When to Buy a Stock: This Market Timing Myth is Costing You a Fortune
The truth is, waiting for the perfect time to buy a stock is a loser’s game.
So many readers reached out to say: “Paul, I was waiting for Tesla’s recent earnings release, thinking I could get shares at a discount and now Tesla’s over $330 a share!”
Folks stayed out, waiting for it to trade lower and now they feel like they’ve missed out.
These two companies have something in common — they lead the market in key growth areas.
When it comes to stocks like these, when you like them and have conviction in the long-game, buy. Don’t wait on the sidelines trying to time your perfect entry point and miss out.
November 11, 2019
Amber Lancaster: Welcome to this week’s Market Talk. I’m Amber Lancaster, joined by Paul Mampilly. Each week we look forward to sharing our viewpoints with you and giving insight into what’s on our radar. We are recording this update on Friday, November 8.
For this week’s update I’ll begin by sharing with you what I’m watching and then we’ll hear from Paul. Today I’ll cover three major topics. The first will be my take on recent and upcoming U.S. economic releases. Then my innovation story of the week with our Good News Roundup. Let’s begin.
First off, as this chart shows the November 7 consumer credit release for September disclosed some revealing information about the U.S. consumer. It showed that consumers pared down credit card debt. For September, Americans carried the smallest credit card balances. U.S. consumer credit rose in September at the slowest pace since mid-2018.
Economists were expecting a total credit card debt rise of $15 billion in September. Get this, it only rose $9.5 billion — far less than forecast. In all, per Bloomberg, it shows Americans are getting their finances in better shape, especially before heading into the upcoming holiday shopping season.
As this next chart shows, on November 5 the ISM non-manufacturing index released its October print. This index represents a key support system for the U.S. economy as it gauges the health of our services industry. This industry makes up about 90% of the U.S. economy. The index showed a rebound in U.S. services industries and an overall improving picture.
In all, it showed economic activity in the non-manufacturing sector grew in October for the 117th consecutive month. It’s because of the robustness of this index U.S. recession fears have not been realized. Economists were expecting a reading of 53.5, but it came in at 54.7. For this index, any reading over 50 represents an expansion. Thirteen non-manufacturing industries represented in the index expanded in October, while only five decreased.
Where the week of November 11 economic releases are concerned, there will be five major releases. On Wednesday, October’s CPI month-over-month number will post at 8:30 am. On Thursday, PPI final demand month-over-month print for October will print at 10 am.
On Friday, we’ll see a trio of releases. October’s retail sales and November Empire Manufacturing will post at 8:30 am while October’s industrial production month-over-month will post at 9:15 am.
For my innovation story of the week all I can say is get ready for a new industry disruption coming our way. Bloomberg is reporting that a potential major disruptor to the global meat industry is about to make headway — and I’m not talking about plant-based meat products like Beyond Meat that have been making major headlines this year.
I am referring to the cell-based meat industry. Cell-based meat is laboratory-grown meat. This meat is cultivated in a lab by using animal cells versus growing a whole cow or a whole chicken. While this potential trend is still two to three years away, Bloomberg is reporting it could capture 3% of the total global meat market.
Over the longer term, cell-based meat may have legs — no pun intended — because it has the potential to compete directly with muscle cuts like steak and chicken breast. Right now, 25 companies in the U.S. and around the world are working diligently to create cell-based meats.
Even large well-known companies like Tyson and Cargill are showing interest in this burgeoning industry. Bloomberg also reports that in November 2018 the USDA and the FDA agreed to the first step of beginning to regulate the cultured meat industry.
My question of the week to you, our dear viewers, would be: Would you consider adding cell-based or lab-grown meats to your regular diets? We’d love to hear your thoughts on that. You can comment below.
Now for our Good News Roundup. Good News Roundup story number one: HousingWire is reporting that thanks to lower mortgage rates, housing is more affordable than it’s been in three years. A study by the National Associate of Homebuilders and Wells Fargo shows that housing affordability is at a three-year high.
Good News Roundup story number two: A 3D printing technology manufacturer and developer called Form Labs is working to make a difference in the dental industry. According to 3Dprint.com, more than 36 million Americans don’t have any teeth and 150 million Americans are missing at least one tooth.
With the advent of 3D printing, which we talk about often here at Bold Profits, the 3D printed denture market is forecast to grow significantly. Form Labs states that 3D printed dentures could cut material costs by up to 80%. The surprise going forward would be that 40% of dentures made in the U.S. will likely be created using 3D printing technology.
That’s pretty cool. The cheaper cost could help patients have more affordable access to dentures, not just in the U.S., but around the world.
Finally, Good News Roundup story number three: According to Consumer Affairs, up to 40 million U.S. consumers could potentially be helped by Experian’s new credit tool. Experian is one of the U.S.’s three credit reporting bureaus. The tool, called Experian Lift, is designed to help lenders accurately measure creditworthiness.
Experian Lift is described as “a suite of credit score products that combines traditional credit scoring with alternative credit and trended data assets to create a more holistic picture of a consumer’s creditworthiness. The product, which will be available early next year, is designed to help up to 40 million people with little or no credit record improve their credit standings with credit agencies.”
Thank you, Amber. I’m watching the Renaissance IPO index, which has been underperforming the broader markets since late July. The underperformance has ceased. It’s on the verge of starting to outperform again, but I’m watching it closely for some confirmation of that.
