Why Diversification Won’t Cut It

Last week, I showed you how it can pay to go “all in” on a massive trend like the rise of the internet.

But I still field questions from many readers wondering if it’s a good idea to concentrate your wealth in one area. Isn’t that too risky, people often ask, and shouldn’t sensible planning involve diversifying your portfolio, so you don’t put all your eggs in one basket?

That brings me to today’s topic, which I’ll begin by asking a question: How many people have gotten rich from an index fund?

The answer: not many.

My point is that with an index fund or other diversified investments, it’s true… you are safer. But at what cost?

You sacrifice the opportunity for big gains and end up only earning 7% or 8% a year. That’s not enough for someone at or near retirement.

Now, brokers and money managers often preach the virtues of diversification.

You see, most financial advisers get paid based on how much money they manage for you, not on returns. So their focus isn’t on generating big returns on your money.

Instead, their focus is on making sure your money stays at the firm, so they can generate big fees on it.

The best way to do that is to issue bland advice that can’t possibly be viewed as unconventional or outside the norm. Nothing that would scare off the customer or make them feel like they are doing something different than their friends.

The mainstream financial advice is to diversify like crazy, to spread your money across bonds, stocks, and real estate, and across many different companies and funds.

Hey, at least it prevents inexperienced investors from putting all of their money into one terrible investment.

But here’s what some of the investing greats have said about the idea…

Warren Buffett famously said “diversification is protection against ignorance,” and that “it makes little sense for those who know what they’re doing.” At one time in the past, Buffett even allocated more than 40% of his portfolio to only one stock.

Stanley Druckenmiller, one of the greatest hedge fund managers of all time, who managed over $12 billion in assets, said: “I think diversification and all the stuff they’re teaching at business school today is probably the most misguided concept anywhere.”

He’s also famous for saying when you see something in the market that really excites you, “bet the ranch on it.”

Look, diversifying your portfolio can work for some folks. But let’s face it, nobody ever got truly rich by diversifying their investments.

When you study American history, you see that most rich, self-made billionaires made their money by going all-in on one business or on one huge revolution.

Think Bill Gates, Jeff Bezos or John Rockefeller.

These folks and many others got truly rich by spotting one giant opportunity and betting big on it.

And while mainstream financial advisers don’t like to advertise this, investors typically see one or two giant financial opportunities every decade.

That’s exactly what my Big Bet Summit is all about.

The bottom line is that if you make a big, smart bet, like the one I want to show you tomorrow, January 11, at 4 p.m. ET, that’s what can be a game changer for your financial life. Click here now to reserve your spot before tomorrow’s event!

Sincerely,

Signed:

Louis Navellier 

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Weekly Upgrades and Downgrades

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for 147 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

This Week’s Ratings Changes:

