Market Wrap-Up for Feb.2 (BRCM, TWX, MAT, HSY, CHRW, WHR, more)

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The market is coming off a big first day of the month, which continues a recent pattern of big jumps at the start of each new month. We are still looking at quite a few candidates as possible additions to our Best Dividend Stocks List , and there were a couple of names that are a bit more aggressive (low yield, more stock price growth) which reported numbers last night.

Lubrizol ( LZ ) and Jones Lang-LaSalle ( JLL ) saw investors embrace their results early on, but did close off intraday highs. Elsewhere, Time Warner ( TWX ) reported good earnings and raised its dividend, to boot. Dividend increases were a big theme today, with Mattel ( MAT ), Broadcom ( BRCM ), and Hershey ( HSY ) also joining the dividend increase parade. On the downside, we were seeing sellers pushing the eject button on C.H. Robinson Worldwide ( CHRW ) and Whirlpool ( WHR ) following those earning results. Lastly, a negative note on FedEx ( FDX ) from a Wall Street analyst pulled those shares lower.

In some parts of the market (namely the Tech/Online space), we are seeing company valuations getting a bit out of hand. The resulting fallout from earnings results can be quite painful when companies with super-high valuations report - even if they meet analyst expectations. If you are trying to make a buck actively trading the markets, please use common sense when it comes to playing with stocks that are trading at 60 to 70 times earnings. The risk/reward will eventually pummel your returns.

Speaking of valuations, check out the recent video from Jim Cramer about a "valuation revolution" that may soon take place. The premise is that private company valuations from the likes of Facebook and LinkedIn will eventually force Wall Street to re-do the math on publicly-traded companies. Jim Cramer does an amazing job for the markets, getting people excited about stocks, but sometimes his rationale can be quite outlandish. You have to realize that companies like Facebook for the most part are being given valuations by VC companies and private investors. Not until their IPO is filed do you get a sense of what type of revenues these companies are actually making, since they're then forced to open up their books for all to see. The bet is certainly more on these companies' potential than anything else, but buying potential is no sure-fire way to hit it big as an investor. Now if you were lucky enough to be an early investor (and 99.999% of us will likely never get that chance), then you will certainly be able to cash in. If the markets pursue any sort of valuation revolution as Jim Cramer believes, I would be a happier seller of stocks than a buyer.

As an entrepreneur that has been able to build a national brand, I often get asked about the best way to proceed with business ideas. I can't stress the fact enough that you should know the market you are considering to enter. Too often, people mistake hobbies for business ideas. I remember back in the mid-to-late 80′s when baseball card stores were popping up everywhere, I said to my fiancee (now my wife) at the time that this was the beginning of the end for the hobby. By the time the early 90′s came around, I was right on the money with my prediction - the industry imploded and card values plummeted. For someone who was a seller at the time (at the time I was flipping factory card sets for 3 and 4 times what I paid for them just 1 year earlier), it was awesome to have stores opening since they often were buyers, hoping to keep their stores stocked. This is just one example of an industry that should have remained a hobby, but for those that ventured into the retail shop business, it was certainly a waste of money and more importantly time. No one seems to value time when they are in the planning stages of building their perceived dream career. Lots of social media gurus would have you believe that you can take any hobby and turn it into a thriving career. Save your time and your money! Focus on businesses that you can assuredly get paid for (web design, computer repair, tutoring in school or music). Scope everything out first, including any additional education you'll need to make things happen.

Just this morning, local college here in New Jersey announced it will now offer "new media" courses to take advantage of opportunities in the radio business. The idea they are pushing is that the state has over 150 radio stations and will need individuals with social media skills to work for them. I wonder, did anyone from the college actually pick up a phone to call the radio stations to see if there are actually any job opportunities? From the people I talk to, radio stations are operating on shoestring budgets and are struggling to keep the lights on. This is just one example of needing to do your homework a bit more than you expect. Don't get blinded by the media's obsession with the "flavor of the day" when it comes to choosing your career. Measure the risk/reward carefully and you can still find time to pursue a hobby that maybe one day you can make some money with, just not something you quit your day job for yet. My passion is to keep people on the smart track with their investing and if my thoughts can help in other areas, I will not be afraid to share them.

Please check out DividendMillionaire.com if you are interested in pre-ordering my book "Be a Dividend Millionaire." The e-book is due out in mid-February and the print version is apparently being moved up to Apr. 4, according to my publisher, which is great news! And as always, check out our industry-leading Best Dividend Stocks List for the top dividend names to put money into right now.

Thanks for reading, and I'll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: BRCM , CHRW , HSY , JLL , LZ

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