Well, here we are halfway through National Sandwich Month. It is also Get Ready for Kindergarten Month and National Peach Month, in case you were wondering.
And don’t get me started on days. I’m sure you’re beyond disappointed to know that we missed National Sneak Some Zucchini Into Your Neighbor’s Porch Day on August 8. Or National I LOVE My Feet Day! on August 17.
I mean, who comes up with these? Clearly people with too much time on their hands.
I have one addition — National Crazy Market Week. Let’s talk about that before moving on to a real national day that actually does have value for us as investors.
National Crazy Market Week
Last week was full of major headlines ranging from big earnings releases to the trade issues with China to the flashing of a recession indicator. The media really ran with the latter headline as the bears came out of hibernation.
The indicator that caused the recession fears was an inverted yield curve. This occurs when the 2-Year U.S. Treasury bond yield is higher than the yield on the 10-Year bond. That means the government is paying more to people who lend to the country for two years than those who lend for ten years. That’s the reverse of what it should be. In a normal yield curve, the longer the maturity of a bond, the higher the yield. This makes sense because bond owners should be paid more for locking their money up for longer periods of time.
When the 2/10 yield curve inverts, it historically has been a precursor for a recession. However, it really isn’t that black and white if you do the research.
Since 1978, when an inversion occurs a recession typically doesn’t happen for 21.3 months – nearly two years. Even more surprising to most is that one year after the inversion, the stock market is almost always higher… and by a big margin! Over the last four decades, the stock market was up 20%+ on average one year after the 2/10 yield curve inverts.
And when you add in the fact that the Fed will likely lower interest rates a couple more times before the end of this year, the odds become even greater that stocks are poised for a major rally in 2020.
Yet again, this is a case of the media telling you only half the story. And it makes it a buying opportunity for smart investors.
If you’re interested in learning more about my thoughts on the current market environment — and get a few bonus stock picks at the same time – check out my recent appearance on Yahoo Finance by clicking here.
National CBD Day!
August 8, was National CBD Day. This celebration makes sense to me because of the rapid growth in CBD availability after hemp became legal last December. The CBD industry is set to explode nearly 40X in just four years. Those opportunities just don’t come along very often.
One company I’ve followed for years celebrated that day in style. GW Pharmaceuticals (NASDAQ:GWPH), the manufacturer of the first FDA-approved, CBD-based drug, hit a monthly high.
The company announced unbelievable revenue growth of 2,081% in its second-quarter report. Most of that came from Epidiolex, the drug I mentioned above. It brought in sales of $68.4 million in the quarter and $101.9 million through the first six months of 2019. Those figures blew estimates out of the water. The Hemp Business Journal had expected full-year sales of Epidiolex to come in around $65 million.
Approximately 12,000 patients have received Epidiolex prescriptions since its launch, and that number is only estimated to continue growing. If the drug’s approval is expanded to treat tuberous sclerosis complex — Phase 3 trials are underway and have been promising so far — its potential client base could increase by another 50,000.
This is only the beginning of CBD. I’ve said it before and I’ll say it again … if CBD were a drug, we would call it a wonder drug. So it’s no wonder that the CBD industry is set to experience a huge boom over the next decade. I am not aware of any other industry that has this kind of potential.
Third Time’s the Charm?
Snap (NYSE:SNAP) is giving smart glasses another shot. Earlier this week the company unveiled its third iteration of Spectacles, which have the ability to record video and take pictures in 3D. This latest version will also provide the ability to apply augmented reality effects to the images and videos — similar to what Snapchat does on our phones.
Spectacles 3 will be released this fall, so there’s your holiday gift for the person who has everything. They come in two colors, are made of stainless steel (an upgrade from previous plastic models), and cost $380.
Augmented reality — and its close cousin virtual reality — isn’t just about adding cool special effects to pictures. The technology can be used in everything from retail to industrial training to professional and amateur sports. That means there will be a whole lot of winners in this space, and you can be sure I’m keeping a close eye on all of them.
Bye-Bye Hybrid Vehicles
The shift toward the future of transportation just took another step forward. General Motors (NYSE:GM) and Volkswagen (OTCMKTS:VWAGY) have announced that they will no longer manufacture hybrid vehicles that run on both gas and electricity. They are going to focus their investments on fully electric cars.
In the next four years, General Motors plans to launch 20 electric vehicle (EV) models. And Volkswagen is looking to debut a small plug-in SUV next year in the U.S. and an electric version of its minibus by 2022.
I think General Motors President Mark Reuss summed the decision up the best: “If I had a dollar to invest, would I spend it on a hybrid? Or would I spend it on the answer that we all know is going to happen, and get there faster and better than anybody else?”
The exact same thinking applies to investing. Invest in what’s going to happen, and get there faster and better than anyone else. That’s how you make the big money.
While other auto manufacturers still plan to maintain their investments in hybrid vehicles along the road toward battery-powered cars, we are now seeing the beginning of what I expect will be a new world of transportation. In fact, Continental AG, one of the largest car-parts makers in the world, announced last week that it would cut its investments in conventional engine parts.
Transportation 2.0 is coming, from EVs to AVs (autonomous vehicles). This revolution wouldn’t be possible without the next generation of batteries. So naturally, the auto manufacturers want a piece of that pie.
Last week, Musashi Seimitsu Industry, a Japanese auto maker, announced a partnership with KeraCel, a battery developer that claims to have created a solid state battery with twice as much energy as lithium-ion batteries that will only cost half as much. Plus, these batteries will be 3D printed, which means they can be manufactured in any shape and in any size — so they can be used for anything!
These potential new batteries are amazing and fit squarely in a couple of big investment themes. And for early investors, they present the kind of moneymaking opportunity that could turn a tiny initial stake into an absolute fortune.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you’re interested in making triple-digit gains from the world’s biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today.