Upgraded: From Hold to Buy
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ABNB Airbnb Inc. Class A C B B
ACGL Arch Capital Group Ltd. B C B
AEP American Electric Power Company A C B
ALL Allstate Corporation A D B
ATO Atmos Energy Corporation B D B
BBVA Banco Bilbao Vizcaya Argentaria B C B
BTI British American Tobacco PLC B C B
CAG Conagra Brands, Inc. B D B
CAT Caterpillar Inc. B B B
CCEP Coca-Cola Europacific Partners Plc B C B
CMS CMS Energy Corporation B D B
CNA CNA Financial Corporation B C B
D Dominion Energy Inc B C B
DE Deere & Company B C B
DFS Discover Financial Services B C B
DISCA Discovery Inc. Class A B C B
DISCK Discovery Inc. Class C B C B
EL Estee Lauder Companies Inc. B C B
EMR Emerson Electric Co. B C B
HAL Halliburton Company B C B
HBAN Huntington Bancshares Incorporated B C B
IP International Paper Company B C B
KHC Kraft Heinz Company B C B
KMI Kinder Morgan inc Class P B C B
LHX L3Harris Technologies Inc. B C B
LNC Lincoln National Corporation B D B
MMM 3M Company B C B
PEG Public Service Enterprise Group B D B
PGR Progressive Corporation B D B
PSX Phillipps 66 B B B
RACE Ferrari NV B C B
SLB Sclumberger NV B C B
SNP China Petroleum & Chemical Corporation B C B
SO Southern Company B C B
SRE Sempra Energy B D B
STLA Stellantis N.V. B C B
TAP Molson Coors Beverage Company B B B
TFC Truist Financial Corporation B C B
TM Toyota Motor Corp Sponsored ADR A C B
TRP TC Energy Corporation B C B
TRV Travelers Companies Inc. B C B
VTR Ventas, Inc. B B B
WLTW Willis Towers Watson Public Limited B C B
Upgraded: From Sell to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
BBD Banco Bradesco S.A. Sponsored ADR D C C
BBY Best Buy Co. Inc. D C C
BHP BHP Group Limited Sponsored ADR C C C
CCL Carnival Corporation C C C
CMI Cummins Inc. C C C
FDX FedEx Corporation C C C
FIS Fidelity National Information Services D C C
FISV Fiserv Inc. D C C
GL Globe Life Inc. C C C
GLW Corning Inc. C C C
HDB HDFC Bank Limited Sponsored ADR C C C
HEI HEICO Corporation D C C
HMC Honda Motor Co. Ltd. Sponsored ADR C C C
HON Honeywell International Inc. D C C
HWM Howmet Aerospace Inc. C C C
IAC IAC/InteractiveCorp. C C C
IHG InterContinental Hotels Group Plc D C C
ITUB Itau Unibanco Holding S.A. D C C
LEA Lear Corporation C D C
LUV Southwest Airlines Co. C B C
LW Lamb Weston Holdings, Inc. C C C
LYFT Lyft, Inc. Class A D C C
MGA Magna International Inc. C D C
NLY Annaly Capital Management Inc. C D C
NVA Novartis AG Sponsored ADR D C C
PCAR PACCAR Inc. C D C
PUK Prudential plc Sponsored ADR D C C
RIO Rio Tinto plc Sponsored ADR D C C
RYAAY Ryanair Holdings Plc Sponsored ADR C C C
SCCO Southern Copper Corporation D C C
SWK Stanley Black & Decker, Inc. C C C
TDG TransDigm Group Incorporated C C C
TSM Taiwan Semiconductor Manufacturer C C C
V Visa Inc. Class A D C C
VALE Vale S.A. Sponsored ADR C C C
VZ Verizon Communications Inc. C C C
Downgraded: From Buy to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
A Ailgent Technologies, Inc. C B C
AKAM Akamai Technologies Inc. C C C
ALB Albemarle Corporation B D C
ALC Alcon AG C C C
ALNY Alnylam Pharmaceuticals Inc. C C C
APH Amphenol Corporation Class A C C C
AWK American Water Works Company B C C
AZN Astrazeneca Plc Sponsored ADR B D C
BBWI Bath & Body Works, Inc. B D C
BIO Bio-Rad Laboratories Inc. Class A C B C
BIO.B Bio-Rad Laboratories Inc. Class B C B C
BLK BlackRock Inc. C C C
CDNS Cadence Design Systems Inc. C C C
CNC Centene Corporation B C C
CRL Charles River Laboratories International B C C
CTLT Catalent Inc. C C C
DXCM DexCom, Inc. C C C
EIX Edison International B C C
GFL GFL Environmental Inc. C C C
HUBB Hubbell Incorporated Class B B C C
HUBS HubSpot, Inc. C C C
ICE Intercontinental Exchange Inc. C C C
IFF International Flavors & Fragrances C C C
ISRG Intuitive Surgical Inc. C C C
JHX James Hardie Industries PLC Sponsored ADR C B C
KMX CarMax Inc. C C C
LIN Linde plc B C C
MDB MongoDB Inc. Class A C B C
MOH Molina Healthcare Inc. C C C
MORN Morningstar Inc. B C C
MPWR Monolithic Power Systems Inc. C C C
MTN Vail Resorts Inc. C C C
NDSN Nordson Corporation C C C
NET Cloudfare Inc Class A C C C
NXPI NXP Semiconductors NV C C C
RGEN Repligen Corporation C B C
RMD ResMed Inc. C C C
SNPS Synopsys Inc. C C C
SOFI SoFi Technologies Inc. C C C
TECH Bio-Techne Corporation C B C
TEL TE Connectivity Ltd. C B C
TREX Trex Company Inc. C B C
TT Trane Technologies plc B C C
TYL Tyler Technologies Inc. C C C
VRSN VeriSign Inc. B D C
XLNX Xilinx Inc. C C C
ZS Zscaler Inc. C C C
Downgraded: From Hold to Sell
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ALGN Align Technology Inc. D B D
ALLE Allegion PLC D C D
BSY Bentley Systems Incorporated D C D
CRM salesforce.com, inc. D C D
CRWD CrowdStrike Holdings, Inc. Class A D B D
ENPH Enphase Energy Inc. D B D
FND Floor & Decor Holdings Inc. D C D
FNV Franco-Nevada Corporation D C D
HOLX Hologic Inc. D C D
HUM Humana Inc. D C D
INCY Incyte Corporation D B D
LBRDA Liberty Broadband Corp. Class A D C D
MASI Masimo Corporation D C D
NEM Newmont Corporation C D D
NEM Newmont Corporation C D D
NTES NetEase Inc. Sponsored ADR D C D
PODD Insulet Corporation D D D
ROP Roper Technologies Inc. D C D
RPM RPM International Inc. D C D
VRSK Verisk Analytics Inc. D C D

To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader, my proprietary stock screening tool. You may get started here.

