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The Top Ten Greatest Stock Trades of All-Time

The Top Ten Greatest Stock Trades of All-Time

Screen Shot 2013-09-13 at 12.31.59 AMHedge Fund titan Jon Paulson pulled off the greatest trade of all time in 2007, raking in a cool $15 billion in his bet against subprime mortgages - according to the International Business Times who ranked the top ten greatest trades of all-time. Some were brilliant masterminds, others were just plain lucky.

The Top Ten Greatest Trades of All-Time

1.    John Paulson’s bet against sub prime mortgages made him $15 billion in 2007

2.   Jesse Livermore’s call on the Crash of 1929 (a legendary trader featured in the popular book, Reminiscences of a Stock Operator).

3.   John Templeton’s foray into Japan in the 1960s (a true investment pioneer, Templeton foresaw the rise of Japan after World War II and profited hugely from it).

4.   George Soros’ breaking of the Bank of England in 1992 (Soros made $1 billion).

Screen Shot 2013-09-13 at 12.31.45 AM5.   Paul Tudor Jones’ shorting of Black Monday in October 1987 (he predicted the crash, bet a bundle & tripled his money as the market crashed 22% in one day).

6.   Andrew Hall’s $100 oil prediction (with oil trading at $30 per barrel in 2003, Hall bet prices would rise to $100 in 5 years; they did and he took home a personal paycheck of $100 million in 2008).

7.   David Tepper’s 2009 bet on financials (as the market hit its low in early 2009, Tepper bought financial services stocks & his fund earned $7 billion that year ($4 billion of that went to Tepper).

8.   Jim Chanos’ prescient shorts (his sharp analysis led him to predict the demise of Enron, WorldCom, and other firms, and he is known as the best short-seller in the world).

9.   Jim Rogers’ early call on commodities (he was bullish on commodities back in the 1990s & has been riding them to great profits ever since).

10.  Louis Bacon’s geopolitical play (he correctly predicted that Saddam Hussein would invade Kuwait in 1990 & profited handsomely by going long on oil & shorting stocks, which helped his fund return 86% that year).

Screen Shot 2013-09-13 at 12.32.41 AMMost of these trades were ‘global macro’ plays where huge, concentrated bets were made by analyzing fundamental economic/business conditions.  These investors excelled at turning a great observation about the world into a great investing idea. But, while these make the headlines, you never hear about the other investors who made a big call and missed, and ended up out of business.

It’s almost impossible for regular investor folks to make a ‘big score’ like these traders.  Rather than trying to throw a touchdown pass on every play and make a big score like these traders, the smarter game plan is to focus on trying to get consistent first downs. Do your homework, watch market/sector developments, don’t chase stocks up or down.  Do that, and the score may take care of itself.

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Source: International Business Times

Bank of America: A Financial Powerhouse's Road to Prosperity

Bank of America: A Financial Powerhouse’s Road to Prosperity

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If you currently own Bank of America (NYSE: BAC) then you have been a strong supporter of the new direction the bank is going in and have been loving the impressive run the stock has been on, +83% year-to-date, +183% over the past 20 months. Just take a look at both of the BofA charts below and you’ll see why investors have been loving BofA’s recent stock performance. While BofA’s recent rally has been nothing short of stellar, it didn’t come from nothing. It was supported by the fact that fundamentally BofA is a strong company from top to bottom. Overall, there is a lot to like about Bank of America and the new direction the company is going in under the watch of CEO, Brian Moynihan.

Bank of America has clawed its way back from oblivion to the delight of traders and investors alike, who have profited on the stock’s advance. BofA has been a great momentum trade and going forward we expect shares to continue to soar. BofA is a great value play and as you can see, the stock is gradually recovering, climbing back to where they were trading before the financial markets collapsed.

Bank of America’s Past 12-Months Stock Performance: +82.13%

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Bank of America’s Past 20-Months Stock Performance: +182.97%

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BofA’s Legal Worries & Future Concerns

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Some of the biggest concerns investors have when it comes to Bank of America are the bank’s legal woes, pending lawsuits and the potential financial ramifications from these lawsuits. Some speculate that the legal settlements could cost the bank and its shareholders billions of dollars. When it comes to investing, I prefer to look at the fundamentals of a company rather than giving into fear and listening to all the rumors. Right now all these numbers being thrown around are nothing but speculation and in the end BofA will pay a lot less in legal penalties than originally expected. Just examine all of the past legal cases against Bank of America and analyze the amount BofA actually paid out versus what analyst’s originally speculated, it’s consistently been a lot less. Many can attribute this success to the work of CEO Brian Moynihan, who before embarking on a career in banking was a high-powered Boston Lawyer. In all seriousness, this legal onslaught is a battle that the company has been at for several years now, as CEO Brian Moynihan has been systematically knocking lawsuits out of the way slowly, steadily, and one at a time.

