Beat Market Insiders That Game the System
In today’s Market Talk, Amber Lancaster, Ian Dyer and I discuss:
- Why you need to invest in one of the fastest-growing industries in the country — medical marijuana.
- How Tesla’s recent stock decrease doesn’t reflect what’s going on behind the scenes.
- The most impressive new mobility tech, with the potential to help millions of paraplegics walk again, at the VivaTech Convention in Paris.
May 20, 2019
Amber Lancaster: Welcome to this week’s Market Talk. I’m Amber Lancaster, joined by Paul Mampilly and Ian Dyer. Each week we look forward to sharing our viewpoints with you, our readers, and giving insight into what’s on our radar.
Today’s outlook is for the week of May 20, 2019. I’ll begin by sharing with you what I’m watching and then we’ll hear from Ian and Paul. But, before we get started, don’t forget to subscribe to this channel — the Paul Mampilly YouTube channel — so you’ll never miss our weekly market updates. As an investor, we’d love to know your thoughts and questions on the topics we’ll cover today. Be sure to comment below so we can follow up with you.
Today I’ll cover three topics. The first will be my take on the recent economic releases and upcoming U.S. economic releases. The second will be my story of the week. The third will be the latest performance numbers on the Disruptification Index.
With the ongoing U.S.-China trade negotiations as a backdrop, last week we saw several positive U.S. economic releases showing the continued buoyancy of the U.S. economy. Here are three standouts.
The first release was April’s housing starts. Housing starts rose 5.7% in April to 1,235,000, beating the projected census of 1,209,000. This increase was stronger than expected. What’s fueling this rise is the decreasing difference between the price of an existing home versus a newly built home.
Since the price variance is smaller, more homebuyers are opting to purchase new-construction homes. Overall, the housing start increase was seen in both single-family and multi-family homes.
The second positive release last week was the Empire Manufacturing Index. This index is a monthly survey of general business conditions in New York State. The survey captures sentiment from 200 manufacturers in the state. This chart illustrates how the survey results for May climbed to a six-month high.
The index came in at reading of 17.8 versus 10.1 in April. Any level above zero indicates improving conditions. In all, May’s reading is a notable indication of good things to come.
Lastly, the third positive release seen in this chart shows a major rebound in manufacturing. The index indicating this rebound is the Philadelphia Federal Business Outlook Survey Diffusion Index. This index, which measures changes in regional manufacturing growth, nearly doubled to 16.6 from 8.5 min April. Economists were expecting a reading of nine. A reading above zero indicates sector growth.
Looking forward to this week’s economic releases, here are the most significant. As you can see in this graphic, on Tuesday, April’s existing home sales will post at 10 a.m. On Thursday, Market Manufacturing Purchasing index from May’s preliminary reading will post at 9:45 a.m. and April new home sales will post at 10 a.m. Lastly, preliminary durable goods orders from April will be released on Friday at 8:30 a.m.
Where earnings are concerned, check out this list of the top U.S. securities reporting earnings this week. There will be a total of 29 releases. These companies include big retail stores like Home Depot, Lowes and Target.
My story of the week focuses on a huge technology event that just wrapped up this weekend in Paris. The event called Viva Technology is in its fourth year running. Viva Tech is described as a celebration of today’s innovations and tomorrow’s possibilities for everyone who believes in the power of technology to transform business and society.
Viva Tech breaks down the traditional barriers between grassroots innovators and global leaders. In all, the event matches startups with established companies for high-energy open innovation. As this graphic shows, this event was attend by 100,500 people, 9,000 startups, 1,900 investors, 1,900 journalists, 450 speakers spanning 125 countries.
One of the key highlights of this event was providing a continued evolution in the robotic exoskeleton industry. At the event, attendees witness an extraordinary feat where disability and mobility are concerned. In short, exoskeletons are becoming the new wheelchairs. At the event, a wheelchair-bound, former trapeze artist stood and walked while wearing a prototype from the Swiss firm TWIICE.
These photos show the former trapeze artist climbing stairs with the help of TWIICE’s robotic exoskeleton. TWIICE is a lower-limb exoskeleton that enables paraplegics to stand and walk again. Its goal is to manufacture exoskeletons that are reliable, lighter and affordable. This exoskeleton weighs 35 pounds and runs on a battery.
Its battery life is about three hours. The exoskeleton is customizable to fit various disabilities and body types. It clearly has the potential to improve many lives. Back on March 7 of this year, Ian wrote an article explaining the exceptional growth in store for this industry. He noted that by 2025 the robotic exoskeleton market is poised to grow 3,000%.
Turning to our Disruptification Index, this chart shows it continues to outperform major indices year to date. As of Friday, May 17 close, the index is up 19.9% versus 17.8% on the Nasdaq and 10.4% on the Dow.
That’s it from me. Ian, what are you watching today?
Ian Dyer: Thank you, Amber.
A lot of great macro data last week. Thursday was full of really great information. The 5.7% housing starts was huge. It really stuck out to me because that means that not only are the housing starts up, that logically means we are going to be building more new homes. New home sales have been the strongest in about 10 years.
