It’s rare that I’ll go long any stock right after it’s made a series of new highs, but Southwest Airlines’ (NYSE: LUV) steady bullish breakout run seems likely to continue into the end of the year. I’m fortunate enough to live just five minutes from Southwest’s corporate headquarters at Dallas Love Field. Not only can I easily catch last-minute flights, but I’ve also befriended numerous Southwest employees and gained an insider’s perspective on the company. Between their input and my observations and research, I see clear blue skies and tailwinds for Southwest this quarter. #-ad_banner-#There’s been a long-standing… Read More

It’s rare that I’ll go long any stock right after it’s made a series of new highs, but Southwest Airlines’ (NYSE: LUV) steady bullish breakout run seems likely to continue into the end of the year. I’m fortunate enough to live just five minutes from Southwest’s corporate headquarters at Dallas Love Field. Not only can I easily catch last-minute flights, but I’ve also befriended numerous Southwest employees and gained an insider’s perspective on the company. Between their input and my observations and research, I see clear blue skies and tailwinds for Southwest this quarter. #-ad_banner-#There’s been a long-standing law in Texas called the Wright Amendment that’s limited Southwest’s routes and profits over the past 35 years. The law restricts nonstop service from Love Field to airports in Texas and eight other states. The Wright Amendment is being repealed in mid-October, and traffic at the Dallas airport is expected to increase nearly 50%. Southwest will be in a prime position to capitalize on this, but that’s only part of the reason I think the stock is a buy here. Coinciding with the Wright Amendment’s full repeal, Southwest has been acquiring new planes and training its… Read More

Amazon.com (Nasdaq: AMZN) has been one of Wall Street’s darlings for some time. From its 2008 lows to its early 2014 highs, the company has seen a meteoric 1,000% rise in its stock price and has expanded its product lineup and reach to become the largest online retailer in the world. This is certainly impressive and may not seem like a company you should be bearish on, but that 1,000% gain wasn’t a straight uphill shot. It was fraught with corrections of 10%, 20%, even 30% and more, and I believe we are on the precipice of another. Read More

Amazon.com (Nasdaq: AMZN) has been one of Wall Street’s darlings for some time. From its 2008 lows to its early 2014 highs, the company has seen a meteoric 1,000% rise in its stock price and has expanded its product lineup and reach to become the largest online retailer in the world. This is certainly impressive and may not seem like a company you should be bearish on, but that 1,000% gain wasn’t a straight uphill shot. It was fraught with corrections of 10%, 20%, even 30% and more, and I believe we are on the precipice of another. Amazon fired off a slew of new products this year, including tablets, a set-top box and its first smartphone, with mediocre success. And on Thursday, I had the pleasure of briefly discussing Amazon’s drones on Fox Business. While drones delivering goods to your doorstep within 30 minutes of purchase is a nifty idea, and Amazon has hired NASA engineers and researchers to further the project, it adds little near-term value to the company. And it’s certainly no reason to pay almost 500 times earnings for AMZN. #-ad_banner-#Let me say… Read More

Many refuse to believe in the economic recovery that has been taking place in the United States for the past four years, because it is the result of the Federal Reserve “artificially stimulating” the economy. But the reality is we have entered a new age where recoveries and commerce are heavily influenced by central bank intervention. And from this perspective, the United States is currently the best of the worst. Sure the Fed continues to print money and buy billions of dollars’ worth of Treasury and mortgage-backed securities each month. But with growth in developed nations generally anemic… Read More

Many refuse to believe in the economic recovery that has been taking place in the United States for the past four years, because it is the result of the Federal Reserve “artificially stimulating” the economy. But the reality is we have entered a new age where recoveries and commerce are heavily influenced by central bank intervention. And from this perspective, the United States is currently the best of the worst. Sure the Fed continues to print money and buy billions of dollars’ worth of Treasury and mortgage-backed securities each month. But with growth in developed nations generally anemic and several countries teetering on the brink of recession, central banks around the world are taking extreme measures to stimulate their economies. #-ad_banner-#The European Central Bank has reduced its key lending rate to 0.15% and set a negative rate on bank deposits parked overnight for the first time. Japan approved a massive stimulus package. China and Korea are printing money and pumping it into their respective economies. Sweden’s central bank announced an unexpected 50-basis-point rate cut. The list goes on and on. When a government or economy struggles, its currency follows suit. Unlike gold, silver and other commodities,… Read More

