Getting the Market Right: How to Use EBITDA

Transcript:
Steve McDonald (SM): Our guest this week is Marc Lichtenfeld. He’s here to talk about EBITDA. And I’ll let you explain what it is because every time I try to say it, I say income tax instead of interest, taxes, depreciation and amortization. I’m in the markets 35 years. I’ve been working in them since ’91. What were you doing in 1991?

Marc Lichtenfeld (ML): I was out of school. That’s when I was starting to learn about the markets.

SM: Okay. I don’t ever remember hearing it mentioned, but in the last five, maybe 10 years, it’s EBITDA this and EBITDA that. What is it? Why are people using it?

ML: Sure. So it’s earnings before interest, taxes, depreciation and amortization. And it’s used to kind of smooth out some of the earnings… you know, some tricky accounting mechanisms that people use because there’s so many noncash items and earnings – so many one-time items in earnings numbers.

And so EBITDA really is almost a cross between cash flow and earnings. It’s a measure of the performance of the business. So you’re taking out the interest. You’re taking out the taxes and those non cash items like depreciation and amortization.

So it’s kind of a measure of just how well the company sells its widgets or sells its services. And they look at EBITDA margins on occasion, so it’s really kind of a performance metric more than anything else.

SM: Can the average guy actually use it? I mean earnings is drilled into us. Cash flow – not quite as much – it should be, but it isn’t. How does the average guy work that into his thinking?

ML: Sure. So you can use it the same way you would use earnings and cash flow. You can look at growth metrics. Is EBITDA growing, and if so, by how much? And how does that compare with its peers in the market?

You can look at the price-to-EBITDA, just like you would a price-to-earnings ratio (P/E) or price-to-cash flow ratio. And a rough metric, you could say, is 10 times. If a stock is trading at 10 times or less its EBITDA multiple, then it’s probably inexpensive. If it’s trading at 40 times EBITDA, that’s probably very expensive.

SM: So the multiples as compared with the P/E  are going to be lower because it’s a bigger number?

ML: Yeah, exactly. And like I said, 10 times is a very ballpark number that you’d want to look at. And again, it’s going to matter what sector it’s in. If a stock is trading at 15 times EBITDA but the sector averages 20, then that’s probably a cheap stock; it probably doesn’t have to be a 10.

SM: Where is the best place to find this?

ML: It depends on the company. Some companies will come out with the EBITDA number in the press release. It will just be as plain as day.

Other times you kind of have to do the math yourself on the income statement and just subtract those other things. …read more

Is Legal Marijuana a Seasonal Industry?

legal marijuana seasonal industry 1

I’m sure all of our readers can name a few seasonal industries.

Tourism and hospitality earnings obviously fluctuate throughout the year. Some energy companies are affected by annual shifts between summer-blend and winter-blend gasoline. And it’s no secret that many retailers make most of their money in the last three months of the year.

But did you know that legal marijuana sales are also seasonal?

They sure are.

This week’s chart – compiled by Marijuana Business Daily using data from the Colorado Department of Revenue – shows a consistent surge in marijuana sales in the spring and summer and a drop-off in the fall.

This yearly pattern has big implications for marijuana investors – especially as Canada prepares to legalize the stuff nationwide this summer.
Why do legal marijuana sales follow the seasons?
You might think marijuana’s seasonality centers around 4/20, the annual stoner celebration. But if you look closely at the chart, you’ll see a consistent lull in April sales.

Instead, tourism seems to be the main driver of this spring and summer surge. And as I mentioned above, tourism is one of the most seasonal industries in existence.

Out-of-staters accounted for more than half of legal marijuana sales in Denver in 2014, according to a recent report from the Colorado Department of Revenue.

And a more recent study from the Colorado Tourism Office found that nearly half of the visitors polled came because of the state’s marijuana laws.

With these statistics in mind, it’s easy to see why marijuana sales fluctuate throughout the year in Colorado. They ramp up along with tourist traffic as the weather gets warmer. Then they fall during Colorado’s autumn off-season.

Why does any of this matter to your portfolio?

