Your Next Profit Opportunities in Our “Unstoppable Trends”

Keith Fitz-Gerald Mar 04, 2015
27 

When I began Total Wealth Research, I highlighted six “Unstoppable Trends” – each of which is backed by trillions of dollars – and promised that we’d check in on them from time to time in the pursuit of profits.

Today, I want to keep that promise.

Not only are all the “Unstoppable Trends” fully intact, many are actually getting even stronger. So are the companies we’re tapped into, especially when they’re in sectors being written off by the mainstream investment community.

For instance, I brought Williams Companies Inc. (NYSE:WMB) to your attention on January 7, 2015, as a way of playing the beleaguered energy sector. It’s returned 15.35% since then, or more than triple that of the S&P 500 over the same time frame.

Then there’s Kratos Defense & Security Solutions Inc. (NasdaqGS:KTOS),a small niche defense contractor positioned for huge gains by playing outside the mainstream defense contracting procurement ballpark. It’s returned more than 16% since I called your attention to a re-entry point on January 9.

Kyocera Corp. (NYSE:KYO), the Japanese tech giant I called out on New Year’s Eve as a means of playing the uneven stimulus that’s powering Japanese markets, is up 10.87%.

Thing is, I’m not telling you this to brag. What I want you to understand is that stocks backed by “Unstoppable Trends” have the potential to dramatically outperform the markets.

And that’s why you need to keep every single one of our trends at the top of your mind… so that you can tap into the potential created by trillions of dollars on the move.

Here’s what you need to know about each of our “Unstoppable Trends” today – starting with the biggest opportunity on the planet right now.

Energy

Energy is probably the most misunderstood of all our Trends today. Yet, it’s also potentially one of the single biggest opportunities out there.

I love the fact that analysts almost universally hate the sector.

To their way of thinking, a whole host of international events, from an oil pricing war with Saudi Arabia to negotiations for a nuclear deal with Iran, are conspiring to further drag down a sector that’s already down and out.

Here’s the thing: Energy shows every sign of approaching an opportunity that should make your heart beat faster as an investor: the point of “maximum pessimism.”

It’s easy to forget, but the demand for oil isn’t falling. Heck, it’s not even merely increasing. Instead, it’s accelerating. Not 1 in 100 investors understands this, which is why many energy companies are priced like they’re going to be out of business a year from now.

In fact, the U.S. Energy Information Agency (EIA) released a report just last month predicting global prices will soar by 33% over the next year. This jump comes despite increasing supply worldwide, with the U.S. alone expected to produce 200,000 more barrels per day in 2016 than in 2015.

Private sector research backs up this view. In fact, Deloitte is even more bullish, predicting a “U-shaped recovery” for oil prices, seeing them average to $62/barrel in 2015 – a 24% increase from today’s prices – while averaging $75-$80 per barrel in 2016. I’m not sure I’ll go that far, but that’s not the point.

What matters is that multiple data points suggest oil is set to rebound even as supply steadily increases.

Some 70% of that is coming from – you guessed it – emerging markets where they have never known the price fluctuations in oil markets like we do. So conservation efforts here in the West are a moot point.

That’s why we’ll continue to seek out bargains in the oil and gas sector for years to come.

Demographics

The world’s population is about to hit a never-before-seen milestone. According to a report by the National Institute of Health & Aging that was updated last January, the number of people aged 65 and older will outnumber children younger than five years old worldwide by 2020. It will be the first time in recorded history that that has been the case.

Of course, in some countries like Japan, the future is already here. Japan’s aging population has already had huge economic consequences – as America’s will eventually – ranging from diminished productivity to soaring health care costs to strained social security programs.

This will mean surging profits for medical companies like Becton, Dickinson & Co. (NYSE:BDX), and it will contribute to a complete global currency realignment, perhaps even breaking several major currencies including the yen.

We’ll be following the situation closely, looking for even more companies and exchange-traded funds that stand to profit from the inevitable consequences of a Demographic revolution.

Medicine

U.S. national healthcare spending hit $3.8 trillion in 2014, thanks in large part to Obamacare’s implementation and a related surge in Medicaid expenditures driven by millions of Americans who are now required by the law to purchase insurance. More than any other single factor, this was the cause of the 3.6% jump in health care spending in America in 2014, which far outpaced GDP growth for the same period.

