On Wednesday, I told you that companies and Wall Street analysts are playing a game with your money, and everyone’s in on it. The analysts, the media, the data compilers, and the company executives are all working in concert to make earnings look a lot better than they are.
Stocks can be affected by central bank policies, macro-global events, and existential crises. But in spite of, and especially in the absence of those “big-picture” market impactors, it’s earnings that drive stock prices.
But as I told you, headline earnings numbers fed to us by companies, analysts, and the media are more often than not jacked-up by means of creative accounting tricks.
The headline earnings reports investors take as gospel every quarter when the circus comes to town are non-GAAP, pro-forma, “Street” earnings, not bona fide earnings based on Generally Accepted Accounting Principles.
As you know, the difference between non-GAAP and GAAP earnings can be huge and can trap investors.
If you’re making investment decisions based on headline earnings metrics, and you don’t know what you don’t know, chances are you’ve been burned… or you’re going to get burned very soon.
After the gadget behemoth Apple Inc. (Nasdaq:APPL) posted “abominable” Q1 earnings, the stock plunged and took the Dow down with it – shaving off a total of 58 points. Has it seen the end of what Shah calls a “dangerous drop”? He joined Varney & Co. to share whether it’s a buy or sell – and how he believes the markets will continue to react to Apple not meeting expectations.
Conversely, Shah believes that if Facebook Inc. (Nasdaq:FB) crushes exceptionally high earnings expectations – by 50% to be exact – it could be the one hope for the entire tech sector. Even with a potential stock surge, Shah advocates for a specific buy-in price for the $335 billion social media giant.
This fast food pioneer just posted its first-ever quarterly loss with sales down 29% in Q1 2016. “This company is way overpriced and has legacy issues,” Shah says. He believes there are much stronger food stocks to own.
Last week, we dove deep into the Panama Papers – the scandal that’s implicated dozens of world leaders and several big banks – and I told you that ordinary investors routinely use shell companies as a perfectly legal way to protect their assets.
Many of you have asked just how you can use these advantageous structures to protect your assets from lawsuits, creditors… and just about everything else.
So today, I’m going to answer your best questions about how you can get in on the shell game.
Today, Shah joined Varney & Co. to discuss the impact the primary elections have had on the markets – and if they will continue to push them forward (or if they will regress) as we get closer to November.
It’s not new news that Yahoo is an acquisition target now. “This is the first time in four years that Yahoo’s quarterly revenues are below $1 billion,” he says. “The company’s going the wrong way and doesn’t have much lower to go.” Shah shares what he considers the “sweet spot” price for a potential buyer, too.
As a huge proponent of the $350 billion tech giant since its IPO, Shah weighs in on Facebook’s new “tip jar” initiative. He explains how this social media juggernaut is going to use this brand-new feature to help benefit both investors and users alike. He believes this plan “is just the beginning,” for what could be a potentially lucrative shift in the crowdsourcing realm.
Finally, he discusses the surprising reason why this $130 billion healthcare company’s been one of the best performing stocks right now.
There are slippery brokers everywhere who want to manage your retirement money – and now they want to get their hands on it as fast as they can.
That’s because starting next April all brokers will be held to a much higher “fiduciary” standard rather than the simple “suitability” standard they’re held to now.
Believe it or not, there’s a huge difference between being a fiduciary and offering up suitable investment advice.
And not knowing the difference could be costing you a fortune.
Today, I’m going to tell you about the new standard for brokers managing retirement accounts – including the difference between the suitability standard and the fiduciary standard, the new rule changes going into effect next year, and what it all means for your money.
And make no mistake – it means a lot. Americans have stashed about $14 trillion in IRAs and 401(k) plans, and brokers have been making a killing giving so-called “suitable” advice.
On Wednesday, I told you that the world was just beginning to reckon with the fallout from the Panama Papers, the 11.5 million emails hacked from Panamanian law firm Mossack Fonseca.
That’s because investigators around the world have only just begun to sift through the wreckage.
After U.S. tax authorities, the U.S. Justice Department, Panamanian, Brazilian, Thai, British, and a handful of other outraged countries launched their own inquiries, the Joint International Tax Shelter Information and Collaboration (Jitsic) Network convened a meeting of 28 nations in Paris on Wednesday to coordinate joint investigations.
The unprecedented international coalition intends to look into the 210,000 companies domiciled in 21 different offshore jurisdictions uncovered in Mossack Fonseca emails.
Not only are investigations going to lead to a lot of buried treasure, they’re going to bury a lot of rich, powerful, and crooked people.
And that’s not all…
Of the over 500 banks and bank subsidiaries implicated in the Panama Papers, some are major global banks.
That creates a major trading opportunity for us – and I’ll show you how to get into position to catch profits as investigators follow the paper trail.
“The markets are up this week because it’s seeing good news,” says Shah, on a recent episode of Varney & Co. Both oil and commodity prices are on the rise, but he explains whether the market will continue to be buoyant as it continues to “float” on this good news. Of the 30 stocks in the Dow Industrials, a whopping 28 of them are up. Shah gives the one reason why these stock are surging… it’s not what you may think.
Shah then discusses why the U.S. government’s tax collections have reached a record high this year. He also reveals who could be feeling this $1.48 trillion hit the most – and how it could be the new “norm.”
“Eternal Bear” Harry Dent believes the U.S. markets are on target for a crash just like China. See Shah’s response to his predictions and his reasoning for when it’s a good time to be a bear – and even a bull – in today’s markets.
On April 3, the first news reports surfaced detailing leaked information in what’s known as the “Panama Papers” hacked email documents exposing more than 214,000 shell corporations created by Panamanian law firm Mossack Fonseca.
The Papers identified heads of state and government leaders from over forty countries as beneficiaries and investors in secretive off-shore shell companies.
The auto loan business is booming – total auto loans in the U.S. are up 50% from 2010 to December 2015.
But of the more than $1 trillion auto loans outstanding, Experian estimates that between $205 and $388 billion are subprime loans, with 15% to 20% of those loans securitized.
We’ve been here before – though in much worse trouble – back in 2007.
Now, when you consider that U.S. subprime mortgages outstanding in 2007 were $1.3 trillion (based on Ben Bernanke’s remarks from May 2007) and mortgage-backed securities and MBS derivatives based on those subprime loans outstanding probably totaled another $2-$4 trillion, subprime auto loans don’t come close to the depth and breadth of subprime mortgages back in the day.
Still… when the subprime auto bubble pops, it’s going to be messy – and smart traders are going to have the opportunity profit… if they know where to look.