Because Canada is set to legalize marijuana nationwide in just a few months. It’s already the home of most publicly traded marijuana companies. And like Colorado, it has a beautiful summer tourism season and a chilly autumn off-season.

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How do you play this seasonal industry?
If Canada’s marijuana retailers are anything like Colorado’s, their seasonal trends should also be exploitable.

You could simply buy pot stocks during the autumn off-season and sell them during the summer. And you could use call options to amplify your short-term gains.

Or, for even less effort, you could just read Matthew Carr’s newsletters. He’s The Oxford Club’s resident expert on both marijuana investing and seasonal trend trading.

Good investing,

Samuel
Thoughts on this article? Leave a comment below. …read more

Let’s Agree on “How Much Is Enough”

Editor’s Note: Me again! If you’ve been keeping up with your Investment U emails this week, you’re probably thinking, “Get on with it, already! Tell us about these new and exciting changes coming to our free subscription!”

(And if you haven’t been keeping up, now’s your chance!)

In yesterday’s note, I tempted you to a game of Clue. There were two key words that stood out in ETF Strategist Nicholas Vardy’s article, The Father of Free Markets Is Not Who You Think.

Well, several of you wrote in and… all of you guessed correctly – well done!

The words that summarize Investment U’s evolving brand and mission are “liberty” and “wealth”.

We want to do more than just teach you the ropes and leave you to your own devices. Instead, we want to involve you every step of the way on the journey from financial literacy… to financial liberty.

We’re convinced that’s the shortest way to a rich life.

I promise to provide more details next week after Memorial Day.

But for now, because Alex is in transit home from The Oxford Club’s Chairman’s Circle Wealth Cruise, I’m bringing you his original answer to the column, “How Much Money Is Enough?”

Wishing you a terrific holiday weekend with lots of friends and family, beer and burgers, and health and wealth.

Donna DiVenuto-Ball, Managing Editor

I’ve written several columns addressing a foundational question about money: How much is enough?

There’s no shortage of opinions on the subject, as readers demonstrated with their own thoughts in Monday’s column. (It was a smorgasbord of the practical, the political and the philosophical.)

In our increasingly competitive world, some feel that money is the way we measure our competence, our success, even our worth as individuals.

This isn’t just wrongheaded, in my view. It’s offensive. There are plenty of folks doing incredibly skilled and underpaid work such as social workers, nurses, high school basketball coaches or Navy SEALs, to name just a few.

Many feel there is a gap between how they live and the way they should be living – and that money would make up the difference.

And perhaps it would. Money is a linchpin issue in all our lives. We want and need things. It takes money to get them.

Some live openly with the accumulation of money as a primary goal. Others think it isn’t important – or shouldn’t be.

Yet millions harbor a chronic fear that they will never truly have enough – or be able to keep it.

It’s easy for those of us with money – even if we came from nothing – to forget what a struggle life can be without it.

Studies show the majority of Americans spend almost everything they make, shouldering enormous stress as they live paycheck to paycheck.

It’s not just the poor and lower middle class, by the way. A realtor friend once told me I’d be shocked to discover how many neighbors in his gated community were “just two mortgage payments from the edge.”

Money can do great things and promote important causes. But it can also …read more

The Father of Free Markets Is Not Who You Think

Editor’s Note: If you’ve kept up with your Investment U emails over the past few days, you’re aware that big changes are coming to your subscription.

But that’s really all I’ve told you. (And if you haven’t opened your emails lately, now’s a great time to do a quick skim!)

I promise to provide more details next week after Memorial Day. But for now, are you ready for a little game of Clue?

Pay close attention to the themes in today’s article by Nicholas.

Two key words should stand out… and will summarize our evolving brand and mission.

Can you guess which they are? Leave a comment below…

And let’s see who comes closest. Heck, you might even get a shout out in my next note!

Donna DiVenuto-Ball, Managing Editor

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.”

– John Maynard Keynes
I first picked up Friedrich Hayek’s The Road to Serfdom in college.

I still remember how instantly compelling I found his insights.

Economically, Hayek argued that Soviet-style central planning didn’t work.

