It’s a perfect storm against growth stocks.
With inflation surging, more interest rate hikes on the way, and political gridlock preventing spending on infrastructure, investors are staring down the barrel of what looks to be a stagnant market.
Well, worse than stagnant if you look at what happened with the Dow and NASDAQ composite yesterday…
That said, dig deeper.
Some of what you might consider “core” American companies, those that have been associated with capitalism in the United States for more than a century, defied the market decline.
Ford gained 2.25%
General Motors gained 1.21%
Union Pacific Railroad was up
Bank of America reversed losses during the trading day by gaining after-hours.
Even IBM was up on the day.
We might simply be looking at a shift in the overall trading market. The pandemic led to wild predictions about the digital future – and companies that had spectacular growth prospects made millionaires out of many retail investors.
However, now we are entering a more old-fashioned trading environment. Raw materials, basic transportation, energy, commodities… this is where we may find the gains of tomorrow.
This doesn’t mean clean energy or “metaverse” plays don’t have a place. They just won’t be soaring right now.
Of course, that means it is the time to hunt for bargains… and that is more important than anything else you can do right now.
Remember, fortunes aren’t made when the market is soaring. You need to buy at the bottom in order to take advantage of future gains.
A correction is not the same as a bear market. But a correction could mean a major opportunity for you. Indeed, it could mean many, many opportunities.
Stay tuned. The best is yet to come. Moments like this can lay the foundation for financial independence in the very near future.
And don’t miss Chris Hood’s new episode of “Hood Talk” below with some helpful, practical information about how to operate in this tricky environment.
This week Chris covers how options traders with less than 8 or 9 years of experience could be in for a rude awakening in 2022. It could be a year where only nimble traders with a tight plan survive…
Click Here for Episode 54: “Options Trading – Profitable Mistakes, PC Ratio, and Following Signals”
WORD ON THE STREET
Supremes Toss Mandate, E*Trade Fined, 1/6 Investigation Heats Up
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Mixed Ruling At Supreme Court – The Supreme Court has blocked the Biden Administration’s vaccine requirements for large private companies. However, it left in place a vaccine mandate for any medical facilities that take Medicaid or Medicare. It’s a good compromise, because both sides are unhappy.
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Et Tu Adam? – “Apes,” retail traders who were going to buy and “HODL” AMC stock regardless of the cost (or the market environment) are feeling betrayed. AMC CEO Adam Aron, who has leaned into the company’s “meme stock” reputation, sold 312,500 shares on January 11, scoring more than $42 million in profit. Aron tried to tell his followers on Twitter that this was all prearranged, but many shareholders are crying that they have been sold out. Remember, don’t trust any “suits” – at least according to Reddit commentators.
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Social Media Subpoenaed – The House select committee that is investigating the January 6 riot at the Capitol has issued subpoenas to Twitter, Reddit, Facebook, Google, and other social media companies, demanding records on any efforts to spread “misinformation” or domestic terrorism. Whether this will lead to anything is unknown – the Republicans remain favored to recapture the House in the 2022 midterms and House Minority Leader Kevin McCarthy has already said he will not cooperate with the committee, accusing it of an abuse of power.
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$350K? No Problem – The Financial Industry Regulatory Authority has told Morgan Stanley’s E*Trade to pay a $350,000 fine because of an alleged failure to detect “potentially manipulative trading by its customers.” Nonetheless, E*Trade may be getting off easy – it agreed to pay the fine voluntarily and didn’t even have to admit wrongdoing.
HOT SPOTS: What’s Going on in Geopolitics
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“We Are Not Amused” – Sex abuse suspect Prince Andrew has been disgraced and stripped of all military honors and royal patronages by Queen Elizabeth II. It represents a major turn by Buckingham Palace, which until recently has largely ignored the case. The prince is now seen as a major embarrassment. A royal spokesman said that the Duke of York will be defending his sexual assault case “as a private citizen.”
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Poland Warns Europe Close To War – “It seems that war in the OSCE (Organization for Security and Cooperation in Europe) area is now greater than ever before in the last 30 years,” said Polish Foreign Minister Zbigniew Rau. Tensions continue over Russia’s refusal to permit Ukraine to join NATO. Russia’s deputy foreign minister refused to rule out a military deployment to Cuba and/or Venezuela.
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Kazakhstan Mission Over For Russian-Led Alliance – The first “peacekeeping” deployment for the Russian-led Collective Security Treaty Organization (CSTO) is coming to a close as troops have begun their withdrawal. For now, it appears that the CSTO mission was a success – protests have been quelled and about 12,000 people (!) have been arrested by the government.
CUTTING EDGE: What‘s Happening In Tech
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Virgin Orbit Successfully Delivers Satellites – Seven new “cubesats” have been delivered into orbit via Virgin Orbit’s LauncherOne system. Virgin Orbit announced its plans to go public in August and today’s mission may provide potential investors with more reasons for enthusiasm.
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TikTok Dancer > CEOs – Today’s sign of the apocalypse – influencers such as Charli D’Amelio (don’t feel bad, I don’t know who she is either) are earning millions more than the CEOs of America’s corporations. While the median pay for the CEOs of S&P 500 companies was $13.4 million, Ms. D’Amelio made $17.5 million last year. The money comes from a clothing line and promoting various products.
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POTUS Considers Killing Off New Nuclear Programs – One of President Donald Trump’s major military initiatives was an upgrade of the country’s nuclear weapon capabilities. President Biden’s national security team is musing whether it should scrap a nuclear-armed cruise missile currently being researched, as well as eliminate “low-yield” warheads that are currently stationed on submarines.
FOR YOUR CONSIDERATION
“Things that are ‘unthinkable’ can happen quite often in geopolitics… and economics.”
Mr. X defends three of his boldest predictions for the new year – Russia will move into Ukraine, the GOP will take back the House of Representatives in November, and ETH will hit $4,000 – even though crypto looks like it is in a death spiral.
ROGUE RECCOMENDS
Scheme of All Time?
