The call that changed my life... One thing all successful investors must have... Marty Zweig shared his 'secret' with me... Seeing the secret in action... A fortuitous connection... Marc Chaikin knows the secret, too... How to learn the secret yourself... Save your spot for Marc's next big reveal...
Editor's note: We're doing something different in the Digest over the next several days...
We're still tracking the daily market movement, of course. And we'll provide updates as appropriate. But from now until next Wednesday, we're sharing a series of investing lessons from the folks at our corporate affiliate Chaikin Analytics.
Regular readers will recall that we first partnered with Chaikin Analytics last spring. That's when we introduced you to Wall Street legend Marc Chaikin, the company's founder.
This time, we'll begin with an essay from Chaikin Analytics CEO Carlton Neel...
Carlton started his Wall Street career in the summer of 1990. That was shortly after the collapse of Drexel Burnham Lambert – the first Wall Street firm to go bankrupt since the Great Depression.
The economy was sputtering at the time. After entering the job market during a recession, Carlton saw plenty of action...
He worked through the dot-com boom of the mid- to late-1990s. Then, the market busted with the "tech wreck" of 2000 and 2001... followed by another surge in stock prices... and finally, the huge financial crisis of 2008 and 2009.
In short, he has seen a thing or two. And as the saying goes, that means Carlton "knows a thing or two."
Over the years, he learned one key thing that every investor needs to be successful. In many ways, it's a "secret" that some of the brightest minds in finance have also used.
Of course, many things can lead investors to success – like position sizing, using stop losses, and more. But without this one thing, you simply won't find long-term success.
In today's Digest, Carlton reveals all the details...
In 1995, I (Carlton Neel) got a call that changed my life...
A mutual-fund management company wanted to meet with me about becoming a portfolio manager. I was only 27 years old at the time. So this was a huge opportunity.
That's when I met the man who would become my mentor...
He was sitting at his desk, wearing a hooded sweatshirt and running shoes. He got up from his desk to shake my hand. Then, he told me about our post-interview dinner plans...
The local steakhouse was "Charlton's." And he thought that was kind of funny because of my name.
That was my introduction to legendary fund manager Marty Zweig.
Longtime Stansberry Research readers likely recognize Marty's name from some of Dr. Steve Sjuggerud's work – like this August 17, 2021 DailyWealth essay. The DailyWealth Trader team has mentioned him from time to time over the years as well.
Soon after our steak dinner, Marty became my boss and mentor. And importantly, he taught me exactly what it takes to be a successful investor.
Marty eventually put me in charge of managing billions of dollars of mutual-fund money. He trusted that I understood the one thing that makes a successful investor...
Now, this one thing won't guarantee success. But I can guarantee that you'll fail without it.
This one thing led Marty to predict the 'Black Monday' crash in 1987...
You see, Marty was a frequent guest on Wall Street Week with Louis Rukeyser.
The Friday evening show was "must-see TV" for many individual investors. In fact, it was the most influential financial TV show in the 1980s. That was before CNBC or other networks were founded.
On October 16, 1987, Marty was on the show...
Lou asked Marty if he thought the bull market was dead. And Marty responded, "Yes, but I haven't been looking for a bear market per se. I've been really, in my own mind, looking for a crash."
Of course, the next Monday – October 19, 1987 – is now known as "Black Monday" on Wall Street. The U.S. stock market fell more than 20% in a single day.
Marty was a real data cruncher. He loved numbers and built models to help him make investment decisions.
He used quantitative models to take the emotion out of the philosophy. He had more discipline than anyone I've ever met.
And in short, Marty had discovered the "secret" – the one thing that all successful investors need. I'm fortunate to be one of the few people he shared it with.
This secret helped him see the market was headed for trouble just days before it crashed.
Marty isn't the only Wall Street legend I've worked with who cracked this code...
After managing billions of mutual-fund dollars for over 20 years – including 18 years working with Marty before he passed away in 2013 – I met another Wall Street legend...
Marc Chaikin.
Marc and I hit it off immediately. We both recognized that our approach to the stock market – our investment philosophy and discipline – were virtually identical.
I'll never forget the day when Marc learned that I worked with Marty for 18 years... He almost spat out his coffee.
Yes, my office was right next to Marty's...
Yes, I had spent many evenings at Marty's penthouse apartment at the Pierre Hotel...
Yes, I shared many dinners with Marty after our first steakhouse experience...
And yes, most importantly, we talked about the markets all the time.
