Articles

Don’t fall into the trap of thinking you can’t beat the market. It’s total nonsense—and that goes double if you look outside stocks, to other assets.

Consider preferred stocks for example—they’re “bond-stock” hybrids that trade on an exchange, like stocks. But like bonds, they trade around a par value.

The best part is the income. Our favorite way to buy preferreds—through actively managed (we’ll come back to that in a second) closed-end funds (CEFs)—gets us yields of 7%+.

And select preferred-stock CEFs trade below their net asset value (NAV, or the value of their portfolios) today—with some of those discounts reaching well into double-digits.… 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

One of the worst investing mistakes you can make is blindly sticking to “rules of thumb” given out by so-called “experts.”

That goes double when you use these overly broad guidelines for the most important decision you can make: planning for your financial future.

Consider a recent article by Bankrate telling retirees to follow the “rule of 25,” which is as simple as it is deceptive. This piece tells us that you “should have 25 times the annual amount you plan to spend in retirement saved before you leave the workforce.”

That’s a lot of money! Take a look at the table below to match up how much you plan to spend in retirement (to make things easier, we’ll set inflation aside and use today’s dollars) with how much you’d need to save.… 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

Remember a decade or so back, when we heard over and over again that the coming decades would be all about China?

If you ignored that prediction and stuck with well-established US investments (especially dividend-paying US stocks and funds), you made a smart move. (We’ve done the same since we launched our CEF Insider service back in 2017.)

Our conviction continues to be that the USA is the best place to find top dividend payers—including our favorite high-yielding closed-end funds (CEFs).

I’ll give you 16 such US-focused CEFs to consider in a moment—as well as specific looks at two 17%+ (!)… Read more

Me: “Let’s find companies with lots of debt and buy them. And make a lot of money.”

You: “Wait, what?”

(Nod as always to the late, great Norm Macdonald.)

Hear me out. Last week, plain vanilla investors threw a midweek fit when Federal Reserve Chairman Jay Powell said something we contrarians assumed already: No rate cut coming in March.

The Fed decides the Fed funds rate. This often cues the two-year Treasury yield to follow. (Yes, sometimes, the two-year leads. As always in economics and relationships, it’s complicated.)

We can debate who leads who, but the key is that the Fed controls short-term rates, but the bond market determines long-term rates.… Read more

If we can say one thing about the rest of 2024, it’s this: We’re looking at a stock-picker’s year here—and folks who try to play it with vanilla ETFs will have a tough time.

Just look at the state of play in front of us.

The Fed is trying to thread a needle, and if economic numbers come in too hot or too cold for Goldilocks, well, good luck holding something like the SPDR S&P 500 ETF Trust (SPY)!

In an environment like this, a good plan is to zig when the market zags.

To do so, we’re targeting stocks in the bargain bin with “recession-resistant” strengths such as steady revenue from clients who must buy their services no matter what.… Read more

You probably know the Don Henley song “Dirty Laundry.” It was one of my favorite tunes in the 1980s. A criticism of media sensationalism, the repetitive chorus rang in my ears when I was much younger than I am today:

“Kick ’em when they’re up,
Kick ’em when they’re down.”

This aptly describes the nightly news of the 1980s and the financial press of the 2020s.

In early 2022, for example, Business Insider kicked tech stocks as they were going down: “Rising interest rates and expectations of strong economic growth and inflation are all key factors in the sell-off” the site wrote then, mixing up the good (“strong economic growth”) with the bad (“inflation”).… Read more

Magnificent Seven? Tired.

Dividend Six? Wired.

Plain vanilla investors fawn over chipmakers and AI stocks. They hope they can buy them high, and sell them higher.

Contrarian income investors like us? We focus on the companies that support the AI hype. The “pick and shovel” providers. A “Dividend Six” that plays on AI and pays $26,000 to $41,500 in dividends alone on a $500K stake.

With that we’ll say move over, Magnificent Seven—a term coined by Bank of America’s Michael Hartnett (and inspired by the classic Sturges Western) to describe the market’s predominant tech names.

Those stocks? Microsoft (MSFT), Apple (AAPL), Facebook parent Meta Platforms (META), Amazon.com… Read more