Politically, he pointed out that collectivism – whether pursued by the “right” in Nazi Germany or the “left” in the Soviet Union – led inevitably to tyranny.

Morally, Hayek noted even well-intentioned social policies gave government bureaucracies too much power, ultimately oppressing their citizens’ freedom and liberty.

When I shared my enthusiasm for Hayek’s ideas in my seminars, the intense blowback from my professors perplexed me.

Naively, I was unaware that Hayek had become an icon of the political right…

And that both Margaret Thatcher and Ronald Reagan had often cited Hayek as inspiration for their policies.

The irony is that Hayek’s intellectual stock has skyrocketed since then.

The evidence?

Following the debates surrounding the financial bailouts of 2008, The Road to Serfdom became the No. 1 best-seller on Amazon in June 2010.

Hayek’s ideas are as relevant today as they have ever been.

It’s ironic that an Austrian-born economist’s focus on limited government, free markets and liberty reflects so well the basic instincts of many Americans today.
Who Was Friedrich Hayek?
Hayek was born into an academic family in the Austro-Hungarian Empire in 1899.

He earned his academic stripes by completing two doctorates at the University of Vienna in the 1920s.

In 1931, Hayek was plucked from the bush leagues of Austrian academia to fill a prestigious chair at the London School of Economics.

Hayek promptly positioned himself as a rival to the English economist John Maynard Keynes at Cambridge.

Hayek’s clash with Keynes focused on the role of the government in managing the Great Depression.

With the publication of Keynes’ TheGeneral Theory of Employment, Interest and Money in 1936, Hayek lost the debate.

I believe Hayek’s loss was due as much to style as to substance.

Keynes was flamboyant, quotable and brilliant. He was also the ultimate insider.

In contrast, Hayek was cerebral, rambling and nerdy. He was an outsider with a strange accent.
Hayek’s …read more

Your Marijuana ETF Primer

Editor’s Note: Like Chief Investment Strategist Alexander Green, Matthew is away this week sailing the ocean blue on The Oxford Club’s Chairman’s Circle Wealth Cruise. So it’s a great time to borrow an article he recently wrote for Energy & Resources Digest on the new category of marijuana ETFs.

It’s also a good (albeit bittersweet) time to let you know that Matthew will soon be bidding bon voyage to the Investment U e-letter.

It’s not because we don’t love and value him. I will personally miss our weekly banter about Elon Musk’s latest boneheaded move, traditional brick-and-mortar retailers who can’t adapt to the new world order and which 90s song lyric would most resonate with you.

And don’t worry. You’ll still be able to follow Matthew’s latest take on marijuana, manufacturing, metals, oil and the markets (did I mention marijuana?) for free in Energy & Resources Digest.

But as I’ve mentioned the past two days, exciting changes are coming to your daily Investment U subscription.

We’ll invite Matthew back from time to time. But until then, let’s just say “See ya when we see ya” – like next Wednesday when he gives you his parting “Peace out.”

Donna DiVenuto-Ball, Managing Editor

I was shocked last week when someone complained to me, “There isn’t even a marijuana exchange-traded fund!”

I sighed. They were right.

Because there isn’t one. There are four!

Admittedly, two just launched in February. And one is a converted Latin American real estate ETF.

But this illustrates how much investors still have to learn about the cannabis market as well as how quickly it’s evolving… not to mention how far removed it is from the mainstream.

So today we’ll delve briefly into the four marijuana ETFs and their differences.

They each have their pros and cons, despite sharing several positions.

But in the volatile world of pot investing, these basket opportunities can offer a less risky approach.
The Best Way to Play “Big Cannabis”
The Horizons Marijuana Life Sciences Index ETF (TSX: HMMJ; OTC: HMLSF) was the first marijuana ETF.

It includes Aurora Cannabis (TSX: ACB; OTC: ACBFF), Canopy Growth Corp. (TSX: WEED; OTC: TWMJF), GW Pharmaceuticals (Nasdaq: GWPH), MedReleaf (TSX: LEAF; OTC: MEDFF), Scotts Miracle-Gro (NYSE: SMG), Aphria (TSX: APH; OTC: APHQF) and Cronos Group (Nasdaq: CRON).

