When things don’t go right, fault lines in a system become glaring.
And the Russian invasion of Ukraine has exposed some very troubling fault lines in the global system.
Some even call it the end of globalization as we know it…
But that remains to be seen. Certainly, the inability of the West to contain Vladimir Putin will send a strong green light to China’s territorial ambitions.
And Putin chose a very opportunistic time to start checking off his bucket list of annexing Ukraine…
Inflation is already putting a wet blanket on global growth, which renders the West’s sanctions basically useless.
You see, unless the West sanctions Russia’s oil and gas industry… Putin just doesn’t care. He knew the West wouldn’t target Russia’s oil.
Probably because he knew that we put ourselves in this inflation hole via a needlessly over-accommodative Federal Reserve.
Meaning with oil at over $100, we can’t sanction him where it hurts. If we did, 7.5% inflation could turn into 27.5% quickly.
He’s been waiting and planning for years.
For instance, did you know Russia’s U.S. bond holdings were already near zero leading up to this invasion… and were replaced by gold?
That’s not by accident.
Putin, along with other global players, play the long game… While Americans are simply focused on two-year election cycles… a fault line in our system.
But when it comes to the economy and the bottom line… all this geopolitical crisis has really done is accelerate the trends we have been predicting would unfold.
We called the commodities trade last February.
The Bloomberg Commodity Index is up 35% since then… along with thriving companies like Archer-Daniels-Midland (ADM), Freeport-McMoRan Inc (FCX), and FMC Corp (FMC).
We warned how the Fed is behind the curve on inflation and would have to crash the stock market by pivoting hawkish.
And we warned to stay far from Hype Lifecycle stocks like Virgin Galactic (SPCE) and Tesla (TSLA) at $1,200 a share. The Tesla episode was one for the ages… Elon Musk himself was selling 10% of his stake while hype chasers kept buying. I guess they thought they knew something he didn’t.
But when trends go into overdrive, some pockets of the market get bulldozed along with everything else… setting up big opportunities.
|
Free Trading Resources Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out. |
Growth with Substance
Last week, I wrote about a portfolio of stocks I’m currently tracking closely.
Individually, these stocks have little in common, except for one thing…
They have growth with substance.
It’s easy to identify them…
These are companies that have spent years operating at a loss and are now poised to start generating profits.
And in a fear-filled market, profits are all that matter. Not hype, not some narrative-driven theme – just profits.
It’s the common denominator of the market.
And recent earnings reports continue to explain the strong price reactions, confirming why they’re outperforming in a down market.
Live Nation Entertainment (LYV) is a prime example.
Take a look at the chart below…
After years of operating in the red – and even withstanding all the COVID restrictions over the past two years – its stock has held up.
And this year, it has held up in a brutal market.
It’s not just outperforming the market… it’s doing it in style – rising while everything out there seems to be underwater.
On top of beating earnings estimates, its net income is projected to swing positive this year and grow at 86% next year alone.
That’s growth with substance.
And companies like Live Nation will continue to outperform the market by a long shot. I could only imagine how much these stocks can rise if the market finds its footing.
Regards,
Eric Shamilov
Analyst, Market Minute
Reader Mailbag
In today’s mailbag, Jeff Clark Alliance member Krystof comments on Jeff’s recent essay on options trading…
Hello, Jeff.
Thanks for the good article on painting a conservative approach to options trading. It’s a pleasure to be a lifetime subscriber and learn more and more while trading.– Krystof S.
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at [email protected].