Legendary Stock-Picker Predicts Best-Performing Stock of 2020

Recent Pullback Is a Bullish Sign for Stocks

Right now, a lot of folks are worried that stocks are about to start another big decline. That’s a possibility, of course. But as we’ll show you today, it’s not the most likely outcome. In the weeks and months following our 50-DMA breakdown signal, stocks were higher across all time frames, on average. And stocks performed better more often than in all market conditions. Our study shows that rather than this being the time to sell, stocks are likely a good buy today.

Right now, a lot of folks are worried that stocks are about to start another big decline. That’s a possibility, of course. But as we’ll show you today, it’s not the most likely outcome. In the weeks and months following our 50-DMA breakdown signal, stocks were higher across all time frames, on average. And stocks performed better more often than in all market conditions. Our study shows that rather than this being the time to sell, stocks are likely a good buy today.

By Ben Morris and Drew McConnell, editors, DailyWealth Trader


On Friday, the benchmark S&P 500 Index broke down…

It dropped below its intermediate-term trend line – its 50-day moving average (50-DMA) – for the first time in four months.

The trend is still up. But a lot of investors and traders start to worry when stocks fall below this widely followed level.

Last week, though, we told that this pullback could actually be a great buying opportunity…

Timing your trades isn’t always about nailing the exact right moment to get in… If you can simply identify higher- and lower-risk entry points – and take action when your risk is reduced – you’ll give yourself a major advantage in your trading.

With that in mind, the question we’re asking today is, “Is right now a higher- or lower-risk moment to buy stocks?”

The answer might surprise you…


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To help us answer this question, we looked at similar occurrences in the S&P 500 over the past 50 years. Specifically, we looked at the S&P 500’s returns following its first break below its intermediate-term trend line in at least three months.

In the chart below, you can see when this happened on Friday…

A lot of traders consider a break below the 50-DMA to be a bad sign. But let’s draw our conclusions from the numbers…

Over the past 50 years, the S&P 500 has held above its 50-DMA for at least three months 39 other times. (Friday was the 40th time.) The table below shows how the index performed following the first day that it closed below its 50-DMA…

On average, stocks climbed across all time frames. In the following two weeks, stocks were higher about 60% of the time. One and two months later, that percentage jumped to about 70%. And three months later, stocks were higher more than 80% of the time.

Those are good odds, especially when we compare them with the S&P 500’s “normal” performance…

The table below shows the same metrics for the S&P 500 for the past 50 years with no limiting criteria. In other words, the first number in the first row is the average two-week return for the S&P 500 over the past 50 years.

You might be surprised to see that the S&P 500’s average and median returns were better than normal after it broke below its 50-DMA across all time frames. The percentage of the time that stocks were up was better after the breakdown, too.

How can we explain this?

Well, if the S&P 500 has held above its 50-DMA for at least three months, it typically means the stock market is in a strong uptrend. And when the market is in a strong uptrend, you want to own stocks.

These results suggest that one of the best times to buy stocks in a strong market is after a pullback, like when the S&P 500 drops below its 50-DMA… as it did on Friday.

Here’s our takeaway…


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Right now, a lot of folks are worried that stocks are about to start another big decline. That’s a possibility, of course. But as we showed you today, it’s not the most likely outcome.

In the weeks and months following our 50-DMA breakdown signal, stocks were higher across all time frames, on average. And stocks performed better more often than in all market conditions.

Our study shows that rather than this being the time to sell, stocks are likely a good buy today.

It probably doesn’t feel like the right thing to do right now, but if you have some cash on the sidelines, you may want to consider putting it to work. At the very least, don’t exit your bullish positions right now unless they’ve triggered your stop losses.

We can’t promise you that today is the perfect day to buy stocks. But we can tell you – with 50 years of history backing us up – that your risk in the stock market is reduced. And generally, that’s the time to buy, not sell.

Our advice for stocks traders and investors right now is to stick to your stop losses and to stay long.

Here’s What’s Behind the Current Volatility

After rallying as much as 61% off its March lows – the broad market has retreated 9% since the start of September. Of course, a resurgence of coronavirus cases in Europe is behind some of the current sell-off. Investors fear a second wave of the pandemic could lead to a new round of global lockdowns. But Teeka Tiwari says much of the current weakness is due to government policy. That’s because the market has gotten addicted to two things: low interest rates and government spending.

After rallying as much as 61% off its March lows – the broad market has retreated 9% since the start of September. Of course, a resurgence of coronavirus cases in Europe is behind some of the current sell-off. Investors fear a second wave of the pandemic could lead to a new round of global lockdowns. But Teeka Tiwari says much of the current weakness is due to government policy. That’s because the market has gotten addicted to two things: low interest rates and government spending.