With all the legal worries soon to be behind them, investors should now be focusing on the many great prospects Bank of America currently has going for them. The two biggest factors that make Bank of America successful are their ability to innovate their products to attract new customers while cutting costs and also their ability to produce strong sales numbers.

BofA’s Impressive Sales Growth

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A strong indicator for past and future success for Bank of America has been their impressive sales growth. BofA has increased their sales growth across all segments of their business. In their 2Q earnings report, BofA’s five main operating segments all posted impressive growth rates and earnings. Compare the two figures below to see just how substantial BofA’s sales growth has been:

2nd Quarter of 2013: $1.4 Billion

2nd Quarter of 2012: $184 Million

Bank of America’s 2013 2nd Quarter net income ballooned to $1.4 billion vs $184 million prior year driven by higher net interest and non-interest income. BofA’s net income multiplied 7.6 times in one year, a very impressive figure and a strong indicator for continued future success. What was more impressive was the factthat it was a balanced performance with BofA seeing all five segments of their business improve:

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  1. Retail Banking: Despite banking center consolidation and cost reduction, BofA saw a significant increase on the retail side in deposits, new accounts, plus credit/debit card usage.
  2. Mortgage/Loans: Real estate services managed to come in with $1 billion in revenue and marks a great improvement over last year’s -$186 million.
  3. Wealth Management: Revenues in investment management literally skyrocketed 10-fold to $4.5 billion with net income increasing 261% to $758 million. The segment now has a 17% net income-margin.
  4. Global Investment Banking: Global banking revenues increased to $4.1 billion up from $231 million in the same period last year driven by investment banking activity and loan origination. Global banking now has a 31% net income-margin and is highly profitable.
  5. Equity Trading: Global markets revenue, driven by equity revenue came in at $4.2 billion and profits at $959 million.

Sales are what drive Bank of America as a company and to see this kind of growth across all segments of their business is very impressive and a bullish indicator for future success.

BofA’s Ability to Innovate

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Innovation has always been something that has distinguished Bank of America as a company and made them stand out from their competitors. BofA’s ability to innovate new products, making the lives of their customers easier while cutting costs has been a winning strategy. The newest innovation will be BofA’s ‘Teller Assist‘ ATM machines that will allow customers to do the following:

  • Cash checks for the exact amount, including receiving change.
  • Receive cash withdrawals in a variety of denominations ($1, $5, $20 & $100).
  • Deposit checks with cash back.
  • Split a deposit into two or more accounts.
  • Make loan or credit card payments.

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Bank of America has consistently been making strides to go automated in its entirety, in terms of banking; similar to the way tons of food stores now have implemented self-scan devices for checkout. The more machines in place, the more automation, the fewer tellers needed, the less the bank spends. This has been an initiative that the bank has been working on for the past few years, and I believe that this forward looking “automation innovation” is going to yield the bank tangible results in terms of cost cutting and general efficiency in the future. Katy Knox, Retail Banking and Distribution Executive at Bank of America says it perfectly in the following quote:

“We know that customers want to bank on their schedule – not ours – so we are constantly looking at how to deliver more convenient banking options to them. This technology gives customers easy, convenient access to ATM banking services with the added option of having a personal interaction and the support of a teller available at the push of a button.”

In one new innovation, Bank of America will be simplifying the lives of their customers while cutting costs and saving money in the long-run. It’s a win-win if you ask me and it’s innovations like the Teller Assist ATMs that will lead BofA to prosperity.

BofA’s Stock is Significantly Undervalued

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When it comes to valuation, BofA is significantly undervalued compared to its peers as it has a book value discount of 28% and a forward P/E of 10.5. Bank of America trades at the largest discount to book value while Goldman Sachs (NYSE: GS) and Wells Fargo (NYSE: WFC) already manage to trade at a premium. Even though Bank of America had a great Q2 with an EPS estimate beat of 28%, its valuation continues to lack its peers. While the P/B industry average stands at 1.1, Bank of America is comparatively cheap with a near 30% discount from book value and near 10% earnings yield providing investors with a significant margin of safety.

What to Expect from BofA’s 3Q Earnings?

Bank of America surprised everyone with their 2Q earnings, reporting a 70% increase in profits, primarily through cost cutting measures. Overall revenues grew 3.5% however BofA’s stock price and valuation still lag compares to its immediate peers. While reducing uncertainty with respect to book value credibility and legal risks, Bank of America’s valuation remains low and attractive. I also expect that Brian Moynihan will be a man of his word and Bank of America will step up its shareholder remuneration policy with an estimated annualized dividend yield of 2-3% in 2014/15.

I expect BofA to once again beat the analyst’s expectations reporting strong 3Q earnings. BofA has been making strategic cuts to reduce overall costs while increasing revenues & strengthening the core parts of their business. Merrill Lynch continues to be BofA’s most profitable division & expect Merrill’s profits to continue to increase going forward as the two companies become more integrated with one another. Overall, BofA is a great long-term investment and a strong BUY for investors. Those who currently own the stock, simply hold onto your shares and over time watch them grow!

