How to Invest Like Wall Street's Best
Living legend Marc Chaikin reveals a few secrets... How to invest like Wall Street's best... Watch the replay of Marc's event now... Know the right industry... Mortgage rates spike... A big bitcoin buyer... More on golfer Kevin Kisner...
Nearly 300,000 people signed up to hear our friend Marc Chaikin's presentation last night...
And those who tuned in were treated to a timely and informative event that anyone with money in the markets could find valuable.
Marc, the namesake founder of our corporate affiliate Chaikin Analytics and nothing short of a living legend on Wall Street, gave a truly comprehensive presentation for everyday folks on what's really going on in the markets today...
Marc shared more details about the ongoing "rolling crash" playing out in U.S. stocks... and discussed when it might end. He shared which groups of stocks have crashed already and which ones have not...
While people have been glued to the S&P 500 and the Nasdaq, waiting to see if we're still in correction or bear market territory on any given day...
We've already seen hundreds of stocks in weak industry groups suffer big crashes – for over a year. The only difference is that now the losses are widespread enough to get your attention.
He revealed how he knows this... and several other Wall Street secrets he has learned over the years, including a simple yet powerful idea that many of the world's best investors use to make money – in bull or bear markets – and how everyday folks can put it into action today.
If you were unable to catch the initial airing of the event last night, I (Corey McLaughlin) have good news to report... You can catch a replay or read a transcript here at your convenience... It is 100% free for all Stansberry Research subscribers...
We could highlight a lot of great things about the event...
For one thing, Marc shared two free recommendations – one stock to buy right now and one to avoid completely – for anyone who tuned in. He also offered a special time-sensitive bonus designed specifically for Stansberry Research subscribers.
This bonus offer expires at midnight tonight (Thursday) Eastern time, so if you haven't already watched the event, make sure you do before then if you are interested in hearing more about this "Stansberry specific" report.
But, in general, I can tell you Marc did something we love... He offered insight into "how Wall Street works" and, more important, offered tools that anyone with a brokerage account can use to "level up" with the world's elite investors and apply to more than 4,000 different stocks.
A few months ago, you might remember, we shared the fact that many studies have shown that "asset allocation" – that is, how much of each stock you own in a portfolio – can account for a greater percentage of returns than the choice of the stocks themselves.
That's one dirty secret about the investing business, we said. Well, last night, Marc shared another rarely told truth about what makes for outsized gains... like the 66% annual return the famed and private Medallion Fund has enjoyed since 1988.
As Marc said...
This is what you need to know. It might actually be the most important lesson I ever learned on Wall Street.
Studies have shown that 50% of a stock's performance can be attributed to its industry. Fifty percent.
That means choosing the right industry is literally half the battle when deciding what to buy... and what not to buy.
For those who don't know, or missed our essays the last few days, Marc worked for decades on Wall Street... He made enough money to retire in 1999 and started Chaikin Analytics in the wake of the financial crisis to help everyday investors protect and grow their wealth. He knows markets.
In fact, Marc is part of the fabric of the markets...
Among other things, Marc invented the "Money Flow Indicator," which is part of every Bloomberg Terminal in the world. He has worked with some of investing's biggest names, saw how they made decisions, and incorporated what he saw into his own work...
And as he said last night, for decades, this "know the right industry" approach is what directed all of Marc's buying and selling decisions over the years. It's even the approach he took investing money earmarked for his own children...
As he said, this is a message anyone with money in the markets could learn from...
I, along with the thousands of financial advisers and high-net-worth investors who have followed my work for the past decade, know the stock market isn't just one big thing.
It's actually 11 different, smaller things. It's 11 different sectors that are all connected – and unconnected – in specific ways...
Whoever could see the biggest threats and opportunities in the market first... and correctly determine how they would ripple through specific industries... had a huge advantage.
From there, you can then find the strongest companies within the strongest industries. Or you can spot the weakest sectors and stay away from them... and especially the weakest names within the bearish groups.
Today, Marc is focused on helping everyday investors see what most will never see... like a "rolling crash"... or the right industries to find opportunities in, or stay away from... or anything else that might happen over the next few months...
As he said last night...
Until recently, it's been a relatively smooth ride to all-time highs. As long as you had money in the markets, you were doing everything right.
On both a fundamental and technical level, the U.S. stock market is a wildly different animal than it was even just three months ago.
And it's time to pull over, take your hands off the wheel, and see what's really going on.
Said another way, what worked in the past might not work in the future… and you need to be armed with the tools that will help you make decisions like Wall Street's best. Be sure to check out Marc's presentation to hear much more.
Moving on, let's catch up on some other stories...
A big one is what's happening in the housing market...
The start of a rising-interest-rate run, dictated by the Federal Reserve, has made for a jittery U.S. stock market the last few months and has raised concerns about slowing economic growth. We know that...
Practically speaking, we can see one reason why...
The Fed's slight "hike from zero" earlier this month – and widespread expectations for more benchmark lending-rate hikes throughout the rest of the year – is already having a "cooling" influence on one of the largest parts of the economy... real estate.
As Stansberry NewsWire analyst Nick Koziol reported today, the average 30-year mortgage rate rose to 4.67% this week, according to mortgage finance company Freddie Mac.
That's the highest level since December 2018 and is a sharp increase over the sub-3% average rates as recently as this past fall. As Nick wrote...
