By Kris Sayce, editor, Casey Daily Dispatch
What is investing?
Think about it.
It’s not difficult.
It’s about opportunities…
Specifically, it’s about taking advantage of opportunities…
And learning from missed opportunities.
As we explained yesterday, September is the worst-performing month of the year…
Which also means it provides some of the best opportunities to invest at lower prices.
Let’s check it out…
If this is your first time reading the Dispatch, welcome. If you’ve been here before, welcome back.
At the Dispatch we have two goals:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by showcasing ideas from our in-house investing experts: Dave Forest and Nick Giambruno. And from the founder of our business, Doug Casey.
Today, we’ll show you how to play the worst-performing month of the year… because turns out, one of our investing experts has the perfect portfolio for this market.
And it’s a great example of our favorite investing approach…
Do You Have the Willpower to Go Against the Crowd?
Yesterday was a frantic day. But it wasn’t stocks that caught everyone’s attention, it was bitcoin and cryptocurrencies.
In a few minutes in the morning, the bitcoin price fell around 10%. Ethereum fell 20%.
Both have since regained around half the losses. So, what was the deal with that?
To be honest, the reasons don’t really matter. Just as the reasons why the S&P 500 fell 0.34% yesterday don’t really matter. (Although in the case of bitcoin and Ethereum, some folks suggest El Salvador’s first official use of bitcoin had something to do with it.)
The most important thing about yesterday’s price action is that it supports the data about September being a bad month for the markets.
Now, that doesn’t mean every day will be bad. You’ll get good days, too. But history shows that if you have the willpower to go against the crowd, September is a great month to buy.
The biggest risk (aside from us being wrong!) is that the negative headlines will paralyze you into doing nothing… that rather than taking the opportunity to buy a handful of beaten down investments, you’ll do nothing. Or perhaps worse, you may decide it’s time to sell.
Don’t get us wrong. We’re not saying this is an easy market. The Federal Reserve’s money-printing and low interest rates have distorted the markets. Not to mention the seemingly endless “temporary” stimulus programs which also distort the market.
But what can you do about that? You can either complain about it… or you can exploit it for your own benefit.
We prefer the latter approach. So we’ll show you real life examples of how you can take advantage of the September slump.
This Could Be Your Single Best Opportunity
Take for instance Dave Forest’s Strategic Investor service.
Dave and his chief analyst John Pangere have researched, analyzed, and recommended an impressive range of stocks. In many ways, the Strategic Investor portfolio is a great example of how to build a portfolio based on the Casey “10 x 10” Approach.
It contains a handful of diverse sectors and themes, each with a handful of stocks that Dave and his team believe will benefit the most from specific market conditions.
Overall, the portfolio is in great shape. His best performing stock is up 257% since it entered the portfolio way back in 2018.
Another position (a warrants trade) is up 228% since he added it to the buy list in October last year. And already in 2021, Dave has cashed in profits on two stocks for gains of 194% and 283%.
But here is perhaps the most important thing. As we mentioned at the top, investing is about opportunities. And when a market and stocks fall, it presents you with opportunities that you may not otherwise have.
Take one of Dave’s favorite open positions. We can’t give you the name and ticker symbol as that wouldn’t be fair to his paying subscribers.
But in July, Dave explained to his subscribers why they should buy two specific stocks because:
The core positions – like [this specialty retail stock] and [this 5G infrastructure stock] – are where your serious money belongs.
At the time, the first stock was trading roughly where it is now. But between then and now, it has been up to 10% higher – which was above Dave’s recommended buy-up-to price.
But now it’s trading just below Dave’s buy-up-to price. Although not by much. A 1-2% gain from here will push it back above that level. You see what we mean about opportunities?
Don’t Fear This Market
Moments like this in the market give you opportunities. It’s just whether you take them. Sure, the price could fall further… and maybe you could buy it cheaper.
Or, this could be the single best opportunity you get to buy it at this price. And when Dave tells you that this is the kind of stock “where your serious money belongs,” we suggest listening to him.
The bottom line to all this is that you can either look at volatile days in the market and fear them… or you can look at the same market and view it as an opportunity.
That’s how we prefer to play it. It doesn’t mean you ignore the bad news. It just means that you use it as an opportunity to build your wealth. In our view, now is the perfect time to do that.
Editor, Casey Daily Dispatch
P.S. As we mentioned… Dave’s portfolio is, in our opinion, the perfect example of the Casey “10 x 10” Approach in action… And as contrarian investors, September is the right time to get in on the action.
Don’t miss out.
Welcome to Casey Daily Dispatch’s Chart Watch. We’ll look at the best technical opportunities in the market. You’ll see that chart analysis is a very powerful edge that every investor should have in their toolbox.
Our mission is to simplify price charts. We remove all the clutter and the noise, leaving you with a crystal-clear view of the markets.
Here’s What Happens After the Crypto “Flash Crash”
By Imre Gams, technical analyst, Casey Research
We last provided an update on Ethereum on August 12.
In that edition of Chart Watch, we analyzed the expected aftermath of the “London Hard Fork,” which was a significant technology upgrade for the Ethereum network.
Allowing more transactions per second while further lowering the cost of these transactions is a strong fundamental boost for the price of Ethereum.
Sometimes, big news like this is already priced into the market – how many times have you seen a company beat earnings only for the stock’s price to fall?
It can be difficult to figure out how much of a market’s price has already been baked in on the expectation of good news.
This is one of the reasons why technical analysis is so helpful. It allows us to set aside the news for a moment and look at the raw data – the price action – to determine where prices are going in the future.
As a technical analyst, sometimes I find myself taking a contrarian position before big news hits the market. Other times, I agree with the majority view.
What never changes is that I make my decisions based on the price chart.
That’s why when the London Hard Fork hit the Ethereum network, I was confident that traders hadn’t “bought the rumor” and would now “sell the news.”
In that August 12 update on Ethereum, I wrote:
Breaking above the $2,893 key level is the confirmation I was looking for… and in my estimation, it places ether on bullish footing.
As I write, ether is trading at $3,082.
This is an indication that the price is heading towards a new all-time high.
Providing the price stays above the key level, any price weakness will be an opportunity to buy before it hits that all-time high.
Let’s now look at an updated price chart to see what has happened.
Ethereum has indeed worked its way higher as expected, going from $3,082 to a high of $4,030. That’s more than a 30% gain. (Note: This chart only shows closing prices. The intra-day high over this run was $4,030.)
I have also drawn out a triangle chart pattern that was a fantastic opportunity to go long.
We’ve explored the power of this chart pattern in past issues of Chart Watch. After a triangle breaks out, you can expect a swift movement in the direction of that breakout…
And afterwards, you can be sure to expect a sudden and swift reversal. This reversal kicked off as I was writing this very update and has so far resulted in as much as a 20% selloff.
There may be a bit more to go before this correction can be considered complete, but the bottom line is that Ethereum’s greater trend is up… not down.
While Ethereum has not made a new all-time high yet, I believe that we are well on our way to doing so… despite the 20% correction.
This means that dips such as these should ultimately prove to be great buying opportunities.
I look forward to providing another update on Ethereum as the price action progresses.
Until next time,
Technical Analyst, Casey Research