Conclusion: What to Expect from BofA Long-Term?

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Investors need to look past the newspaper headlines and short-term outrage against Bank of America and instead analyze the core parts of BofA’s business. Bank of America combines a market-leading, deposit-strong banking franchise with impressive sales and earnings growth, declining/encouraging delinquency and loss trends, and a low valuation. Dividends and share buybacks can further add fantasy to the stock. Under Moynihan’s ‘Project New BAC’, BofA has been able to leave its legal troubles behind and focus on fundamentals and cost cutting. Going forward the company is going to remain a lean and clean sales machine for investors.

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Innovation continues to be a strength of BofA as consistently they have been able to innovate their consumer bankingproducts to attract the highest number of customers and in return deposits. Over 50% of Americans currently has some form of relationship with Bank of America whether it’s a checking/savings accounts, credit card, mortgage, auto loan, investments, you name it.

As the economy improves, Bank of America should profit from higher consumer spending and an increased transaction business with a strong possibility to outperform EPS estimates. Fueled by its innovation, future steady dividend and the recovering housing market, I recommend investors to buy BAC. My 12-month price target for Bank of America is $24 per share, a yield of +65%.

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World GDP: Is Our Global Economy Actually Improving?

World GDP: Is Our Global Economy Actually Improving?

global-currencyOnly four years have past since the world was hit with one of the worst financial crisis of all-time and while many believe our economies are improving others disagree stating that some of the improvements are superficial as in fact the world is faltering again.

According to The Economist’s calculations, world GDP grew by just 2.1% during the first quarter of 2013 compared with a year earlier. Just 12 months ago, output was growing at a reasonable clip of 3.1%. The European Union, the world’s second-largest economy, which welcomes its 28th member on July 1st, is back in recession. Meanwhile there are concerns about stumbling blocks as China seeks to rebalance toward a more consumption-oriented economy and more moderate growth rates. Long the mainstay of the world’s fortunes, China alone has been responsible for nearly half of all world economic growth since the end of 2009 when the world began growing again. Other big emerging markets, Turkey, Brazil and India, are struggling to quell social unrest over frustration with governments’ inability to deliver growth and make appropriate reforms.

How do you feel about the overall health of our global economy? Are we truly making improvements to get back on the right track or have we yet to fix the true problems that crippled our economy just four years ago? People always point to the success of the stock market as a sign that out economy is improving but history has shown us that the correlation between the stock market going up and our economy improving can sometimes be very far apart. We want to hear what you think so simply click on the link & share your opinion on our Facebook Fan Page or by sending either Stocks on Wall Street or our Founder a Tweet.

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Source: Economist

The Best Places to Fly This Summer

The Best Places to Fly This Summer

Screen Shot 2013-05-04 at 7.01.02 PMIf you haven’t booked your summer plans yet, brace yourself. There’s actually good news this year, for a change. Airfares to many popular U.S. destinations have dropped. This is according to the Wall Street Journal who earlier this week posted an insightful article detailing the best places to fly this summer. WSJ added an entertaining graphic as well which you can see below:

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Screen Shot 2013-05-04 at 7.00.18 PMAs for the airline industry, as many of you know Stocks on Wall Street has been very bullish the past two years. Most specifically when it comes to the five airline stocks we hold:

Allegiant Travel (NASDAQ: ALGT)

Boeing (NYSE: BA)

Delta Air Lines (NYSE: DAL)

Southwest Airlines (NYSE: LUV)


For those of you who haven’t read any of our past articles on the airline industry, simply click on the links below:

Five Airline Stocks That Continue To Soar

Five Airline Stocks That Have Soared to New Heights

Five Airline Stocks Ready to Pop

Going forward, we think that the airline industry might have seen it’s best days. We will be going into more detail about our thoughts in our article next week so make sure to tune into SWS throughout the week to find out more!

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Source: The Wall Street Journal

The Three Biggest Threats to Your Financial Future

The Three Biggest Threats to Your Financial Future

Here are three of the biggest risks and threats to your financial future and your wealth today. Also read for advice on how you can exert more control over each one and enjoy more of what’s yours.

Screen Shot 2013-04-30 at 12.19.28 AMRisk #1:  Currency Fluctuation.  The U.S. dollar has taken a real beating this past year and is expected to stay down over the long term.  Having all of your assets in U.S. dollars (or any single currency) is not sound financial planning.  You don’t have a diversified portfolio if all your assets are in one currency.  By going offshore and holding portions of your assets in other currencies, you are truly diversifying and protecting yourself from the ups and downs of one currency.

