Back to normal investing after this bear market?
And that’s great news for you… Because the fact is, the normal times you’re missing right now were never normal at all…
Where the market closed up 3% every other day…
Where online basement dwellers colluded to pump up the stocks of lousy businesses…
Where digital currencies named after dogs fought for attention…
Investors had their minds warped by this kind of market action for the past several years.
But if you ask me, you don’t want any part of that kind of normal when it’s your money on the line.
Those times are dead and gone. And I say “good riddance!”
Because with the fallout of those crazy times, we’re seeing a generational investing opportunity.
And I want you to be able to take advantage of it today.
The Implosion of the “New Normal” in the 2022 Bear Market
During 2020 and 2021, it was normal for a stock to soar 100% in a few months.
And that’s being conservative.
Because “COVID stocks” rose much more.
Stocks like Zoom, Peloton and Etsy were soaring 300%, 400% and 700%.
But all that changed at the start of this year.
Interest rates started to rise, and inflation soared higher.
And since January 2022, the stock market is down more than 17%.
Speculators were acting like this was the “new normal” and that the party would never end…
But I’m an investor. Not a speculator.
Speculators try to figure out what the next price will be, while investors focus on where the business is going.
Trying to figure out price movements is a game I don’t play.
I have no idea what the stock price will be one week, month or year from now.
I play a much simpler game: I find quality businesses and buy them when they trade at bargain prices.
Meet Charles Mizrahi
Charles is the only professional ever crowned Wall Street’s No. 1 trader by Barron’s, AND named top market timer over a seven-year period. He left Wall Street to help Main Street investors make money in the stock market.
When Sarah Palin was unhappy with her portfolio, Charles helped her get back on track.
And former Arkansas governor Mike Huckabee is another of Charles’ Alpha Investors. He calls Charles “one of the top investment gurus in America.”
To see why people call him a “Miracle on Main Street,” click here.
And then sit on my butt as the business moves higher.
I never stopped investing this way.
And everything I knew was telling me that the speculator’s party of 2020 and 2021 would soon come crashing to a close.
Fast-forward to now, and overhyped COVID tech stocks have fallen 50% on average.
The market has had its worst year since 2008, and the worst start to a year in 60 years.
Inflation is at a 40-year high. And the Federal Reserve has made it clear that it’ll keep fighting it with rate hikes.
Consumer sentiment has tanked to all-time-low levels.
It’s clear that the era of easy money is over. We’re in a bear market.
It’s been brutal. And people are scared.
I get it. I’ve been through six bear markets in my career.
But let me share with you a little secret that might sound a little crazy…
This bear market is the greatest gift you could ask for.
My Most Controversial Bear Market Advice
I know what you might be thinking … this guy is nuts!
Now’s no time to be buying stocks … it’s time to run for the hills and bury gold beneath the floorboards.
I’ve heard it all before!
But here’s why I’m fine with whatever name you want to call me.
One hundred years of data PROVES that investing in a volatile stock market, like the one we’re in now, will give you a 100% chance of making money.
If there’s one thing you’re guaranteed to get from me — it’s real talk.
No-nonsense or Wall Street mumbo jumbo.
And the real talk is this: EVERY bear market throughout history was followed by an even bigger bull market.
Bull markets (blue) always follow the bear … and last longer.
But you’re not going to get the returns you deserve by investing in lottery ticket-type stocks.
Forty years of investing has taught me that you need to buy quality businesses that represent American innovation.
Businesses with rock-star CEO leaders driving growth…
When shares of these businesses trade at a bargain, you back up the truck.
That time is now. And I have my sights set on a group of businesses that look inevitable.
Buy “Inevitable Wealth” Stocks
While I was managing my hedge fund during the 2008 to 2009 market crash, fear and panic were at an all-time high.
People were looking for hope and guidance.
It felt a lot like what I’m seeing now. So I’ll say to you today exactly what I said to my clients back then…
If you can see past the short-term pain, you’ll have the opportunity to see the long-term gains. Remember, we’ve got 100 years of data to back that up.
That’s exactly why I released my first Inevitable Wealth portfolio a month before stocks bottomed in 2009.
