The Efficient Market Hypothesis, or EMH, is a concept developed by Eugene Fama, which asserts that the prices of financial instruments, reflect all known information about the future values and beliefs of the investors about those particular financial instruments. This means that you, the investor, cannot outperform the market in the long run.

Here is a quick example: Suppose you watch the evening news, and there is a report of how High-Tech companies are getting more popular. You think to yourself it will be a good investment, and you decide to buy stocks of High-Tech companies. Will you outperform everybody? probably not. What knowledge you have about the stock market is available to each and every individual. This means that you are not the only one that noticed that High-Tech companies are getting more popular and hence, these beliefs are already reflected in the price!

This may mean the price is higher if it were not for that particular belief. Please note that this does not mean that every idea and notion you may have about the market is already reflected in the price. You could predict something that nobody even considered, but that would be luck! You could also think you know how a particular sector or stock would perform and not get it right. This is what happens most of the time. Thus, in the long run, the prices of the financial instrument already reflect the consensus of beliefs about the particular stock/bond/etc and it's future performance.

The EMH is usually divided into three categories: The first is called the Weak Form Efficiency. This means that you cannot outperform the market in the long run by using historical prices. This includes Technical Analysis and other statistical methods. For example, You may analyze past prices and see that on a Monday, stocks usually rise by 2%. You think you have a good shot at making some money out of it. The problem is that everybody has access to past prices and everybody would try to make money that way and hence the price would already reflect the use of those tools. This may be debatable and some have showed that there are statistical anomalies that have existed over a long period of time (although most have faded away by now).

The second category is the Semi-Strong Efficiency. This means that the prices reflect all known information and news about it, which means that fundamental analysis cannot help you in analyzing the value of the stock because yet again, everybody has access to the news and information.

The last category is, of course, the Strong Efficiency, which means that the prices reflect ALL information and no one can earn excess return. Of course, that would have to take into account, the legal issues of insider trading. For those who do not know, insider trading means that someone INSIDE the company, that has knowledge that the public does not know yet (such as a big merge), uses it for personal gains. If insider trading is not legal, than you could, and people had, outperform the market. Insider trading is very lucrative and that is why each year you can read the news about someone being accused of it.

You could argue and say that you know several stars and hedge funds that outperform the market but do realize this: there are more that fail and the percentage that is consistently outperforming is VERY small. So small in fact, that this be may attributed to sheer luck.

So how efficient are the markets? The bigger the market the more efficient it is usually as more and more people try to use information to help them gain money and outperform it.

Injecting A Little Common Sense

In the previous article we spoke about how the transition from paper to ‘real money’ trading can be much more difficult than you may imagine. Now we can aim at reducing these problems and increasing your chances of success first time around. To do this we need to inject a little common sense. On paper it is pretty likely that you will have built yourself up so that you are executing fairly large ‘paper’ orders. This will boost your confidence as you see just how much money you can make once you move to real money. Once again you may be setting yourself up for disaster by jumping straight in with large orders as soon as you switch to your live account. After all you were making two thousand dollars a week with paper so you will take that in real money thank-you very much!

Rather than taking this route and potentially exposing yourself to a large amount of emotional stress we are going to use our patients (lets face it, if you are successful on paper then it’s highly likely that you posses enough patients to be profitable with real money – you just have to remember it) and start off by executing the smallest order size possible. Why would we do this? After all it is possible that we may incur a small loss due to the costs of trading (exchange fees, commissions etc) even if we follow our trading strategy perfectly. The reason for doing this is to expose ourselves to the emotions of trading with real money as gently as possible. Think of it in another context; you don’t just wake up one morning, 70lbs overweight and run a marathon. Well you could but there is a good chance that it may kill you! It takes a dedicated and progressive training regime to adapt your body to the challenges it needs to meet. This is the philosophy we are going to implement in our trading.

Building Up

Just as someone training for a marathon would be able to gradually increase the distance they run week by week, we will be able to increase our order size but only if we are trading successfully. A runner who breaks down in a puddle of sweat after 2 miles is unlikely to attempt to run 5 miles the very next day. However if he/ she is able to run 2 miles, three times a week for two weeks then they may very well increase the distance they run by an extra mile. If the distance becomes too difficult then they will drop down a level or so.