Investing in currencies on your own, without an ETF, can be difficult.  Most retail investors are better off with currency ETFs (exchange-traded funds) which track a single foreign currency or basket of currencies by using foreign cash deposits or futures contracts.  Currency ETF’s allow investors to speculate in the currency market without the risk of investing directly in currencies and without entering the forex market.  Some of the most popular currency ETFs are offered by Wisdom Tree Dreyfus, Rydex, PowerShares, Market Vector and Barclays.  But you need to do your homework before diving in.

Screen Shot 2013-04-30 at 12.20.21 AMRisk #2:  Rising Taxes.  Beginning Jan. 1, 2013, all American citizens will experience significant tax increases, many in the form of hidden taxes and fees.  At the same time, U.S. citizens with foreign bank accounts may pay a withholding tax of 30% on transfers of funds to and from these accounts (a provision of the recently amended and little-known HIRE Act).  So, if you run your own business, it makes great sense right now to think about moving your business to a more tax-friendly environment offshore.  Or, you could stay in the U.S. and keep an account offshore where it is free of U.S. tax obligations.

The key point is that, whatever you’re going to do, you should do it as soon as possible and well in advance of 2013.

Screen Shot 2013-04-30 at 12.19.50 AMRisk #3:  Litigation. The U.S. is a litigious society; a new litigation suit is filed every 17 seconds.  This may or may not affect everybody.  But, if you’re a doctor, for example, or someone with a high profile who’s more susceptible to being sued, then you understand the increased risk.  In this case, the best solution is to protect your assets by moving them offshore.  Your offshore assets will be outside the realm of U.S. judgment and, therefore, far more difficult for creditors to get at.  This should not be confused with the fact that U.S. citizens and green card holders will continue to be taxed on their worldwide income, no matter where they reside or hold their assets.  Income tax is unavoidable other than legitimate tax reduction strategies.  However, you can minimize litigation risk to your assets by going offshore.

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Do You Trust Your Bank?

Do You Trust Your Bank?


With all the scandals coming from the banking sector over the course of the past few years, the average consumer has lost faith in their bank. This is not just the big banks we’re talking about, it trickles all the way down to your local bank and credit union. The big question left is have you lost trust in your bank? If so do you believe this is something that can be changed or forever will banks be viewed as greedy corporations not looking out for the best interest of their customers? Please share your thoughts below or on our Facebook Fan Page or our Twitter Page.

(Below is a poll illustrating the levels at which people distrust their bank)


Source: The Financial Brand

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How America Ended Up With Four Airlines

How America Ended Up With Four Airlines

Screen Shot 2013-02-16 at 1.13.58 AMThroughout the past few years the airline industry has been completely reshuffled, through various bankruptcies and mergers have reduced the major U.S. airlines down to four mega-carriers. Stocks on Wall Street has been a huge supporter of the airline industry specifically five stocks we invested in. Their overall performance since we originally invested are listed below:

Allegiant Travel (NASDAQ: ALGT) ⇧86.13%

Boeing (NYSE: BA) ⇧19.21%

Delta Air Lines (NYSE: DAL)  ⇧104.61%

Southwest Airlines (NYSE: LUV) ⇧36.35%

UAL Corp (NYSE: UAL)  ⇧60.42%

Total: 306.72%

Average: 61.34%

To read our original article on the airline stocks, click on the link: Five Airline Stocks That Continue To Soar

Below is a chart to see how exactly the airline industry has shifted over the years and how America has now ended up with four major airlines.

click for ginormous graphic

Source: CNN/Money

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Five Airline Stocks That Continue To Soar

Five Airline Stocks That Continue To Soar

For those who follow Stocks on Wall Street and have read our past articles, you know then that we have been big fans of the airline industry over the course of the past 17 months. More specifically it has been five airline stocks that we have continued to hold and follow and to date it has become one of our top performing sectors with all five-airline stocks totaling a combined return of 306.72%. Average that out over the five stocks and you get 60.42% each pick, not too bad for just 17-months. The five airline stocks are the following:

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Allegiant Travel (NASDAQ: ALGT) ⇧86.13%

Boeing (NYSE: BA) ⇧19.21%

Delta Air Lines (NYSE: DAL)  ⇧104.61%

Southwest Airlines (NYSE: LUV) ⇧36.35%

UAL Corp (NYSE: UAL)  ⇧60.42%

Total: 306.72%

Average: 61.34%

As you can see, DAL, ALGT, and UAL have been the big winners with LUV recently joining the group after a strong 6-month rally of 30%. While it doesn’t have the flashy gains like the others, BA has still performed as we had expected a Large Cap Dividend Stock to perform.

Our Five Favorite Airline Stocks Section began back in August of 2011 when we first published ‘Five Airline Stocks Ready to Pop!‘, after a very successful year where we saw all five stocks soar to new heights we decided to reanalyze our positions on July of 2012 in our article ‘Five Airline Stocks That Have Soared to New Heights!’

After another strong six-month rally we are back at it again! This time pointing out what worked in the past, a look back at our past recommendation, highlighting the key factors we like going forward, and finally giving out 12-month price targets for each pick.