Sincerely,
Louis Navellier

Louis Navellier

The “Pay Dirt” Hiding Under This Massive Trend

Imagine you’re a gold miner, you’ve been digging for a while, and one day you finally hit pay dirt.

You discover a rich vein of gold. Would you just pick up a nugget or two and walk away? If you’re like me, you’d get down there with a shovel and cart and haul away as much as you could get your hands on.

And that’s exactly what we do when we discover a massive moneymaking trend that’s getting red hot.

When that happens, I don’t just recommend a stock or two and call it a day.

I analyze these trends from every conceivable angle.

I ask myself: Who are the main players? The manufacturers? The suppliers? The distributors? Are there elements or precious minerals that will be in demand as a result of this trend? Are there other new technologies that will develop? What small, off-the- radar companies with a competitive advantage will corner a significant portion of this new market?

I look at it all. Once I see one of these trends developing, I don’t stop digging for “gold.”

I mean, why have one or two massive winners when you can have eight or nine?

Case in point: the rise of the internet in the early 2000s. The internet, of course, had an incredible wealth-building impact on society – and internet technology continues to revolutionize whole industries. It is one of the biggest, richest veins of gold to ever come around.

But it paid to be invested when it counted most… at the beginning.

That’s when my systems helped me spot an internet networking firm called Cisco Systems, Inc. (CSCO), before it soared as high as 16,000%.

And database innovator Oracle Corporation (ORCL), before it went up as high as 8,196%.

Not long after, I began writing about a small company radically transforming the internet space. Few people at the time understood its business or recognized its importance.

But I knew this first-mover, by using the disruptive power of the internet to underprice “brick and mortar” stores and sell things online, was going to completely transform global commerce. So, I kept digging.

I recommended Amazon.com, Inc. (AMZN) at $46… before it shot up as high as $3,400.

Just like with energy stocks and PC stocks, when the internet arrived, I went all in, recommending stocks with incredibly diverse product and service offerings – from e-commerce stores to search engines – all of which benefited from the rise of the internet.

The bottom line is that I found a revolutionary sector that was poised to soar, where massive amounts of money was flowing in. As a result, folks who followed my recommendations had the chance to make incredible gains.

Well, that time has arrived again. One very important sector of the market is about to go through a major technological transformation.

It’ll remake whole industries, completely changing thousands of businesses and our daily lives. In the coming months and years, how we shop, communicate, and travel will never be the same again once the technology from this market sector starts taking hold.

It truly unprecedented. On Tuesday, January 11, at 4 p.m. ET, I’ll unveil this trend and how you need to play it at my Big Bet Summit. It’s just a few days away, so sign up now to reserve your spot for Tuesday’s event.

And check back here Monday. I want to “clear the air” about a sticky issue many folks ponder when setting up their retirement accounts and stock portfolios.

Sincerely,

Signed:

Louis Navellier 

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Cisco Systems, Inc. (CSCO), Amazon.com, Inc. (AMZN)

Why I’m Going All-In on This Massive Wealth Building Trend

Yesterday I showed you how a select group of energy stocks soared higher and higher from a massive trend in rising energy prices, and how my systems spotted the trend coming well ahead of time.

It’s an important example because it underscores one of the great principles of wealth-building I want to share today: If you go big on a massive, inevitable trend in advance, then phenomenal wealth is virtually certain.

Look at things like PCs, the internet, and smartphones.

The folks who were smart enough to foresee the incredible moneymaking potential of personal computers in the late ’80s and early ’90s and went all in – the Michael Dells and Bill Gates of the world – well, they’re sitting pretty right now.

I, too, was also able to foresee the wealth-building potential of PCs long before the mainstream. Back in the late 1980s, my system was going haywire when it noticed the potential of the PC industry.

My system pointed me to:

  • International Business Machines Corp. (IBM) in the early 1990s, when it was trading at the equivalent of just $14 per share… and well before it shot up more than $200.
  • Apple Inc. (AAPL) in 1987 when it was just a $1.49 stock – before it soared as high as 9,500%.
  • A PC maker called Compaq before shares soared as high as 2,460%.
  • And a promising young company called Dell Technologies Inc. (DELL) revolutionizing the PC mail-order business when its shares cost less than a buck, and before they went up more than 500-fold.

When things started getting red-hot, I didn’t just recommend these PC makers. I also recommended other companies that were poised to benefit from the PC industry’s rise.

For example, I told folks to buy the businesses developing the revolutionary software that enabled PCs to be used in our homes and by small businesses.

