We hope you all had a good week. Its been a mixed bag for investors, with the prevailing doom and gloom punctuated by hope that President Trump’s stance in the US - China trade negotiations may be softening following his announcement on Tuesday that proposed tariffs on toys and electronics had been delayed until 15 December.
The resulting rally in US retailers helped lift the S&P 500 Index considerably, with heavy weights such as Apple gaining almost 6%.
Despite this short term relief, our US Equity Checklist remains negative and has correctly foreshadowed losses for equity investors this month.
Whilst I have been (and, I think, continue to be) bullish on stocks in general for some time, this month hasn’t been pretty for most. In fact, the S&P 500 is still down some 100 points or so from its July high even with the bounce back that President Trump further fuelled with his Trade comments.
Amidst the noise, and even though the market may be down, our high quality single stock ideas have seen gains this month. Our “mystery stock” prevailed at the top of our watch list, having gained 6.8% month-to-date versus the -2.1% loss posted by the MSCI World Index global equity benchmark.
Whilst I must admit that I didn't expect this idea to play out so well and so soon, when I see this chart I am increasingly optimistic about the potential for a break out and resumption of a long term uptrend following the multi-year consolidation.
And this is why I love this game! The market may be falling, and everyone around you may be fearful, but by positioning correctly in the right stocks you can still make money and dramatically outperform the index. In the words of Peter Lynch, that’s One Up on Wall Street!
To reveal the name of this stock, and be better informed than retail investors who do not employ the same process that we teach as professional fund managers, join us at the Academy to become a member of our Trading Club, and learn from Lex himself with our Million Dollar Traders Online Course.
Have a great weekend,
James Helliwell | Chief Investment Strategist