Author: Andrew Packer

Stock market strategies

We Study Billionaires: Making Smarter Decisions & Why Great Investors Are Great Quitters

Posted on by Andrew Packer

Risk. It’s the ultimate challenge for investors. A great investment opportunity can (and should) carry some risk to it. Understanding that risk and how to reduce it is a crucial tool for investment success.

Most risk managers simply look to plug in numbers to determine a mathematical level of risk. That could prove dangerous. Risk changes over time. Plus, risk can include outside factors that may not fit neatly into a spreadsheet.

One tool that can be crucial for managing risk is to avoid overinvesting. Investors should look to take quick profits (or losses) on positions that aren’t playing out as expected.

Why? Because there are always other investment opportunities elsewhere. The market always offers new ideas for investors, no matter their risk level.

 Next, investors should avoid cherished ideas and not get married to a position. Getting too emotionally attached to an investment means lost objectivity.

And a company that has a great story behind it may not necessarily mean a great investment opportunity.

Investors who think more efficiently about an investment’s prospective returns and who are willing to walk away can make better decisions. Over time, better decisions compound.

Knowing when to walk away from a poor investment, and being willing to do so can make a huge difference in investment returns.

 

To watch the full interview, click here.

Stock Picks

The Average Joe: Alphabet’s AI Comeback Spells Upside for the Stock

Posted on by Andrew Packer

The past 18 months has seen a massive surge in interest in all things AI. Big tech companies have announced multi-billion-dollar plans for incorporating the technology. Many have already done so. Others have been a bit of a laggard.

Alphabet (GOOG), the parent company of Google, has been such a laggard. The company’s AI engine, Gemini, faced a poor rollout. Since then, Google has been making rapid improvements.

There’s still room for further improvements.

The company has already released updates for its AI suite of products. They even gave AI the focus at their annual cloud computing conference. Gemini’s generative AI capabilities appear to now be on track to credibly challenge OpenAI.

 So, it’s clear that Google has been behind other major AI players. With the company’s AI changes, there could be some upside momentum for shares ahead. Google has lagged most of the other tech giants.

With the market now pulling back, it may be an opportunity for investors to play AI with a simple investment in Google.

Remember, Google still dominates the search engine business. There’s been no credible challenge there. Adding AI tools can add more revenue opportunities for Google in the years ahead.

As the company catches up to other AI players, their share price could start to show some stronger momentum.

 

To read the full opportunity in Google, click here.

Commodities

Heresy Financial: A Second Wave of Inflation Has Begun

Posted on by Andrew Packer

The latest economic data indicates that inflation is here to stay. Rather than drop to the Federal Reserve’s 2% annual target, it’s closer to 3.5%. And it’s starting to show signs of rolling higher.

It also doesn’t help that data like retail sales show that consumers continue to spend. That’s a sign of a strong economy, not one where interest rates are leading to cooling conditions. This could also point to another inflation wave higher.

The trend looks similar to the 1970s. The early 1970s saw an inflationary surge as oil prices more than quadrupled. Inflation soared to double-digits, then declined in the mid-1970s. However, they spiked again.

For the 2020s, we started the year addressing the pandemic with considerable money printing. This took the form of direct and indirect stimulus. The massive quantities of new money flooding the economy led to inflation soaring to over 9% at its peak in June 2022.

While inflation has slowed, it’s not back to its range yet. Even after the Fed has raised interest rates to its highest level in 15 years, the economy may not have slowed enough yet.

That suggests that inflation remains sticky now. And that if the Fed cuts rates later in the year as expected, inflation may take off again.

Investors can still get inflation-beating returns in short-term bonds. Commodities will likely also fare well under inflationary conditions.

 

To watch the full explanation of how inflation may spike again, click here.

Commodities

CME Group: Gold Is Breaking Out, What’s Next?

Posted on by Andrew Packer

Gold has been outperforming the overall stock market in 2024. And since markets have started to trend lower in recent weeks, gold has held its gains. And it’s even hit new all-time highs in the U.S. dollar, topping $2,400 per ounce.

