Another new record high

Tuesday, 12 September 2017
Melbourne, Australia
By Bernd Struben

  • Markets setting up for a huge year in 2018
  • Bellwether indices
  • Investing in IPOs with the insiders

If you’ve taken a defensive position in cash, you might want to skip ahead a bit.

Stock markets across Europe and the Americas all closed well into the black yesterday. And Asian and Aussie markets are following their lead.

Adding 1.39% yesterday, Germany’s DAX Index has now returned 19.59% over the past full year.

And in the US, the S&P 500’s gain of 1.08% saw it close for yet another record high.

They say stock markets never rise in a straight line. And that’s true, of course. But if you have a look at the one year chart of S&P 500 below, it’s remarkably close, especially if you take out the ugly dip in the weeks preceding the US presidential election.



chart image

Source: Bloomberg
Click to enlarge

The S&P 500 has now returned 11.13% year-to-date and a stellar 19.37% over the last full year.

One way to get exposure to the index is through the SPDR S&P 500 ETF Trust [NYSEARCA:SPY].

With a market cap of US$241.28 billion, it’s the largest of several ETFs tracking the S&P 500. And its delivered gains slightly above the index, up 11.49% year-to-date.

There’s no guarantee the index will continue its upwards march over the next year. Although Time Trader’s Phil Anderson is convinced it will. That’s no airy opinion either. All of Phil’s work is based on literally centuries of historical research.

Most of that history occurred well before the advent of the internet. Meaning most of those documents need to be sourced the old fashioned way. You know libraries, books, microfiche…

It’s painstaking work, but it continues to pay off for Phil and his team at Time Trader. And Phil shares exactly what his research reveals here.

We’ll get back to that in a tick. First a look at the latest action in the markets.

Markets

Overnight, the Dow Jones Industrial Average gained 259.58 points, or 1.19%.

The S&P 500 added 26.68 points, or 1.08%.

In Europe, the Euro Stoxx 50 index finished up 47.50 points, or 1.38%. Meanwhile, the FTSE 100 gained 0.49%, and Germany’s DAX index rose 1.39%.

In Asian markets, Japan’s Nikkei 225 index is up 230.00 points, or 1.18%. China’s CSI 300 is up 0.24%.

In Australia, the S&P/ASX 200 is up 36.75 points, or 0.64%.

On the commodities markets, West Texas Intermediate crude oil is US$48.04 per barrel. Brent crude is US$53.77 per barrel.

Gold is trading for US$1,325.91 (AU$1,656.77) per troy ounce. Silver is US$17.76 (AU$22.19) per troy ounce.

One bitcoin is worth US$4,238.14.

The Aussie dollar is worth 80.03 US cents.

Markets setting up for a huge year in 2018

As mentioned above, Phil Anderson is extremely bullish on the outlook for global markets in the coming years. I’ll share something with you that he wrote to subscribers of Time Trader this morning.

The market is setting up very well, in line with our expectations for a huge year in 2018 and into 2019. You’ll have a front row seat for an insight into the future that is simply, not available elsewhere.

That doesn’t mean Phil is bullish 365 days per year. He knows his history — and its forecastable cycles — far better than that. Phil is, in fact, cautious for the next few months. He’s not predicting anything close to a crash. But a correction may well be in the cards.

Here’s something else he wrote in Time Trader this morning:

Gann called the 7th month of the 7th year his “death zone”, when a panic or correction would likely occur. This was often true, but sometimes a bull market has stretched into September or early October.

There’s a good chance the current bull will remain in control until later in the season this year, as well. We’re watching very closely and we take steps to protect our capital quickly.’

Protecting his subscribers’ capital is foremost in Phil’s mind. Knowing how and when to take a loss, and when to redeploy your capital back into a winning stock, is one the first things he’ll take you through in Time Trader.

Those winning stocks of course, are the ones you want to hold for the ride up.

As you saw in the chart of the S&P 500 above, the index had a great year. But there were plenty of losing stocks among the 500 companies comprising the index as well.

The trick to getting the best returns will never be an index tracking ETF. The trick is sorting the wheat from the chaff…and investing in the wheat.

Obviously, that’s far easier said than done. Which is where Phil and his team at Time Trader can make all the difference. You can find out how here.

Bellwether indices

The S&P 500, by the way, is considered one of the best representations of how the US economy is tracking. And with gains approaching 20% over the last year, that would indicate the US is ticking along at a rapid pace.