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Allegiant Travel (ALGT) 7.82%

allegiant_landing-22From 2011 to 2012, Allegiant Travel was the big surprise stock rising over 78% in a little over a year. Going forward, it was no question that ALGT was due for a correction and some quiet times. That’s not to say that it’s still not a great company and a premiere airline stock. While only rising 7.82% since July 24th, we still see lots of potential going forward. ALGT has done an excellent job at growing their business and there still is lots of room to expand as they continue to acquire new loyal customers.

In our previous July 24th article we wrote:

“While this is great and all, some of you out there might want to consider taking a conservative approach and sell off some of your shares, take your profits, and play with the house’s money. “

This time round we don’t plan on playing it so conservative. In fact, we think ALGT’s a solid buy for several reasons. To start, ALGT has an exceptional PEG ratio of 0.48, not to mention they currently hold over $357 Million in the bank. What most stands out however is that 20.71% of ALGT’s Shareholders are Insiders.

This is a staggering number to take into account, and it’s usually noted that insiders don’t take that strong of a position unless they have a reason to back it up. This is a good indicator that good times are still ahead for ALGT.

While the surprise factor is no longer there, that’s not to stop ALGT from continuing to pump out great earnings along with higher revenue numbers resulting in them beating the street’s expectations.

If we’re looking at a 12-Month Price Target, expect ALGT to be trading around $95 per share, a total yield of 27.5%.

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Boeing (NYSE: BA) 3.55%

Tesla-CEO-Elon-Musk-offers-Boeing-unsolicited-help-via-TwitterBoeing has been a safe and steady stock for some time now. After bouncing +40% from 2010 to 2011, shares have been very steady throughout 2011 and 2012. Boeing is one of the major aerospace and defense companies.  Boeing’s biggest strength is the company as a whole. The fundamentals are strong from top to bottom. Their book of business is great as well. Some numbers that standout to us are there PEG Ratio of 0.20, P/S of 0.71, 62.75% ROE, and the fact they’re holding over $11 Billion in cash. Remember cash is always king and a cash flow positive company is always attractive for that reason.

In our previous July 24th article we wrote:

“Going forward we like Boeing and expect the stock to continue to steadily rise with a strong outlook ahead, bullish analyst coverage and upbeat expectations. We originally pegged it to rise to $95 and we’re sticking with that price target. With more huge contracts to come, a solid book of business top to bottom, no cash flow problems, and a great business overall the future looks great for Boeing.”

While BA didn’t quite pan out like we had anticipated rising only 3.55% over the past six-months, it doesn’t mean we have lost faith in the company overall. We are still firm supporters of BA going forward and the majority of the analysts covering the stock hold this same opinion.

Of the 25 analysts covering BA, 80% hold a BUY Rating or higher, 55% have BA pegged at a STRONG BUY. The 25 analysts breakdown like this: Strong Buy, 9 Buy, 4 Hold, and 1 Underperform.

If we’re looking at a 12-Month Price Target, expect BA to finally make its strong push very similar to when they jumped 40% from 2010 to 2011. We expect BA shares to be trading around $100 per share come one year from now, a total yield of 36%. Tag on a 2.60% dividend and you have a total net yield of 38.6%!

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Delta Air Lines (NYSE: DAL)  48.34% 

6a00d8341c767353ef0120a7bad6c7970b-800wiDelta Air Lines has not just been one of the best airline stocks over the past 17 months, they have been one of the best stocks period. After soaring +56% the previous year many expected the stock to slip-up or stay situated, heck even we did.

In our previous July 24th article we wrote:
“They are one of the great success stories making such a strong comeback after their shaky past history dealing with bankruptcy and restructuring problems and failing to become relevant. Well they are relevant now! Don’t expect the stock to duplicate it’s amazing past performance nevertheless we’re still confident investors will see nice steady gains.”

DAL did the complete opposite of what everyone had expected, soaring another 48.34% over the next 6-months making their total net gain of +104% in a 17-month period. The famous trader, Peter Lynch would call this a ten-bagger.

Going forward you would expect the good times to be over for DAL right? Nope, in fact analysts couldn’t be more bullish about the stock as 93% of the analysts currently covering DAL issuing a BUY rating or higher. Breaking it down, of the 15 analysts covering DAL; 5 Strong Buy, 9 Buy, & 1 Hold.

If that doesn’t sell you then maybe this will. DAL holds a PEG Ratio of 0.20, a P/S of 0.32, and they have over $3.2 Billion in the bank. After panning out as our trendy pick in 2011, we went away from the fundamentals and as a result it cost us from capitalizing on DAL’s second big rally. Luckily we have learned from our mistakes and are fully set to ride out another great run by DAL.

If we’re looking at a 12-Month Price Target, expect DAL to be trading around $20 per share, a total yield of 44%.