It focuses on the large cap – or “Big Cannabis” – players.

That means its top holdings include the household names of the industry. It gives investors exposure to some of the largest licensed producers in Canada, such as Cronos, which was the first pure marijuana play to be listed on a major U.S. exchange.

Those companies represent 66.28% of the ETF’s holdings. And of Horizons Marijuana’s 37 positions, 79.6% are in Canada, 12% are in the U.S. and 7.5% are in Great Britain.

You also get a biopharmaceutical with GW, which happens to be the largest component of the U.S. Marijuana Index.

GW’s cannabidiol epilepsy treatment, Epidiolex, is a groundbreaker for the medical cannabis industry. It not only has a favorable recommendation from the FDA but could potentially bring in $1 billion in sales per …read more

American Eagle Stock Price and Research (NYSE: AEO)

american eagle stock price american eagle research nyse aeo 2

American Eagle (NYSE: AEO) is a mid cap company that operates within the specialty retail industry. Its market cap is $5 billion today and the total one-year return is 116.89% for shareholders.

American Eagle stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✓ Earnings-per-Share (EPS) Growth: American Eagle reported a recent EPS growth rate of 76.67%. That’s above the specialty retail industry average of 27.35%. That’s a great sign. American Eagle’s earnings growth is outpacing competitors.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the specialty retail industry is 24.51. And American Eagle’s ratio comes in at 19.67. It’s trading at a better value than many of its competitors.

✓ Debt-to-Equity: The debt-to-equity ratio for American Eagle stock is 0%. That’s below the specialty retail industry average of 110.21%. The company is less leveraged.

✓ Free Cash Flow per Share Growth: American Eagle has increased its FCF per share over the last year relative to its competitors. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.

✓ Profit Margins: The profit margin of American Eagle comes in at 7.65% today. And generally, the higher, the better. We also like to see this ratio above competitors. American Eagle’s profit margin is above the specialty retail average of 5.08%. So that’s a positive indicator for investors.

✗ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for American Eagle is 16.66% and that’s below the industry average ROE of 20.94%.

American Eagle stock passes five of our six key metrics today. That’s why our Investment U Stock Grader gives it a Strong Buy.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

If you’re interested in finding Strong Buy stocks yourself, check out 3 Powerful Technical Indicators for Smarter Investing. We’ll show you how to eliminate emotional bias from your trading process with three powerful technical tools you can start using to boost your trading profits immediately. Click here to learn more. …read more

Don’t Miss This Once-in-a-Generation Opportunity

Editor’s Note: A generation represents a period of roughly 20 years.

You know what else happens over 20 years? New technologies are developed that make our lives better, easier and fuller.

Think about it…

The ’40s ushered in the TV along with a decade of military advancements, including the guided missile, helicopter and atomic bomb.

The ’60s brought us the first heart transplant, BASIC programming language, the light-emitting diode (aka LED), AstroTurf and the birth control pill (ah, those “make love, not war” hippies).

In the ’80s, earlier advancements from the ’70s including cell phones, video game consoles and personal computers were first marketed for mass consumption.

And the turn of the millennium spawned the internet, email, smartphones, tablets, artificial intelligence, electric vehicles… and the list is still evolving.

The advancements above are all still around today… albeit in different iterations. After all, evolution is the only way to stay relevant and competitive in today’s marketplace… which is exactly why we’re making exciting changes to your free Investment University subscription.

It’ll still be free, but the mission behind our nearly 20-year-old Investment U e-letter has evolved… along with your needs.

Chief Investment Strategist Alexander Green and ETF Strategist Nicholas Vardy strive to do more than just educate you about investing and leave you to separate the wheat from the chaff. Rather, they want to empower you to confidently take charge of your journey from financial literacy… to financial liberty.

And they’ll be there involving you every step of the way. After all, they’re convinced it’ll be the shortest way to a rich life – better, easier and fuller.

(To be continued…)

Donna DiVenuto-Ball, Managing Editor

When I studied finance in the classroom, roughly 80% of the focus was on evaluating stocks.

