2017: Big Changes Will Produce Big Profits for Savvy Investors
[The First of Two Parts] – When I started Total Wealth, I told my publisher that I wanted plenty of “red meat” – meaning actionable information, insight and, of course, recommendations as opposed to the usual click-bait that runs rampant all over the Internet today and that you see in mainstream news rags. Anything less simply wouldn’t be acceptable.
Today I want to continue that vein of thought with a look ahead at 2017 and how I see profit plays related to each of the six Unstoppable Trends we follow developing.
As is often the case, these are opportunities other investors don’t see and simply cannot recognize ahead of time because they’re not part of the Total Wealth Family and they don’t have the advantages you do when it comes to analysis, trends, and tactics that can lead to huge profits.
So pull up a chair and grab a cup of your favorite libation…
…the profit potential is simply outrageous!
How to Ride a Mature Bull Market
Millions of investors are worried that the stellar performance we’ve seen in recent months can’t continue. That’s understandable given how complicated the world is at the moment, but it’s bassackwards, to borrow one of my grandfather’s favorite terms.
Don’t get me wrong… I am not trying to be dismissive. You’re not alone if you are apprehensive right now. In fact, I feel the angst, too. I simply want you to try your best to put that aside, because the kind of ginormous profits I see ahead in 2017 dictate that you do so.
Worrying about things that can derail the markets is a natural reflex based on the past. The far better – and more profitable approach – is to think about where they’re going. That way you can put your money in the right places ahead of time instead of constantly chasing a train that’s left the station like most investors.
This year’s story continues to revolve around our proven three-step approach:
Put your money ahead of six Unstoppable Trends, each of which is backed by trillions of dollars in spending that Wall Street cannot hijack, the Fed cannot derail, and Washington insiders cannot stop.
Buy only the best companies making “must-have” products and services as defined by a combination of key metrics, including rock-solid balance sheets, experienced management, and brands that are “global challengers” – a term I’ll have more on in a moment.
Manage risk with laser-like intensity knowing that “letting your winners run” isn’t enough to ensure profits. You’ve got to “buy low and sell high” using well proven profit targets and trailing stops.
Let’s start with the investing backdrop itself.
I expect the markets to run sharply higher this year, but after a solid pipe cleaning that scares the pants off most investors who aren’t prepared to use it as an opportunity like we are. The potential for a correction is highest during the second half of 2017 when the inaugural bump has worn off and President Trump’s first 100 days have passed. In the meantime, managing expectations is critical and potentially very profitable, too.
If this week’s buzzword bingo is any indication, the fight over Obamacare is just the beginning of what will be a pitched battle between those who refuse to let go of the status quo and those who are keen to move on. It’s not a political exercise despite what the media will have you believe.
The dissent will be all about the money… it always is. And, that’s your opening.
Let me deviate from our forecast for a moment and give you an example that will put this into context. It’s important that you understand how and why this is so important.
Think about the big tech companies we talk about frequently: Alphabet Inc. (NasdaqGS:GOOG), Facebook Inc. (NYSE:FB), and Amazon Inc. (NasdaqGS:AMZN). They’ve all evolved to the point where it’s them versus everybody else. There isn’t a single company in the world that has not been impacted by their growth. Everything from strategy to big data to social media… it all feeds into a complicated equation.
For investors, this is fabulous because it means huge growth. For regulators around the world who are jealous that they can’t control what’s happening, though, this is a monster nightmare.
The E.U., for instance, is fit to be tied that they don’t have homegrown competition, so they’re warming up for everything from privacy claims to punitive taxation. I think they actually go so far as to label them “monopolies” in 2017.
Traders will freak when that happens because they’re prone to that sort of short-term emotional input. But thinking like we do and knowing what we know, local regulation does not stop an Unstoppable Trend. The world cannot live without what these three companies provide. Each will continue to attract capital as a result – not shed it. Ergo, you’ll have a spectacular entry point on your hands.
There are similar stories for every one of the Unstoppable Trends we follow: Demographics, Scarcity/Allocation, Medicine, Energy, Technology, and even War/Terrorism/Ugliness which, unfortunately, remains a growth industry at the moment.
I’ll be back next week with a look at the strategic implications driving each Unstoppable Trend as well as their relative influence on our strategy in 2017 versus 2016.
Until then, here’s a little taste of what’s ahead and a quick look at a stock with the potential to be one of this year’s great winners.
Ever heard of HEICO Corp. (NYSE:HEI)?
Most people haven’t, despite the fact that the Florida-based defense contractor is one of the world’s leading aerospace and defense mission critical manufacturers.
Founded in 1958 as a laboratory instrument maker, today it has a market cap of nearly $4.8 billion and generates almost 30% of that in sales annually or $1.3 billion. HEICO employs an estimated 6,400 people and has 60 production/distribution facilities in 20 states and 11 countries.
Acquisitions have driven growth in a low rate environment, but that tells me organic growth is about to take off, as is usually the case when costs are amortized and synergies take over. Bear in mind, that’s on top of the record net sales, operating income, and net income for Q4 and the full-year growth guidance it just reported.
There’s also President-elect Trump’s $1.6 trillion infrastructure plan and the corresponding boom in both defense and commercial aviation to contend with. I think that’s a cash “flusher” that will allow management to build on the 13% boost it just handed shareholders with its 77th consecutive semi-annual cash dividend.
In closing, I’m thrilled you’re here and will do everything I can to ensure the trust you place in me and my team is well founded.
Now, let’s go get’ em – the profits, that is.
Happy New Year!