Author: Andrew Packer

Cryptocurrencies

Bitcoin Magazine: How Bitcoin Will React After the U.S. Election

Posted on by Andrew Packer

Cryptocurrency bitcoin has had a strong year, up about 49%. That’s better than the stock market, or even gold. But the crypto is well off its highs from earlier in the year. Even with new demand from bitcoin ETFs, and the recent halving.

This year, bitcoin made a new all-time high before its halving event. That could be a case of investors and traders getting in ahead of the news. However, signs point to further upside in the future.

That future could be shaped by the outcome of November’s election. Bitcoin correlates strongly to trends in the S&P 500. That trend will likely increase as bitcoin investments become more institutionalized.

Typically, the S&P 500 rallies higher following an election, and into the first year of any presidency.

That bodes well for bitcoin prices. That would also be on par with the bitcoin rallies in 2017 and 2021.

If bitcoin follows a similar move to its returns following the 2016 election into 2017, bitcoin could peak out at nearly $500,000. If the trend is closer to that of the 2020/2021 period, bitcoin could see a price of $250,000 in the next year.

And bitcoin’s overall peak likely won’t happen until 2026, before the next winter cycle sets in. So investors with the patience to sit through pre-election market volatility in bitcoin could be heavily rewarded. It just takes a timeframe of the next 12-18 months.

 

To read the full analysis, click here.

Income investing

Mr. Dividend Investor: Top 3 Dividend Stocks For October 2024 That I’m Scooping Up

Posted on by Andrew Packer

September is nearly over. The month is historically the weakest for markets. But for the first time in five years, markets are holding their own this month. However, October could be a different story.

That’s because October is the second-worst month on average for investor returns. October is also the month that ends to see big market selloffs. It’s even the month most associated with crashes.

While a major crash is likely off the table this year, markets could still trade choppy. But with interest rates coming down, dividend-paying stocks should look increasingly attractive.

Investors can get a steady stream of income with dividend stocks, plus further capital gains.

For example, Occidental Petroleum (OXY) is an oil giant that provides investors with a 1.7% dividend at current prices.

While that’s not the largest in the oil space, Occidental pays out just 20% of its earnings as dividends. That’s a sustainable payout, especially with oil prices trading near $70 per barrel. And Occidental has a history of gradually rising its payout over time.

Oxy has grown earnings by 35% over the past year, even in a challenging market for oil. OXY shares are down 17%, but are at a level where big buyers have historically been interested in buying more.

 

To view the other two dividend stocks worth buying now, click here.

 

Technical Analysis

Lead-Lag Report: John Roque on Mastering Technical Analysis, Bond Yield Cycles, and Precious Metals Trends

Posted on by Andrew Packer

Markets stand at a pivot point as interest rates start to decline. Investors looking for market direction and trading potential volatility may see these opportunities by using technical analysis. Most investors know to look at a price chart to decide if it’s time to get into a trade or not.

But technical analysis can offer far more opportunities. It can give a sign of when to sell a winning trade. Or when to make a short-term trade.

Technical analysis looks for repeated patterns that occur in stock charts all the time. They can occur in individual stocks, sectors, or entire indices.

Today, investors have access to a number of technical tools available for free on nearly every financial website.

While markets have gotten increasingly complex, technical indicators can cut through the complexity.

For instance, investors looking for big returns can look for a breakout trend. That’s where a stock moves out of a trading range and surges higher.

For more defensive investors, moving averages often act as places of support. A falling stock or the entire market will often pause when it gets near a key average. The most-followed moving averages are the 50-day and 200-day.

With interest rates trending lower, technical analysis favors investing in the bond market now. Investors can likely see prices continue to rise as yields fall.

 

To watch the full interview, click here.

 

Economy

Rebel Capitalist: This Economic Bellwether Gives Dire Warning

Posted on by Andrew Packer

Investors have a nearly infinite amount of data to look at to determine the strength of the economy. However, some data points are more valuable than others. Most data is lagging, coming out months after it could be of strong use.