About 15% was devoted to understanding bonds.

The remaining 5% covered everything else.

The implicit message was clear: The only important asset class worth learning about was stocks.

Once I began studying the world’s very best traders, I found that their approach to investing was different from what I had learned in textbooks.

The top traders focused on many other asset classes – areas that were barely covered in any text.

But what really set them apart from the crowd?

They were agnostic about where and how they made their money.

Adopting this belief drove me to study asset classes other than U.S. stocks.

I studied everything from global stocks to commodities to global currencies.

My research led me to develop an extremely flexible approach to investing.

In my mind, it didn’t matter how you made money in the markets.

You could get rich speculating on the price of coffee or by investing in the latest red-hot Silicon Valley social media stocks.

The only thing that mattered was the size of the profits in your brokerage account.

Today I track and analyze hundreds of ETFs.

After the market close each day, I generate a report that analyzes hundreds of markets, asset classes and investment strategies around the world.

Keeping tabs on these asset classes helps me identify the very best money-making opportunities.

And today – based on my survey of the wide range of markets – I want to …read more

Noah Holdings Stock Price and Research (NYSE: NOAH)

noah holdings stock price noah holdings research nyse noah 2

Noah Holdings (NYSE: NOAH) is a $4 billion company today. Investors that bought shares one year ago are sitting on a 148.16% total return. That’s above the S&P 500’s return of 16.43%.

Noah Holdings stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.

Our system looks at six key metrics…

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✓ Earnings-per-Share (EPS) Growth: Noah Holdings reported a recent EPS growth rate of 77.77%. That’s above the capital markets industry average of 61.68%. That’s a great sign. Noah Holdings’ earnings growth is outpacing competitors.

✗ Price-to-Earnings (P/E): The average price-to-earnings ratio of the capital markets industry is 28.28. And Noah Holdings’ ratio comes in at 33.61. Its valuation looks expensive compared to many of its competitors.

✓ Debt-to-Equity: The debt-to-equity ratio for Noah Holdings stock is 10.83%. That’s below the capital markets industry average of 185.60%. That’s a good sign. Noah Holdings’ debt levels are not out of control.

✗ Free Cash Flow per Share Growth: Noah Holdings has decreased its FCF per share over the last year relative to its competitors. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth.

✗ Profit Margins: The profit margin of Noah Holdings comes in at 22.04% today. And generally, the higher, the better. We also like to see this ratio above competitors. Noah Holdings’ profit margin is below the capital markets average of 28.22%. So that’s a negative indicator for investors.

✓ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for Noah Holdings is 20.21% and that’s above its industry average ROE of 13.56%.

Noah Holdings stock passes three of our six key metrics today. That’s why our Investment U Stock Grader gives it a Hold.

Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.

Do you like investing in small caps, value stocks and dividend payers? Check out 10 High-Yielding Small Cap Stocks Under $15 and you’ll get a list of ten powerful stocks which are all of the above. Click here to learn more. …read more

Readers Sound Off: How Much Money Is Enough?

Editor’s Note: Our Chief Investment Strategist Alexander Green is out of commission today, adrift with spotty Wi-Fi somewhere in the Mediterranean between Rome and Marseille on The Oxford Club’s Chairman’s Circle Wealth Cruise.

And truth be told, we’re kind of glad he’s gone…

Only because his change of venue is the perfect excuse to tell you about another exciting change of scenery… one coming to your free Investment U subscription.

Don’t worry. Alex and ETF Strategist Nicholas Vardy will still be delivering their time-tested expertise on everything and anything concerning the markets, including their core investment philosophies, unconventional insights, unique opportunities… and beyond.

While I can’t give you the specifics just yet, I can tell you it’s clear that the mission behind our nearly 20-year-old e-letter has evolved along with your needs.

We think founding father Benjamin Franklin had it right when he said, “Tell me and I forget. Teach me and I may remember. Involve me and I learn.”

We want to do more than just teach you the ropes and leave you to your own devices. Instead, we want to involve you every step of the way on the journey from financial literacy… to financial liberty.

We’re convinced that’s the shortest way to a rich life.

