I spent more than a decade at some of the biggest investment banks in the world... And one secret I learned is to ignore the day-to-day headlines of the financial media.
Instead, follow the money.
When you turn on the TV or check Twitter, you'll find a lot of hype and even some flat-out lies. The goal of the financial news media is to gain viewers and get clicks. And you don't do that by saying everything is OK.
You get folks to tune in when they're scared. That's why we've seen so much fearmongering lately... especially from the biggest names in finance.
Take Ray Dalio, the founder of Bridgewater Associates.
Back in September, as the market was already down 22%, Dalio warned that markets have further to fall before a recession hits...
We are right now very close to a 0% growth year. I think it's going to get worse into 2023 and then 2024, which has implications for elections.
In another headline just weeks after the first, he warned of "a 'perfect storm' of pain." And he was back three weeks later, calling for not just a financial meltdown, but a full-blown war.
Look at these words... "dangerously close to a war that would crush economic growth."
Dalio's not the only one with a bearish tone...
David Einhorn, famous for shorting Lehman Brothers in 2008, is another example. He claims he's bearish because the Federal Reserve's "official policy is to make the stock market go down."
There's also the great Carl Icahn, whom Wall Street dubbed "the corporate raider." Lately, he has been hitting the presses, warning regular Americans not to "be fooled..." that the recent rally "doesn't mean we are out of a bear market."
Perhaps the worst offender is Michael Burry, the man made famous from the movie The Big Short. You'll remember Burry made $100 million for himself and $700 million for his firm Scion Capital by betting against the housing market in 2007.
Now, he's back with even more harrowing predictions.
He has been on Twitter spreading fear. He said the market was like "watching a plane crash." He hinted that everyone will soon trample one another to get out of the markets. And he also tweeted, "You have no idea how short I am."
Most folks would read these headlines and start to panic. They'd think to themselves that maybe cash is the safest place to be.
But again, ignore the day-to-day headlines. They are meant to scare you.
Instead, follow the money.
Today, the money is telling us that people are starting to move cash into the market. Even all those money managers we mentioned above have been buying in recent weeks, despite what they say to the public.
In particular, a massive amount of cash is flowing into one specific sector. This group of stocks is poised to soar in the coming months and years. You need to position yourself now, and we're giving you seven of the best stocks in the sector to buy today.
In my latest presentation, I explained how Wall Street is secretly bringing on the next major event to rock the markets, what the insiders are buying, and how it's likely to soar in value in the weeks ahead.
If you haven't watched it yet, you can get all the details – absolutely free – right here.
Now, let's get into some of the things you've had on your minds this week. As always, keep sending your comments, questions, and topic suggestions to [email protected]. We read every e-mail.
Q: Loved your article about coffee. So very interesting. Are you only talking about [caffeinated] coffee having all of these benefits, or does decaf coffee have the same benefits or a lesser degree? Thank you. – C.M.
A: For years, the research pointed to the benefits coming from the caffeine in coffee. But more and more studies show that decaf coffee has benefits, too.
As I mentioned earlier this month, coffee – regular or decaf – contains antioxidants that battle inflammation. We know that inflammation is a major cause of diseases like Type 2 diabetes, Alzheimer's disease, and heart disease. We've seen plenty of studies that show coffee offers nearly identical benefits regardless of whether it's caffeinated or not.
A 2012 study from the National Institutes of Health showed drinking coffee lowered the odds of dying from causes like heart disease, stroke, and diabetes. Study participants who drank three or more cups a day lowered their risk of dying during the yearlong study period by 10%... The outcome was the same whether participants drank coffee with caffeine or without.
So if you can't or don't want to drink caffeine, you'll still get benefits from a cup of decaf.
Q: I'm holding stock shares that haven't moved much in the past year, and right now they're slightly down. Could I sell covered calls to collect some extra income? – L.S.
A: That depends on the stock and what your outlook is.
With a covered call, you're selling someone the right to buy your shares at a given price. It's the strategy I use in my Retirement Trader service.
But while covered calls are an incredible way to generate income and lower your cost basis – because the money you collect by selling a call effectively reduces the total amount you spent to own the stock – you give up some of your upside if the stock soars.
So if this is a biotech company that would add 50% if its new drug gets approved or a deep-value play that you think is worth double its current market price, then selling calls makes little sense. You're working at odds to the reason you're holding the stock.
If this is a steady, mature company that pays a dividend and is closer to a reasonable valuation, then selling calls could be great to take advantage of the languishing that your stock seems to be doing.
What We're Reading...
- Did you miss it? The turmoil in the banking sector has the market on edge. Here's how to survive it.
- Something different: California moves to ban "toxic" snacks.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
March 24, 2023