Some corporate data can give a timely sense of how the economy is faring. This kind of data can show if customers continue to spend, or have started to cut back on their spending.

One of the key companies to watch for the economy is FedEx (FDX). The delivery firm is a bellwether for the economy. Why? Because its total sales and deliveries point to the total amount of activity in the economy.

Recently, FedEx has shown some weakness. Shares dropped 15% in a day on their latest earnings.

Why? The company reports that demand for speedy delivery has declined.

In other words, customers have a lower need for overnight delivery services on anything from signed paperwork to physical shipments. That could be a sign of a slowing economy.

Meanwhile, the stock market trades at all-time highs. But there are signs that the economy is not running on all cylinders. And that investors need to be cautious on their investments, looking for only the best opportunities right now.

 

 

To watch the full video, click here.

Economy

Game of Trades: The Damage Is Irreparable

Posted on by Andrew Packer

Interest rates are starting to trickle down. But it may already be too little, too late for the economy. Since 2018, the cost of the average mortgage payment has jumped by nearly $1,000 per month, up 76%. That’s partly due to rising home prices, but largely due to higher interest rate costs.

The same is true in other parts of the economy. The cost to borrow for personal loans has doubled. Money spent on interest isn’t being spent elsewhere.

When interest rates are high, consumers eventually need to think about financing costs. With consumer loan defaults on the rise, it’s possible that consumer spending is hitting a turning point.

Consequently, we could see a further slowdown in consumer spending. That would impact the overall economy, given how much weight consumers carry in the overall economy. That could lead to some market danger in 2025.

The recent rise in unemployment suggests that inflationary dangers have passed. But it may now be rising too quickly for comfort.

In a credit-based economy, keeping interest rates from moving too high is crucial. Many now think the Federal Reserve has acted too little, too late to avoid economic danger. It may be too late for rate cuts to avoid a recession, the so-called “soft-landing,” even as markets have moved as though that’s been the case.

Investors should continue to monitor consumer spending and debt trends to determine the strength of the economy.

 

To view the full analysis, click here.

Commodities

Kitco: Think You Know Gold Stocks?

Posted on by Andrew Packer

Gold has continued to trend higher. It continues to beat the market year-to-date, even with stocks near all-time highs. Investor interest in gold is staring to perk up. But understanding the right reasons to own gold is crucial.

The good news? Gold production is on the rise globally. But that rise is being more than met by demand for central banks. This demand remains robust, and growing. Meanwhile, retail investors have largely been on the sidelines as gold prices continue to rise.

Several short-term factors are helping to push gold higher. One is central bank buying, which provides a massive support for prices above retail buying.

Another is geopolitical risk fears. Global tensions remain high. And that tends to help support gold.

Finally, the trend in commodities has started to look bullish over the long-term, going back to 2020. That suggests that commodities are in the early stages of a bull market. Commodity bull markets tend to last for nearly a decade, with the largest gains occurring near the end.

That suggests that most investors are likely under-allocated to gold right now. As retail investors pile in, there may be a big price spike. But that might be a good sign for today’s investors to take some profits in gold and gold mining stocks off the table.

 

To read the full analysis, click here.

 

Income investing

Dividend Growth Investor: Six Dividend Growth Stocks Rewarding Shareholders With Raises

Posted on by Andrew Packer

Markets have been touching all-time highs. Some see valuations as stretched. Particularly with tech stocks, which have soared over the past two years. Investors increasingly look for short-term wins.

But finding long-term winners can be just as rewarding. And it’s a lot less work to replicate over a shorter timeframe. That’s where dividend growth stocks come into play. These companies provide current growth, but also the promise of future growth.

Companies that can grow their earnings over time have a variety of options with that money. They can expand the business. Or they can buy back shares. Or they can pay a dividend. They usually do a mix of all of those.

Some companies look to pay a growing dividend to reward their bosses, the shareholders.