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Southwest Airlines (LUV) 29.79%

Southwest-395Southwest is a proven winner, year in and year out the stock continues to perform. LUV continues to be America’s leading discount airline, a title that has made them a revenue machine and a great investment.

In our previous July 24th article we wrote:

“If you currently own the stock we recommend you to hold onto LUV but new investors don’t be jumping out to buy this one as we’d rather see you invest in Delta Air Lines. Nevertheless expect LUV to rebound and make a strong run.”

How has LUV performed since we wrote that? Quite well, up 29.79% so for the investors who stayed put they did quite well. When you compare LUV 30% rally to DAL’s 48% jump it doesn’t look as impressive but LUV still proved to be a solid investment.

Going forward we’re still holding onto LUV however new investors shouldn’t be jumping out to buy new shares unless they drop significantly. We like LUV’s 0.42 PEG Ratio, their 0.48 P/S, and the fact they have $2.97 Billion in cash. We don’t like the fact analysts aren’t that bullish about LUV as more analysts have a HOLD rating out for LUV than a BUY.

Nevertheless LUV is a great company from top to bottom and if we’re looking at a 12-Month Price Target, expect LUB to be trading around $14.50 per share, a total yield of 30%.

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UAL Corp (UAL)  18.16%

united-airlinesAfter an exceptional run of over 42% in 2011 and 2012, many questioned whether UAL Corp could keep up the trend. Not for one second did we doubt that UAL would continue to deliver steady returns.

In our previous July 24th article we wrote:

“Like Delta Airlines, they were another stock working through some bankruptcy restructuring issues and having troubles with becoming relevant in the industry. They have done a fabulous job reinventing themselves and becoming relevant again. With the worst of their problems behind them and strong analyst coverage along with upbeat expectations expect UAL to continue to perform well throughout this year and into next.”

UAL once again delivered with a return of +18% over 6-months. Looking ahead it may be time to be cautious and shareholders should consider taking their profits after a 17-month run of 60.42%.

We recommend new investors to only buy UAL on a dip. Current shareholders hold UAL however don’t be hesitant to sell off your shares if UAL peaks. This isn’t to say UAL is not an attractive investment but more of being a cautious investor in what some say are turbulent times for the market going forward.

There are still some major factors that we like about UAL, for instance a 0.44 PEG Ratio, 0.22 P/S, 6.68 Billion in Cash, and the fact 11% of shares are held by Insiders. Analysts are mostly favorable towards UAL with 66% of the 15 analysts covering the stock issuing a BUY Rating or higher. The analyst breakdown is: 4 Strong Buy, 6 Buy, 4 Hold, & 1 Underperform.

Looking at a 12-Month Price Target, expect UAL to be trading around $32.50 per share, a total yield of 35%.

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Who Were The Top Five Worst CEOs of 2012?

Who Were The Top Five Worst CEOs of 2012?

Screen Shot 2013-01-31 at 3.36.26 PMWho are the absolute worst chief executives of 2012? Sydney Finkelstein thinks he knows. The longtime professor at Dartmouth College’s Tuck School of Business is the author of 11 books with such titles asWhy Smart Executives Fail and Think Again: Why Good Leaders Make Bad Decisions, so he knows a thing or two about utter failure. He’s been putting out his list for three years now, and last year it included the chief executives of Netflix (NFLX), Research in Motion (RIM), and Hewlett-Packard (HPQ). Here’s the list (except where noted the companies didn’t respond to a request for comment):

1. Brian Dunn, who resigned as chief executive of Best Buy (BBY) in April after allegations surfaced that he had an inappropriate relationship with a much younger subordinate. That’s not why he’s on the list, though. Declining stock price, cratering same-store sales, loss of market share to more nimble competitors, and an addiction to share buybacks that cost the company $6.4 billion with little to show for it—that’s why he’s on the list.

Screen Shot 2013-01-31 at 3.34.51 PM2. Aubrey McClendon, the CEO of Chesapeake Energy (CHK) who apparently has trouble keeping his company’s finances and his own apart. According to Reuters, McClendon borrowed as much as $1.1 billion over three years in undisclosed loans against his stake in thousands of company wells and ran a $200 million oil-and-gas hedge fund on the side, an “obvious conflict of interest,” Finkelstein says. Use of the company jet (and company employees) for personal purposes and a corporate sponsorship deal for Oklahoma City Thunder while McClendon was an owner of the basketball team also didn’t help. Jim Gipson, a spokesman for Chesapeake Energy, declined to comment.

3. Andrea Jung, who stepped down as chief executive of Avon (AVP) in April but remains as chairman through the end of this year. Jung has been unable to fix the company’s operational problems, failed to groom a successor, and turned down a $10.7 billion offer from the beauty-care company Coty that, in retrospect, it should have leaped at. Since 2004, the company’s Screen Shot 2013-01-31 at 3.35.05 PMmarket value has fallen under her watch from $21 billion to $6 billion. And the company has had to spend $300 million in legal expenses related to allegations that it violated the Foreign Corrupt Practices Act, which bars bribery of foreign officials.