But what most people don’t know is that the rest of the world is experiencing surging healthcare spending, too. Various sources including Deloitte, McKinsey, the IMF and others foresee total global health spending rising by an average annual rate of 4% or even 6% by 2017.

Whether these forecasts are conservative or optimistic is immaterial. What matters from an investing standpoint is that the resulting movement in capital will place huge amounts of stress on governments, social security systems, and insurers and developing markets.

As part of that, I expect trillions of dollars to get transferred worldwide, with several trillion right here in the U.S.

This will be accelerated as new politically driven “mandates” create guaranteed market shares for favored companies and organizations, and therefore enormous profits.

And while we at Total Wealth may shake our heads at the chronic case of government overreach, we’re going to pursue every dime of profits with new recommendations along the way.

War, Terrorism, & Ugliness

Speaking of which, my least favorite trend – War, Terrorism & Ugliness – seems to be growing. Much to my dismay, it remains as pertinent as ever, both personally and professionally.

Generals and defense experts in the U.S. are urging Britain to revise its budget for military expenditures upward, from “only” Β£35.5 billion. Russia, even at the height of its currency crisis, announced plans to spike its military spending by 33% by 2016. Meanwhile, the U.S. Department of Defense, which already spends more money than the next three largest U.S. government agencies combined, has requested a budget for fiscal year 2016 that steps up spending by 7.7% to a whopping $585 billion.

Like health care, the defense sector will benefit enormously from increased government spending and guaranteed contracts as governments gear up to defend against new and emerging threats. As the struggle against ISIS continues and efforts to prevent a nuclear Iran heat up, defense companies like Raytheon will flourish.

I wish this weren’t the reality we live in. But, since it is, I say we take full advantage of the trillions in capital that are on the move to prepare our portfolios and our profits accordingly.

Scarcity/Allocation

Mention Scarcity/Allocation, and most investors immediately default to energy. I can’t blame them, given the long gas lines of the 1970s, the politically elusive concept of energy independence, and the concept of Peak Oil – all of which have been driven into our consciousness over the past 40 years.

Yet, Scarcity/Allocation is a Trend that’s powered not just by the lack of precious commodities, but also by the allocation of resources including money itself. Consequently, it’s a perfect way to play central bank meddling.

It’s also front and center when it comes to global resources being more strained than ever before.

The World Bank, for example, estimates that every year, 24 billion tons of fertile soil are lost due to land erosion, while 12 million hectares (29.6 million acres) of fertile land are lost due to drought. This pattern will make companies like CNH Industrial NV (NYSE:CNHI) that deal in agriculture and improved farming methods more in-demand and even more prosperous than they are already.

But back to the money for a second.

People don’t think this way, but money is a resource, too. That’s why exchange-traded funds like the Proshares UltraShort Yen (NYSEArca:YCS) have such potential.

As I noted a few years back during a presentation in San Diego, I think it’s the closest thing to a home run trade most investors will see in their investing lifetime.

Technology

Of course, no discussion on the Trends would be complete without a reference to Technology.

Unfortunately, most investors don’t understand how to play it. They think they do, but what most folks are missing is the distinction between obviation and extinction.

For example:

Apple Inc. (NasdaqGS:AAPL) is clearly not content to rest on its laurels following its world record earnings report last quarter. I love the fact that the company is making automakers nervous with its plan for a driverless car, the “Apple car” because it’s the kind of creative destruction that can redefine an industry and the profits that go with it.

Meanwhile, GoPro, often cited as having great upside, is actually on the wrong side of the Technology Trend. That’s because new Chinese alternatives are causing investors to rethink the possible and the obvious. Not surprisingly, GoPro stock has dropped to levels it hasn’t seen since the early days after its IPO and is likely to drop further.

Or Google Inc. (NasdaqGS:GOOG). The company is in the news for its $300 million investment in solar energy, which will allow it a hefty federal tax credit as a tax-equity investor in the Solar City Corp. fund. The investment comes on the heels of a massive breakthrough in solar panel technology that allows 40% of the power from sunlight to be harnessed, a 15% increase from regular photovoltaic panels.