I chose 30 great businesses selling at bargain prices and recommended them to my clients in January 2009…
All told, $1 million invested in that portfolio would now be a $5.3 million fortune.
A 5X return.
See for yourself:
Not every stock was a winner … but they didn’t need to be.
The 1,533% gain in Texas Instruments (TXN) … 1,190% gain in Autodesk (ADSK) … and 2,028% gain in Microsoft (MSFT) more than made up for the handful of losers.
I believe we’re facing the exact same kind of opportunity now.
Only this time, in today’s market, I think we can do even better — 10X in 10 years.
That’s why I just released a brand-new Inevitable Wealth portfolio, which I’m confident will one day turn every $100 into $1,000.
If you’re ready to treat this bear market for what it is — a generational buying opportunity…
And realize that all the pain we’re seeing today is actually a reward for the patient, mindful, no-nonsense approach to investing that has never failed in the past 100 years…
You’re in the right place.
Until next week!
Founder, Alpha Investor
P.S. I’m so happy to meet some new folks through The Banyan Edge. For me, my readers are like family.
Like James, who said:
“You’re changing my life for the better. I don’t worry about the market ups and downs anymore. Thank you so very much!”
Or Betty, who wrote:
“You have taught me that patience is a virtue! I don’t get upset anymore when the market has a set back because you’re right Charles, the market always comes roaring back … [I’m] truly excited about my future investments.”
Jeffery wrote me:
“You have made me a believer that the little guy can have investing success with you guiding the ship. I have highly recommended your services to family and close friends. Thank you so much.”
This is what I want to see. Wednesday is my new favorite day because I get to talk to you.
And I’d love to hear from you.
Drop me a line anytime at BanyanEdge@BanyanHill.com. Introduce yourself and tell me what you’d like to hear more about.
See you next Wednesday!
Chart of the Day:
Does This Look Like a Bottom to You?
By Charles Sizemore, Chief Editor, The Banyan Edge
We’re fighting the war for stock market profits on three fronts.
We’re fighting the Fed. We’re fighting inflation. And we’re fighting what is likely to be a rough earnings season once fourth-quarter results start rolling in in January.
All of that should be enough to make you cautious.
But capping it off, we’re also fighting high valuations…
Even after suffering through a bear market for virtually all of 2022.
Consider the cyclically adjusted price-to-earnings (P/E) ratio, better known as the “CAPE” or as the “Shiller P/E” after Yale professor Robert Shiller, who popularized the metric 20 years ago.
The CAPE compares prices today with a 10-year average of earnings. This smooths out the booms and busts of the economic cycle, as stocks can appear to be “cheap” near the end of the cycle, when flush with earnings and “expensive” in recessions, when earnings tend to fall.
Here’s a chart of the CAPE ratio going back 20 years…
The chart tracks the CAPE of the S&P 500, and while the metric has come down significantly since the late 2021 highs, it’s not exactly in bargain territory.
In fact, it’s at levels you’d normally associate with a top rather than a bottom. It’s about 12% higher than the average of the past 20 years, and the only times in history the CAPE has been materially higher was during the peak of the 1920s stock bubble and the 1990s tech bubble.
This is just one metric, of course. But others tell the same story. The price-to-sales ratio of the S&P 500 is at approximately the same levels today as it was at the peak of the tech bubble in 2000.
High prices don’t cause a bear market. Stocks can go from expensive … to vastly more expensive. And this overpricing can persist for years. Stocks have been wildly expensive by historical norms for the past five years.
Likewise, cheap prices don’t cause a bull market. Cheap stocks can always get cheaper, particularly if the macro backdrop is cloudy, as it is now.
But let’s keep this simple: Would you rather buy the S&P 500 when it’s cheap … or when it’s expensive?
There will come a time to back up the truck and load up on index funds again. I believe that.
But until that day comes, I’d rather pick the best stocks, those that are priced to deliver solid returns regardless of the direction the market goes. And that’s where Charles Mizrahi excels…
If you’re looking to deploy some capital at these much-better prices, look at Charles’ Inevitable Portfolio. Picking the right companies is the move to make as this bear market plays out, and stands to hand you outsized returns in the next bull.
Chief Editor, The Banyan Edge