More signs of inflation … but Louis Navellier says we’re in a “Goldilocks” environment … the tech resurgence continues … Matt McCall’s Top 5 stocks to own for the next decade
Another sign of inflation…this time from the world’s most well-known investor.
At the Berkshire Hathaway annual shareholder meeting this past weekend, Warren Buffett gave his two-cents on inflation:
We are seeing very substantial inflation.
It’s very interesting. We are raising prices. People are raising prices to us and it’s being accepted.
We’ve got nine homebuilders in addition to our manufactured housing and operation, which is the largest in the country. So we really do a lot of housing.
The costs are just up, up, up. Steel costs, you know, just every day they’re going up.
Last week, we noted how the Federal Reserve has told us not to worry about inflation. Though it’s rising, we’re told it will be “transitory.”
Yet, we pointed out how the measure of inflation the Fed is watching doesn’t include some of the biggest line items of a family budget – namely, grocery prices, gas, and housing.
So, in one sense, it’s irrelevant what the Fed tells us since it’s not factoring in some of the biggest influences on your wallet.
When we do factor in these influences, the numbers tell a far different story.
From Barron’s last week:
Over the past week alone, the price of corn rose 8% to the highest level since 2013, while soybeans and wheat prices hit their highest points since 2014.
The CRB foodstuff index, which includes hogs, butter, and sugar, in addition to grains and other agricultural commodities, is up 15% this year and trading at the highest level since summer 2012.
Grocery prices are in turn at seven-year highs.
Meanwhile, the price of an existing home surged 17% in March from a year ago—the fastest pace on record.
Last week, billionaire and well-known investor, Leon Cooperman echoed our concerns:
I think that Mr. Powell will be surprised by inflation. It’s not going to be as quiescent and transitory as he thinks.
I think the Fed will be forced to say something before the end of 2022
Bottom-line: inflation is here. Buffett and Cooperman see it… as we pointed out last week, many Fortune 500 C-level execs are feeling it… you’re likely seeing it yourself… and more is coming.
We’re curious – what are you doing to prepare your portfolio for inflation? Are you making defensive moves or adopting a wait-and-see approach? If you’re waiting, what will be the indicator that signals it’s time for you to act? Email us at Digest@InvestorPlace.com and let us know.
***Though inflation is a concern, Louis Navellier believes we’re in a “Goldilocks” environment for high-quality stocks
For newer Digest, readers, Louis is one of the early pioneers of using predictive algorithms to scour the markets for quantitatively-strong stocks. Forbes even named him the “King of Quants.”
This numbers-approach has helped him produce decades of triple-digit winners for his private clients and subscribers. Today, he’s one of the most respected, veteran analysts in the industry.
In last Friday’s Breakthrough Stocks update, Louis commented on the Fed’s efforts to ignite inflation, and reduce unemployment, as well as the resurgence of the U.S. economy:
The Federal Reserve’s main priority has been to fix unemployment and spark inflation, which in turn would stimulate both business and consumer spending.
From what I can tell, the Fed is very close to meeting its objectives, while, at the same time, it remains committed to keeping key short-term interest rates at or near zero through 2023.
In fact, the Federal Open Market Committee (FOMC) stood pat once again (last) week. Members voted unanimously to keep short-term interest rates near zero and to continue to purchase at least $120 billion worth of bonds every month.
Fed Chair Jerome Powell also stuck to his dovish guns, once again stating, “It will take some time before we see substantial progress.”
Overall, Louis sees several bullish factors lining up for fundamentally-strong stocks:
There’s the U.S. economy hitting the gas (last week we learned that first-quarter GDP expanded at second-fastest pace since 2003) … there’s the continuing rollout of COVID-19 vaccines… many Americans are sitting on higher levels of disposable income courtesy of the most recent stimulus checks… and we have a Fed that will try to keep rates low for the foreseeable future.
Louis believes this puts the market in a “Goldilocks” situation that’s just the right temperature for more gains, so to speak:
The fact of the matter is that we’re in the midst of a “Goldilocks” environment for stocks.
