2018’s Hits, Misses, and Home Runs!
It’s that time again.
I have to take a deep breath…
I get to live my dream every single day – finding and sharing the world’s best, most promising investment opportunities with you.
I can’t believe it, but 2019 is the 12th year since becoming Chief Investment Strategist here at Money Map Press and the fifth year since I founded Total Wealth Research with and for the sharpest minds in the business…
Honestly, I didn’t know what to expect when I first put a pen to paper. I just figured I’d put out the best research I could, telling you what Wall Street won’t and what Washington can’t. Then, I’d let the chips fall where they may.
Today, our Family reaches millions of hardworking, savvy investors like you around the world.
We’ve had one helluva run so far, and I remain deeply humbled by the trust you place in me to help you find stocks like:
- Masimo Corp. (NYSE:MASI), up 171.26%.
- VMware Inc. (NasdaqGS:VMW), up 154.26%.
- Adobe Inc. (NasdaqGS:ADBE), up 116.29%.
- BioTelemetry Inc. (NasdaqGS:BEAT), up 112.4%.
… while also avoiding the worst Wall Street has to offer.
You know the ones I’m talking about… stocks that have devastated the portfolios of millions of investors who got caught flat-footed, again, having fallen for the hype:
- General Electric Co. (NYSE:GE)
- Sears Holdings Corp. (OTC:SHLDQ)
- FitBit Inc. (NYSE:FIT)
- Twitter Inc. (NYSE:TWTR)
I’m not here to gloat, though.
There’s a new wave of tech stocks taking over our stock markets; defense stocks and AI are going to plow sharply higher as spending accelerates; key players in the medical arena will also plow higher as reforms plow their way through the system.
Don’t take my word for it, though.
Examine what we’ve discussed right here in Total Wealth and ask yourself one important question…
… have I helped you make money?
If I haven’t, then I don’t deserve the trust you place in me, let alone your subscription.
Frankly, I wish Wall Street would “own up” the way I do – warts and all – because that’d go a long way towards helping millions of investors. Sadly, you and I both know there’s a snowball’s chance in hell that’ll happen because they’re too busy trying to steer you into investments that boost their profits at your expense.
But that’s a story for another time.
Let’s take a look at 2018’s Hits, Misses, and Home Runs.
Major Corrections: A+
I told you in my 2018 Outlook that I saw the “probability of a pullback highest in Q1/2018.” And, I became markedly cautious before the long run in Q3, urging that October’s pull back would be among the most serious in years.
The former, I went on, would “not be an excuse to run for the hills.” Companies would rebound, I observed at the time, and grow into valuations others thought were expensive but which really weren’t. Especially with FANG stocks.
Surviving the Q3 pullback, I noted repeatedly in October, when things started to unravel, that the situation would be all about risk management and far more tactical in nature – despite the fact that much of Wall Street still thought the early bumps were just a minor deal.
That, too, proved spot on.
Once again,Total Wealth Tactics like the Trailing Stops, Profit Targets, and Rebalancing were key to capturing gains instead of watching them turn in to losses, like millions of investors did (again) for having failed to learn their lesson in 2000 and again in 2007-2008.
Whereas 2018 was a year of “continuation,” this year – 2019 – will be a year of “turning points.”
They’ll be sharp and quick which means you have to think ahead and position your money accordingly.
Waiting for confirmation may seem like a good idea but, odds are, you’ll leave a lot of money on the table if you do (and I don’t want to see that happen).
The Fed: A
I began sounding the alarm regarding the Fed’s actions in late 2017, at a time when Wall Street was broadly concerned that the bull market was over. No, I insisted… the real problems would hit in late Q3 and Q4 2018, when investors began to focus on the witches’ brew of slowing earnings and a Fed that was hell bent for leather on raising rates.
That happened in spades, with Fed Chairman Jerome Powell making a series of gaffs that cost the bull market dearly. Outdated models, mouthy Fed officials, and a complete lack of regard for reality took their toll.
Looking ahead, I am optimistic that the Fed will “learn” and possibly even lower rates again by year end 2019. I still see EPS growing at 5% to 6% year-over-year with multiples in the 15X to 16X range. Both imply the S&P 500 tapping 3,000 by this time next year.
I know that’s hard to believe, but the data shows that the S&P 500 has notched positive returns 81% of the time since 1930 if GDP falls by less than two percentage points, according to CNBC, Goldman Sachs analysts, and my own research.
Market Leadership: A
FANG stocks – Facebook Inc. (NasdaqGS:FB), Apple Inc. (NasdaqGS:AAPL), Netflix Inc. (NasdaqGS:NFLX), and Google (Alphabet Inc. (NasdaqGS:GOOGL)) – got blown up after Q1’s correction but recovered nicely and made you a lot of money even if “riding them” was akin to being a bull rider in search of the eight-second buzzer!
Q3’s nastiness was unpleasant, but entirely logical, given how widely held they all are and how badly hedge funds and institutions placed their bets. The selling was simply a gigantic margin call and computers trying to keep up with the deleveraging.
The best choices this year are going to be high quality names with three defining characteristics: 1) broad brand recognition, 2) growing top line sales, and 3) margin pricing power – meaning they can raise prices faster than inflationary concerns slow earnings in less viable companies.
Big tech, incidentally, will come back, just not like people think. In fact, there’ll be an entirely new class rising to the top (like the one I recommended this past Wednesday).
