We said last week that election week, Fed week, jobs report week—would be the most important of the year for the markets. Bingo! It was. The House flipped, the Senate’s Democratic majority slipped, and the market sipped (no, guzzled!) the heady cocktail of $600 billion in fresh Fed purchases of U.S. government securities between now and next July. They call it Q.E. II, for the second stage of “quantitative easing,” and trust me, on male-dominated Wall Street the policy is more welcome than the arrival of a massive cruise ship loaded with cash, champagne and Gisele Bundschen lookalikes. Never mind that some wet-blanket types are troubled by the idea of having one arm of the government issue debt while another, the Fed, prints money to buy it. And never mind, too, that the almighty dollar had another week of OMG! moments, sliding and gliding to historic lows against the Yen and multi-month troughs versus the Euro. For this week, at least, stock investors laughed all the way to the Discount Window. So, we’re off to the races, right? Wrong. I still think we’re in a really tough spot economically, and 2011 could be quite rugged. But there’s one rally you can get in on now, even if the post-election bull market doesn’t last. A rally 10 years in the making Did you know there has been another powerful rally taking place on Wall Street? It’s one that no one seems to be talking about, despite the fact that has been building over the last 10 years. The biggest gains — the true wealth-changing types of returns — all came from a certain class of stock that has outperformed all others by leaps and bounds over the last decade. Take a look: The top performing stock from 1999 through 2009 was a company called Green Mountain Coffee Roasters (GMCR), which delivered an eye-popping 9,266% gain in that timeframe. What made Green Mountain so special? It was a lesser-known, nimble, small cap company on the verge of making it big. GMCR was classified as a small cap ten years ago, but a decade later their market cap has grown to $4.75 billion. Investors who got in before the company took off profited handsomely from that growth, turning a $5,000 investment in Green Mountain in 1999 into $468,265 by December 31, 2009. While GMCR, a small cap turned mid cap, was the best performing stock over those ten years, it’s far from the only example. On average small cap stocks have walloped the indices over the last decade. For the decade that ended December 31, 2009, the S&P 500 is down 24%...the NASDAQ is down 44%...and the Dow is down 9%. Compare that to the performance of the S&P Small Cap 600 index, which is up 68% over that time, and small cap stocks start to look pretty darn good. That’s not to say that small cap stocks are the perfect investment. On the contrary, for every small cap that delivers a ten-bagger profit, there are a handful of others that go nowhere fast—or worse, crash and burn. That’s where my Wall Street newsletter can help, by giving you a chance to invest alongside some of the world’s most successful money managers. How to Find Five Star Small Caps A year ago, I launched Wall Street to give investors like you access to stock recommendations, sector analysis and market commentary from a team of investing pros I hand-picked for their experience and expertise. We’ve done pretty well, covering everything from dominant techs to global giants to top financials to energy leaders, but there was one area we had yet to represent — small cap stocks. Now I’m thrilled to announce that legendary stock picker and five star fund manager Mario Gabelli has joined our Wall Street Elite panel of experts to be our specialist in small cap stocks.  | Spooked by extreme volatility, investing scandals, the flash crash and the struggling economy, many individual investors are avoiding the stock market — and it is costing them more than they realize. All of the gut-wrenching volatility in the markets recently has made it easy to forget just how much progress we’ve made since the March 2009 lows. In that time, the Dow is up 70%, the S&P 500 is up 74% and the NASDAQ has gained an astonishing 94%! That upswing has occurred largely without the participation of the individual investor. I understand why so many investors are scared, and why, perhaps, they’ve lost faith in the market. But I still firmly believe the American stock market is the greatest system in the world. The core of investing remains the staunch belief that the best-run and most innovative companies will ultimately pay off for their shareholders. And on that score, I think there is reason for optimism. My Wall Street Elite stock pickers are helping our subscribers find the right stocks to buy in this market. Get off the sidelines and into the game! Join us at Wall Street and see what stocks we’re buying now. | |  | For those of you who don’t know him, Mario Gabelli is one of the best, most versatile