It never ceases to amaze me that people continue to short the market during strong uptrends.
Sure, the data doesn’t make sense…
There’s millions of people unemployed…
And our healthcare system flirts with disaster every day.
But that’s not going to stop Jerome Powell from making it rain on equities.
Keep it up J. Pow!
Why should you and I worry?
This is EXACTLY the kind of market traders like us have been waiting for!
Price movement so fierce it should cause nightmares!
Sure, we might get a pull back or even a large correction.
That’s why I wrote this Jump on the Week…
To tell you exactly where and what to watch out for.
You know – the key events that could flip the market like a pancake.
Grab a fork and knife and get ready to DEVOUR this delicious information dish.
Ever wondered what this actually means?
The PMI is a survey of businesses along a variety of topics on everything from costs, new orders, employment, to outlook, etc.
Two main places offer PMIs: IHS market and ISM.
The two can differ at times based on their methodology.
ISM tends to favor larger companies than IHS. Additionally, IHS asks respondents to confine their answers to US activity vs ISM.
Take a look at how the ISM PMI dropped compared to the depths of the Great Recession.
What I find interesting is how the PMI made a ‘V’ shaped recovery, which is in line with the market’s expectations for a rebound.
As we’ve seen the reopening phases of the U.S. grind to a halt, I’m looking to see how that plays into the manufacturing index releases on Monday.
I don’t expect manufacturing in the U.S. or globally to suffer the devastation wrought by 2008, in part because home construction is remarkably robust as well as other capital projects.
As long as these areas continue to remain solid, we’ll have a base that keeps the economy from truly cratering.
The big question market comes on Friday. Jobless claims remain stubbornly high. Enhanced benefits begin to taper in the coming weeks. Stories abound of people still waiting to be processed through the state and local systems.
Unfortunately, I don’t see this changing anytime soon. Any recovery we experience will always be dragged backwards by an enormous amount of unemployment.
Right or wrong, the administration’s efforts on trade may reduce alternative avenues of demand, crimping growth in the U.S.
After reading the Fed’s statement this week, I wanted to comment on a point of contention between hawks and doves.
Some speculated that the Fed would pull back on its support for the markets which have become excessively frothy. Yet, there appeared to be no indication of that from Powell.
However, we are starting to see the Fed’s balance sheet shrink ever so slightly.
Fed Balance Sheet
In fact, we’re down $220B since June 10th, which is nothing to sneeze at.
Those overnight repos (bank borrowings) that went berserk even before the crisis have fallen out of favor as well.
Liquidity swaps (currency exchanges with other countries) has also taken a nosedive. Part of this may have led (or been led) by the drop in the U.S. Dollar.
Unfortunately, the people hurt most by all these actions are the ones who need help the most.
The Fed’s Main Street lending program fell flat. While the stock market is doing great, the garbage savings hurt folks with simple checking and savings accounts – which are held more often by lower-income households.
My biggest fear is they continue this longer than necessary, leading to crap companies surviving and a widening wealth gap.
Last week gold breached $2,000 an ounce, with the GLD ETF also taking out the high from 2011. At the same time, the dollar index fell in concert with gold’s epic rise.
While we’re likely to see a pullback here, both gold and the dollar ended at the high and low of the month respectively. That leads me to believe both have further to go on in their trends.
Real estate (XLRE) and exporters like Caterpillar (CAT) benefit the most from the cheaper dollar.
But the trade has been and remains in the big growth conglomerates.
Tech companies from Apple and Amazon to Facebook are unstoppable. They fund their operations with dirt cheap debt, allowing them to suck up competition and discount prices.
That’s why I’m focusing on the momentum plays – ones that continue to grow during the pandemic like Zoom (ZM).
The biggest challenge most of these startup companies faced was expensive financing.
But the Fed hasn’t blown up that concern.
Well, that’s something you’ll have to join Bullseye Trades to find out.
Laying out my best trade idea, I explain exactly how and why I like the trade and would play it.
All for less than the price of a cup of coffee per day – and we’re not talking about the head of the FCC with the comically massive coffee cup.
Stocks I want to bet against this week…
SC, DFS, PENN, IWM, SNAP, ROKU, SPOT, WK, EBAY
Stocks I want to buy this week…
MJ (none), DKNG (Aug 21st), PYPL (July 29), OKTA (Aug 26), ZM (Sept 3), TWLO (Aug 4), CVNA (Aug 5), ECL (July 28), CARR (July 30), GDX (none), RNG (Aug 3), NEM (July 30), CLX (Aug 3), VAPO (Aug 3), PTON (Aug 5), SHLL, RH (Sep 8), AVLR (Aug 5), SHOP (July 29), JNJ (Oct 20), MSFT (July 22), TTD (Aug 13), GOOGL (July 30), CRSP (Aug 3), FMCI (Aug 5), BA (July 29), FSLY (Aug 5), WMT (Aug 18), WORK (Sept 2), TWTR (July 23), AVLR (Aug 5), SQ (Aug 5), JD (Aug 11), NET (Aug 6), ADBE (Sept 25)
Every great investor has a nickname.
