K-Cup + Coke = Huge Green Mountain Potential — Today’s Rise Likely Just The First Step

Thursday, February 6, 2014
K-Cup + Coke = Huge Green Mountain Potential — Today’s Rise Likely Just The First Step

Coca-Cola’s (KO) 10-year contract with Green Mountain Coffee Roasters (GMCR), along with an investment in the firm, is one of those unusual game changer announcements. Similar to an oil company discovering a large reserve or, perhaps even better, Steve Jobs announcing the iPad, GMCR’s fundamentals changed overnight.

Better yet, those fundamentals cannot be calculated yet, so how well Green Mountain will fare (and how high GMCR will rise) is left up to investors’ imaginations. As has happened before (even to Green Mountain), a new product with seemingly unlimited market potential can create a dramatic stock price run-up amid excitement and ever-expanding growth expectations.

This article is published on SeekingAlpha.com


Stock Market’s Plunge Lights Up Two ‘Buy’ Indicators – Now What?

Monday, February 3, 2014
Stock Market’s Plunge Lights Up Two ‘Buy’ Indicators – Now What?

That was fast. In one day, the market and the media triggered the two indicators discussed in “Stock Market Support Is Fragile – 2 Indicators And 2 Strategies For Success If 2nd Shoe Falls.” All it took was a 326-point drop in the DJIA. The question now is whether to act on the flashing “buy” signal or come up with some reason to wait. This write-up is aimed at helping with that decision.

This article is published on Forbes.com


Stock Market Support Is Fragile – 2 Indicators And 2 Strategies For Success If 2nd Shoe Falls

Monday, February 3, 2014
Stock Market Support Is Fragile – 2 Indicators And 2 Strategies For Success If 2nd Shoe Falls

From January’s negative stock market performance comes the pursuit for the answer to “Why?” The search has produced the usual suspects: Overvaluation, reaction to 2013’s high return, long overdue “correction,” and sales/earnings disappointments (actual and/or outlook). Then there are the coincidental events: Fed confirming its taper policy and emerging markets/currencies raising havoc once again. Finally, there is the January decline (nee effect), seemingly casting a pall over the next 11 months.

Nice try, but the underlying fundamentals remain the same: Economy, business and consumers sound and improving well. Company earnings growth? Not so easy at this point in the cycle, but that’s not a surprise because, with normality back in town, competition has heated up. However, the key is that growth conditions are here: Capital spending is at work, corporate borrowing is rising (and banks’ willingness to lend is up), housing is hitting its stride, consumer spending this holiday season was fine (not for all retailers, but that’s normal), oil and gas prices are in check as is inflation overall, students are actively applying for colleges next fall, states and local governments are recording nice gains in revenues, vacations are being planned, etc. etc.

This article is published on Forbes.com


2014 Conundrum: Stocks Down, Bonds Up — 4 Reasons Why

Friday, January 24, 2014
2014 Conundrum: Stocks Down, Bonds Up — 4 Reasons Why

With 2013’s market trends (stocks up, bonds down) seemingly established, and year-end fundamentals pointing to improvement and growth, the forecast was for 2014 to be more of the same – perhaps even better. Anticipating happy news, investors jiggered their portfolios, then sat back to watch the “January effect” launch the New Year’s bull market, while their former favorites, bonds, wallowed. Instead, from day one, both 2013 trends made U-turns.

With all signs pointing one way, why did the markets go the other?

This article is published on Forbes.com


Best Buy Stock Adrift Without Growth Or Value Lifelines — Traders Circle

Monday, January 20, 2014
Best Buy Stock Adrift Without Growth Or Value Lifelines — Traders Circle

Best Buy’s shocking 2014 news negated its 2013 growth status. Management’s strategy stumbled, turning hoped-for sales and earnings growth into confirmed declines in both. Last year’s resurrected growth story evaporated and with it, almost two-thirds of 2013’s outstanding rise (from $12 to $44, now down to $24).

Analysts, fund managers and individual investors alike can be forgiven for being shell-shocked. After November’s 10% drop on management’s risk commentary, overall holiday electronics sales seemed to be going well. Even preceding management’s bombshell last week, the stock was creeping up on good trading volume.

So, what now? How should we view Best Buy – the company and the stock?

This article is published on Forbes.com


Best Buy’s ‘Shocking’ Drop Provides Reality Check For All Investors

Thursday, January 16, 2014
Best Buy’s ‘Shocking’ Drop Provides Reality Check For All Investors

No one can say the risk was hidden. Best Buy cautioned last November about the risks in the coming holiday season. The accompanying 10% stock drop back then signaled management’s comments were a serious concern.

Now falls the other shoe: A huge 28+% stock plunge following Best Buy’s confirmation of risk becoming reality. (This announcement precedes the January 31 fiscal year earnings report, to be released February 27.)

So, what about the stock market, itself?

This article is published on Forbes.com


Ditch ‘Dogs Of The Dow’ – The Mutts Have Bad Genes, Improper Breeding And False Papers

Thursday, January 9, 2014
Ditch ‘Dogs Of The Dow’ – The Mutts Have Bad Genes, Improper Breeding And False Papers

The ‘Dogs of the Dow’ reasoning sounds sensible, the process is simple and the result are being reported as proof that it works. However, appearances are not what they seem. The basis (genes) is bad, the process (breeding) is improper and the results (papers) are false. Here’s the explanation…

This article is published on Forbes.com

 

Apple’s Missing Ingredient Dulls Its Outlook

Saturday, January 4, 2014
Apple’s Missing Ingredient Dulls Its Outlook

All analysts and investors agree on one thing: Innovation created Apple (AAPL). But innovation has two forms: revolutionary and evolutionary. Revolutionary innovation is what Steve Jobs did so well. His creations shook up the status quo and produced new markets with his dramatically new, must-have products.

But he also was expert at the follow-on – i.e., evolutionary innovation. By advancing his creations faster than the competition, particularly with newly created features, he not only generated Apple’s star leadership status, but also kept its high profit margins intact. Additionally, he ensured highest quality and attractive design, resulting in an ardent customer base and making Apple the standard against which all competitive products were judged.

Then the revolutionary innovation ended…

This article is published on Forbes.com


The Great Recession Is Dead: 10 Steps For Success In 2014

Tuesday, December 24, 2013
The Great Recession Is Dead: 10 Steps For Success In 2014

It’s over. The Great Recession is officially relegated to Wikipedia and academic studies. The financial problems are fixed. Even Bernanke is looking for historical analysis of his efforts as Yellen arrives and the Fed shifts gears. Kiplinger’s employment/unemployment analysis shows an advancing U.S. economy with large, new and exciting growth needs.

The past few weeks’ waterfall of positive economic, business, financial, consumer and sentiment reports overfill a large file drawer. Even separating out the significant, special and surprising good news produces an unwieldy pile.

But aren’t there things to be done? Challenges to tackle? Adjustments to make? Of course, but that’s not the recession speaking. Rather, it’s the return of normality in a dynamic economy within an interrelated world.

So, what does it all mean?

This article is published on Forbes.com


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