investors in America. During his storied career as a value-oriented fund manager, his funds have regularly outpaced their category benchmarks and the S&P 500 stock index. A stock picker ’s stock picker, Gabelli ’s $30-billion asset management company, GAMCO, runs publicly-sold and proprietary funds across a variety of market sectors. His Gabelli Small-Cap Growth Fund gets the maximum five stars from Morningstar for both three- and five-year performance, and four stars for its ten-year risk-adjusted return. I interviewed Mario for the just-released issue of Wall Street, and he explained how focusing on small cap stocks can give investors an edge. You see, there are some stocks that everyone follows, like Google (GOOG). When an analyst goes to visit Google there are likely 200 additional analysts looking at the company at the exact same time. However, with a small cap, chances are the company is completely off the radar. Mario told me that when his analysts call on smaller companies, frequently they’re the only ones there. Oftentimes, that means the company’s stock is stagnant , even when it’s doing well, because no one on Wall Street is covering it. You can find real bargains this way, simply by getting in on the stocks the Street is ignoring before anyone else notices the opportunity. Remember our example of Green Mountain? Ten years ago when no one was following the stock, you could have picked it up for .29 a share (split adjusted)! One of the keys to success with small caps is to know which companies are on the verge of getting on to the institutional investor’s radar…and which ones aren’t going anywhere. It’s Time to Play ‘Let’s Make a Deal’ There’s a second, sometimes even more profitable way to play small caps, and it’s in an area that has heated up considerably lately. I’m talking about Mergers & Acquisitions, and as we head deeper into the 4th quarter, M&A is going to hand plenty of small cap investors a bonus. Mario believes that we’re in the early years of a new wave of merger activity, and he believes this one will be bigger than anything we’ve experienced. The numbers prove his point, too. Deal after deal was announced in August and September:  HP and Dell got into a massive bidding war over 3Par
- Intel bought McAfee
- Hedge fund operator Ramius boosted its takeover offer for Cypress Bioscience
- Wal-Mart is offering $4.26 billion for Massmart, a South African company
- Southwest and AirTran announced a $1.4 billion merger
In total, M&A activity in the 3rd quarter of 2010 was up 25% over Q3 of 2009. And the reason is simple. Companies that are flush with cash — $1.8 trillion of it at last count — are focused on growth and snapping up small cap companies to get it. And Wall Street seems to be rewarding those that do. AirTran jumped 61% the day its merger with Southwest was announced. Mario also told me the story of CoolBrands International, a Canadian company he snatched up that, when it announced a deal, went from $1.68 to 2.58 in four days — a quick 53% gain! Give Yourself the Small Cap Edge Finding small cap stocks ripe for growth or acquisition is exactly what Mario does for us at Wall Street. He’s just added three exciting new small cap opportunities to our portfolio: - Here’s one way to profit from small caps— look for the companies supplying the big guys! The demand for new commercial aircraft is growing, and Boeing and Airbus have a lot of airplanes to build. This small cap gem supplies them both and therefore should have very high visibility and earnings growth over the next three or four years. Plus, they make products for infrastructure — railroads, trucks, highways and runways. They’re poised to profit not only from U.S. investment in infrastructure, but from growth in China and India as well. Mario describes it as “a company I like, with management I like, tied into an industry we like” making this stock a winner on three fronts. Get all the details here.
 Mario’s second pick is in a similar position. A pioneer in the field of manufacturing helicopters, they now find themselves making cockpits for a former rival, which itself is now a subsidiary of a much larger company. But that’s not all they do! They’re also in the industrial distribution and aerospace markets. The distribution business in particular is very strong and they are focusing on building it out, which will only add to their success. He expects the stock to move up sharply over the next 12 to 18 months as earnings kick in.
- This third company may surprise you, because they focus on a sector no one believes in right now…real estate. According to Mario, this money management company has great insight into the real estate market as a whole. As he put it, “If real estate ever comes back — even if it doesn’t — they’ll do well. And if it does come back, they’ll do a lot better than that.” He believes the stock is undervalued at current levels.