Warren Buffett is the “Oracle of Omaha.”
Thomas Rowe Price became the “Father of Growth Investing.”
Peter Lynch is the “Chameleon.”
And George Soros is simply known as “The Man Who Broke the Pound.”
In the world of startup investing, there may be no more iconic name than “Mr. Wonderful.”
Kevin O’Leary has established himself as one of the world’s top venture capitalists.
The hit TV show Shark Tank – where you can find him in the center seat of every pitch – reaches millions of viewers around the world.
He has built one of the most successful Angel portfolios in the world.
And he’s always looking for new ideas and new opportunities.
If only there were a way to tap into his secrets in picking the best startups in the world.
If you love Angel investing, there’s no one on the planet you want to hear from more than Kevin O’Leary.
Kevin is a titan – he’s been leading the worldwide phenomenon that is Shark Tank since 2009.
Since the onset – he has personally invested in more than 50 companies.
So, what exactly is KEVIN O’LEARY – Mr. Wonderful – looking for in a company?
That’s the subject of our conversation with him this week. This week, Kevin joined us live in The Boardroom to discuss his strategies when he decides to invest in a startup.
During our exclusive chat, Kevin outlines the type of entrepreneur, the type of products, and the specific sales channels that he seeks before he hands over a check to a startup.
But there’s more to this conversation.
A special bonus.
You can now invest right alongside Mr. Wonderful…
It’s a deal that checks off every single box in his very narrow, and strict list of rules when he bites on Shark Tank deal.
Kevin O’Leary needs no introduction.
An startup investing legend, he sits in the center seat every week for pitches on the ABC hit show Shark Tank. Since 2009, he’s invested in more than 50 startups and helped build some great brands.
This week, Kevin joined us this week to talk about his experience as an investor in startups.
We talked about his favorite business model…
Dove into the powerful phenomenon that is Shark Tank…
And, best of all, we talked about the tremendous upside of his latest investment – mcSquares – and how you can invest right alongside him in this incredible company.
It was one of the best conversations in the history of The Boardroom.
One of the great things about Kevin…
He knows exactly what entrepreneurs feel like when they’re standing in front of dozens of cameras making their pitch on Shark Tank.
Kevin got his start as an entrepreneur, building a Canadian tech company out of a basement in 1986.
He famously turned a $10,000 investment to seed a company SoftKey Software Products. He successfully convinced big technology companies to bundle his software with their hardware products. That sounds like a no brainer, but it was revolutionary at the time.
His personal startup’s success helped launch a remarkable career that has now spanned decades.
Today, he’s the face of one of the most popular television shows in the world.
And he’s the latest investor in a company called mcSquares, a revolutionary whiteboard system startup that The Boardroom invested in before it appeared on Shark Tank.
mcSquares founder Anthony Franco says that Kevin could add upwards of $4 million in value to the startup. [And you can still join the latest deal round for mcSquares right here at Angel Investing Insider.]
But more importantly, Kevin says that Anthony is one of the rare entrepreneurs that pique his interest and make him jump headfirst into an opportunity.
Kevin’s always looking for companies that fit into HIS portfolio and his philosophy.
He’s always thinking about how a new investment aligns with everything else he owns.
But one of the key starting points is his focus on the entrepreneur.
But he always focuses on the entrepreneur.
When companies face new challenges, they successfully pivot. He places a significant focus on the entrepreneur’s ability to pivot and execute.
With mcSquares, for example, Anthony Franco’s company has thrived despite all of the challenges facing the economy. After all, Anthony was able to land back-to-back investment deals with the Boardroom and Shark Tank.
O’Leary wants every entrepreneur to pitch their idea and explain how their idea solves a problem within 90 seconds.
When talking about Anthony, Kevin says he has a “Great idea” and a “great track record.”
And that’s for sure. Anthony has already started and exited four startups successfully.
Kevin isn’t just looking for a good idea or a good product.
He wants to know where the entrepreneur fits into the Kevin O’Leary portfolio.
Kevin wonders how the company might fit into his sustainability model?
He explores if it aligns with the kinds of products and services he has already sold?
He also wants to know that he has an existing user base he can sell to?
Only if that entrepreneur checks out will he – perhaps the most ruthless shark – bite.
Kevin is seeking a good family vibe when he chooses to work with them. And he likes it when these companies do their diligence on him as well.
But there’s a “Secret Sauce.”
When it comes to investing in a specific entrepreneur, Kevin also says that he is always looking for founders with incredible executional skills.
There are many factors that a startup can’t control. So, they have to know how to re-brand, tweak their products, start new products, or completely change their business model.
Simply put, they have to know how to pivot if they’re going to survive and thrive.
While doing his diligence, Kevin realized that Anthony has that ability.
Anthony was able to restructure his operations to ensure that all production was done in-house. Since other manufacturers were stalling, he needed to take this risky and expensive undertaking to ensure his company would succeed.
Today, the company is pumping out a high margin product with fewer headaches.
Kevin also discussed his favorite business model.
In today’s economy – with COVID wreaking havoc on retail – the answer should come as no surprise.