4. Mark Pincus, the CEO of Zynga (ZNGA), the mobile gaming company that brought the world Farmville,among other online distractions. Zynga stock is down 75 percent so far this year, and the company is losing top executive talent. Pincus has a fairly illustrious pedigree—he got a bachelor’s degree in economics from Wharton in 1988 and his MBA from Harvard Business School in 1993. But Finkelstein says he’s made some rookie mistakes, including hitching his company’s wagon much too securely to Facebook (FB), which Zynga relies on for a big chunk of revenue. And he hardly expressed confidence in the company’s prospects with his move to unload 16 million shares after the IPO lockup period ended. Joe Libonati, a spokesperson for Zynga, declined to comment.

Screen Shot 2013-01-31 at 3.35.25 PM5. Rodrigo Rato, who resigned as chairman of the Spanish lender Bankia (BKIA) in July. Rato is one of Spain’s former finance ministers and a former managing director of the IMF. He’s under investigation for fraud, price-fixing, and embezzlement in connection with Bankia’s spectacular collapse and bailout by the Spanish government. Rato has an MBA from the UC-Berkeley Haas School of Business. In 2011, Bankia announced profit of €309 million; after Rato resigned, it was restated to a €3 billion loss. Carmen de Miguel Hombria, a spokesperson for Bankia, declined to comment.

Two other executives—Mark Zuckerberg at Facebook and Andrew Mason at Groupon (GRPN)—almost made the list. The rap on Zuckerberg is his “massive ego,” while both men get demerits for immaturity and shares that move in only one direction, and not the right one. Says Finkelstein: “There’s no reason to believe they have the management skills to run a major public company.”

And don’t get him started on the hoodie.

Do you think these 5 CEO’s deserve to make the Worst List? Who else would you add to the bunch? We want to hear your opinions so please share them on both our Facebook Fan Page & Twitter! Also don’t be shy to leave a comment below! 

Source: Bloomberg Businessweek

The Top 10 Most Hated Companies in America: 2013 Version

The Top 10 Most Hated Companies in America: 2013 Version

Which brands or companies come to mind when you think of the 10 Most Hated Companies in America? Write down your 10 Most Hated Companies & we will compare them later on. Even if you were unable to complete the list or didn’t try it doesn’t matter as today your getting bailed out by Marketwatch who has a list of the 10 most hated companies in America.

Screen Shot 2013-01-30 at 11.08.54 PM

10 Most Hated Companies

  1. J.C. Penney
  2. Dish Network
  3. T-Mobile USA
  4. Facebook
  5. Citigroup
  6. Research In Motion
  7. American Airlines
  8. Nokia
  9. Sears Holding Corp.
  10. Hewlett-Packard


Individual Analysis on Each Company That Made The Not Top Ten

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1. If you ask me about this list I am quite shocked. Is J.C. Penney really the most hated company in America? I know where not to go back to now.

2. Second on the list was Dish Network and this one I can understand as if there is anything that frustrates it’s when the tv channels, DVR, something isn’t working and of course it happens during all the crucial moments whether it’s a key sports game, season finale, you name it. So yeah I’m not surprised to see Dish at number two, as they must get endless amounts of complaints day after day.

3. Third went to T-Mobile USA and honestly I’ve never used T-Mobile don’t think any of my friends or family do either so I’ve never heard anything bad or good to defend them on, sorry.

Screen Shot 2013-01-30 at 11.06.36 PM4. Now the fourth spot is interesting, Facebook. Facebook is like the cocky jock in High School. Lots of people love him, but even more hate him. Also with recent studies showing how Facebook irritates the daily life of most Americans by making them feel down on themselves after seeing their friends traveling around the world and doing all these great things while they’re stuck at home. Maybe it needs an update Zuckerburg.

5. Fifth on the list is Citigroup and what’s not to hate, they are a greedy, overzealous bank that has a CEO everyone hates and not a great PR Image which all combined puts them at #5 on this list.

6. Sixth on the list is everyone’s least favorite tech company, Research in Motion aka RIM or as of today they will be switching their name to BlackBerry. Known for the Crackberry and for running an ineffective business for quite some Screen Shot 2013-01-30 at 11.06.43 PMtime guess this is what now leads you to becoming America’s #6 most hated company.

7. Number seven goes to American Airlines. Do we even have to get into this one or do we all know why? From baggage screw-ups, to delayed flights, charging to check bags, pricy tickets, the list goes on and on of all the terrible things American Airlines does as a company and then you look at Southwest, a mirror opposite image and you then know why they deserve to join this list.

8. Number eight is Nokia, well shitty phones will never please the customer so this one doesn’t’ surprise me one bit.

9. Coming in ninth is Sears Holdings who from their ridiculous wait times for service trips, bad warranties, and weakening brand deserve to have a seat on this list.