One such software program was saving its users stupendous amounts of time by allowing them to automate calculations and financial analysis, instead of doing single calculations by hand. Today, Excel is the world’s most popular spreadsheet software because it allows one person to do the work of a million accountants from days past.

I knew the company that created Excel, Microsoft Corporation (MSFT), had the potential to create generational wealth for its investors. I told folks to buy shares well before it was a household name, when it was a $0.38 stock, before it shot up as high as 14,671%.

I pounded the table on the producers of computer memory – like Micron Technology, Inc. (MU). I recommended it at less than $1 per share, before it went to $96.

And I pounded the table on microchip innovator Intel Corporation (INTC) at around $3 before it shot up as high as $70.

You see, when my systems alert me to one of these world-changing trends, I don’t just recommend a stock or two.

I take full advantage of the situation. Remember, these opportunities only come around every so often. If you make the right moves, you can see some amazing gains.

I’ll explain exactly how on Tuesday, January 11, at 4 p.m. ET, at my Big Bet Summit. You’ll want to have a pen and paper handy for the event… because my recent discovery might be the biggest of my career. If you haven’t already, sign up here to reserve your spot for Tuesday’s event.

And look out for another note from me soon. I’m going to show you how to extract as much wealth as possible from high-impact trends.

Sincerely,

Signed:

Louis Navellier 

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Microsoft Corporation (MSFT), Micron Technology, Inc. (MU)

Why My “Tsunami Trackers” Are Flashing Red Right Now

Yesterday I mentioned how my eight fundamental factors and my proprietary market-beating formula help me find individual stocks that are poised to soar, typically well before the financial media learns what’s going on.

I also discussed how my stock trackers are flashing at a level beyond what I’ve seen before.

The exciting part is that what I’ve discovered is one of the hottest moneymaking opportunities I have ever seen in my career.

Interestingly, this isn’t just a specific stock or a type of investment, but a sector. One that’s about to undergo a major technological transformation.

That’s what I want to discuss today.

It’s kind of like how scientists detect a giant tsunami is headed toward the shore.

Scientists lay out a system of buoys way out at sea, hours from the coast. These buoys detect changes in water pressure and seismic activity and then send this data back to the surface.

Back at the lab, the scientists then plug the data into models and are able to accurately predict the height, arrival time, and exact locations where a tsunami will hit, hours before it gets to shore.

My system works much the same way. When my numbers start flashing green across a whole sector, it’s one of the best buy signals on the planet.

It doesn’t happen that often. But when it does, it’s a strong signal there’s a tidal wave of money about to flow into a certain industry.

For example, from the mid-1980s through about September 2003, the price of oil held pretty steady at under $25 per barrel. But then various factors led to a huge global supply/demand imbalance.

The price went from $25 a barrel to $40 a barrel, then $50… and then in 2005 it broke what was then sort of psychological barrier at $60 a barrel. Folks didn’t think the price of oil could go that high, because it never had before. In fact, it kept climbing and eventually topped out at around $145 a barrel in 2008, more than five times from where it started in only five years.

Of course, what happened after that was inevitable. The huge rise in the price of oil sent energy stocks through the roof.

I recommended a group of stocks in the sector, starting in 2002, well before the wave of this massive trend crashed on the shore.

  • Occidental Petroleum for 113% gains…
  • XTO Energy for 287% gains…
  • Sunoco for 97% gains…
  • Tesoro Corp. for 150% gains…
  • Valero Energy for 180% gains…
  • Holly Corp. for a 457% gain.

It goes to show, like buoys that detect tsunamis before they strike land, my system helped me detect this incredible market move well in advance.

It also serves to highlight one of the great principles of wealth building — go big on a massive, inevitable trend in advance and phenomenal wealth is virtually certain.

And it’s why I’m so certain of the rise and revolutionary impact the sector I’ve now identified is going to have on the economy and the entire world. I would go so far as to say that if I had to put every penny of my life savings into one industry, this would be it.

I’ll explain exactly why at my Big Bet Summit. As a reminder, it will be held on Tuesday, January 11, at 4 p.m. ET. Click here now to reserve your spot.

I’ll be back in touch tomorrow to show you how going “all in” on a sector that’s about to explode can be transformational for your portfolio. In the meantime, I encourage you to sign up for the Big Bet Summit today.

Sincerely,

Signed:

Louis Navellier 

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

 

What My Data Is Telling Me About This Sector

Regular readers know I’m a numbers guy. And when it comes to finding stock picks, I typically take a “bottom up” approach. Simply put, I focus on individual stocks, not sectors.

I dive into the numbers, focusing on eight key factors:

  • Sales growth.
  • Operating margin growth.
  • Earnings growth.
  • Earnings momentum.
  • Earnings surprises.
  • Analyst earnings revisions.
  • Cash flow.
  • Return on equity (ROE).

