Get into “The Glitch” — 10 Top Scoring Price-to-Sales Stocks

The Price-to-Sales ratio (PSR) is a measure used by many of the Guru Strategies I run on Validea.com as a way to find undervalued stocks. The ratio, which is simply the market capitalization of the firm divided by the company’s sales, has become more popular over the years as investors look for additional ways to uncover value among publicly traded stocks. The individual who popularized the PSR is Ken Fisher. Fisher, a longtime Forbes magazine… Read More

Crisis Predictors Offer Advice

Three of the financial minds who warned of the current credit crisis — Banc of America Securities-Merrill Lynch’s Richard Bernstein, PIMCO’s Paul McCulley, and author and former Wall Streeter Richard Bookstaber — offered their views on the current economy and what investors should do in this market on WealthTrack with Consuelo Mack recently. (Click on the WealthTrack Video on Demand image to watch the video.) Bernstein said it is difficult to form a consistent investment… Read More

What to Expect from Here

How quickly will stocks rebound when the current bear market ends (if it hasn’t already done so)? The New York Times’ Paul Lim offers some interesting data on that subject in his most recent column. Citing data from James B. Stack, editor of the InvesTech Market Analyst newsletter, Lim says that after the nasty bear markets that followed the peak of 2000 and the peak of 1973, stocks took more than seven years to climb… Read More

Don’t Be a Bottom-Hunter

The big question in the market these days seems to be, “Have we hit a bottom?” After enduring a bear market that has lasted nearly 18 months and cut the value of the S&P 500 in half, it’s certainly a reasonable question. But in the latest issue of my Validea Hot List newsletter, I explain that now is no time to be sitting on the sidelines trying to wait for a clear, precise bottom. In… Read More

Fisher: Fears are Greater, but Risk is Lower

In his latest Forbes column, Kenneth Fisher offers advice for those who feel like the stock market is too risky a proposition right now. “This is not an irrational fear; stocks that are off 50% from their highs (and a lot are, at this point) can keep falling,” Fisher writes. “But you can temper your fear by realizing that low prices make stocks less risky, not more risky. Unless there has been a corresponding collapse… Read More

Tobin’s Q Ratio: “Modestly” Bullish Sign

In the latest issue of Equities and Tobin’s Q, John Mihaljevic (CFA and managing editor of The Manual of Ideas blog) explains that the “Q” ratio made famous by Nobel Laureate James Tobin indicates that stocks are undervalued right now — but says that there could still be further declines before a turnaround. (A special thanks to the Manual of Ideas for highlighting this data.) The Q Ratio divides the total market value of stocks… Read More

Gross, Lynch, Malkiel: Varied Perspectives on Current Market

In interviews with the Washington Post, three top market minds — former Fidelity star manager Peter Lynch, PIMCO’s bond guru Bill Gross, and Princeton professor and author Burton Malkiel — offer some pretty wide-ranging views on the stock market and where we’re headed. Lynch and Malkiel express a fairly bullish take for long-term investors. Lynch says that the recent market plunge has affected great and good companies as well as mediocre firms. “It’s brought them… Read More

Good Quant, Bad Quant

MarketWatch’s Paul Farrell recently offered up a scathing critique of “quants”, complete with this eye-catching subhead: “By Predicting Your Behavior, Quants Control Your Mind, Money, the Markets”. Since I run what could be considered “quantitative strategies” both on my web site, Validea.com, and in my money management business, I was interested to see what Farrell had to say about quants and their impact on the market. To be sure, quants play a big role on… Read More

Buffett, Berkshire Focusing on U.S.

Warren Buffett tells Bloomberg that the odds are his Berkshire Hathaway — still on a buying binge — is more likely to make its next acquisitions in the U.S. rather than abroad. “The statement is a reversal for Buffett, who spent four days at press conferences and meetings in Switzerland, Germany, Spain and Italy last May to drum up potential buyouts when U.S. opportunities were scarce,” notes Bloomberg. “With rival bidders cut off from funds… Read More

Kass: It’s Dinner Time

TheStreet.com’s Doug Kass — a pretty hardened bear whose stance began to soften last month — is now standing firm in his call that we’ve reached a bottom. “We live in a Land of Johnny-Come-Lately Chicken Littles, most of whom failed to identify the credit and economic risks 1½ years ago but who today hold with alacrity and great confidence a belief in a continued dire outcome for equities, as they all too often see… Read More