Microsoft Corp.Β (NasdaqGS:MSFT), meanwhile, is leading the way as a pioneer of cloud technology, investing billions of dollars in the cloud computing field as it transforms from being a software-only company to one that hopes to command the emerging cloud-and-mobile future. Even International Business Machines Corp., better known as IBM, is piling in with a reported $10 billion investment in its own cloud expansion program to transform the way we store and receive data.

I wouldn’t advocate investing in either Microsoft or IBM at this point because I think both companies have huge problems ahead, not the least of which is the legacy of having been leaders… once.

But I am absolutely watching with baited breath the score of tiny companies running circles around them, and will let you know when it’s time to make our move.

The winner really will take all…

My job is to help you get your share.

Until next time,

Keith

27 Responses to Your Next Profit Opportunities in Our “Unstoppable Trends”

  1. Barry says:

    Hi Kieth, Thankls af again for the valuable info

    KTOS seems to get new contracts on a regular basis, wonderful

    *** Re EKOS – whenever u can please update this, not only for its benefit to mankind but any updates in your interpretation as an investment and any news u may have

    Its been retreating lately, sometimes no news leads to that and havent seen anytrhing in awhile

    If it gets a little lower plan on buying more

    Barry

    • Keith says:

      Hello Barry.

      Happy to…stay tuned for Friday’s edition.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  2. Marc Hall says:

    Nice work as always Keith of the macro view where global opportunities are headed. My question today is about Alibaba stock and the recent volatility. It seems the recent mid Dec. unlocking of a small % of IPO shares (being able to then sell if so inclined versus in lock up before) has already caused the stock to suffer along with recent bad press. When the mid March unlocking of a lot more (17%) happens, would that not subject it to another round of increasing selling pressure and perhaps not have provided a more timely entry into this position once things settled down?

    • Keith says:

      Thanks for the kind words Marc.

      You raise some excellent points but I am not overly concerned from a tactical standpoint because it’s the strategic picture that makes Alibaba so valuable. Any price drop is a golden opportunity under the circumstances.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

    • Roosevelt Hollis says:

      Hey Keith, when and how so I start investing in some of these companies! Sincerely, Roosevelt

  3. H. Craig Bradley says:

    THE NEW CONGLOMERATES

    I’ve been meaning to ask your opinion about large tech. companies with an abundance of cash to invest as they like, such as Google, Facebook, or Apple. When I think about a large company that primarily makes money by its specific investments, Berkshire Hathaway comes to mind. Warren Buffet has proven his worth as an investment manager over the last 50 years. Who can say if Mark Zuckerman or Tim Cook will even come close in generating similar kinds of returns for their shareholders through acquisitions as Warren Buffet, but I kind of suspect they may fall a bit short.

    For insight or comparison, lets think about how much Mark Zuckerman paid for Instagram a couple years ago. I believe it was $ 1 Billion. Can’t imagine Warren Buffet paying that much and being near as successful for 50 years as an investor in all kinds of markets. I think we have some market distortions and with them, the possibility that anyone can pretend to be a kind of Warren Buffet, for now. We will just have to come back and revisit this comparison in 10 years or so and see how the New Conglomerates are doing ( How much value CEO acquisitions have returned to their shareholders).

    • Keith says:

      Great question Craig.

      I’ve actually spent a lot of time thinking about exactly this issue. To your point, I have my doubts about Zuckerberg and company. But, Tim Cook is another story entirely for reasons I’m outlining in an upcoming article.

      In the meantime, executive compensation is tied to exactly the wrong kinds of incentives so the distortions you’re talking about are very real. For example, I have no problem with stock based compensation. But it’s got to be a 5-10 year vesting period so that the C-Suite is truly aligned with long term value creation not the instant gratification that comes from stock options and cash payouts.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  4. Linda says:

    Keith, Your insights are not only spot on but enlightening also. Thanks for all that you share with us. I love BDX but it is just to far out of my budget range. I wonder if there is a company in the medical field, with similar potential but at a lower price point. Would certainly appreciate ypuo perspective on this issue. Thanks, Linda

    • Keith says:

      Glad you’re here with us and thanks very much for the kind words.

      I’ve tackled your question in Friday’s column…enjoy!

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  5. Jim says:

    Keith,

    Thanks for all the tips. Like Linda, my budget does not cover the large stocks. Please send more like KTOS if possible.

    I am a new member. I am learning just how ignorant I am so keep up the good info.