This investing approach, along with my proprietary market-beating formula, helps me find companies with excellent fundamentals that attract strong institutional buying pressure. That buying pressure, in turn, dropkicks and drives my stocks higher.

It’s why CNBC called me “The Earnings Whisperer.”

It’s why Forbes called me the “King of Quants.”

But what people don’t know is that, in addition to my bottoms-up approach, I also have been making big sector bets my entire career. Every now and then I see exceptional numbers lighting up an entire sector.

That’s when I stop and take notice.

For example, in the mid-2000s, my system spotted a massive trend of rising energy prices well ahead of time. Tomorrow I’ll talk more about what catalysts made my system go haywire, but let me say now that my analysis helped me find big winners like XTO Energy for 287% gains… Tesoro Corp. for 150% gains… Valero Energy for 180% gains… Holly Corp. for 457% gains…

You see, my computer programs are operating at the speed of light. They’re crunching millions of data points on thousands of stocks every day. In this way, my systems constantly have “feelers” out there that are highly tuned to what’s going on in the financial world.

This gives me the rare ability to pick up on an industry’s increasing business and revenue before the financial media does, and way before stock prices do.

Well, the numbers are flashing again in a technology sector that will act as a springboard for exciting breakthrough innovations – and rising share prices for a select group of stocks. I’ll explain it all on Tuesday, January 11, at 4 p.m. ET, at my Big Bet Summit. If you’re interested, click here now to reserve your spot.

I’ll share all the details on how my system works… and the sector that system has identified with huge growth (and profit) potential. Sign up now so you don’t miss out.

I look forward to speaking with you then!

Sincerely,

Signed:

Louis Navellier 

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

 

Weekly Upgrades and Downgrades

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for 44 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

This Week’s Ratings Changes:

Upgraded: From Hold to Buy
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ALB Albemarle Corporation B D B
GLPI Gaming and Leisure Properties B C B
HRL Hormel Foods Corporation B C B
HUBB Hubbell Incorporated Class B B C B
KMX CarMax Inc. B C B
MAS Masco Corporation B C B
WHR Whirpool Corporation B C B
WLK Westlake Chemical Corporation C B B
Upgraded: From Sell to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
CAH Cardinal Health, Inc. C C C
CRM salesforce.com inc. C C C
ECL Ecolab Inc. D C C
GDDY GoDaddy Inc, Class A D C C
GDRX GoodRX Holdings Inc. Class A D C C
GRMN Garmin Ltd. C C C
NEM Newmont Corporation C D C
RCI Rogers Communications, Inc. C C C
WRK WestRock Company C C C
Downgraded: From Buy to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ACGL Arch Capital Group Ltd. C C C
BMY Bristol-Meyers Squibb Company B C C
BSX Boston Scientific Corporation C B C
CCEP Coca-Cola Europacific Partners C C C
DE Deere & Company C C C
DISCK Discovery, Inc. Class C C C C
EL Estee Lauder Companies Inc. C C C
FCX Freeport-McMoRan Inc. C B C
MCHP Microchip Technology Incorporated C B C
MFG Mizhuo Financial Group Inc. C C C
NFLX Netflix Inc. C B C
QCOM Qualcomm Inc. C C C
SKM Sk Telecom Co Ltd Sponsored ADR C B C
SNP China Petroleum & Chemical Corporation C C C
STE STERIS Plc B C C
TAP.A Molson Coors Beverage Company C B C
TFC Truist Financial Corporation C C C
ZI ZoomInfo Technologies Inc. C C C
Downgraded: From Hold to Sell
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ANSS ANSYS Inc. D C D
CCL Carnival Corporation D C D
HWM Howmet Aerospace Inc. D C D
IAC IAC/InteractiveCorp. D C D
LYFT Luft, Inc. Class A D C D
NICE NICE Ltd. Sponsored ADR D C D
NVS Novartis AG Sponsored ADR D C D
TSM Taiwan Semiconductor Manufacturing Company D C D
V Visa Inc. Class A D C D

To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader, my proprietary stock screening tool. You may get started here.

Sincerely,
Louis Navellier

Louis Navellier

10 AA-Rated Stocks for 2022

Here we are, folks, with just one more trading day before we officially close the books on 2021. This was another year filled with many highs and lows. For example…

The broader indices climbed to new records highs, and the Dow broke 36,000 for the first time ever. Companies reported record earnings. There was a record number of stock buybacks. The Wall Street Journal noted that in the third quarter, stock buybacks rose to $234.5 billion, an all-time record.

However, there were some lows, including the violent selloff in Chinese stocks in the early part of the year. That was due in large part to the “blowup” of Archegos Capital Management family office, which held inventory for several brokerage firms. As a result, many Chinese stocks were hit with relentless selling pressure. To add insult to injury, a coordinated slander campaign against Chinese stocks by the financial media ensued, which triggered even more selling.