Get immediate access to my interview with Mario Gabelli — plus the entire Wall Street portfolio when you join us risk-free today. Five Star Expertise at Your Fingertips 24/7  | Bob Doll, Vice Chairman, BlackRock
Maria on Bob Doll: There’s almost no one I can think of who can fuse a well thought-out thesis about the economy and savvy stock selection better than Bob. And he delivers results; his large-cap value fund has outperformed its category average every year but one since 2001. John Calamos, CEO,
Calamos Asset Management
Nick Calamos,
President of Investments,
Calamos Asset Management
Maria on John and Nick Calamos: John is known as a pioneer in investment strategies and techniques to help manage risk. Nick oversees the research and portfolio management for the firm’s mutual funds, closed-end funds and managed accounts. Many of the mutual funds have received accolades throughout his tenure, including 30 Lipper Performance achievement certificates. Dan Niles, Co-CIO, Alpha One Capital Partners
Maria on Dan Niles: Dan Niles can size up a tech stock better than practically anybody I know. He has received five awards in The Wall Street Journal’s “best on the street” survey of analysts, and while he was working as an analyst for Lehman Brothers and others he was a perennial member of Institutional Investor’s all star team. Bill Nygren, Portfolio Manager, Oakmark Funds
Maria on Bill Nygren: Bill is a long-term star, whose flagship Oakmark Select Fund, rated four-star by Morningstar, has a 10-year annualized return better than 91% of its peers. Nygren’s a value guy, and this is the kind of market where value pickers can excel. Clark Winter, CIO, SK Capital Partners
Maria on Clark Winter: I’ve always been impressed with Clark Winter’s savvy understanding of the investors around the world. He travels the globe regularly meeting with everyone from sovereign wealth managers to institutional players to get an inside look at how local economies are doing and where money flows are being directed—a truly invaluable view for investors. David Winters, Portfolio Manager, Wintergreen Fund
Maria on David Winters: Simply put, David Winters knows how to run money. His $900-plus million Wintergreen Fund gets the maximum five stars from the fund raters today. David’s three-year record is better than 91% of his category peers. And David puts his personal money where his shareholders’ is—in his funds. | | | The stocks in our portfolio are recommended by the members of my exclusive Wall Street Elite panel. I hand-picked the members of the Wall Street Elite to bring you the best macro views on the markets as well as specific, actionable buy and sell advice. We’ve covered tech stocks with Dan Niles, delved into global investing with Clark Winter and David Winters, gone after value plays with Bob Doll and Bill Nygren, and explored energy stocks with John and Nick Calamos. And of course, now we’re venturing into small caps with our newest expert, Mario Gabelli. I know and respect every member of the Elite, having covered them and followed their analysis for many years. I chose each one because I sincerely believe they will help you become a better investor. In fact, here at Wall Street we make the following pledge to you: - You’ll always know what to do with the stocks on our buy list. We’ll follow the picks from each advisor closely, bringing you regular updates and buy/sell recommendations.
- You’ll receive stock picks and commentary that fit a wide-range of investment needs and strategies. Whether you’re interested in small caps, tech stocks, dividends or growth, you’ll find stocks and guidance that work hard for you.
- Plus, you’ll have me as your direct source for the latest goings-on on Wall Street. I will share with you what I am hearing from my sources during my travels, interviews and conversations - on your behalf - with some of the foremost investors, CEOS and world leaders. The list includes Meredith Whitney, Alan Greenspan, former President Bill Clinton, Citigroup’s Vikram Pandit, BP’s Robert Dudley and more.
- And best of all, you’ll have six months to test-drive Wall Street 100% risk-free.
My Iron-Clad Money-Back Guarantee I want to make sure you have the time you need to try my Wall Street newsletter and be sure that it’s right for you. That’s why my publisher has agreed to give you a six month, no questions asked, money-back guarantee. Sign up for Wall Street now and if at any time in the next six months you decide you’re not happy with everything it has to offer, you can cancel and get a full refund of every penny you’ve paid. All of the monthly issues, weekly updates, special reports and any other materials you’ve received during that time will be yours to keep, no matter what. With this iron-clad guarantee, why not get started today? The October issue of Wall Street, which includes my one-on-one conversation with Mario Gabelli and the names of his 3 small cap buys is waiting for you online now.  Let’s get started!
Sincerely,
 P.S. Helping investors like you navigate today’s tough investing landscape through my new Wall Street endeavor has been incredibly rewarding for me. I’d be honored to have you join us now. |
FIRST IN BUSINESS WORLDWIDE.
No comments:
Post a Comment