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The End of the Mac & Cheese Trade

Wed, 24 Feb 2010 15:18:28 EST

Scott Rothbort will be a guest on Fox Business News' "Happy Hour" at 5 p.m. EST tonight. Check your cable guide for channels and rebroadcast times.

MILLBURN, N.J. (TheStreet) -- This week is a big one for retail companies, with the bulk of the earnings reports coming from big-box retailers. A smattering of specialty retailers will be reporting this week as well. In a compressed period of time, we'll be inundated with all sorts of financial data, separating the winners from the losers and inevitably resulting in dramatic responses from traders and investors.

As the bulk of the investment community focuses in on individual companies, I'm busy spotting trends in consumerism. Trends begin with subtle signs, but if you can recognize certain patterns and take appropriate action, you'll be rewarded. ...

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Predicting the Rest of 2010

Mon, 22 Feb 2010 11:09:26 EST

Finance Professor Scott Rothbort will be on Stockpickr Answers on Monday, Feb. 22, to respond to your questions. Ask away!

MILLBURN, N.J. (TheStreet) -- With the first month of the year well behind us, it's time to tackle the market proverb: "As January goes, so does the rest of the year."

The theory behind this maxim is that the market's performance in January will be indicative of the remainder of the year. In other words, if the market increases in January, then the rest of the year will also trade positively. On the other hand, if the market falls in January, then the rest of the year will also bring market declines. ...

Eight Most Important Credit Card Changes

Tue, 16 Feb 2010 05:00:00 EST

NEW YORK (TheStreet) -- Major provisions of the CARD Act, which was signed into law in May, take effect Feb. 22. However, the credit card industry has changed dramatically since then. Issuers have reacted to a rough economy and the stricter law by finding new ways to increase revenue.

Companies have raised interest rates, closed accounts, increased fees and decreased reward programs. The number of people who will be hurt by the new changes outnumber those who benefitted.

Here are the major provisions of the CARD Act: ...

5 Winter Weather Losers

Fri, 12 Feb 2010 16:02:26 EST

With the East Coast's recent snow storms in mind, I've already listed my five winter weather winners. Now here are my blizzard losers. Again, note that the weather's impact will differ from industry to industry. Benefits to some of these companies could be short-lived and should not be extrapolated to longer periods of time. On the other hand, a drop in same-store sales by 1% or 2% could have a significant impact on earnings, which might be reflected in revisions to analysts' estimates. As always, do your homework to ascertain the impact, if any, to each stock. Loser 1: Casual Dining Restaurants

Now for the losers, including the food chains that tend to attract families and other diners that want to sit down for a meal. (The casual dining chains also drive some of their traffic from malls, another bad-weather loser.) Likely restaurant victims of the snow storm include Darden's Red Lobster and Olive Garden, DineEquity's Applebee's, Brinker's Chili's and Ruby Tuesday. Loser 2: Apparel and Specialty Retailers

This entire sector is likely to get hurt by bad weather as shoppers stay away from malls, some of which shut down during the recent storms. This segment runs the gamut from big box retailers such as Macy's and J.C. Penney to specialty apparel retailers such as Aeropostale, Abercrombie & Fitch and Foot Locker. ...

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5 Winter Weather Winners

Fri, 12 Feb 2010 15:23:43 EST

In case you have been living in a cave or on a beach in the French Riviera and missed the news, the U.S. East Coast has experienced several severe snow storms so far this winter. Just this past week, the Philadelphia-D.C. corridor got walloped twice, and the New York City area was hit as well. So what stocks stand to benefit (or suffer) from winter weather? In this installment of The Finance Professor , I'll list my blizzard winners. (See my list of winter weather losers here.) Note that the weather's impact will differ from industry to industry. Benefits to some of these companies could be short-lived and should not be extrapolated to longer periods of time. On the other hand, a drop in same-store sales by 1% or 2% could have a significant impact on earnings, which might be reflected in revisions to analysts' estimates. As always, do your homework to ascertain the impact, if any, on each stock. Winner 1: Hardware Stores

Many people didn't expect -- and some had never experienced before -- storms of the severity or duration that that have hit the East Coast recently. In stormy situations, especially the underprepared are in need such things as shovels, ice-melting pellets or salt, snow blowers and fireplace equipment. And the best place to find all of these items at once is a hardware store.

When it comes to hardware, the largest retailers are the two major home improvement stores, Home Depot and Lowe's. Normally, the winter is a slow season for these companies. These storms are likely to boost sales in an otherwise off-season. Winner 2: Staples ...

