Author Archive: Brett Owens

I think I’ve been asked every day this week from ordinary people if I’m trading NVIDIA (NVDA).

Be careful out there, my fellow contrarian!

A sharp pullback is possible. Something has to shake the froth out of this market. When that happens, investors will look for stocks that are high on income and low on volatility. Today we’ll highlight six paying up to 8.6%.

The secret is beta, a measure of an investment’s volatility against a benchmark. For instance, usually the S&P 500.

If a stock has a beta of 1, it means it’s every bit as volatile as “the market.”… Read more

Many investors say they buy low and sell high. But how many really do?

Let’s pick on the people buying NVIDIA (NVDA) at atmospheric levels. First, can they even spell NVIDIA? (Hint: Two “I”s).

Second, do they realize it sports a price-to-sales (P/S) ratio of 32? It is usually a really bad idea to pay 10+ times sales for a stock. Let alone thirty-two.

Note that I did not say earnings. I said sales. Revenues. The ol’ top line. Money before everything.

Scott McNealy, the co-founder of Sun Microsystems, famously told investors it was insane to pay 10-times sales for Sun’s stock.… Read more

You know what we’re gonna do about that hot January inflation print that dropped a couple weeks ago?

Ignore it.

Actually, we’re going to go one better and profit from it by grabbing stocks most folks see as “bond proxies”—solid companies whose stocks move up when rates come down.

But wait—isn’t that the opposite of what we should be doing when everyone is panicking that rates are going to stay high—and inflation is going to stick around?

Here’s the thing: Despite the noise, I don’t think that’s going to happen.

Truth be told, the panic we saw following the January CPI release looked like a mini version of last October’s freakout, when 10-year Treasury rates spiked to near 5% and worry was everywhere.… Read more

Bond bargain alert! Three secure funds yielding 8% to 9% are for sale on the discount rack.

Thanks to a two-year run of rising interest rates, these bond-like investments are cheap. I don’t expect this to be the case for long, with rates ready to relax.

These hybrid vehicles are part-stock, part-bond. They prioritize yield over price gains, which is just fine for us income-focused investors.

These “preferred” stocks share some elements of common stocks (the normal shares of companies that most of us own). We buy preferreds on a stock exchange. They represent ownership in a company. And they can move higher and lower in price.… Read more

Be careful how you buy your bonds. The most popular tickers have four “fatal flaws” that’ll doom you to underperformance at best, or at worst leave you hanging in the event of a market meltdown!

Let’s pick on the widely followed and owned iShares iBoxx High Yield Corporate Bond ETF (HYG) as an example. It has attracted nearly $17 billion in assets because:

1. It’s convenient and as easy to buy as a stock.
2. It’s diversified (for better or worse, as we’ll see shortly) with 1,188 individual holdings.
3. It pays well, at 6% today.

The accessibility of funds like HYG appears cute and comfortable enough.… Read more

If you’re a dyed-in-the wool dividend investor (like me!), you’ve likely taken a look at the big gains folks are reaping on AI stocks … and resigned yourself to missing out on the whole thing.

After all, most AI stocks, like Alphabet (GOOGL) and NVIDIA (NVDA), yield 0% (or close to it!). And we simply demand a dividend before we buy anything.

The good news is we don’t have to miss out—instead, we’re going to go one floor up from the “first-level” options that most folks buy to the “penthouse” of AI investments: tech-focused closed-end funds (CEFs)!

The beauty of CEFs is that by going with these high-yield funds (8%+ payouts are run-of-the-mill in CEF-land), we don’t have to sell the blue chips we currently own!… Read more

These unloved stocks yield between 6.9% and 21.4%. These are big dividends, but not the main reason we are discussing this ignored five today.

Each of these names is so unliked by the Wall Street suits that they have serious upside potential.

How could that be?

These shares are heavily sold short.

Short selling is a way to bet against a stock. To do so, one must borrow the shares and sell them today. In hopes of buying back at a lower price tomorrow.

What happens if the stock goes up tomorrow? And rises the next day? And so on?… Read more

Happy Valentine’s Day, my dear contrarian. On this day of love and (let’s be honest) fake affection, we are going to take a pass on the Hallmark holiday and focus on something more profitable.

Disgust.

Natural gas did it again! It fell below $2 per million BTUs. These washout levels typically represent a floor for nat gas prices.

Every time it drops below this $2 linoleum level, the price eventually pops and tests the ceiling. Now that we have this ideal setup again, let’s back up the truck!

Death, taxes and the cyclical nature of natural gas are the only three things we contrarians can be certain about!… Read more

Look, we’re going to get a slowdown here in America this year—two years’ worth of rate hikes are going to hit home. Fact.

So I’m going to suggest we do something you might find a little bit weird: buy US stocks. But not any US stocks—and certainly not “dividend-dud” ETFs like the ever-popular SPDR S&P 500 ETF Trust (SPY)!

No way.

Instead we’re shopping in the small(er) cap aisle, for stocks in the midcap range kicking out surging dividends. We love these overlooked US-based dividend plays now because:

They’re cheap: while SPY has soared 19% in the last year, midcaps have treaded water, with the Vanguard Mid Cap ETF (VO)—in orange below—up just 4%.… Read more

When the Wall Street cheerleaders actually dislike a stock—well, that sure commands our contrarian attention.

Today we’ll cover one of my favorite traditions, which is fading the opinions of analysts. You know, the guys who typically slap a Buy rating on everything they see?

It sounds counterintuitive, but we don’t want Buy ratings on our stocks. Give us Holds and Sells and general apathy. Or, even better, disgust.

When every analyst rates a stock a Buy, it feels “safe” to purchase. But really, it’s anything but. With nobody left to upgrade, there is nothing to do but wait for the dreaded downgrade.… Read more