It seems to be performing along the same plane as some of these other indices now. I’m watching it closely and I think it’s a big indicator for the IPO market and post-IPO market of recently IPO stocks.
This has been a big week for earnings. We had a bunch of names in the portfolio report and I think, for the most part, the numbers were very strong. The market didn’t interpret all the numbers as being strong, so it’s been a mixed bag in terms of trading.
A couple of them are marketplace businesses and we’ve seen them shift their mix and strategy toward larger enterprise customers. They’ve both done it successfully. The old business of small customers they’ve had, they’ve neglected it or they haven’t focused on it enough. The market is focusing on those businesses and I think it’s incorrect to do so.
That’s just kinda what’s happening right now and I think it’s part of the theme where the market is glass half empty still. If there’s four great data points in an earnings release and one that’s not as great, they are going to focus on that one and drive it down. I think the institutions are happy to sit on the sidelines as the lockups expire and the VCs who made investments into these stocks are trying to sell.
I think the institutions on Wall Street are happy to step aside and let the stocks trade down a bit to get better prices. Maybe to stick it to the VCs a little bit who got a little aggressive on the pricing when they went IPO. I think that’s what we’re seeing happening.
As these lockups come off, I think institutions are going to see the value and great underlying numbers and the potential of these companies and step in and start to accumulate aggressively. When they do that, you’re going to start seeing these stocks moving up fast. I’m not saying it’s happening this week, but its going to happen.
I’m watching the IPO index as an indicator for that as well as a few other things. That’s what im seeing. Over to you, Paul. What are you seeing?
Paul Mampilly: I was listening to you and thinking it’s always darkest before dawn. I have gotten a lot of emails recently with people talking about wanting to buy Tesla and they thought the time to do it would be after earnings. Now Tesla is at $350 and the regrets are pouring in.
I feel like it’s going to be the same for some of these signature IPOs like Uber and Slack. We’ve seen a little bit of it with Spotify. I’ve gotten a lot of emails from folks in Profits Unlimited where we have Spotify and it’s also in our STUF portfolio that I’ve told people about on YouTube. People think they can perfectly time it.
These are growing businesses. If they dominate their business like Tesla does or Spotify does, you want to be in it. Go in slowly, start small. That way you can participate in it versus being on the outside looking in.
Now if you are looking into buying Tesla, you don’t know when to get in.
It’s obvious the stocks have already moved up. You kinda have to be in there.
Paul: You have to constantly be mindful.
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We’re doing this on Friday because Monday is Veterans Day and we have some of our folks out. Many people as the market was looking to make new highs were telling you the market was going to crash. We all know from history that rising markets are a good sign. It’s a sign that money is coming off the sidelines and coming to bid stocks up.
Usually what happens after that is the other money sitting on the sidelines also comes in and follows them. We know from things we’ve all reported to you that the cash on the side in terms of investment accounts is near the highest in eight or 10 years.
There’s an enormous amount of money sitting there that is dedicated for investing and is sitting on the sidelines because of people anticipating a recession, a crash, whatever you want to call it. We, on the other hand, have continued to tell you stay in stocks. We are still positive. The mix of where you want to be has changed a little bit from before.
There’s a bit of a movement into biotechnology, industrials, solar stocks and semiconductor stocks. You can regularly check into the channel or subscribe to Bold Profits Daily, which is our free newsletter. Amber writes — it’s incredible stock picks and you can get information. Make sure you subscribe to that.
I am still unbelievably positive. It’s 10 years in and people have been telling me from day one that this market is long in the tooth. There’s been everything from the euro going to collapse, the debt crisis in the United States, Moody’s downgraded us, then there was Brexit, Trump election — there’s always been something.
That’s the nature of bull markets. There’s always something to worry about. The bull market ends when there’s nothing to worry about because everyone is all in. Speaking of bull markets, I want to tell you about my publisher’s push this week: our phenomenal option trading service Rapid Profit Trader that Ian Dyer and I work on together.
This is an incredibly service. It has some incredible gains. I texted Ian right before coming on and he gave these to me personally. STMicroelectronics in 17 days — 68%. 17 days an option trade made 68%. That was sold on October 25. We have an incredible trade lined up to come out on Tuesday.
However, to get that trade you have to get in and subscribe to us by Monday, which is the deadline for Rapid Profit Trader for this subscription. Make sure you click on the strong hands and we’ll send you to the page with all the details to subscribe to Rapid Profit Trader. It will get you that trade that’s coming out on Tuesday.
Just so you know, the last time we did this on Extreme Fortunes when we did our subscription push, that stock has gone up 30% in a couple day. We did it for True Momentum and that stock I saw today is up 6-8%. Get in on it.
Stay positive. Stay in our stocks. Stay tuned to us. Amber gives you a really good balance of the macro information. The media is focused on bad news, but there is good news out there. There is still more upside left in this market. Stay in our stocks, stay positive and keep watching us. Back to you, Amber.
Amber: Thank you, Paul. Thank you. Great information as always. Thank you to our viewers for tuning in. We wish you a wonderful week. Until next time, take care.
For more of my thoughts on investing and industry news as it happens, be sure to follow me on Twitter @MampillyGuru.
Editor, Profits Unlimited