Where traders see a stock ticker, I see a real business.
They spend a lot of time trying to figure out which way the stock market will zig or zag.
I’ve found a much simpler way to make money in the stock market.
All it requires is 4th-grade math skills and a general idea of the business you are investing in.
In today’s update, I’m going to show you exactly what I’m talking about with a real live example.
It’s a drug company we added to the portfolio that Mr. Market priced at $0 per share!
When we took pencil to paper, our valuation came out to as much as $10 per share.
We added the stock to the portfolio and pretty soon after realized we were wrong.
The stock was worth way more than $10 per share.
Click on my handsome face to see what I’m talking about.
I guarantee, you’re going to like how this story ends.
Or you can read the transcript here.
This is just one example of the easy layup opportunities we’re seeing today.
Because despite the stock market moving higher this year, we are STILL finding several quality businesses trading for bargain prices.
And that’s why, about six months ago I started a $1 million portfolio … to see exactly why and how you can invest, click here.
Founder, Alpha Investor
Will the Fed Hit Its Target?
Consumer price inflation fell to its lowest levels in two years last month, dropping to just 4%. That’s a massive drop from the 5% we saw the month before.
So even if inflation is still well above the Federal Reserve’s 2% target, it looks like inflation is trending lower, right?
Not so fast.
A major driver of May’s inflation swoon was the 12% drop in energy prices. Now, I’m as happy as the next guy to spend less money filling up my gas tank.
But energy prices are wildly volatile, and anything that can drop 12% in a month can just as easily spike 12%.
Let’s not forget that our own Charles Mizrahi and Adam O’Dell both expect energy prices to go sharply higher over the next several months.
Stripping out food and energy prices, core inflation is still clocking in at 5.3%. But that’s not all.
Not only is core inflation higher, it’s also stubbornly refusing to trend lower.
On the chart below, you can see the headline inflation number (blue line) trending sharply lower over the past year. But the core inflation rate (red line) has been hovering in the mid-5% range all year.
Again, I’m happy to see any progress at all on inflation. But we’re not likely to see core inflation drop lower until one of two things happen:
We get a recession that massively reduces demand.
We get a productivity boost that allows us to produce more with less.
I believe we’ll eventually get both. But regardless, the investment play here is straightforward enough.
In a recession, businesses look for ways to cut costs and produce more with less. And artificial intelligence and automation technologies are the obvious way to do that. Corporate America is already doing it, and the pressures of a recession will only accelerate it.
But it’s important to be nimble in the market, and take cues when investment opportunities are undeniable. Watch Charles Mizrahi’s new video for details about his “inevitable wealth” stocks.
Chief Editor, The Banyan Edge