But it’s not just the S&P 500 indicating strong growth ahead. The latest price data from China is also looking bullish. From Bloomberg:

‘[The latest price data from China] indicated a surge in inflation that suggests global growth is on the march and should prolong the rebound in commodities. At the same time, loose financial conditions — from persistently low interest rates to record equity prices and a weak dollar — have created a feedback loop that’s intensified the hunt for yield.

“We have solid global growth and some of the easiest financial conditions in history,” Andrew Sheets, Morgan Stanley’s chief cross-asset strategist, wrote in a client note. “Hooray”.

China’s producer prices surged 6.3 percent in August from a year earlier, ahead of expectations by a margin comfortable enough to drive speculation that the world’s second-largest economy may spark momentum across developed and emerging markets alike.’

Phil would agree on both counts.

First, that the US and global economy are set for a boom year in 2018.

And second, that major stock market indices are a great tool to help forecast what the economy will look like in six to nine months. Economists take heed.

Here’s what Phil writes:

The market is always right. And it doesn’t care for our opinion.

The stock market is always looking six to nine months ahead.

If you want to know what the economy will do, you don’t need to listen to economists, financial commentators or the business press. Just watch the stock market. It’s the most efficient information-processing mechanism on the planet.

The only thing that can usually surprise the market is something it can’t predict, and therefore price…like an earthquake.

Continuing this logic, we can read the charts of many key stocks and assess what they’re telling us about the progression of the economy. And, of course, trade the stocks for profit.’

The above excerpt gives you a glimpse into the complex sets of data — current and historical — that Phil scrutinises before even considering entering a trade. And once he’s in a trade that scrutiny doesn’t stop.

Believe me. I’ve been following Time Trader closely since it launched in May 2016. And the moment one of the stocks in the Time Trader portfolio deviates from what Phil expects, it’s out of there. Soon to be replaced by a more promising trade.

You can get all the details on Phil’s T.I.M.E.D based approach to trading stocks here.

But don’t wait too long.

Publisher Kris Sayce agreed with Phil to close the door on new membership this Friday at midnight. And he tells me it may well not open again until this time next year

Investing in IPOs with the insiders

In last Tuesday’s Port Phillip Insider, I wrote to you about IPOs (initial public offerings).

As a quick recap, an IPO is when a private company first offers its stock to outside investors by listing on a stock exchange. Once a company is listed (after the IPO) investors like you and me can freely trade its shares. Hence, the company has gone public.

One IPO that caught my eye this week is Indian based Matrimony.com Ltd. According to Bloomberg, ‘India’s biggest online matchmaker opened its initial public offering Monday, selling shares in Matrimony.com Ltd. for about $15 apiece.

With a population of 1.3 billion people and growing, the right matchmaking stock could do quite well, especially in a nation where arranged marriages are still common.

But there’s an important aspect of IPOs that many people don’t fully appreciate. Even if you’d invested in Matrimony.com Ltd at market opening on Monday, you weren’t really an initial investor. And often the price will spike quickly after listing, meaning you’ll pay far more than the real initial investors.

The initial investors are the ones who get in before a company lists, before the stock is available to the public. These are generally institutional and high net worth investors. It’s almost impossible for retail investors like you and me to get in with the ‘insiders’. Especially when it comes to top quality companies.

That is until now.

Earlier this year, Greg Canavan launched a new premium service, Greg Canavan’s Exclusive IPO Investor. Working closely with a few broker friends of his, Greg has opened the door for his members to buy stock before the company’s shares are publicly traded, in what’s called a priority allocation.

At that time, Greg Canavan’s Exclusive IPO Investor was only open to our Alliance members. But next week, for three days only, it will be available to any of our paid subscribers.

And the timing couldn’t be better.

You see, Greg has a true inside scoop (nothing illegal mind you!) on a new listing coming to the ASX. And he’s secured a priority allocation of stock for his subscribers. But this isn’t just any old new listing.

This company is on the vanguard of online advertising, with over 90% penetration already in the US. Its revenues are growing (US$21 million in 2016) and Greg tells me it’s only listing to fund ambitious expansion plans.

And the management team couldn’t be more impressive.

The co-founder of Myspace, Tom Anderson, will be non-executive director and drive the social media strategy. This is his first gig since leaving Myspace. And the former head of strategic marketing at Myspace will be the CEO.

Excited yet?

Stay tuned for more details.

Cheers,
Bernd