CEOs: Put Your Money Where Your Mouth Is

by Robert Williams, Publisher

It’s well documented. Insider buying is a terrific way to gauge a stock’s investment appeal. (Investment legends, like Peter Lynch, have long sung the praises of insider buying.)

I mean, can you get a better vote of confidence from a CEO than one that’s willing to open his own checkbook for shares?

Probably not.

That being said, such buying alone should never warrant entry. Other factors are always “in play,” too.

For example, what warrants a “significant” buy on behalf of an insider? Well, with access to the right information, you can track the amount an insider antes up relative to his salary.

You’d also be interested in knowing whether the “buy” is merely an exercising of stock options, or a genuine purchase of shares.

My point

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Harry Dent: Bold Predictions of the Great Depression Ahead

by Alexander Green, Chief Investment Strategist Monday, October 6, 2009: Issue #1108

As they said in the movie “Poltergeist”: “They’re baaa-aaack.”

Who’s back? Harry Dent, the self-styled “economic futurist,” who presumes to tell us about the great economic booms and busts that lie ahead.

How can he possibly know these things?

According to Dent, an analysis of the “highly predictable” nature of consumer spending based on demographic trends – increasing spending during child-rearing years, peak spending as the kids leave home and slower spending during late work and retirement – reveals what lies ahead for the economy and the stock market…

Harry Dent: Dow 44,000 & Other Flimsy Forecasts

Harry Dent is a man worth listening to. After all, he has a near perfect track record – as a contrary indicator…

For example:

With less than auspicious timing, Dent ...

One viable approach to investing is seeking growth at a reasonable price (”GARP”) — the P/E ratio divided by the earnings growth rate (”PEG”).  It is a method that attempts to make comparison of P/E ratios between companies more meaningful by considering growth rates.

GARP is a hybrid method that has elements of value investing and elements of growth investing.  The method was popularized by Peter Lynch.

Generally, PEG ratios above 2.0 are considered expensive.  Ratios below 1.0 are considered discounted.  Lynch said that attractive PEG ratios are at or near the earnings growth rate of the company.

The method is imperfect, as are all methods, but it widely used.  It is best applied to companies with above average growth rates, but not growth at extreme levels.

Extreme growth rates create silly or impossible ratios.  Companies growing at sprint burst speed cannot sustain those rates, and show unrealistically low PEG ratios.  Companies with negative

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Winn-Dixie Stores, Inc. (WINN) will report its fiscal fourth-quarter results on Monday, Aug 24.

< ?DART(15);?> Earnings estimates for that quarter, as well as for last fiscal year and this fiscal year, have advanced over the past month. The higher revisions can be traced back to late July, when the company raised its fiscal 2009 guidance.

Shares of WINN are up approximately 4% Friday afternoon, which makes this food retailer a top-performing Zacks #1 Rank stock. Volume is at 359,000 shares, which is above the daily average of 257,000.

WINN is part of the retail-supermarkets industry, as is Whole Foods Market, Inc. (WMFI). They are both on today's Zacks #1 Rank List, which includes 230 stocks.

Fiscal 2009 Guidance Raised

WINN offered a bullish assessment of its fiscal 2009 on Jul 21. On that date, the company raised its adjusted

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Why Most Investment Systems Simply Won’t Work

by Alexander Green, Advisory Panelist Wednesday, August 12, 2009: Issue #1064

Early in my 16-year career on Wall Street, I made an astonishing discovery: The overwhelming majority of my colleagues – bright, educated, experienced, and articulate – didn’t have the foggiest idea what they were talking about.

This only became obvious in retrospect, when I saw how their carefully constructed financial theories and investment forecasts turned to dust rather than generating any significant profits.

(You’d be surprised to learn, for example, how many investment “pros” lose a substantial percentage of their own money in the market each year.)

The truth is that there are virtually limitless ways to take a beating in stocks – and only a few methods that work well over time. These methods are generally codified into widely accepted investment principles,

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Point Roberts, South Salem, New York - May 13 2009 - Investorideas.com a leading green investor portal, presents solar stocks commentary with J .Peter Lynch, a solar expert and frequent contributor to Investorideas.com.

a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_VQGtBvsQTCg/SgBvsHu0zsI/AAAAAAAAApY/G0SiVsAj-1o/s1600-h/gone+fishin.jpg"img style="margin: 0pt 0pt 10px 10px; float: right; cursor: pointer; width: 132px; height: 200px;" src="http://3.bp.blogspot.com/_VQGtBvsQTCg/SgBvsHu0zsI/AAAAAAAAApY/G0SiVsAj-1o/s200/gone+fishin.jpg" alt="" id="BLOGGER_PHOTO_ID_5332384762587041474" border="0" //abr /divToday's book review is span style="font-style: italic;"The Gone Fishin' Portfolio/span by Alexander Green. Mr. Green is the investment Director of The Oxford Club, as well as Chairman of Investment U. /divbr /div /divThe span style="font-style: italic;"Gone Fishin' Portfolio/span is a clear and concise read. It is written for the individual investor who has limited to moderate financial knowledge. And lets face it, this is a huge audience. He says it best in the introduction, "No one cares more about your money than you do." Its a simple sentence, but its so true.br /divbr /The book is broken down into three parts: 1) Get Wise; 2) Get Wealthy; and 3) Get On With Your Life.br /br /It starts with why you should ...

Monitoring insider buying is a great way to determine how those who run a company truly feel about its prospects. When a company insider lays down his own money to buy shares in his company at market prices, chances are that there is a very good reason.

Company insiders have intimate knowledge of how their particular business operates. They know when sales are likely to rise. They know about a new marketing strategy that could boost the company’s bottom line. They know about industry conditions that may be changing for the better. And they know the company’s balance sheet like the back of their hands.

A company insider might sell shares for any number of reasons. He or she might need cash for a major purchase or decide to donate a lump sum to charity (yes, this has happened). So an insider selling shares does not necessarily mean bad news for the

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By Dan Ferris, editor, Extreme Value Real investors almost never buy gold stocks. Mind you, I'm not talking about traders. I'm talking about investors. I'm talking about people who know the value of owning a great business for decades... people who have proven they can intelligently deploy capital and compound wealth at double-digit rates for a generation. Great investors like Warren Buffett, Charlie Munger, and Peter Lynch usually laugh at the thought of buying equity in a gold mining business. Mining companies use enormous machines and armies of people to dig gigantic holes and pull tons of dirt and rocks out of them. They have relatively small amounts of cash on hand and lots of inventory, property, and equipment. They sell a commodity that can be produced by any of their competitors. There's no premium brand name in raw gold. All these ...

Based on the investor poll, commodities seem to be the most appealing investment for 2009. Followed by stocks, bonds and cash as the worst asset class for the year. In this post I would like to gather opinions about investing in 2009 from top investor gurus. Let me start with Warren Buffett. Warren called stock market bottom already in mid 2008 and have started to add equity positions to his holding. Last actions show buying interests in railroads companies. He increased stake in Burlington Northern (BNI). Despite of declining volume, earnings have gone up by 19%. Other interesting picks from industry are Union Pacific with 35% earnings growth or CSX Corp (CSX) with 16%. Another two top investors, Donald Coxe and David Winters, like railroads. Companies will benefit from low energy costs. P/E vary in range of 6 - 8 for the ...