On April 5, This ‘X’ Pattern Changes Everything

It appeared before Ambrx Biopharma climbed 175%... before AMC soared over 1,000%... Now, it’s appearing in multiple stocks on a regular basis. Luke Lango believes he’s cracked the code. On April 5, he’s going to reveal everything – including a free X-pattern pick.

Wed, April 5 at 4:00PM ET

Follow the Money… Regardless of the Source

Follow the Money… Regardless of the Source

Source: Shutterstock

Hello, Reader.

Tornadoes aren’t common where I live – the last one touched down 22 years ago, and it caused very few problems.

But one doesn’t have to experience the raw power of a tornado to know what it can do. And as quickly as they appear, they disappear at the same rate.

While you certainly don’t want to put yourself in the path of a tornado on purpose, you also can’t live your life as if a tornado is ALWAYS on the verge of forming.

The same can be said for what has happened in the market this week.

What I’m saying is, this week’s drama will die down. This is not a repeat of 2008, and there is no reason to panic.

This is more of a “wait-and-see” sort of situation, so that’s exactly what we’ll do. I am eager to see what the Fed will do and say in the coming weeks.

Until then, I would advise investors to hang tight and not panic…

And follow the money.

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Money Doesn’t Discriminate

Whenever the U.S. government showers specific industries with cash and/or subsidies, we investors owe it to ourselves to follow that money and see where it takes us.

Currently, for example, the newly enacted Inflation Reduction Act (IRA) is handing out billions of dollars in tax credits to the green hydrogen industry, which means it’s time to follow that money… and see where it leads.

From a political perspective, we might not welcome heavy-handed government intrusions into the private sector; we might not want the government to “pick” winners or losers. But from an investment perspective, our political perspective is irrelevant.

The stock market never bothers to consider what “should be;” it merely reflects what is and what will be.

Like it or not, the government meddles in the private sector sometimes. In fact, it meddles far more often than we capitalists might like to admit.

According to a popular narrative, “winning business concepts need no government support.” Ergo, any business that cannot “stand on its own two feet” without a boost from the government is a loser.

But that narrative ignores some inconvenient facts from the history of American capitalism.

During the last 160 years, the government has subsidized many large-scale infrastructure projects that enabled enterprising (or lucky) individuals to prosper.

Let’s take a quick stroll down Memory Lane…

  • In 1860, President James Buchanan signed the Pacific Telegraph Act to “facilitate communication between the Atlantic and Pacific states by electric telegraph.” It subsidized the construction of the transcontinental telegraph line by granting $40,000 per year to the winning bidder, along with a free quarter-section of land every 15 miles along the entire 2,000-mile route from Omaha, Nebraska to the West Coast.
  • Then, just two years after the Telegraph Act became law, President Abraham Lincoln signed the Pacific Railway Act, which authorized the construction of a rail line westward from Omaha to the Pacific Coast. This act lavished bountiful subsidies on the winning bidders, and it also granted one square mile of public domain land on alternating sides of the railway along the entire route.
  • In 1956, President Dwight D. Eisenhower signed into law the Federal-Aid Highway Act of 1956, which allocated $25 billion to establish the Interstate Highway System, consisting of more than 40,000 miles of roadway.
  • President Richard Nixon signed into law the Airport and Airway Development Act of 1970, which expanded and beefed up the nation’s airport and airway system.

Each of these ambitious government-subsidized projects provided opportunities for certain companies and industries – while directly or indirectly dooming other companies or industries.

It’s the Money’s Way… or the Highway

The transcontinental railroad network, for example, created immense opportunities for mail-order pioneers like Montgomery Ward and Sears & Roebuck.

Similarly, the national railroad network, combined with the opening of the Panama Canal in 1914, enabled enterprising West Coast businesses like American Can Company and California Packing Company (later Del Monte Corp.) to transport canned Californian fruits and vegetables to the East Coast.

By the end of World War II, American Can had become one of the country’s 100 largest corporations. A few years later, its stock joined the prestigious Dow Jones Industrial Average.

The 1970 Airport Act also created new opportunities. Just one year after this Act cleared Congress, the FedEx Corp. (FDX) opened for business and eventually became a $50-billion logistics giant.

Obviously, not every American walked through those government-financed doors, but the openings were there.

As investors, we can grumble about the way things “should be,” or we can respond to the way things are. The first option rarely produces a good result; the second one usually does.

Tesla has spent most of its corporate life nursing at the breast of government subsidies and tax credits. But that doesn’t make its astronomical $600-billion valuation any less valuable.

So, you can grumble… or you can follow the money.

The newly enacted Inflation Reduction Act may be a boondoggle of Herculean proportions… or it may be a prudent investment in the future of renewable energy… or it may be a combination of the two.

But whatever it may be, it is the source of a multibillion-dollar bounty that will combine with private-sector capital to rewrite the arithmetic of renewable energy economics in the United States.

I suggest following the money.


Eric Fry

Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends… before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a contest. And today he’s revealing his next potential 1,000% winner for free, here.

Article printed from InvestorPlace Media, https://investorplace.com/smartmoney/2023/03/follow-the-money-regardless-of-the-source/.

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