August takes investors on a wild ride ... a narrower market was expected from the beginning of 2019 but that doesn't mean you can't find winners ... the sun shines brightly on one sector
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Well, August certainly lived up to its reputation for market-volatility.
Low volume and screaming headlines led to some serious ups and downs. Just look at the Dow's wild swings over the last 30 days.
It's easy to see why some folks are nervous.
We've had 10 years of a bull market that has seen a rising tide lift all boats. Now, between a trade tariff spat with China, the possibility of a "no deal" Brexit, a yield curve inversion, and an increasing volume of negative interest rates around the world, collective investor sentiment is less confident about the future.
But here's the thing.
My colleague Jeff Remsburg and I read and listen to a ton of market analysis. It's our job after all. And, of course, we hear the most from our stable of analysts at InvestorPlace.
No one is talking about any immediate, big changes to their approach. What they are doing, and the advice they are giving subscribers, is to focus on the fundamental principles of investing that they've been following for years. While some specific picks may change, the underlying nature of those investments and the rationale behind investing in them hasn't changed.
Market conditions change, the principles of good investing don't.
At InvestorPlace, we're lucky to have some of the best minds in the industry providing guidance for our subscribers. So, let's review what they have been saying throughout the crazy market gyrations of August.
***The best defense is a good offense
Louis Navellier hasn't developed the reputation of "investing legend" for nothing. It's his experience and market-honed insights that led him to be spot on with his predictions about August, and 2019 in general.
Here is what he wrote to his Growth Investor subscribers in late July ...
Folks, we are less than a week away from my least favorite month of the year. If you've been a Growth Investor member for a while now, then you know it's not the oppressive heat in August that causes me to sweat. Rather, it's the fact the most of Wall Street and Europe jet off on summer vacations in August, leaving the stock market subject to unscrupulous short sellers and "air pockets" that can cause stock prices to fall in the low liquidity environment. And that's exactly what happened. If you look at the results of the Dow over the last 12 months, you can see that we are essentially flat from October 2018.
Way back in December, Louis was already predicting a narrower market, and a much tougher environment to pick winners. As we discussed in the November 20 Special Market Podcast, most sectors are broken. No longer can you simply invest in a sector and expect to achieve market-beating returns. So we need to remain laser focused on stocks with superior fundamentals, growing dividends and stock buybacks. The advice to stay laser focused on stocks with superior fundamentals has certainly paid off for his readers. Out of the 61 Growth Investor companies that reported second quarter earnings through this week, 54 stocks reported positive earnings surprises, four were in-line with estimates and only three missed earnings expectations.
DexCom, Inc. (DXCM) reported a stunning 700% earnings surprise and has since hit several new 52-week highs, including a new 52-week high of $178.45 yesterday. That's after hitting a 52-week high on Tuesday, which was immediately topped by an even greater, new high last Friday -- keep in mind, this was happening while the rest of the stock market was selling off.
That's a stock pickers market if there ever was one.
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***Confirmation of a mega trend for solar
Louis is not the only one who picked winners during this crazy month of August.
One of Eric Fry's recent calls in his Investment Report is leaving the S&P 500 in the dust.
How can that be? The market was crazy lately, so how is Eric finding winners?
Well, he's a longtime investing expert and author, with a legendary status in the financial industry. Eric has called nearly every significant market move of the past 25 years ... and he's made more stock recommendations that resulted in 1,000%+ gains than anyone in the financial newsletter industry.
His track record includes a stunning 4,114% gain ... a 7,908% gain ... and an incredible 5,997% gain (a 61-bagger).
Thanks to that extensive experience, Eric has a knack for showing investors how to survive -- and thrive -- during the down times. For example ...
Let's look at his recent recommendations about solar power.
Since late July, the S&P is down 4.5%.
But not only have solar stocks NOT dropped with the broad market, they are up 7%. That's incredible relative strength and indicative of a super powerful trend.
Take a look at the performance of solar stocks (represented by the TAN solar ETF in blue) vs. the S&P (black) in the chart below.
Eric has been tracking this trend for a while, and here is what he wrote to his subscribers about the upside potential.
At the end of 2018, the world's installed capacity of solar-power generation totaled nearly half a billion megawatts -- accounting for more than 7% of the globe's power capacity.
But new capacity installations are on track to soar 25% this year, according to Bloomberg New Energy Finance, and to nearly double by 2021.
Many forecasts anticipate an equally spectacular growth trajectory. For example, according to the International Energy Agency's (IEA) "Sustainable Development Scenario," solar-power capacity will soar fivefold between now and 2025, accounting for a whopping 38% of global power generation.
Looking further out, the IEA anticipates a 13-fold increase in solar-power capacity by 2040, at which point this renewable source would be providing two-thirds of the world's power needs. Identifying the big trends and getting in early is what has driven many of Eric's recommendations to stratospheric return-levels over the years. That's why he's developed the nickname, "Mr. 1,000%."
Two of Eric's stocks that he recommended to Eric Fry's Investment Report subscribers in early July are up 13% and 20%, even as the market has gone nowhere. I can't give them away out of respect for his subscribers, but don't miss the point - select, superior stocks can still thrive even in "go nowhere" conditions for the broader market. The question is, do you know how to identify them?
Thank goodness August is over. I hope you enjoyed a relaxing summer, and hopefully the market will return to more predictable "relaxing" behavior itself after Labor Day.
We'll keep you up to date on the trends our analysts see in the future.
Enjoy the long weekend.
Luis Hernandez
Editor in Chief, InvestorPlace
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