By Chaka Ferguson, editor, Palm Beach Daily

On Monday, we saw wild volatility rip through the markets…

And nothing was spared. The S&P 500 closed down 1.2% while the Dow fell 1.9%. Meanwhile, gold dropped 2%… and bitcoin fell 3.7%.

Across the board, nearly every asset class was bleeding red.

But at PBRG, we have a robust risk management strategy in place to guard against extreme moves in the market. If you follow it, it’ll protect your portfolio – over the long term – from wild swings like we’re seeing now.

Today, I’ll go over our strategy… but first, let me tell you what’s rattling the markets.


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The Market’s Latest Addictions

After rallying as much as 61% off its March lows… the broad market has retreated 9% since the start of September.

Of course, a resurgence of coronavirus cases in Europe is behind some of the current sell-off. Investors fear a second wave of the pandemic could lead to a new round of global lockdowns.

But Daily editor Teeka Tiwari says much of the current weakness is due to government policy. That’s because the market has gotten addicted to two things: low interest rates and government spending.

This crypto technology could revolutionize nearly every industry – and change your life forever.

Teeka says low rates and a surge in government stimulus have boosted equity prices since the outbreak. But while the Federal Reserve announced it will continue low interest rates for the foreseeable future… the stimulus part of the equation is uncertain.

Here’s Teeka:

Last week, the Federal Reserve said it will keep interest rates very low for an extended period of time… That really wasn’t news to the market; it knew rates would stay low… And that’s why the market had such a muted response to the Fed’s announcement.

Now, low interest rates are very supportive of higher equity prices. But government stimulus probably has more to do with the rally we saw off the bottom than anything else. The government put trillions of dollars directly into the hands of consumers. And consumers did what they’re great at. They spent, right? And this surge of capital just went directly into the U.S. economy and has really cushioned the economic blow of the coronavirus.

So the question here now is – at least in terms of the direction of the market – can the U.S. economy continue moving forward without another shot in the arm from the federal government? My gut is saying probably not.

According to Teeka, we’ll likely see another round of stimulus pass Congress. But with both sides trying to one-up the other, it might not happen until next year. And that uncertainty is rattling the markets.

So what can you do in the meantime?


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We’re Prepared No Matter Who Wins

At PBRG, we remain bullish on both the stock and crypto markets.

As we’ve written about before, the crypto market has several catalysts that will drive it higher. And as for stocks, they’ll climb over the long term as the Fed is forced to continue pumping stimulus into the economy.

We know that’s a difficult position to take when stocks and cryptos are in free fall. But the key to being a smart investor is to look at the big picture… and to prepare your portfolio to weather any short-term volatility.

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At our flagship Palm Beach Letter advisory, we’re prepared for anything the market throws our way.

You see, we use a highly diversified asset allocation model and risk management to protect and grow our portfolio.


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Various studies show that over 90% of a portfolio’s long-term returns are driven by asset allocation.

Unlike the 60/40 mix of stocks and bonds recommended by Wall Street, we diversify into eight asset classes: equities, fixed income, real estate, private markets, cryptos, precious metals, collectibles, and cash.

Since our newsletter’s inception on April 13, 2011, through September 18, 2020, our recommendations have averaged annual returns of 114.7%. For comparison, the S&P 500 has annualized returns of 12.6% over the same period.

And not only does our broadly diversified portfolio hand you better returns… it also results in lower risk and better protection for your money.

For example, from February 19 to March 23, the Russell 3000 dropped 35%. (It represents about 98% of the U.S. stock market.) Yet our PBL portfolio was down only 28% over the same time frame.

And this doesn’t account for our alternative recommendations. We have several plays outside the stock market. If we factored them in, we’d only be down by about half as much as the index.

Now, the key to making asset allocation work is risk management. Always use sensible position-sizing and stop losses to protect your downside, where appropriate.

When it comes to position-sizing, Teeka’s simple rule of thumb is this: If an investment hits its stop, your maximum loss should be no more than 2–5% of your portfolio’s value.

So even if a second wave of the coronavirus pandemic trips up this most recent rally… as long as you diversify your portfolio and stick to your risk-management guidelines, you’ll be set up to profit when it restarts.


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Although bitcoin is down 3.7% today… Teeka is still bullish. In fact, he believes crypto is one of the best ways to diversify your portfolio.