Traders can make similar incremental steps; starting on 100 shares a trader may wish to increase their order size to 300 shares the following week, then 500, then 1000. At each stage the trader must record their success rate. Not in terms of dollar profit but their ability to follow their strategy, how nervous do they feel, are their palms sweaty, sweaty brow, becoming frustrated and angry etc. By keeping tabs at each stage a trader can make a natural transition into ‘real money’ trading rather than forcing an unnatural one.

Each Of Us Is Unique

You must have heard the phrase ‘each human being is unique’, or something very similar, several million times and surprise surprise, trading is no different. Each trader is likely to progress at a different pace through paper trading and on to using a real account. The important thing is that he/ she must move at their own pace and don’t be afraid to take a step back rather than feeling the heat and making mistakes. If you ever feel yourself falling into any part of the vicious circle we spoke about in the previous article it can be extremely costly if your pride or inpatients is too strong so as to prevent yourself from taking a step back and recomposing yourself. You should never be afraid of reducing the number of shares you trade or increasing you order size at a slow rate. Listening to and controlling your emotions is a strong sign of future success.

The idea of paper trading can seem like a tedious time waster to those of us who are eager to get started in the World of the financial markets. By starting with real money we can immediately tap into the excitement of the markets and start earning the millions we have always dreamed of. However, jumping straight in with real money very rarely works. There are several reasons for this: we have no robust strategy, the strategy we have that we believe to be robust is in fact a loser, the signal service we use is poor at best and is incapable of producing profitable trades and the most profound reason of all: we have no idea of the emotional roller coaster trading with real money creates and how it effects our decision making skills.

Patience On Paper Pays
Each of these problems can be overcome but this article will focus on the latter. Therefore we will assume that we have a profitable, proven strategy that has shown its effectiveness in a range of market conditions and we have proven our ability to work with our strategy (yes this means paper trading!). At this point I would like to stress the importance of paper trading. If you can’t make money in a practice account then guess what, you will just be giving money away in a real account. Sure, we’ve all done it but just don’t do it again OK! There is no substitute for patients in the financial markets and if you are the sort of person who lacks this quality (the sort of person who will skim read this article) then you will need to learn.

Fear Of Loss
Paper trading teaches us how to implement a strategy. It teaches us how to follow rules and recognise patterns, it even teaches us the basic of market dynamics such as how to enter an order. What it doesn’t teach us however is how to manage our emotions. Someone who has never traded with real money will be all to unaware of the emotional and psychological side of the vocation. Sure, there is some emotional involvement in our paper trading; we all want our strategy to prove itself and our skills to be refined with experience producing a higher success rate. However this emotional involvement doesn’t even come close to what we will feel on the first day our real money is at stake.

Changing Our Plans
As emotional discomfort increases so does the likelihood that we will change the way we trade. There is a common vicious circle that first time ‘real money’ traders expose themselves to that can quickly spiral out of control. Fear of loss can lead to hesitation on entries and exits. Now losing trades become even larger and winning trades are reduced in size or missed altogether. The first seeds of doubt are sewn and a trader will begin taking riskier entries in order to recoup what he/ she has missed out on. When these riskier trades begin to lose trading accounts begin to take a real battering and self-doubt controls our thoughts. Hesitation and frustration will lead to even more losses and most traders will either give up an emotional wreck or a few thousand dollars worse off, quite often both.

Trading options online has become very popular, because not only is it fast but its easy too. Options trading is very similar to futures trading. They both involve the process of buying stocks at a pre-determined price and then selling them when the price is higher than what they were brought for.

Online options trading eliminate the need trade options face to face. You can simply log onto your favorite online options trading website and complete all of your transactions, simply, and easily at the click of a button.

The fact is, you will save more time and money trading options online because you will save yourself the hassle of meeting with your client or broker, this will give you more time to spend doing research and analysis of the different stocks and options that are on the market. With today's market being the way it is most online options trading websites have teleconference and even video conference facilities that allow you to communicate with your broker or client.