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How to Trade the Midterm Elections

Wed, 10 Feb 2010 13:17:11 EST

MILLBURN, N.J. (TheStreet) -- The election of Republican Scott Brown to fill the late Ted Kennedy's U.S. Senate seat set off a political tidal wave in Washington. The Senate Democrats no longer have the 60 votes necessary to assure cloture (a vote to end debate), putting health care legislation in jeopardy and raising the stakes for upcoming midterm congressional elections, which will likely be heating up much earlier than usual.

In 2008, I wrote about how to trade a presidential election. With the 2010 midterm elections on our horizon, let's investigate whether we can come up with some guidelines for trading those.

Note that I have accumulated data for the S&P 500 going back to 1950, a midterm election year. Thus, 2009 (a post-presidential year) represented the end of the 15th presidential election cycle in my database. ...

The Bar Mitzvah Portfolio: Finance Professor

Mon, 25 Jan 2010 13:09:17 EST

My wife, my kids and I have attended many B'nai Mitzvot (plural of Bar or Bat Mitzvah), nearly every weekend, over the course of the past several months. I always get asked the question:

"What should we do with the child's gift money?"

Several years ago, I devised the Bar Mitzvah portfolio. The portfolio, which I periodically update, is comprised of growth and income stocks, and I constructed it in such a way as to pique the interest of a teenager, including stocks that the beneficiary can identify with. ...

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Economic Rebound Bolsters Temporary Hiring

Thu, 21 Jan 2010 05:00:00 EST

CHICAGO (TheStreet) -- Already faced with shrinking benefits, a lack of job stability and the demise of pension plans, full-time employees may be on their way to becoming an endangered species.

A theorized corporate shift from a permanent workforce to a network of project-based freelancers has created a buzz among economists and financial analysts. Earlier this month, BusinessWeek weighed in on the matter with a cover story entitled "The Disposable Workforce."

A sea change in how companies hire employees may not seem so imminent based on recent employment statistics. According to the U.S. Census Bureau, third-quarter revenue for the employment services industry was down 7% from the same time a year earlier. Staffing Industry Analysts (SIA), a provider of information about the contingent workforce, projects that total staffing industry revenue declined 26% from 2009 to 2008. ...

Four Things to Watch for in 4Q Earnings

Wed, 13 Jan 2010 07:00:00 EST

MILLBURN, N.J (TheStreet) -- The holidays have come and gone, and earnings season is once again upon us. Here are four things that The Finance Professor will be focusing on as companies report their fourth-quarter earnings over the course of the next few weeks.

1. Revenue Growth

2009 was marked by net income stabilization and moderate growth, a feat achieved primarily through cost reduction. Top-line revenue growth, however, was stunted due to poor comparisons with the prior year and a strengthening U.S. dollar. If we are truly going to experience an economic rebound, earnings growth is going to have to be sourced from top-line revenue growth. ...

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How to Measure Your 2009 Performance

Thu, 31 Dec 2009 10:00:00 EST

2009 is drawing to a close. Whether you are a professional money manager or an individual investor, it's time to measure your performance for 2009. This is a time when you can bask in your glory while also reflecting upon your mistakes.

First, let me reiterate the Finance Professor's Portfolio Grading System. This system incorporates both absolute and relative performance measures. (Please note: Performance should be calculated after you subtract all fees and expenses.) Grade A: Your rate of return substantially outperformed your benchmark by more than 5 percentage points.

Grade B: Return performance beat your benchmark by at least 0.25 percentage points but less than 5 percentage points....

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Top 10 Winners & Losers of 2009

Thu, 31 Dec 2009 07:00:00 EST

Plenty can happen during the course of a year. We came into 2009 with much despair and are leaving with hope. Of course, as with any other year, some expectations were met, there were also some disappointments, and uncertainty seems to rule. And over the course of the year, we had our share of winners and losers. Without further ado, here is The Finance Professor's list of the Top 10 Winners & Losers of 2009, beginning with the five biggest winners. Winner 1: Steve Jobs

Steve Jobs had a form of pancreatic cancer. He cheated death. He then had a liver transplant. He cheated death again. He's built Apple into of the largest and the fastest-growing technology companies in the world. Through last Friday, Apple's stock price had appreciated 144% in 2009. Winner 2: The Gold Bugs

You have to give these creatures credit when credit is due. Just like the cicadas, the gold bugs emerge every few years. 2009 was their year. According to data from Kitco, the price of gold rose by 25.3%, from $881.10 on Dec. 31, 2008, to $1,104.10 before the holiday break. But I have some bad news for the gold bugs: The Nasdaq 100 rose 54.3%, and the S&P 500 rose a not-too-shabby 24.7% in the same period of time. Still, I have to tip my hat to the gold bugs, who finally put in a decent year. Winner 3: Brian Cashman ...