As long-term bond yields have risen (on the probability of Federal Reserve rate hikes), mortgage rates have followed suit – rising in almost a straight line higher.
This will continue to spark fears of declining housing affordability. Home prices continue to rise, and now mortgage rates are making it more expensive for prospective buyers to finance a home purchase. That could eat away at demand and push home prices lower.
However, Nick also made an important note... that the recent sharp rise in mortgage rates alone won't end the booming real estate market.
As regular readers know, our colleague and True Wealth editor Steve Sjuggerud – who considers a booming real estate market his top prediction for the 2020s – says that housing busts only happen when supply overwhelms demand... and prices plummet.
As Nick wrote, that's not the case right now...
Housing supply is at – or near – all-time lows. And demand is relatively strong. If mortgage rates cause a sharp drop-off in demand, and supply then outweighs demand, then we could see the strong housing market turn lower.
We'll watch to see whether higher rates put a dent in demand, but for now we're not detecting a material change in the fundamental trends in real estate just yet...
Lastly today, about those cryptos...
We briefly mentioned the recent rally in bitcoin, the world's most popular cryptocurrency, in a note in Tuesday's Digest... and that inflows to crypto products have been positive in eight out of the past 10 weeks of 2022.
We told you we'd have more later in the week... and here it is. In his latest Crypto Capital weekly update last Friday, editor Eric Wade highlighted one of the "very specific" reasons for bitcoin's recent climb.
If you've been following cryptos, you likely know about "stablecoins," which are (or are supposed to be) backed one-to-one to the U.S. dollar. This is a way for many folks, or cryptocurrency companies, to convert dollars to coins in the crypto ecosystem...
Well, it turns out one company, Terraform Labs – which has developed its own stablecoin, TerraUSD – has been busy buying a lot of bitcoin lately... because it's seeking to back a stablecoin not in dollars, but in bitcoin.
According to Terraform Labs CEO Do Kwon, the idea is for the company to eventually have at least $10 billion in "bitcoin reserves." Forget about the "why" for a moment. Let's keep the conversation focused on bitcoin's price. As Eric said in his update...
That brings up all kinds of interesting concepts, right? Terra Labs is trying to figure out, "I wonder how much bitcoin we'd have to buy." And the number that's been floated around right now is $3 billion worth.
Is it possible to buy $3 billion worth of bitcoin, and then see that $3 billion rise enough that bitcoin could entirely back [the] stablecoin?
Terra is currently betting on buying enough bitcoin to grow to $10 billion... and it is pushing the price of bitcoin up as it does.
The company bought about 3,000 bitcoins on March 22 and earlier this week bought roughly 3,000 more... each purchase worth around $140 million. The bitcoin "wallet" linked to the new purchases now exceeds 30,000 bitcoins, or roughly $1.5 billion.
On March 22, Kwon also said the company already had $3 billion to seed the project. At current prices, bitcoin market's cap is around $870 billion.
We won't get into all the math, but given bitcoin's eventual capped supply of 21 million coins, this massive "accumulation" approach – by a company with means like Terra or simply by more bitcoin users – could lead to higher prices.
For more on this story, and industry-leading crypto research and recommendations, be sure to follow along with Eric and his team. Existing Crypto Capital subscribers and Stansberry Alliance members can catch his latest weekly update right here.
Taking a Bullish Stance... on Human Progress
In this episode of the Stansberry Investor Hour, Dan Ferris interviews Kevin Duffy, editor of The Coffee Can Portfolio and manager of the Bearing Core Fund – a contrarian, macro-themed hedge fund...
As Kevin explains, despite how much the world and investors' moods have changed in less than a year, he remains a long-term optimist. He's bullish on "human progress," but tells Dan why folks should be rightly critical when deciding where to put their money today...
Click here to listen to this episode right now. And to catch all of the videos and podcasts from the Stansberry Research team, be sure to visit our Stansberry Investor platform anytime.
New 52-week highs (as of 3/30/22): AbbVie (ABBV), Bristol-Myers Squibb (BMY), Brown & Brown (BRO), Costco Wholesale (COST), Enterprise Products Partners (EPD), Formula One Group (FWONA), Hershey (HSY), Johnson & Johnson (JNJ), Royal Gold (RGLD), Virtu Financial (VIRT), and Utilities Select Sector SPDR Fund (XLU).
In today's mailbag, feedback on the idea of "bring on the recession"... and at least one other subscriber noticed our logo on professional golfer Kevin Kisner's shirt over the weekend... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"I agree with all the reasons [Carrie M.] cited [to welcome a recession].
"A system can only abuse the financial well-being of a society for so long. The masses will not tolerate the 'let them eat cake attitude' much longer, and then things will get ugly." – Paid-up subscriber James F.
"Couldn't help but notice last week the Stansberry Research logo on the shirt pocket one of my favorite pro golfers, Kevin Kisner.
"In my opinion, Kevin has always been an inspirational model. And what a great performance by KK, as Dell World Golf [Championship] runner-up, as he is so often capable of producing.
"Hats off to both KK and Stansberry for the business relationship that shows off excellence in making choices that reflect noble ideals and goals. Such stands out in today's crazy world!" – Paid-up subscriber Paul B.
All the best,
Corey McLaughlin
Baltimore, Maryland
March 31, 2022