Buy-and-hold investing carries a wonderful vision:

Find a successful company
Buy the company’s stock
Sit back, relax, and watch the money grow

The problem is that most successful companies peter out, either meandering around some plateau, producing no return — or, worse, falling back with mounting losses.

Many events and conditions can cause firms to succeed or fail. A common risk occurs when a technological development occurs. How the company responds can determine whether its future will be filled with success, mediocrity or failure.

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Cerner (CERN) caught my interest last year because of its outstanding stock performance. It is a part of the healthcare field’s modernization developments that focus on coordinating and improving medical care through technology. The company’s growth shows in its results – long-term double-digit percentage gains in both sales and earnings. The outlook for 2012: sales growth of 13+% to $~2.5 billion and earnings growth of 22+% to $2.25 per share.

This article is posted on SeekingAlpha.com

I was doing some Dow Jones index analysis and happened across flaws on a CME Group (CME) website that makes me question management’s skill. The misfit finding is one of those odd facts, like a bad puzzle piece, that doesn’t match the picture of a desirable investment.

This article is posted on SeekingAlpha.com

I recently wrote about U.S. stocks recovering their valuations after this year’s sell-off. However, that doesn’t mean the market’s rise is over. There is another source of gains that is potentially very large. However, to view it, we need to take a contrarian stance.

This article is posted on SeekingAlpha.com

Last month I described a 3-stock Wall Street portfolio that I believed offered a good – and diversified – approach to investing in Wall Street’s activities. However, I’ve had a change of heart and have cut two of the positions.

The three holdings were Goldman Sachs (GS), JPMorgan Chase (JPM) and KKR (KKR). Now, the one holding is KKR.

This article is posted on SeekingAlpha.com

The 3rd quarter earnings report season is about over, allowing analysts and investors to incorporate both the company results and outlooks into their thinking. On Monday we examined the Dow Jones Industrial Average (DJIA) overall. Today we will see how individual firms have fared.

This article is posted on SeekingAlpha.com

The stock market has fully recovered its lost ground from this year’s sell-off. Analysts and investors have now incorporated lower economic growth forecasts, information from company earnings reports/outlooks, and mega-trend fears. Evaluating the earnings adjustments and the stock market’s valuation show a stock market that has recovered from its oversold position. Moreover, future growth remains attractive and the market’s valuation offers the potential for future improvement.

This article is posted on SeekingAlpha.com

For two years following the March 2009 bottom, Caterpillar (CAT) led the stock market ever higher. It even gave Apple (AAPL) a run for its money. Then it ran into two downdrafts this year. The first, April-June, was a valuation adjustment in line with the stock market. The second, July-September, was a recession fear buzz saw. For cyclical companies like Caterpillar, recessions are destroyers of profitability and investors’ returns. Adding in previous expectations of high growth and the stock’s dramatic rise made CAT particularly vulnerable. These conditions produced a 35+% drop (meaning a 50+% rise was needed to reclaim its lost ground).

Clearly, CAT participated in the October rally, rising over 30%. So, now what? Does that take it back to a more reasonable valuation? Or is there still plenty of room to grow? I believe it’s the latter, and here’s why…

This article is posted on SeekingAlpha.com