Playing offense while becoming increasingly defensive is the best way to sum this up.
Speaking of which, here’s a smattering of other stuff we took on together (and how I did):
GE – a “Bug in Search of a Windshield”: A+
General Electric Co. (NYSE:GE) lost 56.6% of its value in 2018, with shares falling $10.41 – from $17.98 to $7.57, as management threw one “hail Mary” pass after another in an increasingly desperate attempt to stave off the inevitable. It’s trying to rally this year and has risen to… wait for it… $8.71, as I type. But, the damage has been done. The dividend is now a single red cent… $0.01 per share, just so the company can still say it has a dividend I would hunch! Once profitable divisions are long gone, and the stock is no longer an “investment” but more akin to a purely speculative bet.
Buffett Will Rue the Day He Trolled Tesla CEO Elon Musk: C
Berkshire Hathaway Inc. (NYSE:BRK.A)’s down 0.31%, while Tesla Inc. (NasdaqGS:TSLA)’s up 10.30% since I wrote to you on May 9 – so this is unfinished work. I still believe it’s true – that Buffett will rue the day but, Musk, as brilliant as he is, has some serious challenges ahead. Tesla stock, meanwhile, appears to be “Teflon” – in that nothing “sticks,” no matter how egregious. Amazing!
“3% (on the 10-Year Note) is Not a Big Deal”: B
Wall Street and Washington alike were convinced that all hell would break loose when the 10-Year Note hit 3%, but I counselled that it’s the speed of the increasing rates that matters more.
Individual investors would get taken on a “white-knuckle” ride if they didn’t stay the course.
I was correct on both counts but, ultimately, the Fed threw a spanner into things when it refused to let the markets do their job. I took Chairman Powell at his word when he said he’d be more data-dependent; clearly that was a mistake, not to mention optimistic on my part.
$5 Glu Mobile Would Be a Great Turnaround Play: A
Shares of Glu Mobile Inc. (NasdaqGS:GLUU) are up 111.90% since recommendation, to $8.90, as I write. CEO Nick Earl hasn’t looked back from the “creativity-first” strategy he implemented, and the market likes that. If you’ve been following along as directed, you should be sitting on a coveted Free Trade right now – with half of your position sold and redeployed into another money-multiplying opportunity while watching the rest “ride.”
Facebook Reminds Me of Enron: B-
Once a media and Wall Street darling, it was the company that could do no wrong. I saw things differently and told you the company reminded me of Enron. Things aren’t quite that bad yet, but Team Zuckerberg is in serious trouble. Defectors are spilling the beans, and the once hallowed halls don’t appear so hallowed any longer. Shares dropped from a high of $218.62 on July 25 last year, to a low of $123.02 on Christmas Eve; I expected worse, so I’m going to give myself a B- on this one because shares are edging higher – as unbelievable as that is to me.
How to Play the “President’s Amazon-Ire”: F
President Trump has made no bones about his animosity for Amazon.com Inc. (NasdaqGS:AMZN), and I recommended you play that with two contract airlines with whom Amazon’s entered strategic partnerships: Atlas Air Worldwide Holdings Inc. (NasdaqGS:AAWW) and Air Transport Services Group Inc. (NasdaqGS:ATSG). The former traded really well and significantly better than the broader markets until October, when it fell out of bed – while the latter has struggled to hang on. I don’t think the game is over for either because Amazon tends to absorb strategic partners over time but, still, I let you down on this one big time. Doggonit!
Halloween May Be More Trick Than Treat This Year: A/C
I got the timing right but the attribution wrong, so I’m going to give myself a split “grade” on this one. I knew that October would be tricky (which turned out to be correct), but I believed it would be pension funds that kicked off the trouble (which was not correct). As it turns out, large institutions deleveraged with computerized programs, racing to the bottom on their behalf, so I wasn’t entirely off-base with my thinking, which just may be a silver lining.
The Vicious Selloff Will be GREAT for Your Money: Exam Still in Progress!
The proverbial jury is still out, even if history is very clear with its verdict – selloffs don’t feel good but are ultimately GREAT for your money.
The key, as always, is how you handle ’em!
Speaking of which…
The six Unstoppable Trends we follow are all still intact and all still backed by trillions of dollars that will get spent no matter what Wall Street does next, what happens in Washington next, and what the Fed tries to do next.
Playing offense, in other words, still makes all the sense in the world this year.
Especially if you prioritize the “must-have” companies we do in our quest for big, consistent gains.
In fact, 2019 could be one of the single most profitable years ever, if we play our cards right and harness the volatility that’s going to trip other investors up who are not part of the Total Wealth Family like you.
Adding insult to injury, the “nice to haves” many investors think are so important (and Wall Street does its best to make you think are so great) will continue to separate the unsuspecting from their money as volatility continues.
In the meantime, I’ll be hunkered down in my office and doing what the world’s best investors always do under similar circumstances – finding the NEXT best investment opportunities… the ones that could deliver 100%, 500%, even 1,000% or more!
I’m also going to be out on the road this year in in Las Vegas, Los Angeles, New York, Malta, Tokyo, and a few other choice locations along the way. I hope we’ll have the opportunity to compare notes and meet up! (Details to follow as they develop, naturally.)
In closing, thank you for being a part of the Total Wealth Research Family. I will do everything I can to make sure the trust you have in me is well placed, not to mention very profitable.
Here’s to a fabulous 2019!
Until next time,