New home sales are going to keep being strong. There’s huge demand for them, especially from millennials who make up about 40% of the home-buying market. Housing looks very good. There was also an increase in building permits in April. That is even further back on that chain where you get the permit, then you have the house built. That just shows there’s a lot of demand for productivity and jobs as the economy continues to get stronger.
Construction has to do with that too. If you are having all these things built, you need someone to build them. Construction jobs are one of the fastest growing areas in the country. In April it was pointed out a couple weeks ago and I think I pointed it out that about 33,000 construction jobs were added. Making the total for 2019 about 86,000 construction jobs.
That’s one of the biggest-growing industries in the country in terms of the job market. Speaking of the job market, Thursday it was reported that 212,000 jobless claims were reported over the last week. This was extremely low. We’re still right around the 200,000 to 220,000 range we’ve been seeing.
That’s the lowest since the 1970s. We’re see 45 to 50 year lows in jobless claims. That signifies a very strong job market as well as growing construction demand and productivity as well as the growing real estate market.
All in all, the economy still has a lot of bullish information coming out. We’re still bullish on the economy. We believe stocks in the U.S. are a great investment right now.
What I want to focus on today in terms of disruptification is marijuana. It’s one of the biggest growing industries in the country right now. There are four big, publically traded marijuana companies. These four companies had about $230 million in sales last year. This year it’s supposed to jump to $940 million. Then, by 2023, it’s supposed to be $7.7 billion.
That’s exponential growth over the next five years — about 2,300% sales growth. That’s something you really don’ see very often. It’s a huge opportunity to invest in. Not only that, there’s also been a huge letting off of the stigma surrounding marijuana over the past 50 to 70 years.
As a result, it’s becoming legal in more and more places. Especially in Middle America where there was the heaviest pushback about legalization. Within that time period, 33 states have made medial marijuana legal. The last to do so was Oklahoma, which goes back to the whole Middle America legalization.
It has been a complete hit there. It was legalized last June and so far they’ve had 70,000 people sign up for medical marijuana licenses. It’s a huge audience it’s targeting. In June 2015 there were about 25,000 total medical marijuana patients in the Y.S. About three years later in May 2018, that number was all the way up to 2.1 million.
That is huge growth. People are reporting that it’s extremely useful, especially for pain. With the aging Baby Boomer generation, there’s a lot of demand for this as a pain treatment. With the growing opioid crisis that have high addiction potential and really bad side effects, this is proving to be a strong alternative.
Recently there was a big survey done with thousands and thousands of older Americans. About two-thirds said not only did medical marijuana improve their pain significantly, it also helped them get off of opioids. 27% of those people said they completely quit opioids and the rest are weaning off.
It’s a slow process but people are really benefitting from it. There was also a huge reception in terms of whether or not they would recommend it. About 86% of those Baby Boomer patients would recommend it as a pain treatment. Last year there was a huge step taken by the FDA. They approved a medical marijuana plant-based medication for the first time ever from a company called GW Pharmaceuticals.
This medication treats two forms of epilepsy in children and it’s by far the best treatment they’ve ever had for it. The benefits just keep piling up. It’s a huge hut across all age groups. It’s still schedule 1 so that means there are no known medical benefits. That’s going to change in due time and it’s going to propel the growth even further.
Once it’s legal on a Federal scale and states continue to legalize it for medical purposes that’s just going to make it grow even more and more. In my article this Thursday, I’m going to talk more about this and give what I think it the best way to invest in this industry and get into this growth while it’s still young.
Make sure you keep an eye out for my Bold Profits Daily on Thursday. That’s all I have for this week. Paul?
Paul Mampilly: Thanks, Ian.
We have a lot going on with respect to the trade war. Last week in Bold Profits Daily I did my update on why you should buy and why you should stay in. I was just looking at my phone where I was getting alerts on stocks that are in our portfolios. I haven’t seen the market, but I’m sure it’s moving down because there’s a lot of stuff going on.
For example, Google is now going to stop Huawei, China’s big cell-phone maker, from using Android. That’s a big deal. That’s wipes out Huawei as a business. They don’t have the software to put into these phones. It would take them years to be able to develop one.
There’s going to be a lot of volatility. From looking at the numbers or where we are as a country and economy, I would tell you that what I said in the update still stands. Interest rates are the big Boogeyman of markets. It completely changes why you would want to invest in markets.
High interest rates mean you can just leave your money in savings accounts, bonds and things that don’t move up and down and aren’t subject to the whims of investors. That’s the big deal. Interest rates are low and there’s a chance they may go lower. That would mean a boost for stocks, a boost for the demand for stocks.
The second thing is that productivity is rising. That’s a big deal. We haven’t seen this for 30 years. We saw a small amount of growth in the late 1990s. Productivity is the big kahuna of economies, countries and societies. Every time you go to invest, you’re starting to get more than you would have two years ago. As I put it: Doing more with less.
We’re optimistic. We still think you want to stay invested in the stock market. If you are looking for places to invest we would tell you to focus on things we focus on in Bold Profits: innovation companies, disruptification companies, companies that have products and services that look forward and are of the new.