Investors also had to contend with new COVID-19 variants, port bottlenecks, supply chain glitches, the semiconductor chip shortage, a ban on drilling on federal land and the Federal Reserve pumping too much stimulus into the economy. Put it all together, and it led to one of the biggest stories of the year: inflation spinning out of control.

The inflation story will continue into 2022, but as I discussed in last Tuesday’s Market360 article, inflation is actually good for the stock market. Residential real estate and stocks remain the best way to protect an investor from inflation, so fundamentally superior growth stocks and dividend stocks should remain an oasis for investors. In fact, millions of new investors have opened brokerage accounts; those folks are increasingly turning to stocks to protect themselves against the highest inflation in 39 years (since 1982).

Given this, I look for the stock market to trek higher in the New Year, aided by the “January effect” in the beginning of the year. This is when investors pour new pension funding into the market as 2022, which, in turn, can dropkick and drive stocks higher.

With that in mind, here are 10 AA-rated stocks (meaning they earn an A-rating in Portfolio Grader and Dividend Grader) that could be go-to names for investors in the New Year.

For more stocks that offer a one-two punch of income and growth, consider giving my Growth Investor newsletter a look. It features two Buy Lists: my High-Growth Investments and Elite Dividend Payers. So, you have plenty of stocks to choose from. I also include a Top Stocks list, which is a select list of stocks from my Buy Lists that have not only Quantitative grades from persistent institutional buying pressure, but also stunning fundamentals that typically result in big earnings surprises. (Find the full details here.)

I hope you have a happy and healthy New Year. Here’s to an exciting and prosperous 2022!

Sincerely,

Signed:

Louis Navellier 

P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.

What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.

Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.

It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.

It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.

It’s free to watch, and by doing so, I know you’ll be ahead of everyone else struggling to understand what is really going on.

P.P.S. While the stock market will be open on Friday, December 31, the InvestorPlace offices, including our customer service department, will be closed. We will resume our regular Market360 schedule next Tuesday.

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

American Financial Group Inc. (AFG), Quest Diagnostics Inc. (DGX), Extra Space Storage Inc. (EXR), Hartford Financial Services Group, Inc. (HIG), Kroger Co. (KR)

How to Capture Fundamental Upside with This “Controversial” Strategy

Stock options have become simultaneously one of the most lucrative, most useful, most misunderstood, most controversial, and most dangerous financial instruments on the planet.

I know that’s a lot of different “mosts,” but it’s absolutely true.

Stock options can mean so many different things to different people because they are kind of like clothes. They come in all shapes and sizes. They can be mixed and paired together to meet totally different goals.

Over the years, some people have traded stock options to become phenomenally wealthy. Some traded them and lost fortunes. Some have traded them and walked away flat out confused.

The problem is they trade options on stocks with no concern for – or knowledge of – the quality of the business the options get their value from.

You see, the biggest driver of an option’s price – by far – is the price action of the stock the option gets its value from.

The price action of an option’s underlying stock is 100 times more important than any other part of the option. The truth of the matter is you can know all about the ins and outs of options, but if you buy a bullish option on a weak company with a sinking stock price, you’ve already lost.

And this is where so many investors get it wrong, and why I want to help them.

They buy and sell options based on gut feel, hot tips, and rumors. They don’t do what is obvious to me: which is place a huge focus on the quality of the business you’re buying an option on!

Remember, a stock isn’t some flashing light on a screen or a trading hot potato.

A share of stock is an ownership stake in a real business.

A share of stock is an ownership slice of a company’s equipment, inventory, patents, real estate, and brands. When you buy a stock, you become financially exposed to both the company’s upside and downside.

So, the more a company grows its earnings, the more its shares will be worth. It’s the iron law of the stock market. Simply put, prices follow profits.

Stock price trends can diverge from earnings trends for a while, but over the long term, if a company expands the amount of cash it takes in, its share price is sure to head higher.

That’s how the market works. It’s why top growth stocks like Amazon.com, Inc. (AMZN), Netflix, Inc. (NFLX), and Microsoft Corporation (MSFT) have handed their early investors tens of thousands of percent gains.

And that’s what my proprietary, data-driven stock system is based on.

I analyze billions of data points and find companies with superior products and services, as well as superior sales and earnings growth. I consider this the high-tech version of “following the money.”

So, if you’ve ever wanted to use stock options to grow and protect your wealth – but have found the world of stock options to be confusing or too risky – the entire Power Options research service is for you.

The bad news about stock options is that many people use them recklessly and lose money.

The good news is that used intelligently, options can be an amazing investing vehicle for making big gains in the market without taking big risks.

