You’re flooding our inbox with questions…
So we’ll get straight into the topics that are on your mind.
If you have a question you want answered, send it to us at [email protected].
Q: Will there be a transcript or replay of the Cannabis Investing Event, as I am already committed for that evening? – D.R.
A: On Wednesday night, during my publisher’s first-ever Cannabis Investing Event, our experts talked about the historic opportunities in the cannabis market today, why the industry is approaching a watershed moment, and what you need to do to profit.
Unfortunately, we aren’t replaying the event in its entirety, but you can read a full recap of what happened – including clips from the night of the event – right here.
Q: Doc, my ideal target would be a growth stock with a high potential to turn into a value stock. How possible is that? What might that entail? – D.S.
A: Finding a “value stock” – a good business that’s trading at a reasonable price – that turns back into a “growth stock” – a business that can increase its sales and profits quickly – should be the ideal target for anyone. After all, the goal should always be to pay a cheap price for growth.
Unfortunately, the market doesn’t work that way. These situations are very rare.
Stocks that have above-average sales and earnings growth are perceived by investors as being worth more than stocks that don’t. That’s why growth stocks have lofty valuations.
When growth stocks turn into value stocks, on the other hand, it’s usually because growth has slowed or because investors see potential challenges that the companies will face that might impact future growth. Most of the time the market is correct, and these growth stocks become cheap for good reason…
But every once and a while, the market gets it wrong. Investors are emotional. And that’s when we want to take advantage.
I’ll give you an example… Back in December 2017, I recommended that my Retirement Millionaire subscribers buy shares of online dating company Match Group (MTCH). Match was in a high-growth industry and its sales had increased 19% from 2015 to 2016 and 23% from 2014 to 2015. It was a classic growth stock.
Then, a few months after we bought the stock, social media giant Facebook (FB) announced it was introducing a new dating feature to its platform. That sent Match’s stock down 22% in one day. We of course thought the Facebook news was nonsense and that it would have little to no impact on Match’s business and future growth (so far, we’ve been right).
But the overreaction in the market (investors getting too emotional) sent Match’s shares down so much they turned into a bargain. The stock had a price-to-earnings (P/E) ratio of 20, about the same valuation as the S&P 500 Index. If you bought Match at that price, you paid a cheap price for its growth… a.k.a. the holy grail. And you’d be up nearly 70% today.
These types of situations are rare, but keep an eye out for scenarios where the market overreacts… And when it does, be ready to make your move.
Q: I have very much enjoyed your articles on inflammation recently. As a lawyer with a high-stress job, and a former football and rugby player with all kinds of aches and pains, I’m no stranger to inflammation and what it can do to our bodies. For an entire year, I thought I had celiac disease, until I realized it was really just inflammation (aggravated by non-digestible sugars – FODMAP). So, I’ve taken your advice on diet (I eat steel cut oats with blueberries most days of the week), exercise, sleep, etc. My body and gut (and emotions!) are now on the mend.
Recently, a friend and I were discussing our lower back pain, and he related that he’s been taking turmeric curcumin supplements, which have really helped him. Can you please remind me/us whether the supplements show any efficacy (beyond placebo effect) vs. a diet with turmeric added in? Is there any benefit to be had? Or are we wasting our money? – C.J.
A: Glad to hear you’re doing better, C.J. We know several people around the office who follow a low-FODMAP diet. (Look for more on this in the future.)
As for your turmeric question…
Years ago, health care giant Johnson & Johnson (JNJ) sold Band-Aid bandages containing the spice turmeric in India. Turmeric bandages might seem odd, but the spice has a long history of medicinal use in India. Many creams and salves there include the spice. Turmeric contains a chemical called curcumin, which is a powerful anti-inflammatory. That’s how it fights pain.
As with most spices and foods we write about, it’s always better to go for whole foods instead of supplements. The problem with turmeric supplements is that higher doses can cause upset stomachs, diarrhea, and gallbladder contractions. It may also thin your blood. This last side effect is especially dangerous if you’re already on blood thinners or an aspirin regimen.
Also, since turmeric is a spice, the U.S. Food and Drug Administration doesn’t regulate it. Turmeric supplements may contain other things besides the spice. That includes things like flour, food dyes, and lead. And no current studies set standards for an upper safety limit. Curcumin has these standards, and they vary by body weight. We suspect turmeric is probably similar.
We recommend using turmeric as a spice, rather than in a pill. You can get a good helping with cooking, so try adding it to your next stir-fry, roasted veggies, or soup.
Q: Might you and your staff be able to suggest websites or software packages that can be used to consolidate all of my investment accounts into a single, complete overview? – C.C.
A: There are a few ways to track all of your brokerage accounts from one place.
Personal-finance service Mint is a longtime favorite of several folks around our office. Among other things, it combines your brokerage accounts to let you see the allocation breakdown of all your investments. Mint will even show you if you’re outperforming or underperforming the S&P 500.
SigFig also has a popular – and free – portfolio tracker. Like Mint, you can use SigFig to see your complete allocation overview of your portfolio. But that’s about it. SigFig is purely for your brokerage accounts… unlike Mint, which offers a wider range of financial tracking services.
Personal Capital is similar to Mint. You can see all your investments in one place, use budget tools, and track your cash flows. Some of our colleagues have used and like Personal Capital. The downside here, from what we’ve heard, is that you’re likely to get sales calls once you’ve signed up.
How do you keep track of your investments? Drop us a line at [email protected].
What We’re Reading…
- Did you miss it? You’re not ready for an emergency.
- Something different: The danger of “inactive ingredients” in medicine.
Here’s to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
March 29, 2019