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Four Things I Learned in Phoenix

Wed, 30 Dec 2009 08:00:00 EST

In the first week of December, the annual IMN Super Bowl of Indexing conference took place in Phoenix. I had the opportunity to speak at the event once again as an IMN ETF advisory board member. I also used the opportunity to take some time away from the conference and explore the Phoenix and Scottsdale area. Here are some of my observations from the conference and my trip to Phoenix. Leveraged ETFs

Over the course of the last two years, I have spoken at several conferences and outlined the growing problems with leveraged and inverse-leveraged exchange-traded funds. I had a rather hotly contested conversation -- argument, perhaps -- with the attorneys who represented one of these leveraged promoters while participating in a Coral Gables, Fla., conference panel this year. I've written various articles on the subject of leveraged and inverse-leveraged ETFs, now archived on my Web sites, and contributors such as Eric Oberg have also written about the dangers of these products.

Our efforts have begun to pay off. Many brokers have taken the initiative to curtail trading in leveraged and inverse ETFs. On Dec. 1, Finra instituted new margin rules for leveraged ETFs. At the 2008 Super Bowl of Indexing, purveyors of leveraged and inverse ETFs were flouting their products and discussing aggressive plans for the future. Both ProShares and Direxion were sponsors or exhibitors at that event. At the 2009 event, Direxion, the firm whose three-times products were all the rage in 2008 was conspicuously absent. Remember, you can't spell Direxion without the word "dire." An Afternoon at the Mall ...

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10 Things Not to Miss About 2009

Tue, 29 Dec 2009 13:40:36 EST

Well, here we are, and another year has passed. I hope that you are all a year healthier, wealthier and wiser. Every December I compile a list of the 10 things I won't miss about the past year (and never want to see or hear again). It's time for the 2009 installment of this tongue-in-cheek satirical look at corporations, government, society and the media. Without further ado, in no specific order, are the 10 things I am not going to miss about 2009. Celebrity Indiscretions

Since Bill Clinton took the art of getting caught in flagrante delicto to new heights during his presidency, other politicians and celebrities have followed in his footsteps. This year, we were delivered a triple play of celebrity indiscretions.

First there was Gov. Mark Sanford of South Carolina. Then came CBS "Late Show" host David Letterman. Most recently, and not to be outdone, was Tiger Woods, who has appeared to triple bogey his way into marital infidelity, losing some sponsorships (such as Pepsi's Gatorade) and keeping others (such as Nike). ...

The Five Greatest Lies About Investing

Thu, 17 Dec 2009 11:44:41 EST

We are coming to the end of two long and arduous years of investing. Along the way we have endured one of the worst selloffs and rebounds in stock market history, a systemic breakdown of the global financial system, and volatility not seen since the 1987 stock market crash. Fortunes have been made and lost. Investor confidence was shaken and very much stirred.

Very few people sold at the top in 2007 and then bought the bottom in 2009; some did manage to do one of those two things. Some bought the top and sold the bottom; most performed somewhere in between.

Now it's time to measure individual performance and prepare to move on to 2010. Naturally, we'll cling to some age-old trading and investment maxims, which are often the root of common faux pas made by bulls and bears, traders and investors, equity and fixed-income types. ...

Recession Raises Economy Watcher's Profile

Tue, 15 Dec 2009 09:20:37 EST

CAMBRIDGE, Mass. (TheStreet) -- From a small office between the campuses of Harvard and MIT, a coterie of influential economists at the National Bureau of Economic Research serves as the official arbiter of when these woeful business cycles begin and end.

The NBER, which began as a small nonprofit, has evolved into one of the nation's leading economic research organizations. Sixteen of the 31 American Nobel Prize winners in economics and six of the past chairmen of the President's Council of Economic Advisers have served as researchers for the group. The number of active researchers publishing their work through the NBER totals nearly 1,000, and notable members have included Federal Reserve Chairman Ben Bernanke, Paul Krugman and Milton Friedman.

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