    Jim

    • Keith says:

      Hello Jim and welcome. I am thrilled you are here and honored, too.

      I’ve got some thoughts for you in Friday’s column that may help. In the meantime, remember that it’s not necessarily how much something costs…but what it’s actually worth that matters.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  6. John Kolin says:

    Good explanation of trends! However, no specific buy advice on stocks or ETF’s.

    • Keith says:

      Roger that John.

      I usually highlight that information in specific articles rather than in an overview like today’s column. That said, every ticker I referenced makes a compelling buy today or I would not have included it…save MSFT and IBM as noted.

      Stay tuned!

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  7. Dennis says:

    Thank you keith. Your words are encouraging. Have you any further info on EKSO ? Perhaps, your outlook for Jan.2016 ? I’m also asking do you believe that Japan or China is better play for the currencies ? I’m thinking perhaps for Jan., 2017 ahead. I so very value your info. You bring a fresh clarity forward.
    Dennis

    • Keith says:

      Thanks for the kind words, Dennis.

      Stay tuned for Friday with regard to Ekso. As for the Yen and the Yuan, I believe they’re both compelling trades. Generally speaking, the playbook is short the Yen and long the Yuan. In broad brush strokes, that’s because Japan is a stimulus driven nation which implies currency weakness while China still has plenty of real growth which implies strength ahead of global markets.

      Best regards and thanks for being part of the Total Wealth Family, Keith πŸ™‚

  8. Dave says:

    I read the info you published today and can’t get any real recommendations unless I can’t read what your saying. Give me a summary of what I am supposed to do with todays article(3/6/15)

  9. Dave says:

    Please help me with todays article. What should I be looking as as far as recommendations?

  10. Michael Upper says:

    Keith

    Your October 2014 “Unstoppable Trend Report” contained an investment opportunity in a company called Vuzix Corporation. I bought a few shares on 10/21/14 at $3.06 (including commission) and at the close of business 2/27/2015 it was selling at $6.33, a gain of 107%.

    I wish I would have bought more.

    You never mention this company that is in the “Augmented Decision-Making” group. Why not?

    Thanks,

    Michael Upper

  11. Dave says:

    I think that the world is catching on that the planet MUST move away from fissile fuels. I understand that alternatives like tidal, solar and wind are starting to really move. Are you looking at companies that are working in these areas?

  12. Keith says:

    Energy – Oil stocks were strong throughout most of 2014 but have gotten hit hard in 2015 with the sell off in oil. Biotech-Med stocks have done well since mid 2014 and are a leading industry so far in 2015.

    From your research and experience, what’s the best way to identify emerging industry groups before they have experienced a big move?

    Thanks for all your great work!

    Keith

  13. Bill B. says:

    Hello Keith,

    Prior to finding you I subscribed to other investing newsletters. Thankfully I stumbled upon you…the others do not compare in value or knowledge.

    Question. Do you have a service that will review my portfolio (most decisions were made prior to following you) and help me get on a better course?

    Regards, Bill

  14. John says:

    I would like to have a deeper understanding of technology stocks related to solar industry. Could you elaborate on the Solar City comment?

  15. Nancy says:

    I am a new comer to your family and very much appreciate your thoughtful advice. Thanks again and God Bless.

  16. Richard Cerwinski says:

    Hi Keith,

    Really enjoy reading your article’s.

    Q. You have been big on KTOS and today has taken a big hit for what I consider a cheap stock. Does this create a better buying opportunity or throw up caution flags? Appreciate you feedback.

  17. RON says:

    Keith
    Where would you put Textron TXT at this time: Tech or Military Supplier? Both?
    Upside potential seems ++++++++
    or am I just seeing things?

  18. KC Farmer says:

    Seems to be some conflicting info regarding the energy sector. In the article above we read about oil’s inevitable rise but on the same page there’s an article pertaining to “Universal Fuel” that’s reportedly going to completely alter the entire energy picture. The latter sounds too good to be true and certainly conflicts with the predictions proposed in the former article. What say ye, Obi wan?

  19. Diana Sherrod says:

    Hi Keith, I’d like to know about Medical Marijuana and all of the companies involved, and also the Legal Marijuana which will be sweeping the all of the states soon. Can TW readers expect an article about this soon?

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