Best Growth Market Environment EVER! Are You In?
We’re in an ideal market for growth!
But some people are still holding back from our Strong Hands philosophy.
So, to those of you who are a little wary of investing, I have just one thing to say:
In all of my experience with the stock market, I believe that RIGHT NOW is the best time to get into growth stocks.
There’s room to grow in technology, America 2.0 is gaining steam and the younger generations are taking their first steps into investing.
I’m bullish, optimistic and positive (#BOP) on all of these factors for the Fourth Industrial Revolution!
Check out Market Talk to find out how you can invest in growth stocks for your America 2.0 future today:
Huge Economic Growth is Coming
Amber Lancaster: He’s here to answer your burning market questions and give his take on the current state of the U.S. economy and what it means for your America 2.0 and Fourth Industrial Revolution stocks going forward.
Plus, I’ll share three compelling economic charts that support our long-term bullish outlook on America 2.0 stocks. Lastly, Paul often states in his webcasts and writings, no stock ever goes up in a straight line. Market shifts are inevitable.
That’s why using a trading strategy that relies on catching stocks when they’re cheap and then riding their rebound as they recover can be a substantial investment windfall for you. Paul, along with our Senior Investment Analyst Ian Dyer, have developed an options trading service that aims to capture these upswings, called Rebound Profit Trader.
Paul Mampilly: You brought up Rebound Profit Trader. I was recording the IanCast with Ian. He was telling me in 2020 Rebound Profit Trader had this amazing record that you would think is statistically impossible. We had 63 wins to four losses. It’s incredible. A phenomenal record.
Amber: What I want to start off with is Paul often has great investment and economic conversations with the team.
Paul said this week,
“All the data continues to show that we’re going to have huge economic growth. The micro data, if you will, says the same thing. You could not create a better environment for stock performance if you have a long timeframe like we do, which is for a minimum of one to three years — minimum.
I’m very, very, very BOP on our America 2.0 and Fourth Industrial Revolution stocks. People will look back at this moment and rue that, while they could have loaded up on our stocks on the cheap, they held back because they were focused on short-term, temporary price weakness.”
Paul: I can only reinforce that. I even put on the right t-shirt for it with the diamond hands and the rockets. Amber, when you look at what is going on, this is in my career — and I’ve been doing this by some way, shape or form since 1991 — I have never seen a better environment to get invested in and start investing.
You can look out one, three, five, seven and even 10 years and see the economy is going to continue to keep growing. Technology is going to increase productivity, which is going to increase wages and income. Between the continued effects of globalization, implementation and adoption of the megatrends, inflation is not going to be a problem.
Interest rates are going to stay low as a result. Yet a lot of people, not our true Strong Hands Nation, they are believers, but there are a lot of people who are looking where it’s most comfortable. Where is that? In the rearview mirror.
They are looking back and they are seeing crises. I can tell you from everything we see this is the single-best environment I have ever been in. There were bigger problems in the bull market of the 1990s. You could see some of the issues. We don’t have that.
In fact, we just had an economic report that came out that said GDP was at 6.4%. I read a lot of economic analysis. In it, there were some amazing numbers going on in our economy. Listen to this because some of these numbers you really cannot believe. That’s how astounding these facts are.
There is an estimated $2 trillion of savings sitting in our economy today. $2 trillion with a T. Not million, not billion — trillion. That has come about as forced savings as people have stayed home during the pandemic for more than one year. Of course there are payments that have been made from our government to various people.
That has additionally helped. You have a lot of money that can go into a lot of different things. In our Slack message I brought up a few things that people are doing that are productive and actually add to our country, society and lives as human beings.
One is that we have younger generations that have been saddled with student debt. Some of this saving can take psychological pressure off them by allowing them to pay off this debt. Paying off debt is one place. The other place you and I talk about all the time is people are going and buying houses and building communities and households.
This is a positive thing. The third thing they are doing is, once you have a house, you want to have a comfortable life. You and I know, we use our houses for everything. I can personally tell you that before this I worked from home, so you can say I got additional productivity and utility out of the house.