One of the best advantages to online options trading is that you are able to get real-time updated statistics on the options market just like you are with the stock market. You can monitor and observe the trends taking place in the market from the comfort of your own home. If you need assistance or needs or advice concerning the market, you can email, instant messaging or even use skype to communicate with your broker or other fellow investors.

Options trading forums allows you to communicate with your fellow investors. Forms are a good place to start if you are a beginner that is new to options trading. You can hang out in the forums and pickup advice from more experienced investors.

Many people have learned about the latest option trading techniques being used, in the forums from other forum members. However you should never take any advice that you are given as the truth, until you test the advice yourself or consult your broker for clarification.

Online options trading provides so many benefits that traditional trading doesn't. It is not difficult to get started because many online options trading websites provide a wealth of information to get you going.

I am often asked whether men or women make better stock market traders and investors. My answer has always been women, and I have now been proved right. A recent study by Digital Look, who analysed 100,000 portfolios, revealed that ordinary women investors, living all over the country and dealing in shares via the internet, telephone or investment clubs are consistently doing better than highly paid professionals in the city. During the period of the study the average female portfolio rose by 10% compared to just a 4% rise for the overall FTSE index and a 6% increase for that of the average man.

Apart from being proved right, what is even more encouraging is that both the men and women outperformed the money men of the city. If it is therefore possible for these ordinary investors to outperform the so called professionals, why don’t more people handle their own investments? I have no doubt there are many reasons including, a lack of both time and knowledge, but I personally believe the main reason to be fear. The world of finance can seem intimidating and complex and it is an impression those on the inside do little to dispel. However, what they sometimes forget is that without the contribution of those on the “outside” this world would not exist at all. The money fuelling this industry comes from the everyday activities of ordinary men and women and from the mundane markets such as savings and pensions.

For women it is even more important that they overcome this fear as within the next generation they are forecast to own over 60% of all personal assets, the first time this has ever happened. More women are starting businesses and soon there are going to be more women millionaires than men. Many companies have recognised this trend and have been quick to develop specialist services, yet the financial industry seems extremely resistant to this trend, with only a handful making half hearted attempts. In general they only pay lip service to this huge and growing market.

Women make better traders and investors for many reasons. Firstly, and most importantly, women are prepared to listen, admit any mistakes and learn from them. Men, on the other hand, will blame the market or their advisers, rather than their own judgment and will stick doggedly to a view even when the facts are obvious that they are in fact wrong. Getting a man to admit an error of judgement or that they have made a mistake is very rare. In the trading world this can be a costly personality trait, and yet it is a common one in men. Ask most men the reason for this and they will answer that admitting a mistake is a sign of weakness. As all women know, it is in fact the reverse. A classic behaviour is in map reading. All men think they are natural navigators and will refuse the offer of help even when completely lost, preferring to carry on until they find some recognisable landmark. This is generally miles from where they wanted to be yet this small success will be offered in vindication of the major detour that has resulted. Women will stop and ask as soon as they are lost. In the trading world this is a major strength. Accepting a loss and moving on is one of the key characteristics that defines a good trader from one who will be wiped out very quickly.

Women are happy to learn, men are not. Give the same piece of technical equipment to a man and women and observe the different approaches. The man will not read the manual, but attempt to use the equipment straight from the box. Invariably this fails, but reading the manual is a last resort for the male, who ploughs on regardless until finally admitting defeat and is forced to grudgingly read the instructions. The woman on the other hand will probably read the manual first before attempting to use the equipment. If both are doing it together then conflict ensues!

Finally women make better traders as ironically they are more able to remove emotion from the trades. Men will become irate and take it as a personal insult when trades go wrong, whilst women are more philosophical about the loss and take a more dispassionate view. Being able to trade without emotion is one of the keys to success in the financial markets – just ask any successfully trader – this is a business and not personal.

The buying of options (rather than writing them) is the most popular way most new commodity traders start out. Little do they know that over time, their chance for success is 10% at best. The premium cost over a year is tremendous. Read about how the pros use commodity options and how you should too.

