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| By Jim Nelson |
I hope you were able to stay away from the financial media on Monday.
The Dow dropped 1,000 points. And everywhere you looked, pundits were flying into a panic.
Fortunately, your editors gave you plenty of reasons to keep a cool head.
Sean Brodrick was first to act, telling readers:
“The Nasdaq-100 is down nearly 11% from its peaks, and the S&P 500 is down almost 6% from recent highs.
That doesn’t mean we should panic. The broad U.S. stock market experiences a correction (10% or more) nearly every year. Some stats:
- A double-digit drawdown in the broad market has happened around two-thirds of all years since 1928.
- The average drawdown from 1928 to 2023 was -16.4%.
- Since 1950, the average correction in a given year was -13.7%. This century, it’s been -16.2%.
What happens after those corrections? Stocks bottom, and great stocks at dirt-cheap prices abound.
And we’ll scoop them up, IF we get a steep correction. There’s no guarantee of that.”
Gavin Magor also told readers that “This is certainly not the time to panic, but we need to prepare.” He even offered a specific action to add cautious protection … and not to sell everything.
Michael A. Robinson chimed in with his recollection of being the San Francisco bureau chief of American Banker during the real Black Monday in 1987 — the day when the Dow lost 22%.
He gave you some context about this past Monday:
“Fact is, when it was all said and done, the Dow closed the day down a mere 2.6%.
Let’s go one step further and look at how the Dow has done since it peaked on July 17. Since then, it is down just 6.1%, still well below a correction, defined as a 10% decline from a recent peak.
This is why it is so important for us to ignore all the noise out there and stick with our mission: Find the best-in-breed tech stocks and use savvy portfolio management skills so we protect our risk capital and maximize profits.”
Nilus Mattive, however, had a different take … a bit more amusing one:
He then recalled his readers to his 2024 outlook issue from January of this year.
He shared some of that here at Weiss Ratings Daily on Tuesday:
“Here’s my basic operating roadmap for what is most likely to happen in the year ahead:
- We will see the Fed keep rates where they are as long as possible and continue trying to talk down inflation and suppress market expectations for a pivot. They might even enact one last surprise rate hike to further those goals. But either way …
- Because there is a substantial lag between interest rate policy actions and their effects on the fundamental economy and financial system, we will see some corners of the markets — or many areas — start breaking. Some outside catalyst could spark this as well.
- At this point, the stock market will start dropping sharply, especially the riskier and more economically-sensitive names — including high-flying tech shares. (Defensive dividend-paying stocks will hold up better as they always do.)
- Bond prices, particularly longer-dated U.S. Treasury bonds and other safe havens, will rally sharply. Yields, which move inversely to prices, will be coming down.”
You can read the rest of that here.
Of course, your other editors shared their takes here at Weiss Ratings Daily, too. Here’s what they had to say …
How to Use Weiss Ratings in a Volatility Storm
Gavin is our Director of Research & Ratings for a reason. Even before the day kicked off officially, he was highlighting the wild increase in volatility that sent shares crashing on Monday … and how to ride that storm.
How to Play the Market’s Face-Plant
Sean, always looking for cycles and ways to play them, shares his three-step action plan to not only weather this market environment … but to take advantage of it.
Buy These 4 Non-Stock Assets Today
Nilus wrote in a second time this week to let you know his own action plan — diversification. He highlights four non-stock asset classes he believes you need to be in right now. He certainly is.
Why You Want a ‘Case of the Mondays’
Michael found a niche market that is absolutely exploding right now. Big Tech is desperately trying to build out their own solutions for it. But Michael has one much smaller company that has already beat them to the punch … and is performing much better.
Have a great weekend!
Jim Nelson
Managing Editor, Weiss Ratings Daily
P.S. You might notice one of your regular experts missing: Chris Graebe. It’s not because he has nothing to say about what’s happening. It’s just that he’s got bigger game to hunt.
He’ll be ready to share it on Tuesday, August 13, with you. It has a technology that could destroy Elon Musk’s empire and spark a $1.8 trillion tech disruption. Grab your free ticket here.
