system of advice-giving is broken, and the “suitability” standard that broker-dealer reps is absolutely unsuitable for a relationship that’s supposed to be based on integrity and trust. So don’t be conflicted -- take your business to an advisor who adheres to a fiduciary standard and always places the client’s interests above his or her own.
For more investing insights, please take a look at my new book, Your Nest Egg Game Plan or visit my website at www.HardWorkingMoney.com.
Here’s a direct quote from a client proposal from Smith Barney. Note that the references to “CGM” are for Citigroup Global Markets, Smith Barney’s parent company: “CGM and its affiliates may give advice and take action in the performance of their duties to clients which differs from advice given, or the timing and nature of advice given, with respects to other clients’ plans. Moreover, CGM or any of its affiliates may advise or take action with respect to itself or themselves differently than with respect to clients.”
Take a moment to read that quote again. The message is scary-funny. In essence, your Smith Barney broker can recommend that you buy a stock while recommending that another client sell the same stock. Or he/she might urge a more important (i.e., wealthier) client to buy a stock on Monday, and then urge his/her less important clients to buy the same stock on Tuesday, helping to push up the price and making the important client marvel at his broker’s expertise. And worst of all, the last sentence makes it clear that the broker may sell a stock in his personal portfolio even while he’s recommending it to you.
The current system of advice-giving is broken, and the “suitability” standard that broker-dealer reps is absolutely unsuitable for a relationship that’s supposed to be based on integrity and trust. So don’t be conflicted -- take your business to an advisor who adheres to a fiduciary standard and always places the client’s interests above his or her own.
For more investing insights, please take a look at my new book, Your Nest Egg Game Plan or visit my website at www.HardWorkingMoney.com.
Tuesday, December 15, 2009
Buy, Sell, Hold and Ignore
Maybe it’s me, but I think all this buy-sell-hold nonsense epitomizes all that is wrong with Wall Street. Here’s an example. Yesterday, December 14, Jesup & Lamont upgraded Palm to Hold from Sell. Now think about this. If you had followed J&L’s previous advice, you would have sold Palm. So if their advice now is to Hold Palm, wouldn’t you first have to buy it in order to Hold it?
And what does “Hold” mean at all? A better approach to investing in individual stocks is to continually evaluate whether you would buy or sell the given security at the current price. If the answer is yes, then you continue to hold it. If the answer is no, then you should sell.
Hold is a cop-out rating. It really should be termed “Neutral.” The problem, of course, is that Neutral would imply that the analyst had no opinion one way or the other -- and how could he or she justify their quarter-of-a-million dollar salary without expressing an opinion?
For more investing insights, please check out Your Nest Egg Game Plan: How To Get Your Finances Back On Track and Create a Lifetime Income Stream by Phil Fragasso and Prof. Craig Israelsen.
And what does “Hold” mean at all? A better approach to investing in individual stocks is to continually evaluate whether you would buy or sell the given security at the current price. If the answer is yes, then you continue to hold it. If the answer is no, then you should sell.
Hold is a cop-out rating. It really should be termed “Neutral.” The problem, of course, is that Neutral would imply that the analyst had no opinion one way or the other -- and how could he or she justify their quarter-of-a-million dollar salary without expressing an opinion?
For more investing insights, please check out Your Nest Egg Game Plan: How To Get Your Finances Back On Track and Create a Lifetime Income Stream by Phil Fragasso and Prof. Craig Israelsen.
Monday, December 14, 2009
Beware the Forked Tongue of Wall Street Shills
Everyone is selling something. Keep that in mind as you watch the endless stream of “expert” analysts pontificating on CNBC, Fox Business, and in the financial press.
Let’s begin with the man who has never seen an interview he didn’t like -- Peter Schiff, a long-time investment guru who is trying to turn his almost daily appearances on CNBC, MSNBC and Fox Business into a Connecticut Senate seat. Schiff’s claim to fame is that he is a perennial bear on U.S. stocks and never wastes an opportunity to trash the U.S. economic system while talking up foreign stocks and gold. Not-so-coincidently Schiff is President of Euro-Pacific Capital, a company focused solely on selling its clients non-U.S. stocks and gold. So listening to Schiff’s advice will boost his coffers whether you profit or not.
Then we have Jim Rogers, who wrote the book “Hot Commodities,” has his own commodities index, and runs a huge commodities fund. Guess what Rogers is always trumpeting? Commodities. Here’s a recent quote from Rogers’ blog: "Paper money throughout the world is being printed right now.... We may have to wind up with all of our money in commodities because there's no paper money that we can trust." Wouldn’t that type of global collapse be great for Rogers?
And then there’s Glenn Beck. Regular followers of Beck know that financial apocalypse is right around the corner -- and it’s all due to President Obama who, by the way, Beck believes is a racist (to use Beck’s own reprehensible word). The only way to protect yourself from the inevitable collapse is to buy gold. Lots of gold. Of course that’s what he says on his TV and radio program where he can be “objective.” But it’s a whole different ballgame when he becomes the spokesperson for Goldline.com and promotes viewers to buy gold -- especially from a firm you can trust like Goldline. The man is a self-indulgent, self-loving hypocrite.
So before you buy any of the stuff these guys are selling, do your own homework and make an informed decision. The talking heads you see on TV are one-dimensional shills but life is three-dimensional.
For more investing insights, please check out Your Nest Egg Game Plan: How To Get Your Finances Back On Track and Create a Lifetime Income Stream by Phil Fragasso and Prof. Craig Israelsen.
Let’s begin with the man who has never seen an interview he didn’t like -- Peter Schiff, a long-time investment guru who is trying to turn his almost daily appearances on CNBC, MSNBC and Fox Business into a Connecticut Senate seat. Schiff’s claim to fame is that he is a perennial bear on U.S. stocks and never wastes an opportunity to trash the U.S. economic system while talking up foreign stocks and gold. Not-so-coincidently Schiff is President of Euro-Pacific Capital, a company focused solely on selling its clients non-U.S. stocks and gold. So listening to Schiff’s advice will boost his coffers whether you profit or not.
Then we have Jim Rogers, who wrote the book “Hot Commodities,” has his own commodities index, and runs a huge commodities fund. Guess what Rogers is always trumpeting? Commodities. Here’s a recent quote from Rogers’ blog: "Paper money throughout the world is being printed right now.... We may have to wind up with all of our money in commodities because there's no paper money that we can trust." Wouldn’t that type of global collapse be great for Rogers?
And then there’s Glenn Beck. Regular followers of Beck know that financial apocalypse is right around the corner -- and it’s all due to President Obama who, by the way, Beck believes is a racist (to use Beck’s own reprehensible word). The only way to protect yourself from the inevitable collapse is to buy gold. Lots of gold. Of course that’s what he says on his TV and radio program where he can be “objective.” But it’s a whole different ballgame when he becomes the spokesperson for Goldline.com and promotes viewers to buy gold -- especially from a firm you can trust like Goldline. The man is a self-indulgent, self-loving hypocrite.
So before you buy any of the stuff these guys are selling, do your own homework and make an informed decision. The talking heads you see on TV are one-dimensional shills but life is three-dimensional.
For more investing insights, please check out Your Nest Egg Game Plan: How To Get Your Finances Back On Track and Create a Lifetime Income Stream by Phil Fragasso and Prof. Craig Israelsen.
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