There are many ways to hold a speculative position in futures contracts and hedge yourself against unlimited risk. All methods will cost you something. The market is a wash and gives nothing away. It will reward you only if you uncover an advantage that the majority misses. You must use the proper trading vehicles and analysis to capitalize on these situations. The wild card is that the market and optimum tools are always changing.

I talk about the dangers of option buying from experience. Over the years, I've done well buying and selling futures contracts as well as other traders I know. But, except for a few tremendous gains when the market collapsed while holding put options, I've seen most traders lose consistently when straight buying options. This erosion happens even when the market forecast is correct. That is the most disheartening part - to have the move take place and the options erode in value. Unless you are expecting an unusually fast move in a short period of time, find a way to use futures contracts for the job.

Writing (selling) options is a good way to capitalize on this eroding asset. Again, there are no free lunches and it takes as much skill to make money writing options as it does trading futures contracts. Writing options also contains as much risk. This threat of risk is your reality check to make sure the market will pay you for your skills. Without taking on risk, you are an outsider trying to play a pro's game.

Let's not forget about the spreads when trading commodity options. Except for some very active financial markets, option bid and offer spreads are usually so wide you can drive a truck through them. The New York commodity option pit markets are notorious. An illiquid market is the problem with many commodity futures options.

Some trading is so thin you simply cannot get in or out without paying an outrageous price. After buying, try to sell it back minutes later and you might be down 30%. I've seen times when some option spreads have been one-bid to three-offered. Even 3/4 point is considered a good spread in some commodity option markets. Unless you follow a few rules to getting in and out, expect to pay. In defense, most financial commodity option markets are reasonably liquid and active.

When you add up the spreads in illiquid markets over a year's trading, they can be many times more than the brokerage commissions you paid! These are expenses that may take you from profitable, to break-even, to even losing for the year. Many traders think that they can pay these expenses "just this time" and the trade will take off and make it all up. This attitude gets contagious in a wild commodity bull market as traders buy at any price.

Trading has to be viewed over a long series of trades. Some trades will be losers, some will be break-even and some will be winners. They must be all taken together. Calculate your expenses to arrive at one bottom line. If the best pros have a hard time scratching out 50%-100% gains per year with their low overhead and expertise, how can you expect to cover greatly higher option expenses and come out ahead?

In contrast, most futures contracts are very fair in their spreads since they are more liquid. For example, the e-mini futures contract, (currently priced at 1200) if scaled down to equal 120, has an equivalent bid/offer spread of about 1/40th of a point! Now that a fair and low entry-exit expense!

I simply want to make you aware of what you're up against when buying options. Being aware is being prepared. You need to have skills, an edge, reasonable expenses, the proper trading vehicles and good advice to survive and prosper trading commodities. My advice is don't get lazy and depend only on the false security of buying options. Learn to use these trading vehicles like a pros. Take on the risk of futures, option spreads and other strategies that require more experience. Take on the challenge to learn more about commodity trading strategies.

Read my free course lessons #26 and #29 to find useful information on using futures and option hedges to avoid these pitfalls. I hope this lesson will help to clear the fog, false hope and comfort of buying these eroding assets. You will discover there are much better vehicles and techniques for position trading.

Good Trading!

The buying of options (verses writing them) is the most popular way most new commodity traders start out. Little do they know that over time, their chance for success is 10% at best. The option premium cost over a year is tremendous. Read how most pros use commodity options and how you should too.

There are special times when options can be bought. There are special reasons too. I've seen good buys when sugar is wallowing at its lows around 4-5 cents. Buying a nine-month-out call option near the money costs only 20 basis points. These are the times to take notice and buy options assuming you have a forecast showing a good rally. (or decline)

Another good time to buy is simply when the option gets way undervalued from current market volatility conditions and you are looking for it to swing back to its volatility norm. Reverse everything mentioned above when buying put options. You want to see panic buying and short covering so that the put premiums are deflated, of course.

The market pays you for having skills that are better than the average trader. It also pays you for taking on risk. Buying a load of inflated options based on the crossover of a moving average and then sitting on them for a few months takes no skill at all! In addition, there is really no "unknown risk" being taken. Yes, you pay your option premium, but it's really your bribe to the market to make you feel comfortable.