It turned out that Marc also knew Marty. In fact, he had spent many afternoons in East Hampton at Marty's oceanside mansion. But we both knew that Marty would rather talk about the markets in his office than go sit on the beach and watch the waves crash.
I've told you everything so far for one simple reason...
Marc Chaikin also knows the secret – the one thing that all successful investors need...
You see, Marc has also made some extraordinary calls in his 50-plus years in the markets.
And they've mostly come from a model he developed – the "Power Gauge" system.
The Power Gauge is related to the one thing every investor needs to be successful. And it's a big reason for Marc's success...
For example, in early 2020, Marc took a "bearish" stance on stocks.
Now, it's important to note that this was before most folks had even heard of COVID-19. While it had surfaced in China at the time, almost no one feared that it would soon spread across the globe. And the stock market kept grinding to new highs at the start of that year.
While the Power Gauge couldn't have predicted a global pandemic, it did spot something wrong beginning in early 2020... It started flashing negative signals on many stocks. That made Marc very cautious about the near-term prospects for the market as a whole.
And of course, we all know what happened next. The S&P 500 Index plunged roughly 34% in about a month through its March 2020 bottom.
It's an incredible result. But Marc spent decades learning and implementing the secret...
You see, he didn't officially build the Power Gauge until about 12 years ago. However, it's based on his more than five decades of knowing a thing or two about the markets.
Folks, maybe this sounds too simple to be true, but hear me out...
You need an investment strategy – and the discipline to follow that strategy – regardless of what's going on in the world.
That's the secret. It's a repeatable process.
Does that one thing alone guarantee success? Nope. But without it, you'll be lost as an investor.
The world is a crazy place right now. Our nuclear adversary, Russia, is fighting a war in Ukraine. Inflation is at a 40-year high.
Folks are growing more concerned about the economy. And the supply chain is mangled. Heck, I've been seeing empty shelves at the grocery store for almost a year now.
So I understand if you're nervous.
The market is responding in kind, too. The S&P 500 just experienced its first "correction" – a drop of 10% or more – since the early days of the pandemic.
It's a lot to manage.
But if you have a process – a repeatable investment process – all this news is just noise.
Here's how to learn everything you need to know about this secret...
I've been fortunate enough to have a very fruitful career. I've seen firsthand what it looks like when investors successfully implement a repeatable process at the highest level.
It was amazing to be part of that process with Marty Zweig for 18 years. And today, I'm honored to be part of that process as the CEO of Chaikin Analytics alongside Marc Chaikin.
Marc has cracked the code. I know because I've seen it done before... He has a repeatable process. And it's one of the best in the world.
Today, he's using it to share a warning with individual investors just like yourself. It's about where the market is today... and more importantly, where the data says it's heading next.
Marc plans to share all the details during a special event next Wednesday night, March 30, at 8 p.m. Eastern time. It's FREE to attend for all Digest readers.
And everyone who shows up will learn the names and ticker symbols of two current opportunities. You'll hear about one popular stock the data says you should avoid at all costs... plus an under-the-radar stock the data says should return triple-digit gains in 2022.
Get all the details right here.
New 52-week highs (as of 3/24/22): Alcoa (AA), AbbVie (ABBV), American Financial (AFG), Altius Minerals (ALS.TO), Bunge (BG), Bristol-Myers Squibb (BMY), Berkshire Hathaway (BRK-B), Black Stone Minerals (BSM), Freeport-McMoRan (FCX), Formula One Group (FWONA), Cheniere Energy (LNG), Mosaic (MOS), MP Materials (MP), Nucor (NUE), Palo Alto Networks (PANW), Pure Storage (PSTG), Sprott (SII), Travelers (TRV), Virtu Financial (VIRT), SPDR S&P Oil & Gas Exploration & Production Fund (XOP), and Alleghany (Y).
Today's mailbag features feedback for Ten Stock Trader editor Greg Diamond. In Wednesday's Digest, we talked about the big "wave" that Greg sees hitting the stock market soon. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Hi Greg, you have outdone yourself with this week's Market Outlook. It reflects your best to explain the difficult job of making predictions in this week of market complexities and the knowledge and effort you've expended to relate possible market alternatives.
"I particularly like [how] you've bracketed the range of possibilities and not made a simple up or down call with caution warnings. I also appreciate your hallmark of brevity." – Stansberry Alliance member Wayne S.
Good investing,
Carlton Neel
March 25, 2022