Not only is it a hedge against broad market volatility, its underlying blockchain technology has explosive upside. You can learn more right here…

These Foreign Stocks Could Rally 24%

One basket of foreign stocks should be on your "can’t ignore" list. It’s a group of stocks from the next "up and coming" markets. And this basket of stocks is breaking out to new highs now.

One basket of foreign stocks should be on your “can’t ignore” list. It’s a group of stocks from the next “up and coming” markets. And this basket of stocks is breaking out to new highs now.

By Chris Igou, analyst, True Wealth

Not all foreign markets are equal…

Some are like China… integral to the global economy. But some are like Venezuela… plagued with issues that keep it from being worth a real investment look.

Regardless, most U.S. investors don’t spend as much time thinking about investing overseas as they should. And that’s especially true today – because one basket of foreign stocks should be on your “can’t ignore” list.

It’s a group of stocks from the next “up and coming” markets. And this basket of stocks is breaking out to new highs now.

History shows that we could expect strong outperformance from here… including the potential for a 24% gain over the next year.

Let me explain…


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The group of foreign stocks I’m talking about goes by the name “BRICs.” It stands for Brazil, Russia, India, and China.

These countries have been on the up-and-coming list for decades. And they continue to mature with every year that goes by.

These markets have a history of volatility. So they aren’t the kinds of assets a conservative investor would want to buy and hold for years. But here’s the thing…

If you can buy this basket of stocks when they’re breaking out, it can lead to fantastic profits.

You see, the MSCI Emerging BRIC Net Total Return Index, which holds a broad basket of stocks from these countries, has hit nine new highs since 2001. And eight of those nine instances led to more gains over the next year.

That matters because this basket of stocks recently hit a new 52-week high. Take a look at the iShares MSCI BRIC Fund (BKF), which tracks this underlying index…

These stocks recently broke out to new highs. And history says the uptrend is likely just getting started.

Since 2001, similar events have led to massive outperformance compared with a simple buy-and-hold strategy. Check out the returns in the table below…

Buying a basket of these stocks has led to solid gains over the past two decades. Investors could have made 12% per year since 2001. But buying after new highs blows that return out of the water…

Similar instances have led to 7% gains in three months, 12% gains in six months, and a 24% gain over the next year. Those are fantastic upside numbers. And we’ve got the chance to take advantage of them right now.


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You don’t have to do anything tricky. You can simply buy the iShares MSCI BRIC Fund (BKF), which we charted above. It holds a basket of stocks from these four countries. And based on history, it’s a smart bet to make today.

Simple Indicator of Growing Wealth

Smart investors can use this simple indicator of growing wealth to spot the next birthplace of tomorrow’s success stories.

Smart investors can use this simple indicator of growing wealth to spot the next birthplace of tomorrow’s success stories.

By Brian Tycangco, analyst, True Wealth Opportunities: China

Few things symbolize the dawn of the Western middle class better than shopping malls…

They’re big, clean, full of variety, and everything’s usually on sale.

Take the American Dream mega-mall, for instance. It partially opened for the first time last year in New Jersey. Once it’s complete, it will feature more than 450 stores, covering roughly 3 million square feet of retail space. It even has an indoor ski slope.

But what if I told you that the last large mall like this one to open in the U.S. was New York’s Palisades Center… back in 1998?

That was more than two decades ago. And I’d guess that you probably can’t recall the last time a new mall opened up near where you live.

In Asia, it’s the complete opposite.

Shopping malls have been popping up just about everywhere in this region. Many of them make the American Dream mall look tiny in comparison. And this trend is something you can’t afford to ignore.

Let me explain…


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The Iconsiam… CentralPlaza WestGate… SM Seaside City Cebu. Do any of these names sound familiar to you? Probably not.

These are just examples of malls that have opened in Asia (outside of China) over the past five years. And each of them is nearly twice as big as the American Dream mall.

All of the world’s 15 largest malls are located in Asia, including four in the Philippines where I live.

This is showing us where the middle class is growing fastest. And I think it paints a clearer picture than any number out there.

That’s because shopping mall operators only build when and where they see a good market. That means enough people who want things like home appliances, furniture, casual dining, movie theatres, and personal care services.

The businesses that set up shop inside malls do their homework, too…

McDonald’s (MCD) won’t open unless it’s sure there’s the right amount of foot traffic to keep its cash registers ringing. Neither will Apple (AAPL), Starbucks (SBUX), Nike (NKE), or any other well-established retailer.

So, when malls are opening up left and right – especially when they’re the size of several football fields – it’s usually a good sign that people are becoming wealthier.

Real estate firm CBRE estimates that since 2016, close to 80% of all shopping malls under construction has taken place in the Asia Pacific region. They cover a combined area that’s the equivalent of 100 American Dreams.