The option writer is the guy really taking on uncertain risk and is feeling uncomfortable. The market usually will favor him if only for that reason. A smart pro writing options will then lay off some of his risk by hedging some future contracts (or opposite side options) against the option write. How can he make money doing that? He locks in money because you were willing to pay a higher than normal option premium and/or were willing to buy at the offer price, giving him some spread and premium slush to work with.

It takes no skill to enter and maintain a position when buying a load of options. None at all. But entering a market with a futures contract and staying on-board requires sharp timing skills and a forecast that works out without a large adverse move against you. The good part is you have all the time in the world for the futures contract move to take place! No ticking clock eroding premium like an option. (there may be a small futures carrying charge when long, but it works for you when short)

Someone might say it's a wash... the advantages outweigh the disadvantages. But I say if you are a skilled position trader, holding futures have a tremendous advantage over buying put and call options. Generally, beginners have few skills and pay the price by getting wiped out due to eroding option premiums.

Many brokers will encourage beginners to buy options because they are very low time maintenance and of little risk for them. The broker and client become cheerleaders cheering or gagging as they watch the news. Lots of "safe, no risk" entertainment for a few months. Maybe one or two out of ten trades work out. But the end result is always the same.

These traders eventually lose all their money to the option writers and simply fade away. Nice ride while it lasted. Next. Buying a load of options removes "responsibility" to the market. If you're wrong, the account erodes slowly (or quickly) while you're fat, happy and hoping for a miracle .

In contrast, if you're sloppy entering a futures contract trade, you get booted out on your rear end within a day or two. There is instant feedback and pain. There's hard work and risk servicing a group of futures trading clients. But that's the price that must be paid for the chance for higher probability market success.

More advanced option buyers like to do "free" option trades where they buy two, and then sell one or two to take in some buffer cash. This is actually a decent idea and can reduce expenses or lock in some profits when the market chops or backs off after a rally. However, your upside potential is also reduced. No free lunches. See my free course lesson # 26 for more details on "free trades."

The buying of options (verses writing them) is the most popular way most new commodity traders start out. Little do they know that over time, their chance for success is 10% at best. The option premium cost over a year is tremendous. Read how most pros use commodity options and how you should too.

Let's talk about the time advantage futures contracts have over options. If you bought a futures contract and the market went sideways for a full year, depending on the carrying charge differences between months, you could possibly break even on the year. But there is a chance of getting stopped out. So what? Get stopped out of the futures contract and then re-evaluate the situation. You most likely have most of your capital still intact and can always get back in. Or simply let the trade go and look for something better.

With options, many traders feel locked in after a loss and go down with the ship. They figure they have "limited" loss and the market may come back. Maybe, maybe not.

Successful futures traders with accounts under $20,000 are more likely to buy small lots - one or two futures contracts with loose stops. They will also consider buying an option as a HEDGE against unlimited risk. That's the right reason to buy an option. (as well as selling (writing) them to collect the premium as they erode in time) Buying options to reduce the risk of a futures contract or naked option position for small, critical periods of time is the correct way.

Many new option buyers let their options erode to nothing once the market goes against them. Option premiums have a tendency to get slammed during adverse moves in percentages far greater than the underlying futures contact's move. It's not unusual to see an option get cut by 50% in one day while the futures contract has moved the equivalent of 10%. (this is the futures contact's actual move times the margin leverage) Of course, an option can double in one day, which keeps the public hoping and buying more.

Some option buyers purchase options when "the cat is out of the bag" and pay greatly inflated premiums. This happens when dramatic news hits the market and the futures move sharply. But if the cash market then goes sideways, the futures contract prices stay intact, while the premiums in the options get sucked back out. Again, I've seen times where options have dropped 50% in value in a single day's time, while the futures contract price went sideways.

The bottom line is that an option buyer is paying a huge price to avoid taking on "risk." The professional option sellers taking the other side are the ones putting their hands in the fire and taking on the risk. The market pays us to add liquidity and take on risk. It penalizes us (through high option premiums in this case) when ducking risk and liquidity to feel comfortable.