Several factors are at play that could allow the metal to perform even better in the months ahead. With the asset breaking higher on a technical basis, further momentum appears likely.

What’s driving the metal higher? A combination of supply and demand.

Right now, demand is the largest factor.

Central banks continue to be net buyers of the metal. They’re looking to diversify their reserves. And do so with an asset that isn’t likely to face sudden devaluation, like another country’s currency.

Plus, geopolitical tensions have been on the rise. Iran’s direct attack against Israel led to classic “risk-off” market actions. That includes selling assets like growth stocks and buying defensive assets like gold.

Even if those tensions subside, inflation looks like it may be higher for longer. Some investors are even worried about “double-dip” inflation akin to the 1970’s.

In that scenario, gold could be a massive winner. However, it’s too soon to tell if that’s the case yet.

With gold in a bullish technical trend, the metal has more upside. And it’s likely that gold-related trades like the miners have further upside too.

 

To watch the full case for gold’s breakout, click here.

Stock market

Invest With Jacob: SP500 Technical Analysis (Elliott Wave Theory)

Posted on by Andrew Packer

The stock market’s sideways trend has broken lower in recent sessions, following weeks of a deteriorating structure. Markets trended sideways as economic data hinted that inflation remained strong.

That data has been pushing up bond yields in recent weeks. The 10-year U.S. Treasury yield is now at its highest level in five months. That’s put some pressure on markets, as has other events such as rising global tensions. The net result? Markets finally selling off.

Looking at a market chart with an eye versed in Elliott Wave Theory, these events look like a logical progression.

Markets failed to gap higher on Monday, instead reversing lower. On an hourly basis, the past few days has seen the market make a series of lower highs and lower lows.

That’s bearish and suggests stocks will struggle in the coming weeks. The chart indicates a potential market pullback to the 5,000 level, where the markets have some support.

If selling remains strong, that support may be broken and stocks trend lower.

Measures of market fear and greed have also shifted from overly bullish to slightly bearish.

The good news? With markets breaking down quickly in a few days, the worst of the current selloff has like happened. And any positive geopolitical news could allow stocks to stage a relief rally.

 

To watch the full analysis, click here.

Cryptocurrencies

Bitcoin Magazine: Skybridge’s Anthony Scaramucci Predicts $170,000 Bitcoin Price on CNBC

Posted on by Andrew Packer

In just under one week, bitcoin will go through its halving process for the fourth time. The halving reduces the reward for mining bitcoin by 50%. Each of the prior three bitcoin halvings has seen a massive price jump higher.

As with prior halvings, bitcoin prices are already perking up. The cryptocurrency even made a new all-time high ahead of a halving for the first time ever. That could be a sign of strong performance in the months ahead.

This year, investors have more options than ever for investing in bitcoin. The SEC approved trading of 11 bitcoin ETFs, and trading has already begun. These ETFs have attracted billions under management already.

With strong demand and new supply about to be cut in half, that’s a recipe for higher prices. While some have made some big-picture investments, price action for the end of 2024 still looks strong too.

Anthony Scaramucci of Skybridge Capital estimates bitcoin can hit $170,000 in the months after the halving.

That’s about $100,000 higher than current prices, or 142% higher.

And as bitcoin soars higher, altcoins will start to see big moves as well.

That means investors have a few days left to position themselves. After bitcoin’s halving, there may be an initial dip. But looking out a few months, prices could be far higher.

 

To read the full price prediction on bitcoin, click here.

Commodities

SchiffGold: Prices Up 2500% Since FDR Abandoned Gold

Posted on by Andrew Packer

April 5 marked the 91st anniversary of the day that the United States abandoned the gold standard domestically. Americans were able to buy and invest in gold again in the 1970s.

However, the country has remained on a fiat money system. That simply means that governments can print or borrow money at will without any limits. The gold standard limited governmental expansion of the money supply only to total gold holdings.

As a result, prices have soared far higher. Cumulative inflation since 1933 is about 2,500%. That simply means that every $100 in 1933 carries less than $1 in purchasing power today.

Today, inflation has been trending lower compared to the past few years. Investors view that as good news. However, as inflation is cumulative overall, higher prices are the cost investors have to bear today.