In other words, the current environment of near-zero interest rates, more than 6% GDP growth forecasts for 2021, record order backlogs and robust consumer spending are all adding handsomely to companies’ top and bottom lines.
So, I fully expect earnings and sales growth to remain strong for all of 2021 due to the economic recovery and easy year-over-year comparisons.
***One area of the stock market that’s been enjoying strong growth in recent weeks has been tech
Though the Nasdaq is down today as I write, tech stocks have been rallying in recent weeks.
For more, let’s turn to Luke Lango. For newer Digest readers, Luke is our hypergrowth expert and the analyst behind The Daily 10X Stock Report. His specialty is finding market-leading tech innovators that are pioneering explosive trends.
The month of April is in the books, and – as we expected – things are slowly but surely starting to turn a corner for growth and technology investors.
Throughout the past two decades, the “long growth/tech” trade has dominated Wall Street. As we told you previously, from the start of 2003 to the end of 2020, the tech-heavy Nasdaq-100 gained 1,210%, versus a much more pedestrian 266% gain for the “old school” Dow Jones Industrial Average.
Over that 18-year stretch, the Nasdaq outperformed the Dow in 14 years. The Dow shined brighter in just four years…
So, history tells us that “old school” and value stock outperformance does happen from time to time. But when it does happen, it’s always short-lived.
This is proving to be true this time around.
From February to mid-March, the Dow rose about 10%, while the Nasdaq slipped 1%. But since mid-March, the Nasdaq has powered 7% higher, while the Dow is up less than 3%.
Tech has retaken the lead.
This is great news for Luke’s Daily 10X service, that aims to highlight stocks with the potential for 1,000% gains over the long term – which, in recent years, have usually been found in the tech world.
Since launching his service roughly one-year ago, Luke has already dug up five such 1,000%+ stocks and a host of triple-digit winners.
Back to Luke for more details:
Our average return per pick continues to improve, and we’ve added multiple new 10%, 50%, and 100% winners to our long list of highlighted stocks. Check out our DTX Monthly Scorecard below:
% Return # of Stocks from DTX 10% or more 194 20% or more 174 50% or more 134 100% or more 91 200% or more 51 400% or more 21 500% or more 17 1,000% or more 5
In other words, the recovery in the long tech/growth trade that begun in March, has continued in April.
We expect things to only get better from here.
Because technology is taking over the world.
We gave Digest readers one of Luke’s most recent potential 10X tech winners last week. The company is Nano Dimension (NNDM). It’s a 3D printing company that’s poised to fundamentally reshape how the world makes electronics over the next few years.
Here’s Luke on why this company’s future could be huge:
The company’s DragonFly LDM system uses proprietary liquid nano-conductive and dielectric inks to simultaneously print both conductive and dielectric layers at the same time, thereby allowing for a full print of a multilayer PCB (printed circuit board) at high resolution.
Based on our research, this is the first technology in the world that is capable of effectively printing industry-grade, multi-layer PCBs.
That’s a big deal.
***Finally, speaking of specific stocks poised for big returns, how would you like to learn Matt McCall’s Top 5 Stocks to own for the next 10 years?
I should note that you can get this information totally free.
If you’re interested, check out Matt’s Moneyline podcast.
You may not know this, but Matt is one of the most prolific stock researchers and content-providers in the entire industry. And Moneyline is where he shares much of his findings.
It’s not just broad theory – you get loads of specific, actionable advice. And again, it’s totally free.
In recent weeks, Matt has covered 10 IPOs that should be on your radar… the latest updates for marijuana investors… semiconductor stocks you might want to consider… great opportunities in SPACs… and how to invest in the growing space economy…
This past Friday, he dug into the Top 5 Stocks to hold onto for the next 10 years. He shared ideas from listeners, plus his own ideas.
If you’re an active investor, or you just want the latest research from one of the smartest guys in the business, Moneyline is a can’t-miss resource. Check it out by clicking here.
Have a good evening,