The S&P 500 and the Nasdaq are a mix of the new and old. You know what I have been saying for a long time, the old is going to go to zero. Some will go slowly, some will go fast. The destination is certain, it’s just the speed that’s unknown. With the new you will have to face volatility.
On days like this you might have a stock that’s down 5-7% and you might think you should sell everything. In all our services we guide our readers in how to stay in and how to allocate their portfolios. We also put videos out on this channel and send emails out to all of you letting you know what to do when days like this happen.
I quickly want to cover popular stocks like Tesla. Tesla’s stock has been going down. There’s a lot of concern about it. Elon Musk has even gone and bought some more stock as an offering they recently did. If I look at Tesla from a technology basis there is something going on that a lot of people are missing and the media has no interest in covering.
From my perspective, the media gets nothing from Tesla because they don’t advertise. So they have no interest in covering Tesla positively. GM, Ford and all the others spend a lot of money on advertising. Also, the gasoline companies spend a lot of money on advertising. Look at this chart. It’s going to show the cost-per-mile of driving an electric vehicle is in deep collapse.
It’s gone from 70 cents to 49 cents and it will go even lower over the next one to three years. The economic logic for owning an electric car is only getting better. It’s getting better in such a way that it will draw more and more people in. While Tesla’s stock has been going down because of all kinds of worries, their business is actually getting better.
They are selling more cars, their autonomous vehicle software is getting better and in general more and more people are saving up to buy an electric car. Things are going well for them.
Google is going to ban Huawei from using Android. That’s a big deal for Google and also a big deal for all the manufacturers of cell phones around the world. If the Chinese don’t have software to put in their phones, that’s kinda like a brick.
One thing I want to mention on Facebook that goes back to what Ian said last week. The explosion of e-sports and gaming is a gigantic deal. Their growth rates are going to be in the hundreds or thousands of percent. A widely owned stock, Facebook, people forget they own a virtual reality maker.
I was talking with my kids this weekend and they said someone pre-ordered this headset and I cannot remember its name, but it’s the first headset that does not require a computer. In other words, it frees virtual reality to go into the wild. This is a big deal and I think it’s really going to push the growth rate up. It’s something to watch for Facebook if you’re in it.
Here’s my shameless plug for this video. We are promoting a new service that we’re starting that I believe is going to be an unbelievable, incredible service. It goes back to taking advantage of a technique I learned about from being on Wall Street. When stocks go down a lot and it causes headlines and everyone is in a panic. Just think this through. Who is buying in that moment?
It’s the Wall Street insiders and market makers. Those folks who know how to game the game and get you to sell your stocks cheap. They buy it. Later on, they mark it up and it’s sold for much higher prices. You come back and you think, “Oh no, I should have stayed in.” We have learned to take advantage of the gamers.
As we like to say, we are going to game the gamers. If you’d like to know more about the service. We’re going to have a link in the video or underneath so you can sign up. We’re going to have a video and an update where you can learn all about the service. You should sign up and check it out.
Moving on to IPOs there are some exciting IPOs coming up that are from another part of the economy that we tell you about that’s part of disruptification: the gig economy. There is a company called Fiverr that is coming. This is a big deal. If you are someone who works in the gig economy you have probably dealt with Fiverr and you might also know of other ones that are going to be coming soon.
While you are going to hear a lot of negativity from the mainstream media, MarketWatch and Yahoo! Finance, we think this is the future of work. These will be big stocks that will be very successful. As we’ve also been telling you, we’ve been looking to start an IPO service exactly because of this.
You are never going to get this information from someone else. Everyone else sees these companies and looks at them the wrong way. They would have missed Google, Facebook and Tesla at the IPO. They would have missed all the great companies today. We won’t miss them because our views are aligned with that way of thinking.
We are going to be looking into all the IPOs. Just watch out in general for updates on how we’re doing with setting that up.
Finally, crypto. Bitcoin hit $8,500. It was just December when I made that video that said I was calling the bottom of Bitcoin and it was at $3,800. It’s carrying a lot of crypto with it. There’s unbelievable activity going on. This is a place I believe people should be interested. I believe it represents the future of money.
Back to you, Amber.
Amber: Thank you, Paul. Thank you, Ian. Pertinent, on-point insights as always. Thank you to our viewers and readers for tuning in to this channel — the Paul Mampilly YouTube channel. Please be sure to subscribe to our weekly updates to stay up to date on current stocks and companies that Paul and the team are looking into by clicking the subscribe button below. Until next week, have an excellent week, everyone. Take care.
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In today’s video, we also discuss:
- The white-hot housing market has been on fire this year, so it’s no surprise that the majority of homes being bought are new construction. And the construction industry reaps the most benefits from this rise.
- With a looming trade war between the U.S. and China, Google is now dissolving a big connection in China, Huawei, for its Android devices.
- The market is flooded with companies that innovate and disrupt, but few are as innovative as those in the virtual reality (VR) space. And now, there’s a company that’s created a completely wireless VR headset, which is just the beginning for VR tech.
Editor, Profits Unlimited
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