However, today, my house is partly a school because my kids do virtual school. It’s now even more of a workplace because now all my work is from here. Then because of the fact so many of our social outlets have been curtailed, I see my tight circle of friends here more and more.
It’s a genuine place where we get together. The utility and value of a house is far greater today than it was pre-pandemic. Nothing is going to change. Yes, restaurants will come back. However, a lot of these habits we have are going to stick.
The last place these savings are going to go is into what we really focus on: Household formation. Once you buy a house you tend to buy other things. That drives something else I want to talk about: consumer spending.
Consumer Spending, Restocking, Reinventory and Reshoring
Consumer spending last quarter was the highest since 1970 — 10.7%. Genuinely astonishing numbers we have not seen anytime recently. Then when you look into it, what are businesses doing in response? They are seeing real demand. They can’t just have the facilities they had before.
Real business fixed investment is up 10.1% on an annualized basis. Some of that is the recovery, but a lot of that is also businesses looking at demand saying they lack the facilities to meet this demand so they are going to increase capacity.
Real equipment spending is up 16.7%. These numbers are very big and they will get even bigger. In fact, I read a Moody’s analysis and said they had GDP numbers that were somewhere in 7% and they said they had to lift them higher.
We are seeing something you talk about, restocking. You have to meet current demand. No one wants to be short inventory if this happens again. You are going to stock a lot more than you used to. Just-in-time inventory is more or less gone.
Then there’s reshoring. There is now a lot of disapproval of China as a society in terms of how they behaved during the pandemic and not giving information out. People want to bring the making of things back from China and other place, especially critical things we want here.
For example, PPE. We were dependent on China shipping us protective materials. We no longer want that to be true. We are going through the three R’s which is restocking, reinventorying and reshoring. That’s an additional element.
When we go to fixed spending in terms of business, what are they buying? They are buying equipment for our megatrends. They are going to be implementing Internet of Things (IoT), software, artificial intelligence (AI). Right now it’s still fairly small scale, but blockchain is going to be implemented.
The Transition to Megatrends
And also transitioning to megatrends like new energy. There’s more solar power being put up on any number of businesses. They are using Tesla Powerwalls. Every place I look, without any exaggeration, this requires no hype, this is a good news story.
I know what people are going to say. “If it’s such good news, how come our stocks aren’t up 100% every day or every week?” Well, you said it, people forget that prices are set in the stock market as a result of demand and supply. They are not set by our wishes, hopes or people setting price targets.
They happen as an interaction of demand and supply. Buyers and sellers come with different inventory positions of their own. Sometimes if they own too much they are willing to take a lower price to get rid of their stock. If they own too little they may come in and bid something higher by 15% or 20% to get more of it.
These interactions happen in micro and macro forms in every single day, minute and, truthfully, every single second. We went through an extraordinary period from March last year to February this year where we had pretty much everything go up. A lot of it went up by huge amounts.
It led to a case where a number of people felt the need to cash in. In other words, too much inventory of certain stocks and they are cashing in. This will pass. We think growth stocks, which is where megatrend stocks are located, are near the bottom.
Now, people are going to come and want to own these stocks and they are going to bid them up higher. So there’s never any market where you get gains every single second, day, week, month or year. There’s always moments of interruption. That’s what we are in.
However, I would tell you if you want big gains that can change your life permanently, the growth stock market and big megatrends and the leading stocks are what we focus on. That’s what we’re in exclusively. This is the money making sector of the stock market.
That’s where we’re in. That’s why I’m BOP on America 2.0 stocks and Fourth Industrial Revolution stocks. I can tell you that people who are looking in the rearview mirror and buying into companies like ExxonMobil and Wells Fargo, yeah it will feel good for a little bit.
However, they never tell you when that permanent steep decline is going to come. Like what happened with Sear or Kodak. We would tell you to focus on growth. Accept volatility. Use our Rules of the Game. Folks who are in our services know what we are talking about.
They will help get you through and endure this volatility so you can make the big money. That’s the last thing I have to say, Amber.
Amber: You said a wonderful mouthful of great information, Paul.
