DAILY ISSUE Ever since Donald Trump won the most recent U.S. presidential election, I’ve embraced the following six-word mantra… Embrace the boom… beware the bust. Since Election Day… the S&P 500 is up about 9%, the Russell 2000 index of small-cap stocks has surged about 6.5%... the tech-heavy Nasdaq-100 has gained about 6%... and Bitcoin (BTC-USD) has also risen about 42% – reaching its all-time high of more than $100,000 earlier last week. From deregulation to tax reform, Trump promises to reshape the U.S.’ economy through pro-growth policies. Those promises are stirring investors’ “animal spirits”… and so the market will likely continue surging higher in the early days of his administration. Embrace that boom. Of course, there are some issues to worry about for a Trump administration (and a turbulent world). An across-the-board 20% tariff would cause extreme disruptions, especially to American firms that manufacture products abroad. And Trump’s selection of Robert F. Kennedy Jr. as the next head of Department of Health and Human Services (HHS) injects enormous uncertainty into the biopharma industry. Meanwhile, the rest of the world remains unpredictable, volatile. Beware those potential busts. Of course, that’s easier said than done. And that’s why my team and I spend the past year developing a system – I call it “Auspex” – that does a lot more than “say” things. It’s a tool and a strategy that turns this embrace the boom… beware the bust mindset into an actionable plan. It requires just about 10 minutes of work a month, and exposure to only around 10 stocks at a time. Even so, our historical analysis shows that from September 2019 to September 2024, that this system if rebalanced monthly, would have returned 1,054%! The S&P 500 only put up 109% over the same five-year period – so, we’re talking about an outperformance of the market by 9X. And it has beaten the market every single month since we started live-testing it with a small group of my members in July. You can learn more about why our “Auspex” system is one of the smartest trading strategies ever created and sign up for my new broadcast this Wednesday by clicking here. But before that, in this letter here, let’s dig into how much longer the Trump boom could last… And at the big reason why every investor should get in on it now – before that inevitable bust (hint: the last 30 minutes of a movie are usually the best). Plus, I want to show you how my new Auspex system can not only help you sidestep getting wiped out in that inevitable bust… but also make market-beating despite it. The Boom We're Embracing Now Thanks in large part to the AI Revolution and long-awaited rate cuts from the Federal Reserve, the U.S. stock market has been booming for the past two years. In that AI Revolution, Big Tech and others have been racing to create the infrastructure necessary to support next-gen AI. Indeed, Meta Platforms Inc. (META), Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), Alphabet Inc. (GOOGL) – pretty much all the world’s major tech companies – continue to spend billions upon billions of dollars to build new AI data centers, create new applications, hire more engineers, etc. And all that investment has created a major economic boom. Meanwhile – after the most aggressive rate-hiking cycle in nearly 50 years – the Federal Reserve finally started lowering rates in September. This has provided much-needed relief to consumers looking to finance big purchases and businesses looking to make new investments. This relief boosted that AI Boom and… This optimal setup has helped stocks to really soar. Since hitting its lows in October 2022 – just over two years ago – the S&P 500 has surged 70% higher. It is now on track to notch its second consecutive year of 20%-plus gains. The S&P rose 24% in 2023. And so far in 2024, it is up 27%. If those gains hold, this will mark just the fourth time since the Great Depression – nearly 100 years ago – that the S&P 500 rallied more than 20% in back-to-back years. We are unequivocally in a stock market boom. And in our view, this boom is about to get even “boomier.” Thanks to Donald Trump’s victory and Republicans’ newfound control of Congress, a wave of deregulation, pro-business policies, and tax cuts are likely to sweep the nation over the next few years. Those dynamics will only add to the current economic boom. All that’s great… so long as you remember that all market booms inevitably end with busts. It is not a question of “if.” It is simply a question of “when.” The Bust We'll Avoid in the Future Remember, the stock market is working on back-to-back years of 20%-plus gains. It has only done that three times before: in 1935/36, 1954/55, and 1995/96. After the two boom years in 1935 and ’36, stocks immediately crashed about 40% in 1937. That boom turned into a bust almost immediately. Following the market boom in 1954 and ’55, stocks went flat in ’56, then dropped 15% in 1957. The boom turned into a bust after about a year. Similarly, post-1995/96, stocks kept partying throughout 1997, ’98, and ’99 – only to crash about 50% throughout 2000-’02. After about three years, that era’s big boom turned into a big bust as well. All booms of this nature turn into busts. It’s just a matter of timing. Does that mean you should dump your stocks while you still can and head for the hills to avoid this inescapable bust? Absolutely not. The Final Word Usually, the last 30 minutes of a movie are the best part of the film. The last episode of a TV show is almost always the best one, just as the last few minutes of a ballgame are normally the most exciting. Similarly, the last few years of a stock market boom can often be the most profitable. Just look at the Dot-Com Boom of the 1990s. Tech stocks had some amazing years therein. The Nasdaq Composite rallied 40% in 1995, about 20% in ’96, another 20% in ’97, and then 40% again in ’98. But tech stocks saved their best for last, with the Nasdaq soaring almost 90% for its best year ever in 1999. Then, the bust started in 2000. Point being: The best year for tech stocks in the ’90s was the final year of the Dot-Com Boom. That’s why you don’t want to leave a stock market party early. But you also don’t want to leave too late. So, what’s an investor to do? Embrace the boom… beware the bust. Ride stocks higher, and then head for the exits when the warning signs appear. Of course, as we said before, that’s much easier said than done. But that’s exactly why we’ve been working to create the Auspex investment tool that helps folks navigate through the market turbulence and all these booms and busts. (Sign up to reserve your spot for my free broadcast on this new tool – this Wednesday – here.) In short, this new tool is a home-grown stock screener that I use to give my subscribers the chance to make long-term gains again in again like clockwork – but in only 30 day bursts. That way, you can get into a position, potentially make a lot of money, and then cash out. That kind of action helps limit your exposure to the increased volatility coming our way in 2025 and beyond. Perhaps the best part? It requires just about 10 minutes of work a month and exposure to only 10 or so equities at a time. And on Wednesday, Dec. 11 at 1 p.m. EST, I’ll be unveiling this investment tool in a new broadcast that you won’t want to miss. Reserve your seat now! |
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