Buying options for EVERY trading signal is the path to ruin. It cannot be done successfully over a long period of time because of this heavy premium expense load. There is a time to buy options when the market falls asleep. This happens near a major, dull bottom. They can also be a good value after a big correction market clean-out, or generally when nobody wants the option, for whatever reasons.

You must pick your spots carefully. Remember that to get the very best option buys you want the previous holders to be panicking and dumping them wholesale. Always wait for a selling panic to buy and a buying panic to sell on whatever time scale you trade. This gives you a great price cushion buffer in case you are wrong and need to dump the position later yourself! At these panic times, call option premiums can be so deflated that you can sometimes own an option (at or near the money) for a little more than the carrying charge cost of a futures contract. (That's cheap!)

The buying of options (verses writing them) is the most popular way most new commodity traders start out. Little do they know that over time, their chance for success is 10% at best. The option premium cost over a year is tremendous. Read how most pros use commodity options and how you should too.

I am going to tell you some things about option buying that may save you a lot of money over your lifetime. This applies to both commodity and stock options. First of all, buying commodity options as a routine way to participate in a market's price move for long term trading is a losing proposition over the long haul. In fact, it's probably the leading cause for commodity trading failure by the public.

Most beginning speculative option buyers (and many brokers) wave the flag saying options have limited risk and you can only lose the money you put in. This is true. But at what cost? Paying a hefty option premium to the market for the privilege of holding it for several months is the price you pay. These premiums add up to a tremendous cost over time.

If you are in the market for a year, whether trading options in and out or holding long term option positions, the clock is always ticking and eroding those option premiums. There is a small window when commodity options are priced at good values and can be bought, but it is a tiny fraction of the time when markets get out of line and the historical volatility gets low. The majority of the time, long term option buying is a formula for failure.

In some cases, it may cost you 100% or more of your account value just to pay and maintain that eroding premium privilege for a full year. For example, it is common to pay about $1000 for a three month call option that is near the money. (near its strike price) If the futures market simply chops sideways, goes down or even rallies slightly, the option will expire worthless in three months. Do this three more times to cover a full year and you've spent $4,000 to simply hold ONE out-of-the-money call option for a year.

Multiply this times ten options and you're talking some serious money paid to the "insurance man" so you can feel comfortable for a year. Bear in mind it is not necessary to have an adverse move against your position for the entire year for this to happen. Think about these statistics and realize that most commodity pros consider it a great year if they earn "just" 30% on their accounts - for the year!

How can one pay many times that cost in option premiums and come out ahead? In compaison, if you were holding futures contracts, they would have been near break-even at year's end. That's a tremendous difference to start with. Also remember that when buying options, a good win/loss ratio for a skilled long term trader is only about 10-20% accuracy. This is low but normal and requires huge gains on the winning trades. This win/loss method information is throughly discussed in my free course lessons #2 and #21.

There is a tendency for many option buyers to "load up" and buy way too many options for their account size. I've seen it over and over. Option buyers are very prone to feeling comfortable and becoming "boy plungers." In contrast, serious futures contract traders are very aware of the potential risk and usually take extreme precautions by trading small for their account size. (small is always a good idea for survival - see free course lesson #28)

Remember that I am talking about the dangers of simply BUYING options and holding them. Selling options (writing them) or using them to hedge the risk of futures or using them in spreads to pay for an option buy position, can work well. To use options efficiently means spending the time to find the proper combination to lay off your risk while still participating in a chance for profit.

As bad as the financial sector has been over the past few months, there are still many industries which have high capabilities of producing strong growth. The asset management industry is one of these groups. With a low P/E ratio of 21 and revenue growth apparent in almost all the upper cap companies, investing in any of these stocks will more than likely reap some benefits. The question, however, is which one will reap the most benefits? Will it be the large caps of Franklin Resources, Brookfield Asset Management, or Principal Financial Group Inc? It is quite possible. However, after looking through the strategic and fundamental elements of various companies in this industry, I see a mid-cap stock, Nuveen Investments (JNC), to have to highest potential of producing capital gains.