Trading LEAPS

At Power Options, I focus primarily on in-the-money and out-of-the-money LEAPS calls trades. LEAPS, or Long-term Equity Anticipation Securities, are long-dated options with expirations lasting from one to three years.

All my recommendations come from fundamentally superior growth stocks that are well-positioned to meander higher over the next year or two. Simply put, I recommend call options on companies with growing sales and earnings and that are likely to post strong earnings results over multiple quarters.

The truth of the matter is I’m not interested in Wall Street’s “hype stocks” or bubble stocks. When a hype stock falls out of favor or the bubble stock is pricked, the smart money flees, and the investor is left holding the bag.

Case in point: GameStop Corp. (GME).

GME was a low-quality stock that surged during the “Reddit Revolution.” Essentially, a group of Reddit users joined forces during the last trading week of January 2020 to put the screws to a bunch of big hedge funds that were shorting stocks like GameStop Corp. Their efforts ultimately created dramatic short-covering rallies that shot GameStop Corp. shares into orbit.

For GME to stay in orbit, it needs fundamentals – and that’s an area where it was sorely lacking. The company’s full-year sales and earnings were on the decline.

So, while the Reddit Revolution is squeezing shorts and sending stocks like GME into orbit, these stocks will fall back to earth due to poor fundamentals. And, unfortunately, many will “burn up” on reentry.

In the case of GME, the stock fell over 40% since November 22, ahead of the company’s third-quarter financial announcements on December 8. The company reported an earnings loss of $1.39 per share, down from an earnings loss of $0.53 per share a year prior and 169% lower than Wall Street’s estimates. Revenue of $1.3 billion increased from $1.0 billion a year prior and beat analysts’ estimates by 9%.

Moves like these are especially dangerous for options traders given options’ already-volatile nature and expiration dates. Investors don’t have the luxury to “hold the line.” Instead, they risk their trade expiring worthless, especially if that expiration date is just days away.

Now consider a fundamentally superior stock like NVIDIA Corporation (NVDA), a major player in the computer hardware arena. It is a leading computer graphics company, making graphic processing units (GPUs) for consumers and businesses.

The company has posted wave-after-wave of positive results, beating Wall Street’s expectations for the top- and bottom-line every quarter since April 2019.

Thanks to double-digit data center and gaming revenue growth, NVDA achieved another quarter of record results in the third quarter in fiscal year 2022. Revenue jumped 50% year-over-year to $7.1 billion, topping analysts’ estimates for $6.83 billion. Data center revenue increased 55% year-over-year to $2.94 billion, while gaming revenue rose 42% year-over-year to $3.22 billion. Both were new records for the company.

Third-quarter earnings soared 60% year-over-year to $1.17 per share, compared to $0.73 per share in the third quarter of fiscal year 2021. Analysts were expecting earnings of $1.11 per share, so NVIDIA posted a 5.4% earnings surprise.

Company management commented, “The third quarter was outstanding, with record revenue. Demand for NVIDIA AI is surging, driven by hyperscale and cloud scale-out, and broadening adoption by more than 25,000 companies.”

NVIDIA now expects fourth-quarter revenue of $7.4 billion, up from $5 billion in the fourth quarter of fiscal year 2021.

Its stock has climbed nicely higher since 2019 – up more than 407%. But that strength has nothing to do with short squeezes or any internet forum; rather, it’s because of the company’s strong fundamentals. NVDA’s earnings soared 149% from $0.47 per share in its fiscal fourth quarter of 2020 to $1.17 per share in its fiscal third quarter of 2022.

My call trade for NVDA came on April 22, 2021. The stock fell as much as 9.4% over the next three weeks. As a result, the call options dropped nearly 40%. However, they rebounded with a vengeance following NVDA’s blowout first-quarter earnings results for fiscal year 2022, released on May 26.

The stock then went on to rally about 12% on the news, reversing the NVDA calls from a nearly 40% loss to a more than 45% gain in seven trading days. When I recommended closing out of the NVDA calls in November, the trade was up 426%.

The bottom line: Good stocks bounce like “fresh tennis balls.” And when those good stocks bounce, so do my Power Options trades.

Now, to be clear, these trades weren’t made on a whim. The companies all have a strong history of growing their sales and earnings, as well as posting earnings surprises. The truth of the matter is I’m not interested in betting on randomness, on the unpredictability of very short-term market movements. That can get you into trouble with “meme stocks” like GameStop Corp. Sure, stocks like that can make massive moves to the upside, but they can also turn just as quickly. So, odds are high that you’ll be left holding the bag after the smart money flees the stock.

As you can see, sometimes it does take a little time for my trades to play out, which is why I focus solely on Long-term Equity Anticipation Securities (LEAPS). This way we have more time to ride out the short-term blips. The reward is worth the wait.