And it’s not just the malls themselves…

Whenever a new mall opens up, land values around it usually skyrocket. This results in a boost in the wealth of individuals fortunate enough – or smart enough – to own real estate in the area.

Yes, the COVID-19 pandemic has hit Asia’s entire retail industry hard, with shopping malls among the worst affected. But this is only temporary.

Meanwhile, growing wealth in Asia has convinced mall operators to pour billions into construction… And it’s an undeniable long-term trend.

It’s the same explosion in middle-class wealth that unleashed the great shopping center boom in the U.S. in the 1950s.

Back then, 4,500 malls opened in just the four years leading up to 1960. That’s a thousand new malls a year. It accelerated sharply after that.

Today, there are roughly 116,000 malls in the U.S.


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Along the way, we witnessed the birth of today’s multibillion-dollar retail giants, like the ones I mentioned above. One of them, Apple, is already worth around $2 trillion.

Smart investors can use this simple indicator of growing wealth to spot the next birthplace of tomorrow’s success stories.

As you probably know by now, that birthplace is Asia.

Investors Guide: Four Steps to Take Before Investing in 2020

With markets hitting all-time highs again, you’re probably wondering if it’s a good time to be invested. I’ll share the answer to that question in a moment. But first, we have to address the most important prerequisites you must meet before putting any money to work in today’s unusual market…

By Austin Root, portfolio manager, Stansberry Portfolio Solutions

What’s an investor to do?

The S&P 500 Index fell about 34% from its February peak to the market’s March 23 bottom. Since then, it’s back up about 58%.

Now, with markets hitting all-time highs again, you’re probably wondering if it’s a good time to be invested.

I’ll share the answer to that question in a moment. But first, we have to address the most important prerequisites you must meet before putting any money to work in today’s unusual market…

You see, investing in riskier assets like stocks and corporate bonds should never be the first step you take in building wealth and establishing financial freedom. It should be one of the last.

All investors – and I mean all – must go through these mission-critical preparatory steps first…


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Clearly define your investment goals.

It seems so obvious, and yet most folks I speak with skip right over this first step. By and large, all investors are looking to do just three basic things…

  • Get wealthy.
  • Stay wealthy.
  • Generate steady, current income.

First, identify which of these goals are yours and then invest accordingly. Stocks, for example, can help you get wealthy… Hedges and hard assets can help you stay wealthy… And bonds and dividend investments can help you produce safe, steady income.

This next step is also an important part of choosing between these priorities…


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Know your investment horizon.

The length of your investment horizon will have more of an impact on how you should be investing than you probably realize. Put simply, the shorter your horizon, the less risk you should take in your portfolio.

That’s because assets with the highest return potential (like microcap stocks or extremely distressed debt) also tend to be the most volatile. Over the longer term – more than five years – these risky assets tend to outperform. But over shorter periods, they can massively underperform.

So if you only have a few years before you’ll need the money, you’ll have to reduce your risk and tilt more toward “stay wealthy” investments.


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Understand your risk tolerance.

This step requires you to be completely honest with yourself.

Do you really have the temperament to stomach the extreme short-term losses that investing in risky assets will bring? If you’re comfortable zig-zagging your way to big-but-volatile investment gains, invest in riskier assets. But if you prefer sleeping well at night, pick safer vehicles.


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Clean up your “personal balance sheet.”

This might be the most important prerequisite to investing. And yet countless folks with student loans and credit-card debts are avoiding it. In short, before you put real money into any stock or bond, you must first pay off your high-cost debt.

Given where markets and prevailing interest rates are today, I suggest you use this rule of thumb… List any and all debts you owe that carry an annual interest rate of 6% or more.

First, look to consolidate and refinance these debts to a rate below that threshold – rates for residential mortgages and home-equity loans have never been lower. But for those debts you cannot refinance, pay them off… before you buy even that fractional share of Apple (AAPL) you’ve been eyeing on your Robinhood trading app.

So what’s an investor to do today? It largely depends on these four mission-critical steps – and where you stand on them.

If you’re primarily looking to stay wealthy… if you have an investment horizon of less than five years… if you can’t stomach big short-term losses… or if you currently owe debts with interest rates of 6% or more – you should not be investing in the stock market today. Full stop.

If you do have your financial house in order, now is a good time to invest – as long as you use caution.

Hold more protection and “rainy day” reserves than normal… And only buy the best kind of stocks. That means owning high-quality, rapidly growing companies with enduring franchises, talented management teams, and high returns on investment.