Before going to the important financial numbers, it is vital to understand what this company offers in terms of business. While many investors may claim that all asset management firms are similar, if that were the case, why do so many differ in terms of fundamentals? With respect to Nuveen, this company "is primarily engaged in asset management and related research, as well as the development, marketing and distribution of investment products and services for the affluent, high-net-worth and institutional market segments," according to Reuters. While the general plan may seem standard for most related companies, the real difference comes in how Nuveen allocates its investment groups. The company "offers six primary investment styles: value equities; fixed-income; growth equities; global equities; blue-chip growth equities, and core equity, fixed-income and hedged alternative investments " With a variety of different options to turn to, pending on market conditions, Nuveen has set itself up to produce excellent gains for its retail and institutional investors. The process will, in turn, translate to better revenue and earnings growth—contributing to strong investor sentiment and a higher share price. As the company also controls three main branches related to managed accounts, mutual funds, and closed-ended funds, there is even more robust alternative strategies for Nuveen to utilize to maximize growth in the future. And as of right now, this plan has seemed to work. Nuveen has seen over 925% share price growth since its IPO launch in 1992 with little correction in linear form.

Looking at the 925% number, much of this success can be attributed to the strong fundamentals Nuveen had and currently has. Its revenue, according to Capital IQ, of near 710 million over the last year contributed strongly to a year over year quarterly growth rate of about 24.5%. That number leads to a gross profit margin of close to 61% in the past year, and a 45% operating margin during the same time—handily beating the top three market capitalization companies in this industry, not to mention the industry itself. As suspected, these high numbers, regardless of a share price near the company's historical high, has led to a forward P/E ratio of 15.3. The multiple beats out the industry's average of 21.2 and also beats out Franklin Resource's 16.77 forward ratio and Brookfield Asset Management's 32.02 multiple as well. In terms of some unconventional multiples, its trailing price to sales of 5.33 beats out Franklin Resources' 6.01 and its trailing enterprise value to revenue of 5.91 beats out Brookfield Asset's 6.04. What is even more enticing is that Nuveen's enterprise value to EBITDA of 10.583 easily comes below Franklin Resource's 13.0, Brookfield's 15.2, and Principal Financial Group's 11.0. Such high cash flow may be the reason for a Brookfield Asset beating PEG ratio of 1.48 over the next five years. Or, the strong number may a contributing factor to capital expenditures the company spent on. With a growth rate of 4.44 over the next five years, according to Reuters, the number easily beats out the poor industry average of -11.35% growth during the same time. From these numbers, it is assessable to say that the data, used in context, does provide a great illustration that Nuveen is performing quite well.

Nevertheless, it is crucial to examine the management of this or any company, because with a poor staff, these numbers could falter very easily. Fortunately for Nuveen, it's CEO Timothy R. Schwertfeger and group of 828 employees have yielded a lot of great management figures over the past year. Its astonishingly high return on equity of 83% easily beats Franklin Resource's 20.5%, Brookfield Management's 18.8%, Principal Financial Group's 13.2%, and the industry's 23%. Nuveen's ROA of 16.3% also beats the industry's 6.13% figure, and the company's ROI of 21.5% beats out the industry's 11.67% as well. These numbers along with the capital expenditure figure aforementioned are the key drivers of why this company is performing so well. Some may question the higher enterprise value of 4.19 billion compared to the market cap of 3.77 billion, when typically companies this industry has their numbers reversed. With the recent vend of Institutional Capital Corporation some extra debt may have accumulated, but, rest assured, there is reason to continue to be optimistic with this company. With a current ratio above one, this company has the ability to take on even more debt because of the tactfulness of upper management. In fact, without this excellent management team to assess what the company requires, I may have suggested another corporation in this industry.

Therefore, the statistics are clear to any smart investor. Nuveen is a great investment. It still trades currently below its 50 and 200 day SMA, and taking a technical position, throughout the past year the company has seemed to increase to a new resistance level, stay there for a bit, drop down after a few days, but immediately continue to grow to a new 52 week and historical high. Indication shows that this company is now at this dip and should begin to sharply rise very shortly. And once this trend occurs, because of an unusually high short ratio of about 15.4, there will be an incredible opportunity for capital gains because of short covering. Thus, now is a great opportunity to begin considering buying shares of Nuveen, even though I believe this company will be beneficial to your portfolio whenever you commit your capital.