To learn more about Power Options and my strategy, click here.

Sincerely,

Signed:

Louis Navellier 

P.S. If you’re not an options expert, that’s perfectly okay! I am especially proud that my Power Options service is easy for brand-new options trades and pros alike, as all of my recommendations are very straightforward and easy to follow. I also offer a LEAPS Trading Primer and educational videos to help get you started.

P.P.S. While the stock market will be open on Friday, December 31, the InvestorPlace offices, including our customer service department, will be closed. We will resume our regular Market360 schedule next Tuesday. I hope you have a wonderful holiday season and a happy New Year!

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Amazon.com, Inc. (AMZN), Microsoft Corporation (MSFT), NVIDIA Corporation (NVDA)

My Favorite Stocking Stuffer This Holiday Season

Can you believe the Christmas holiday is only a few days away? You may be set for gifts for your family, but have you considered a gift for your portfolio?

Personally, I like companies that accelerated technological change and boosted productivity in the U.S. during 2021, which has been surging during in the inflationary environment and can make more money with fewer workers.

One area of the booming tech environment I am particularly excited about is electric vehicles (EVs).

Globally, EV sales rose 80% in 2021, and made up 7.2% of global car sales in the first half of 2021. This is up from 2.6% in 2019 and up from 4.3% in 2020. In North America alone, EV sales made up 3% of sales in the first half of the year. Analysts estimate that number could go up to around 5% once the second half of the year numbers are released.

This tremendous growth was made possible due to the commitment of major automakers this year, like General Motors (GM) and Ford Motor Company (F), for all new car sales to be zero-emission by 2040.

So, if you want to give your portfolio an extra “stocking stuffer,” you might want to consider the car giant, Ford Motor Company.

Here’s why…

Back in October, Ford shares surged after the company smashed analysts’ expectations for its third quarter in fiscal year 2021 and upped its full-year guidance.

In its latest quarter, Ford achieved sales of $33.21 billion, which crushed analysts’ estimates for $32.77 billion. Third quarter earnings soared to $0.51 per share, and analysts were looking for earnings of $0.27 per share, so Ford posted a whopping 86.44% earnings surprise.

During the first nine months of the year, Ford achieved total revenue of $98.7 billion and adjusted earnings per share of $1.52 per share. That’s up from revenue of $91.2 billion and adjusted earnings of $0.07 per share in the first nine months of 2020. Ford also increased its outlook for full-year 2021 – and analysts have, in turn, upped their estimates for the fourth quarter. Fourth-quarter earnings are now forecast to grow 11.8% year-over-year to $0.38 per share, up from previous estimates for $0.29 per share a month ago.

The company’s Mustang Mach-E has been a massive hit, and it’s been steadily stealing market share from Tesla. In October, sales of Ford’s Mustang Mach-E totaled 2,848 – and the company has sold 21,703 vehicles year-to-date.

As popular as the Mustang Mach-E is, I’m betting Ford’s upcoming release of the F-150 Lightning is going to be even more popular. Remember, Ford’s best-selling vehicle remains the F-150 pickup truck, and the company has already received 160,000 reservations for the Lightning model. The Ford F-150 Lightning is anticipated to potentially displace the Tesla Model 3 or Y as the best-selling electric vehicle in the U.S. in the upcoming years.

The bottom line is that there has been plenty of chatter surrounding the EV revolution, given Rivian’s recent IPO and even the COP26 Summit in Glasgow, Scotland. But even with the recent interest in EVs and the industry set to grow exponentially in the upcoming years, not all EV stocks are created equally. Many are still losing money and not even projected to achieve profitability for many years down the road.

As far as overall EV sales are concerned, Ford is expected to take the number-two spot in the U.S. by 2023 due to its hot-selling Mach-E and reservations for the F-150 Lightning.

Aside from being a strong play on the EV industry, Ford is also a good example of the type of stock investors will rotate to in 2021 as Wall Street becomes more fundamentally focused in the New Year.

For full details on Ford Motors, as well as the other stocks I like right now, sign up for Growth Investor now. Once you do, you’ll have full access to my High-Growth Investment Buy List and Elite Dividend Payers Buy List, my Top Stocks and newest recommendations.

You can also read my Growth Investor Monthly Issue for January. In this Monthly Issue, I discuss how I expect the investment landscape to change and where to find the best opportunities. I also unveil my newest buys in the cybersecurity and the 5G sectors. You can get the name and my buy advice here.

Sincerely,

Signed:

Louis Navellier 

P.S. The stock market will be closed on Friday, December 24, in celebration of the Christmas holiday. The InvestorPlace offices, including our customer service department, will be closed on December 24, December 27 and December 31.

I hope you have a wonderful holiday season and a happy New Year!

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Ford Motor Company (F)

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