But what exactly is “rich”? Your responses below to a similar question posed by Alex in January begin to get at the answer…

(More to come…)

Donna DiVenuto-Ball, Managing Editor

My columns on “How Much Is Enough?” generated more reader responses than any others over the past year.

Commentary – inevitably – was quite diverse since there is no single “right answer” to the question.

In fact, only one respondent offered a hard number. Reader Tom B. said that after many conversations on the subject, he and his wife decided that $1.2 million was the minimum needed for their retirement.

Other readers emphasized that “the amount” depends on an individual’s chosen lifestyle. Some got political, especially about the subject of economic inequality. Others took a decidedly philosophical tone.

I’m always spouting my opinions here. Today readers have the floor, uninterrupted – at least for now – by my commentary.

Here is a sampling of responses, lightly edited for length or clarity…
How much is enough? Part 1: You have enough financial security that you do not have to shortcut your values to live a reasonable life. Part 2: You have enough financial security that you can be truly authentic and bold in your profession. Part 3: You have enough financial security that you can radically change your decision making. – David P.

Money is the lubrication of life. Not having enough money for basic needs is like throwing sand into the gears of life. Contentment requires not complaining about who has more – and certainly not looking down on those who have less. Jealousy and envy are destructive and drain a person’s initiative, determination and stamina… all necessary components for the long haul. – Jim T.

Life is about choosing where you live and what you do. You can be the author of such a life. And if you choose wisely, you will have more wealth …read more

Set Your Kids Up for Success by Gifting Stock

 
Transcript:
Here’s a slap from the retirement belt. It’s one I’m sure rings true across all parts of the country.

A close friend was venting to me the other day about his daughter and what he called her “complete lack of money understanding.”

Before he even got started with the details, I asked, “Were we any different?”

He said, “Hear me out… She’s getting married. My wife and I have offered them the option of a big wedding or a down payment on a house. We would even pay the closing costs.”

OK, I know just about everyone reading this has either been in this position or knows someone who has.

His daughter, of course, said, “Oh, but we always dreamed of a destination wedding in Hawaii, a true paradise.”

My first reaction was, “Hawaii? For God’s sake, we live a block and half away from one of the most beautiful beaches in the world. Why are they going to Hawaii?!”

He said, “That’s not my point.”

I replied, “I know what your point is, but it is exacerbated by where we live. We could walk to the ceremony and stop at a few pubs on the way back. Now that’s paradise!”

But she and her intended want to spend $30,000 or $40,000 on a one-day extravaganza.

One day!

Now, let’s take a step back and think about what we were like back in the ’70s. My wedding was two of my buddies from my squadron, their wives and the base chaplain. We didn’t elope, but splurging made no sense to us. Most of my friends did go the big wedding route, and all of them regretted it.

Some of the feedback included… “It was exhausting,” “I didn’t know half the people,” “We didn’t have any time alone or with our friends” and “It was really about our parents’ friends.”

Also, the cost of a big wedding in 1975 – $15,000 – put in the stock market at 7% a year would be worth around $301,000 today.

So I think it’s reasonable to assume, given the chance to do it again, that most of us would opt for the house.

But that’s after 40 years of slugging it out in the world. That puts a different shine on a lot of things, not just one-day events.

So my question to him was this: “If you feel that strongly, why did you give them a choice?”

His answer was one we all have had to say at one time or another: “Well, you know my wife and my daughter…”

Enough said.

But an over-the-top wedding is just the start of bad money decisions when it comes to gifts. How about giving expensive cars for graduation?

The worst possible gift is a new car.

They rust, break down, eventually won’t run at all and depreciate faster than a trifecta bet at the track. And in the end, they’re worthless.

But it’s done all the time.

If your kids won’t go for the house, give them a gift that will ensure they remember you forever. And you’ll know you’ve done a great thing for them (or …read more

The Most Important Factor When Buying a Stock

Everyone can invest.

But not everyone is good at it.

Successful investing all comes down to picking the right stock at the right time, which is easier said than done, especially in a market that moves up and down unpredictably.

Not to mention that sifting through all the pages of company filings and analyzing every news report to figure out whether a stock is a good buy can be overwhelming.