Kevin is looking for companies that sell direct-to-consumer over digital channels.
Shark Tank provides instant fame to companies and their products. And the ones that can sell directly to the customer without a middleman and slow supply chain will produce big margins and bigger profits.
Of course, these aren’t the only lessons that Kevin outlined this week.
He also talks about the reasons why certain investments fail, how acquisition costs impact his investments, and what he thinks about the regulations that have allowed ordinary investors to profit on startups like mcSquares [Hint: He’s very optimistic about Angel Investing].
But the best takeaway is how you can tap into mcSquares and join him in this one-of-a-kind company that checks every box on his list. You can get started, here.
The stock market is the greatest learning classroom on the planet.
But remember one thing: You’re allowed to make mistakes.
Not enough people tell others this in life. People are way too afraid of failure.
It’s okay to screw up.
I’ve made my fair share of trading blunders.
Naturally, I learned from them, and now, I have built a strong trading and investing philosophy that I can pass on, one person at a time.
You’re going to have a bad trade or investment now and then. That’s just how it is.
The trick always comes around to focus on the good.
Trade. Then improve. Trade. Then improve.
Looking back over the last four months (and the previous three crises), I wanted to talk about three lessons I think everyone needs to hear.
Let’s dive in.
It’s always fascinating to listen to the bears sound off on television, predicting that the world is going to end. If you remember in March, hedge fund manager Bill Ackman told the world that “hell is coming.” It turns out, he had a hedge against the downturn, and he ended up making more than $2 billion due to the crash.
Then, he turned around and snapped up stocks on the cheap.
I’ve paid close attention to the people saying that the world is on the verge of collapse.
I’ve started to notice that more times than not – these people are selling something.
Maybe it’s gold.
Maybe they’re the fund manager of an Inverse ETF.
Maybe they own junk that they’re trying to pass onto some other unsuspecting victim because their significant other keeps throwing their clothes out the window of their Manhattan apartment.
The point is that history has shown that markets can rebound.
Don’t let short-term fear overcome long-term growth potential.
If you sell out of fear, you’re more likely to not get back into the market. You’ll sit on the sidelines hoping for a pullback that may never come. This happened to many people after the 2008 financial crisis, and it’s happening again today.
I was surprised by the incredible run over the last three months by Big Tech stocks.
But then again… I wasn’t.
Technology is the underlying driver of economic growth, economic expansion, and an increase in living standards. When major societal events take place, technology drives the new trends.
Over the last decade alone, we’ve seen the explosion of 4G, e-commerce, digital banking, last-mile delivery, and radical healthcare innovation. There’s a reason why stocks tied to these trends have catapulted to the top of the S&P 500.
Just think about Apple for a minute. It was only 14 years ago that they released their first iPhone.
The stock was trading around $17 at the time of its iPhone release (adjusted for previous stock splits).
Today, the stock trades at $425 and is on the verge of splitting four ways.
If you’d listened to the bears in 2011 and ignored the 4G and smartphone trends, you would have missed out on this.
That incredible rise – about 2,400% – comes despite TWO major financial downturns in a little more than a decade.
And that’s just one company.
I was recently listening to a popular Canadian venture capitalist talk about the market, and he said that his industry in tech has never experienced a recession.
I think that’s accurate if you think about the tech firms that genuinely change the world. Even at the height of the Dot-Com bubble, these companies weren’t cutting jobs. They were focusing on their long-term growth, innovating, and creating the technology that we enjoy today.
With 5G on the horizon, the sky’s the limit for so many companies that will create the next generation of tools that dramatically improve our lives and standards of living.
Stay on board even if there is a price correction. It will take mettle to watch your investment take a big hit on paper every few years, but trust me, we’ve seen this play out on Apple stock alone multiple times.
I repeat this often to people because they tend to overlook the obvious.
Look: If you’re serious about having A LOT more money in 10 years than you do now – you can tap into long-term trends that are a lock to produce gains.
Where do you start?
Think about the obvious one.
There are going to be 9.1 billion people on the planet in 30 years.
People need to eat.
People need housing
People need medicine and hospitals.
I know that you’re going to hear a lot of noise that the planet can’t sustain that many people.
To paraphrase a friend’s book, if a serious challenge lies ahead for humanity, an engineer will build a machine to solve it. Again, don’t listen to the bears.
Focus on the technologies that will drive invocation to support the world ahead.
I like biotech companies with a proven history of profitability.
I like food companies that can reduce carbon emissions and create healthy lifestyles.
I like companies that will pick up all of the waste left behind by hundreds of millions of people.
I like the firms that tap into the apparent trends that surround us. Best of all, these companies typically generate a lot of cash flow, meaning our investments will benefit from strong dividend payments or stock buybacks.
I know it’s easy to look at the headlines and feel some dread.
The news is designed to make you feel like you’re falling down a hill, and there’s nothing to grab to prevent the fall.
I promise: Just focus on the trends, buy the stocks, and enjoy the ride.
Sure, economic downturns will occur, but they come and go.
You’ll forget about them during the next Bull run.