If you’re an investor looking for income, you’re facing what I’d call a Yield Drought. And this is no temporary dry spell. Things on the income investing front look they’ll get worse before they get better. Unless a financial crisis intervenes in 2025 to make everything else much worse and the yield story much better. Because, you see, there are two parts to the current Yield Drought.
When I posted the previous version of this Special Report back on September 30, I wrote: “I don’t know which candidate will win the election. Right now the polls are within the margin of error on the national level–and even tighter in the seven battleground states that will likely decide the election. But I do know the results on November 5 will move stocks. Some right off the bat even before the results are certified. And more significantly as a new administration clarifies its policy views and takes office.” That has changed just a bit with last night’s victory by Donald Trump. We do know who won and will be the President come January 20. And we do know whose policies will move stocks and the financial markets in general. So let’s see if I can bring my picks and strategic advice up to date.
Let’s talk today about the changes that global climate change is creating in our capital markets and on the very structure of current capitalism. Part One of this Special Report will look at the nature of the changes. Part Two, later this week, will look at specific implications for your portfolio. Hurricanes Helene and Milton are the perfect case study for the coming changes in capital markets and capitalism.
I don’t know which candidate will win the election. Right now the polls are within the margin of error on the national level–and even tighter in the seven battleground states that will likely decide the electionm. But I do know the results on November 5 will move stocks. Some right off the bat even before the results are certified. Ans more significantly as a new administration clarifies its policy views and takes office.The results will move the stock market in general
And they will move individual stocks and sectors in particular.
The Standard & Poor’s 500 Index had a banner first half of 2024 with the index climbing more than 17% as of June 30. But two-thirds of that gain is attributable to just six stocks: Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Amazon.com (AMZN), Meta Platforms (META), and Apple (AAPL.).Track the performance of equal-weighted version of the S&P 500–rather than the commonly tracked index where the contribution of any stock to the index is weighted by market cap–and the index was up just 3.9% in the first half of 2024. For the second half of 2024 and looking ahead to 2024, I’m not so much worried about the fundamentals of this extraordinary rally as I am by a failure of market imagination Everybody owns the same 6 stocks. Hey, I get the excitement around these stocks and the boom in Artificial Intelligence. I share it. Which is why I own shares of Nvidia, Amazon, and Alphabet in my online portfolios. But there are 494 other stocks in the S&P 500. And 2000 stocks in the small-cap Russell 2000.(Up 9% in the first half of 2024.)After a rally that has recorded 30 new record highs for the S&P 500 just the first half of n 2024, some of that other 494–or 2000–are actually better stock buys, and likely to out perform the 6 stocks everybody owns from their current record high prices. But which ones? That’s what my Special Report: “10 New Stock Ideas for an Old Rally” is all about.
Today I’m making Rockwell Automation my sixth pick in my Special Report 5 Next Big Things. This pick just about completes the picks for my first of those 5 Nect Big Things, the Next Phase in the AI boom.
I will be adding shares of ServiceNow to my 12-18 month Jubak’s Picks Portfolio tomorrow June 27.
At this point in the AI cycle I’d like to own shares of companies providing AI solutions in relatively “easy” data universes. (Nothing as complex as voice recognition for an interface with a diverse customer universe under uncontrolled environmental conditions. Like a family in a car at a McDonald’s drive-through.) And I’d like to focus on shares of companies with products that provide clear enhancements to customers bottom lines. Like my Pick #4 Salesforce (CRM). in my 5 Next Big Things Special Report.
I’d buy Broadcom even at this price as one of my three core AI stocks from the current generation of leaders. I’m adding it today to my long-term 50 Stocks Portfolio.
This Special Report; Trade War! Trade War! gives you my recommendations for what to sell, where to take profits, and where to trim as seen through the lens of a likely global trade war. Here are my choices with my first 3 sells
This special report is about the history of the future. And how to score big returns by investing in the future. By studying the past histories of the future, we can understand what kind of bets on the future pay off with outsized gains. Think about it this way.
I think that rather than trying to hedge market or sector direction in the 2024 market, I’m going to look for plays on the long side that will gain even if the market goes nowhere or tumbles, In other words, in financial jargon, I’m going to look for sectors and stocks that are uncorrelated with market direction rather than looking for sectors and stocks that are anti-correlated (where my gains depend on a downturn in the market.) That’s the logic with Step #5 today. Go long natural gas ahead of what is shaping up as a really, really hot summer.