In recent months, inflation has shown signs of strength. That’s caused gold to perk up. The metal is now once again moving to new highs. It’s just broken over $2,300 per ounce for the first time.

With the metal trending higher and inflation potentially on the rise again, it may be time to add to gold holdings.

Gold stocks may also start to see stronger performance in the months ahead. In a major gold rally, gold mining stocks tend to have better percentage returns.

 

To read the full analysis, click here.

Income investing

Dividend Growth Investor: The Illusion of Choice in Consumer Goods

Posted on by Andrew Packer

Investors have the ability to invest in any number of great brands. A brand tends to have buying power, in that they sell for slightly higher than a generic equivalent. And when inflation trends higher, these brands can raise their prices. That allows them to stay profitable in any environment.

Today, a dozen companies own over 550 of the world’s leading food and beverage brands. This limits total consumer choice, but it also creates a potential basket of great investments.

It’s no surprise that many of these companies tend to also be great long-term holdings. They offer steady growth combined with a history of dividend growth.

For instance, beverage and snack giant PepsiCo (PEP) has now increased its dividend for the past 51 years.

Plus, it has a 10-year dividend growth rate of 8.1%. With a current yield of 3%, investors can likely see further growth in that payout in the decades ahead.

Another consumer goods giant is Mondelez International (MDLZ). They’ve grown their dividend every year since they were spun off 12 years ago.

Shares pay a lower 2.5% yield. But the growth story is far better, with an 11.3% increase on average over the past 10 years.

With a dozen names to choose from, most of these companies pay dividends above the market average. But even better, they grow them at a faster rate.

 

To view the full list of consumer brand giants, click here.

Economy

A Wealth of Common Sense: How to Lie With Charts

Posted on by Andrew Packer

The housing market is starting to shift away from larger homes. Over the past 10 years, the median square footage of new homes under construction has dropped from 2,450 to 2,179. A few homebuilders are even making new homes as small as 900 square feet.

Since these homes are smaller, they tend to cost less. That’s leading to data indicating that new home sales are dropping. On a price-per-square-foot basis, the industry standard for comparison, however, new home prices remain strong.

In other words, it’s all in how you look at the data. Today’s economy has a number of conflicting data points.

For instance, there are signs that inflation is starting to surge higher again. However, inflation has sometimes had short bursts higher while still remaining in an overall downtrend. It’s easy to see the comparisons to prior periods of surging inflation.

On the housing front, declining home sizes reverses a decades-long trend. And it makes it easier for first-time homebuyers to afford a property, especially at today’s mortgage rates.

Today’s housing market may be unusual given the lack of existing homes for sale.

However, shifting trends in new homes indicates that the housing market still has more room to run. And that existing homeowners may not have to contend with crashing home prices anytime soon.

 

To read the full analysis, click here.

Economy

Game of Trades: Investors Don’t Know What’s Coming

Posted on by Andrew Packer

Monthly inflation has been ticking higher, moving to a 0.4% monthly increase in March. That could be a sign that inflation is no longer trending lower. In fact, it may now be making a comeback.

That’s a trend that occurred with the double-dip inflation of the 1970s. The first wave in the mid-1970s declined, only to come roaring back later in the decade amid high government spending and a commodity price shock.

Similar events could occur today. If such a trend is underway, many assets will see a negative reaction.

The worst-performing asset amid another wave of inflation is likely in the bond market. The surging inflation of 2020-2023 saw the bond market face its sharpest losses in history.

Over those few years, bonds lost an average of 51% amid soaring yields, and the largest drop since the 1980s.

Plus, rising bond yields led to three negative-returning years for bond investors in a row, a first in American history.

With most investors owning a mix of stocks and bonds, a typical portfolio sold off worse during 2022’s bear market thanks to the pain of owning both assets.

To avoid the possibility of another inflation wave and higher inflation, investors may want to look at shorter-dated bonds instead. They have the lowest price risk.

And at current bond yields over 4.5%, investors can, for now, get a real return after inflation.

 

To watch the full video, click here.