You always remember your best trades, and if you’re smart (and a little lucky) you might be able to go back to them for more profits later on. Lucky for us, one of my best trades is poised for another big leg up. Back in late 2011, I was looking for the next game-changing stock. At the time, markets were looking weak and everyone was looking for an Apple alternative or at least a derivative play on the iPhone or mobile service providers. My sights were set much higher, and the subsequent investment I offered… Read More

You always remember your best trades, and if you’re smart (and a little lucky) you might be able to go back to them for more profits later on. Lucky for us, one of my best trades is poised for another big leg up. Back in late 2011, I was looking for the next game-changing stock. At the time, markets were looking weak and everyone was looking for an Apple alternative or at least a derivative play on the iPhone or mobile service providers. My sights were set much higher, and the subsequent investment I offered to options clients brought a 300% return from December 2011 to March 2012. That summer, I remember gazing up at a worn array of sagging phone wires strung across two utility poles, then glancing down at my shiny wireless iPhone. It was an almost poetic moment, and one of great inspiration. #-ad_banner-#​The next industrial revolution is surely underway, albeit mostly hidden. The immense, inefficient web of suspended and buried copper wire is being replaced by underground labyrinths of fiber optics fueling massive wireless networks. Change has already begun, but it still has… Read More

Just ahead of Tesla Motors’ (NASDAQ: TSLA) earnings release on Thursday, I was defending the stock on the Fox Network, as other industry professionals doubted its ability to beat Wall Street’s estimates and turn into the biggest growth story since Apple (NASDAQ: AAPL).  As my critics lick their wounds after Thursday’s blowout earnings release, I’ve gotten even more excited about the stock, and I don’t care that it was up 4.5% Friday. In fact, I’m more bullish than ever on TSLA after hearing details from CEO Elon Musk. Today, I’m going to show you how to play this game-changing stock… Read More

Just ahead of Tesla Motors’ (NASDAQ: TSLA) earnings release on Thursday, I was defending the stock on the Fox Network, as other industry professionals doubted its ability to beat Wall Street’s estimates and turn into the biggest growth story since Apple (NASDAQ: AAPL).  As my critics lick their wounds after Thursday’s blowout earnings release, I’ve gotten even more excited about the stock, and I don’t care that it was up 4.5% Friday. In fact, I’m more bullish than ever on TSLA after hearing details from CEO Elon Musk. Today, I’m going to show you how to play this game-changing stock for much less money by using call options. #-ad_banner-#​An Industry Disruptor Not only do I think Tesla is changing the way we drive, but I firmly believe it will go down in the history books as a pillar of American industry, an amalgam of Apple, Exxon Mobil (NYSE: XOM) and Ford (NYSE: F) all rolled into one. Back in the late 19th century, the titans of American commerce used monopolies to gain extreme power. While Tesla might not monopolize electric cars, it is pretty darn close, controlling their ecosystem, competition, infrastructure, and to an extent, their destiny.   Initial naysayers… Read More

Sales of new vehicles hit their fastest rate in almost eight years in June, rising to an annualized 17 million. Analysts had been expecting about 16.4 million units, and many are now boosting their forecasts for the second half of the year. Record auto sales are likely to fuel demand for related industries such as car parts and tires (as in my most recent trade). But one area that traders aren’t talking about much is insurance. When consumers purchase new cars, insurance premiums tend to increase because of the cost of the vehicle. Additionally, financed and leased vehicles… Read More

Sales of new vehicles hit their fastest rate in almost eight years in June, rising to an annualized 17 million. Analysts had been expecting about 16.4 million units, and many are now boosting their forecasts for the second half of the year. Record auto sales are likely to fuel demand for related industries such as car parts and tires (as in my most recent trade). But one area that traders aren’t talking about much is insurance. When consumers purchase new cars, insurance premiums tend to increase because of the cost of the vehicle. Additionally, financed and leased vehicles typically require elevated coverage. This equates to more revenue for insurance companies as long as claims don’t get out of control. GEICO is the undisputed king when it comes to growth. In 2013, the insurer saw auto premiums jump 11.3%, as it surpassed Allstate (NYSE: ALL) to become the country’s second largest insurer. State Farm, a mutual company owned by the policyholders who buy its insurance, is #1. Runner-up GEICO is a subsidiary of Berkshire Hathaway (NYSE: BRK-B), so we can’t invest directly in GEICO. As for Allstate, of the major auto insurers, it saw the lowest year-over-year increase in… Read More

