Markets Post Worst First Half of a Year in Decades; My advice to investors; I bonds; Berkshire Hathaway; Twitter; Cannabis stocks hit an all-time low; My three jumps

1) The S&P 500 had its worst first half in more than half a century, as this Wall Street Journal article notes: Markets Post Worst First Half of a Year in Decades. Take a look at this chart from the article:

As the article explains, the damage wasn't limited to stocks:

Global markets closed out their most bruising first half of a year in decades, leaving investors bracing for the prospect of further losses.

Accelerating inflation and rising interest rates fueled a monthslong rout that left few markets unscathed. The S&P 500 fell 21% through Thursday, suffering its worst first half of a year since 1970, according to Dow Jones Market Data. Investment-grade bonds, as measured by the iShares Core U.S. Aggregate Bond (AGG) exchange-traded fund, lost 11% – posting their worst start to a year in history.

Stocks and bonds in emerging markets tumbled, hurt by slowing growth. And cryptocurrencies came crashing down, saddling individual investors and hedge funds alike with steep losses.

2) So what should an investor do?

First, don't panic and sell at what is likely close to a bottom. As this chart shows (from this Fidelity article: 3 reasons to stay invested right now), if you had gone to cash and missed even a few days over the past four decades, it would have destroyed your long-term returns:

I'm actually pretty bullish, for reasons my friend Doug Kass of Seabreeze Partners laid out in my e-mail on Monday. In particular, look at this table he presented – it shows that the five prior times since 1928 that the market had a similar or worse first half of the year, it generated strong returns in the second half of the year every time:

3) As for specific investment ideas, here's a summary of what I've written about recently:

• Check out my new presentation on one of the less risky moves to make in this market overall.
• Buy U.S. Treasury Series I Saving Bonds ("I bonds"), which I discussed two weeks ago.
• Buy the stocks of high-quality companies that have pricing power at a discount to their intrinsic value. We have recommended many such stocks across our newsletters. The easiest, least-expensive way to start and get some of our best conservative big-cap ideas is to subscribe to Empire Stock Investor, which is only $49 for the first year for new subscribers – just click here.
• At the top of my list is Berkshire Hathaway (BRK-B), which I've long called "America's No. 1 Retirement Stock" for its combination of safety, growth, and cheapness. As of yesterday's close at $408,950 per A-share, it's trading at a 21% discount to its intrinsic value using my conservative valuation method, which I outlined in my May 6 e-mail.
• I'm also bullish on Twitter (TWTR) because, as I discussed on two recent e-mails, I think Elon Musk is likely to go through with his purchase of the company at or near the agreed-upon price of $54.20.

4) Another idea – albeit a higher-risk, higher-reward one – is the AdvisorShares Pure U.S. Cannabis Fund (MSOS), for reasons I outlined in Tuesday's e-mail.

My colleague Tom Carroll from our corporate affiliate Stansberry Research sent me this updated chart which shows that the North American Marijuana Index ("NAMMAR") is at an all-time low – even lower than the bottom during the COVID-19 crash – and far lower on a price-to-sales basis (as there has been strong sales growth over the past two years):

5) Longtime readers won't be surprised to hear that when I look at a mountain or pretty much any rock formation, I want to climb it. And when I see a cliff over water, I want to climb to the top and then jump in.

Sure enough, on the beach at our hotel in Propriano on the French island of Corsica, where we spent the past two nights, there was a cool rock formation, part of which you can see on the right side of this picture:

So I climbed up three times and did a jump, a front flip, and a back flip (the water was only five feet deep, so I only went in feet first). Here's a 17-second video with clips of my jumps and here are four pics of my back flip:

It reminds me a bit of the back flip I did into the Merced River in Yosemite National Park in June 2020, after I finished climbing The Nose of El Capitan – video here.

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.

P.P.S. The Empire Financial Research offices are closed on Monday in observance of Independence Day, so look for the next edition of my daily e-mail on Tuesday, July 5.