The New “Normal” Lies Ahead
I have to also add that yesterday evening my family and I took a drive around our local neighborhood just to see what’s happening outside our front door. I can tell you there is a building boom in my area. People are building energy efficient homes and these people are installing Tesla solar roofs on their homes.
It’s truly great to see that happening in real time. Like you said, household formation is alive and well. People are doing a lot with their homes. I read a stat today that said 10% of people who are working from home today want to return to the office.
Even managers of businesses are expecting a two to three day work week will become the norm going forward. This past year has truly changed how we function in the work economy.
Paul: That means better lives, more productive lives and happier lives. That has to be the ultimate end for what we do.
Amber: So yesterday I sent out a tweet soliciting questions for today. You know people have questions and it’s always good to get answers. We got a question from our subscriber and Twitter follower Byron. He asks,
“Does Paul see any changes, even slightly, in our investing strategy as a result of President Biden’s speech last night and direction for the country? For me, it seemed to support, if not bolster, most of the trends we’re investing in.”
Paul: Byron is definitely a wise Twitter follower and asks excellent questions. In truth, that infrastructure bill is just one more thing. It’s excellent for our stocks and also excellent for us a people and society. I went through it and some of the spending is to improve our education system.
Some of it is for physical infrastructure. All of it leads to more spending in the things that matter today. So much of it relates to technology. That is the basis of our entire investment strategy of being in America 2.0 and Fourth Industrial Revolution stocks.
Eventually, while it may not seem that way, a lot of the spending is going to end up happening for things that are connected to the internet because everything is connected to the internet. It’s going to end up in AI and big data because we want things to be embedded with the ability to make routine decisions so you don’t have to do it all the time.
We want clear ownership of where something is. That’s using blockchain. We want more efficient energy. That would be new energy. If it’s going to go into healthcare, of course we would prefer medicines that are built for our genetic profile and based on our data.
Rather than something where we’re betting on chance. Anything we are spending on today reinforces the investment profile we have for America 2.0 and Fourth Industrial Revolution stocks. I heard nothing in that speech to tell me anything other than to be more BOP on America 2.0 and Fourth Industrial Revolution stocks.
Amber: Well said, Paul. Thank you for joining us today and sharing your knowledge. We appreciate you so much.
Paul: Thank you and thanks to our friend back there, Alex. I think Alex is bored with the talk. Thanks for having me on.
Amber: To wrap up, check out these three compelling charts.
An important gauge of U.S. demand seen in initial estimates of first quarter gross domestic product (GDP) suggests there’s lots — and I mean lots — of fuel to power the U.S economy forward. This first chart shows that right now, there’s a surge in underlying U.S. demand due to leaner inventories.
This foreshadows robust production ahead! This plays right into Paul’s Three Rs forecast for the U.S. economy – restock, reinventory, reshore. So-called final sales to private domestic purchaser which is the sum of consumer spending and business investment representing roughly 85 percent of the economy, rose an annualized rate of 10.6%.
This is the second-fastest pace since the 1983. As Bloomberg data and NatWest Markets aptly frames it, “when placed against a backdrop of leaner inventories, we can be really optimistic about the growth path we’re set have over the next three or four quarters.”
This second chart shows how the U.S. jobs market is steadily moving in the right direction. The latest U.S. initial jobless claims numbers stayed below 600,000 for the third consecutive week. Texas, Wisconsin and Georgia saw the biggest declines in initial claims.
Hiring is expected gain steam as businesses reopen. And this third chart illustrates how we are full speed ahead where U.S. GDP is concerned. In all, U.S. GDP expanded at a 6.4% annualized rate in the first quarter, after a 4.3% advance in the prior period.
This shows how strong consumer spending, surging personal consumption, rebounding jobs market and business reopenings are helping push this increase.
As mentioned at the top of this webcast, if you’re interested in investing in a strategy that relies on catching stocks when they’re cheap and then riding their rebound as they recover, check out Paul and Ian’s Rebound Profit Trader options trading service.
They aim to take the guesswork out of riding rebound momentum. And use options to capture these quick upswings for potential big gains.
Editor, Profits Unlimited