Among recent dividend increases, Realty Income (O), has been a long-term grower. They’ve raised their annual dividends several times each year since going public in 1994.

They currently pay a 3.6% yield, and raised their payout by 2.9%. The yield has been higher in the past, but shares have performed well ahead of declining interest rates.

Another recent increase has been from U.S. Bancorp (USB). The bank raised its dividend by 2%, and is now in the 14th year of consecutive dividend increases. Shares currently pay a hefty 4.5% dividend.

 

To see the full list of companies increasing their dividends now, click here.

 

Stock market strategies

The Intellectual Investor: The Best and Worst Investment Decisions I’ve Made

Posted on by Andrew Packer

Over a lifetime of investing, the top ideas and the bottom ideas will truly stand out. And as long as investors keep their losses small, overall returns may come down to a few big winners.

Understanding how other investors have made big winners and what they’re looking for can help find similar ideas. That’s true whether your preferred style of investing is value, growth, or a hybrid approach.

For instance, one successful investment is Uber (UBER). The rideshare company has stood out as a technology company, in part because it also has an analog component. The company earns a small fee connecting those with vehicles with those who need rides.

It’s a simple, repeatable process. But Uber doesn’t have to pay for the physical vehicles used.

Another interesting component to its success is that it’s become an industry leader. More importantly, it’s such a leader that it’s become a verb, like Xerox in photocopying.

These characteristics are likely to help the company continue to grow. And to grow its profits over time.

Meanwhile, losing investments often have similar characteristics. They may have low-quality balance sheets. They may use complex financial operations to obscure their safety. And management may be questionable.

Investors who can focus on companies providing a great user experience may find big winners of their own. Especially if they avoid questionable behaviors.

 

To read the full analysis, click here.

Income investing

A Wealth of Common Sense: Talk Your Book: Investing in Free Cash Flow

Posted on by Andrew Packer

Investors have a variety of tools that they can use when evaluating a company’s performance. Typically in markets, investors look at the price to earnings ratio, or PE.

While that’s a common tool, it’s one that may not always work in every situation. That’s because accounting  tools can allow earnings to look very different from the money that comes in the first place.

Looking at different tools can help investors find alternative opportunities.

For instance, free cash flow is a metric that can give a sense of a company’s profitability. Unlike earnings, accounting changes can’t lead to wild swings that turn profits into losses.

Free cash flow is different from net income, which looks at a company’s gross income after expenses.

When investors focus on companies with free cash flow, they can find opportunities that trade at a discount relative to looking at a company based on earnings.

Investors can even look at companies with high free cash flow and then look for ones that have strong growth. That provides a value metric and a growth metric that combine for better returns.

Companies with high free cash flow also have the ability to pay dividends or make big share buybacks. Those tools can also help push shares higher over time. That makes free cash flow a valuable metric for evaluating a stock investment.

 

To view the full interview, click here.

Stock market strategies

FX Evolution: You Won’t Believe What Tom Lee Thinks Will Happen Next!

Posted on by Andrew Packer

Markets have recovered from some of their August and early September selloff, and once again pushed to make new all-time highs. Markets view the Fed’s rate cut as bullish, at least going into the cut.

However, the back end of September is historically the worst two-week period of the year. And, at least so far, markets have a 100% track record for a negative September when the first four days of the month are down.

That trend may not hold. But if it does, it suggests that stocks may have some further – and steep – declines over the coming few weeks.

And the market’s shift in the first two weeks of September indicate that markets are more likely to range trade. That’s the view of Tom Lee, the analyst who has had some accurate readings on recent market moves.

Rather than a bull market or bear, it’s more of a kangaroo market. A market that bounces up and down without a strong direction either way.

Plus, as the election nears, investors may want to hold back until there’s some certainty.

So, looking at all these factors, signals point to markets remaining volatile for the next few weeks. The good news? After the election, markets should see a year-end rally.

That gives investors and traders some short-term trading opportunities both long and short. And for a chance for an uptrend to emerge into year-end.

 

To view the full analysis, click here.