You might be all set to buy after The Wall Street Journal gives a company a favorable rating – but then Bloomberg might publish contradictory stats.

So how do you choose the stocks that will give you the best bang for your buck?

According to our survey, our readers believe a company’s growth potential and dividend are the two biggest indicators of future success.

Things like positive earnings and cash flow, a growing market cap, or a reliable dividend make a stock more attractive to investors. On the other hand, a decreasing bottom line or a sudden dividend cut are signs that trouble is brewing.

All of those factors are very important.

But there’s one thing that’s even more telling…

Chief Income Strategist Marc Lichtenfeld has created a system designed to pinpoint the EXACT moment to get in on a stock to make the most money – and it has consistently outperformed the market since 2015.

In fact, it has delivered some of the biggest stock market gains of all time!

The secret? It all comes down to an important “Ignition Event” – as Marc calls it – that happens only once in a company’s lifetime. And he’s figured out a way to predict when it will happen – so you can snag the stock before this Ignition Event and watch your returns skyrocket.

It’s perfect for anyone trying to save more for retirement (which should be all of us) because following this strategy could add more than $125,000 to your retirement portfolio in the coming year alone.

Marc’s revealing it for the first time in a live, FREE webinar on Wednesday, May 23. There are limited spots available, so click here to reserve yours today.

Good investing,

Amanda …read more

This ONE Fact Should Change the Way You Invest

The stock market is shrinking…

And that fact should change how you invest.

According to Wilshire Associates, which compiles benchmarks for U.S. stock markets, the number of public companies peaked at around 7,500 in 1997.

Last year, that number dropped to about 3,600.

In fact, since 1970, the number of public companies has dropped 52% while the S&P 500 has increased 3,628% (including dividends).

Despite the decrease in the number of publically traded companies, the stock market has moved in one direction… up.

This indicates that fewer and fewer companies are driving the big indexes. And those that do are established names like Amazon, Apple, Exxon Mobil, Facebook and Google.

They’re the big dogs. Yet many investors consider them overvalued and believe their explosive growth is behind them.

But that’s not always the case…

If you – like many investors – have been sitting on the sidelines, thinking this market and the companies that control it are overvalued, then you’ve been missing out on quadruple-digit gains…

And you’ll continue to do so unless you adopt a “rifle” approach.

If you’ve ever been to the shooting range, you know that a rifle is highly accurate at long distances (300-plus yards, in some cases).

On the other hand, although a shotgun will cause a lot of damage, it’s less accurate and limited by a 75- to 100-yard range.

This is not the time for a shotgun approach to investing…

It’s time to get out the rifle.

Instead of blanketing certain sectors or indexes, you should be targeting companies with solid fundamentals, strong leadership and sound reputations. And you should especially look for companies on the verge of experiencing a major catalyst.

Most investors know to look for share price movement following earnings calls, FDA approvals, mergers, acquisitions and institutional buying. Those can happen several times throughout a company’s life cycle.

But there’s often a one-time catalyst that produces even bigger jumps in share price. And it provides safer gains than a company’s IPO.

My trusted colleague and friend Chief Income Strategist Marc Lichtenfeld calls it an “Ignition Event.”

According to Kiplinger’s, this event “generally means a company is going gangbusters.”

In fact, this one-time-ONLY event is responsible for some of the fastest and largest returns in history…

1,814% on Hyatt Hotels in six months…

2,340% on Ruth’s Hospitality in just seven months…

4,257% on Big Lots in five months…

4,891% on Ferrari in 16 months…

And these are all mature companies.

So if you think there’s no room for this market to run… you might want to reconsider.

And it certainly doesn’t matter that there are fewer public companies… as long as you know where to aim.

During a free, live webinar on May 23 – called the “Ignition Event Summit” – Marc will reveal details on five companies on the verge of experiencing their one-time Ignition Events.

He believes so strongly in the power of Ignition Events that he’s guaranteeing you could make six figures in the next 12 months by following this strategy.

It’s a bold promise. But based on the research I’ve seen – and Marc’s track record – …read more