I don’t know about you, but I’ve been seeing more Red Lobster commercials than usual over the past few months. While it’s been many years since I’ve stopped in for LobsterFest, the marketing push did pique my curiosity. #-ad_banner-#What was going on at Darden Restaurants (NYSE: DRI), Red Lobster’s parent company? Were they trying to revive the struggling brand? Not exactly. Darden is selling the 46-year-old brand that gave the company its start for a mere $2.1 billion (roughly $1.6 billion net after taxes). Approximately $1 billion from the sale will be used to pay down a portion of its… Read More

I don’t know about you, but I’ve been seeing more Red Lobster commercials than usual over the past few months. While it’s been many years since I’ve stopped in for LobsterFest, the marketing push did pique my curiosity. #-ad_banner-#What was going on at Darden Restaurants (NYSE: DRI), Red Lobster’s parent company? Were they trying to revive the struggling brand? Not exactly. Darden is selling the 46-year-old brand that gave the company its start for a mere $2.1 billion (roughly $1.6 billion net after taxes). Approximately $1 billion from the sale will be used to pay down a portion of its big debt load (total liabilities come in at close to $5 billion), while the remaining $600 million will be allocated to buy back shares in an effort to keep its dividend alive and improve earnings per share (EPS). This deal may be a lifesaver in the short term, but it also opens up many questions about Darden’s growth and stability. Red Lobster was Darden’s second-largest unit (in sales) next to Olive Garden, with Longhorn Steakhouse coming in third. All three units saw traffic decreases in 2013 and collectively saw a year-over-year decrease of 1.3% in 2013 sales. Its specialty niche… Read More

As a pilot, I’m fascinated with all things related to aviation. I’m particularly fascinated when iconic American aircraft builders like Boeing (NYSE: BA) take great strides to disrupt a highly regulated industry.  #-ad_banner-#Believe it or not, innovation is relatively muted in the aviation industry. With a focus on safety, dependability and longevity comes a lot of red tape. Many of the aircraft flying today have changed little from 30 years ago, excluding some advances in technology, weather detection and GPS.  Innovation means pushing the boundaries of engineering, overcoming opposition, and dealing with failures from time to time. Read More

As a pilot, I’m fascinated with all things related to aviation. I’m particularly fascinated when iconic American aircraft builders like Boeing (NYSE: BA) take great strides to disrupt a highly regulated industry.  #-ad_banner-#Believe it or not, innovation is relatively muted in the aviation industry. With a focus on safety, dependability and longevity comes a lot of red tape. Many of the aircraft flying today have changed little from 30 years ago, excluding some advances in technology, weather detection and GPS.  Innovation means pushing the boundaries of engineering, overcoming opposition, and dealing with failures from time to time. I expect Boeing’s minor setbacks earlier this year will prove to be trivial stumbling blocks. At the heart of this story is the Boeing 787 Dreamliner. While it has been the butt of many jokes, the early production problems may be a key factor in our ability to profit from the stock.  Boeing started the year off on the wrong foot as headlines stoked ongoing fears about the aircraft’s battery system when smoke was seen billowing from a 787 owned by Japan Airlines.  #-ad_banner-#A year prior, an All Nippon Airways 787 jet made an emergency landing when the main battery… Read More

This is no doubt a tough market to trade. Stocks seem to be levitating over a pit of ravenous bears. On average, taking big short positions has been a losing proposition for investors, as many stocks have managed to climb higher in the face of uncertainly. If you are going to go short, there better be a darn good reason to do so. Even though momentum stocks may look overpriced, it’s safer to use less volatile stocks in this market environment. Traders should also use stop-loss orders and have realistic expectations. One stock that I am willing to bet… Read More

This is no doubt a tough market to trade. Stocks seem to be levitating over a pit of ravenous bears. On average, taking big short positions has been a losing proposition for investors, as many stocks have managed to climb higher in the face of uncertainly. If you are going to go short, there better be a darn good reason to do so. Even though momentum stocks may look overpriced, it’s safer to use less volatile stocks in this market environment. Traders should also use stop-loss orders and have realistic expectations. One stock that I am willing to bet against here is General Motors (NYSE: GM). The company has been recalling vehicles in large numbers. In December, the automaker recalled 1.5 million cars produced in China to replace a faulty fuel pump bracket.  In January, it recalled 370,000 Chevy Silverado and GMC Sierra pickups to reprogram software that could lead to overheating of exhaust parts and fires. And of course, there was the massive recall of 2.6 million cars for defective ignition switches. Since January, GM has now recalled more cars than it has sold in all of 2013. Federal authorities are also investigating if the company committed… Read More