10. Coming in at number ten is Hewlett-Packard and why to they make this list? Because there business is crumpling, their product is sub-par, and they are doing nothing to fix it.

What companies do you think deserve to be on the most hated list? We want to hear your opinions so please share them on both our Facebook Fan Page & Twitter! Also don’t be shy to leave a comment below! 

Source: 10 Most Hated Companies in America – MarketWatch

If Fund Managers Can't Beat the Markets, How Can You?

If Fund Managers Can’t Beat the Markets, How Can You?

Screen Shot 2013-01-14 at 2.14.04 PMBack in October, 2012 we published an article 80%-90% Of Financial Planners Don’t Even Beat the S&P 500, So Are They Worth Their Fee?

Interestingly this past week, Barry Riholtz referenced Merrill Lynch research that showed only 39% of fund managers beat the S&P500 last year.

Barry went on to write:

This morning, the WSJ references Goldman Sachs research — it shows something similar. Their data showed 65% of U.S. large-cap stock funds trailed the benchmark index net of fees. (5 year average = 66%).

When they looked for funds that beat the index two consecutive years, they came up with an astounding number: A mere 10% of nearly 2000 U.S. stock funds beat their benchmark in both 2011 and 2012 (Source: Morningstar research).

This is why most people are better off putting money into inexpensive passive index funds.

If you want to at last have a fighting chance to pick a fund that actually has a shot to beat its benchmark, these 2 steps are a start:

1. Low Fees — look for funds with an expense ratio of 0.86% or below.

2. Avoid Closet Indexers — find funds with a low R-squared ratio.

The full article explains these in great detail. 

How to Find a Fund Manager Who Can Beat the Market

I still think that for many people, especially those with portfolios under $250k, passive indexing is simpler, less expensive, and more reliable.

investing-in-bonds.s600x600We did further research and found a MarketWatch article that offered similar perspective, “Are Financial Advisors Worth Their Fee.” Quoted in the article:

“An investor who pays a financial adviser to pick mutual funds either misses the point of planning or has a bad adviser. In fact, Blanchett said that the thing that surprised him the most about the research was the value of annual meetings, where clients and advisers tweak strategies, particularly as the consumers is entering or in retirement; both advisors and clients tend to focus on market results more than the benefits they get from having that sit-down.”

How can you beat the S&P 500?  We’re a believer that astute investments in the global market are a better way to beat the S&P 500. What makes it hard for old school money managers at large investment firms to beat the S&P 500 is that in-depth analysis of promising global stocks is often lacking, even at the major Wall Street firms.  The majority of global stocks that interest us do not show up on the lists of researched stocks at many large investment houses.  Most huge investment firms do not provide much coverage of small and micro cap stocks.  It’s only after some of these stocks appreciate 50-100% that big firms finally start to initiate coverage. And, even then, the analysis is sometimes still lacking depth or meaningful analysis.

It can be time consuming, but it’s certainly not too difficult to do your own research.  Those who follow Stocks On Wall Street know that we’re a believer in the long-term growth of Asian and other select emerging market economies.  In addition to the usual economic indicators, we’ve also honed our perspective to include an analysis of how the political and legislative environments will potentially affect the growth prospects of companies and countries.

Granted, taking charge of your own investments, especially in global and emerging markets, is not for the fainthearted.  Don’t fool yourself about the risks.  But, remember, the risk is not just on the down side. We, for one, remain a believer in the long-term economic global growth story relative to the U.S. economy and our almost insurmountable debt.  That doesn’t mean we would shun U.S. investments.  It simply means we will continue to skew our investment perspective toward global and emerging markets, which we believe will deliver greater returns over the long haul.

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Fiscal Cliff in Plain English

Fiscal Cliff in Plain English

You may have seen this before, but it needs seeing again and again and again…..  Here’s the USA’s fiscal problem made easy:

  • U.S. Tax revenue:                                       $2,170,000,000,000
  • Fed budget:                                                  $3,820,000,000,000
  • New debt:                                                    $1,650,000,000,000
  • National debt:                                             $16,440,000,000,000
  • Recent budget cuts:                                  $38,500,000,000

Let’s now remove 8 zeros and pretend it’s a household budget:


  • Annual family income:                               $21,700
  • Money the family spent:                           $38,200
  • New debt on the credit card:                  $16,500
  • Outstanding balance on credit card:     $164,400
  • Total budget cuts so far:                           $385

Got It?  OK now here’s another way to look at the ‘Debt Ceiling':

Let’s say you come home from work and find there’s been a sewer backup in your neighborhood….AND your home has sewage all the way up to your ceilings.

What do you think you should do???…..  Raise the ceilings?  OR, REMOVE IT?

Let us know by leaving a comment below, sending us a Tweet, or commenting on our Facebook Fan Page. Also remember to sign up for Stocks on Wall Street’s Monthly Newsletter!