Author: Andrew Packer

Cryptocurrencies

Bravos Research: You Don’t Want to Miss This

Posted on by Andrew Packer

Cryptocurrencies have sold off this week, liquidating leveraged trades. From its peak, bitcoin is now down over 20%, a meaningful pullback. In the meantime, that’s taken bitcoin’s market cap under $2 trillion.

That’s still one tenth the size of the gold market, which recently topped $20 trillion. And gold continues to inch higher, with one ounce right under $3,000. Given crypto’s four-year market cycles, bitcoin may make a run to close its market cap with gold this year.

That’s because bitcoin tends to rally for three years, then take a year off. After starting to trend higher in 2023 and rallying over 100% in 2024, bitcoin has one year left. Historically, this last year has been the big mover for higher prices.

Meanwhile, institutional demand for bitcoin continues to grow. From ETFs to large firms buying bitcoin, more is being bought and held than ever before. And following last year’s halving, the rate of buying well exceeds the creation of new bitcoin from mining.

That points to a further price shock higher later this year. Despite the recent volatility, which has always been a feature of bitcoin trading, more upside likely remains ahead.

With inflation still looking sticky, and with money supply continuing to increase overall, bitcoin’s fundamentals remain intact as well.

 

For the full analysis on bitcoin’s latest moves, click here.

Stock market strategies

The Financial Economics: “The Only Secret for Higher Returns…”

Posted on by Andrew Packer

Investors have developed seemingly endless strategies to try and beat the market. Some of those involve finding deeply-discounted value stocks. Or buying growth stocks on the cusp of a new product or service.

Strategies can also relate to trying to trade the market as a whole. That could involve using technical indicators to determine when markets are likely to bounce higher or lower. But there’s another factor at play that can also boost returns.

That factor? Investor sentiment. Investors can be irrational at times.

For instance, those who think that tech stocks are priced too expensively see irrational behavior. But sometimes a company may trade for less than the value of its assets. That represents another aspect of irrational behavior.

Markets are mostly, but not entirely, efficient. Being able to step outside of investor sentiment and look at markets objectively can help find the mispriced opportunities.

Market anomalies can take time to develop. And they won’t be resolved quickly either. That gives patient investors an edge. Especially in today’s world, where professional investors are looking for ways to make increasingly faster trades.

Investors who focus on companies with long-term competitive advantages can see great returns. Particularly if they wait for a period of market irrationality to take hold. While that’s not particularly secret, investors who are patient can earn higher returns.

 

To see the full interview, click here.

Income investing

Dividend Growth Investor: Twenty Dividend Growth Stocks Raising Dividends Last Week

Posted on by Andrew Packer

Whether markets go up, down, or sideways, stocks are still an ownership stake in a business. Understanding that business is critical to long-term success.

A well-run business will be able to generate excess returns. Those returns can be reinvested in the business, or returned to shareholders. A cash dividend to shareholders indicates that management is aligned with the owners, who expect a return on their capital.

That’s why many companies pay dividends and will work to grow them over time out of increased earnings. In the past week, a full 60 companies have raised their dividends. Within that group, one third, or 20, have a track record of 10 years of consecutive increases.

One recent dividend increase came from The Sherwin-Williams Company (SHW). The paint producer and seller has increased its payout by 11.3%, and just raised its payout for the 47th consecutive year.

While the current yield is low at 0.9%, increased payouts over time will likely mean an increased share price too.

Retailer Walmart (WMT) also increased its dividend recently, for the 52nd straight year. The payout increased by 13%. Currently, Walmart pays a 1% dividend, and increased payouts over time will increase an investor’s yield.

Overall, dividend growth companies offer a tremendous advantage for long-term investors. So, as investors look for a potential market pullback, it may be an ideal time to create a list of dividend growth stocks to buy.

 

For the full list of dividend growth stocks increasing their payout now, click here.

Stock market

DataTrek Research: The Dull Market Sell Signal

Posted on by Andrew Packer

The market action of the past few weeks, despite a few large down days, has been largely sideways. While investors are a bit fearful whenever the market isn’t shooting up like a rocket, it isn’t the end of the world.

In fact, dull markets with a lot of long sideways trends, tend to be bull markets. Especially if market volatility remains low. But if that volatility starts to meaningfully pick up, a shift could occur.

Historically, volatility has averaged between 17 and 20, as measured by the COBE Volatility Index (VIX).

Today’s investors are coming off the low volatility period of the 2010s. That’s when markets often traded with a VIX under 15. Occasionally, the VIX will spike higher. It spiked to over 40 in August 2024, even as the stock market dipped a total of 8.5% from peak to trough.

With a current read around 20, volatility is within its historical norms, and a sign of a dull market.

What makes for a dull market? It’s much like the one we’re in now. Corporate earnings are growing. GDP growth is stable. Monetary policy is stable. And among other things, there are no issues in the financial system.

Looking at these metrics, it’s likely that the bull market trend is still intact, even if it’s dull right now.

 

For the full details on when to sell a dull market, click here.

Economy

The Compound: Stocks React to Negative Economic Surprises

Posted on by Andrew Packer

Despite hitting all-time highs last week, markets feel much more defensive. Market structure is breaking down. And stocks may see a pullback from here following months of a narrow trading range.

Why would stocks pull back now? Because investors are looking at a variety of negative economic surprises. That includes the ongoing economic data, as well as new developments occurring daily. With rising uncertainty, a retreat in stocks is the likely outcome.

For instance, one negative economic headline relates to defense spending. President Trump’s plan to cut defense spending isn’t good for defense contractors.

Yes, other countries may increase their spending plans to compensate. But it likely won’t offset the overall decline from a cut in U.S. spending.

Next, President Trump’s plans to shrink the government are deflationary. Yes, most investors want to see waste and abuse phased out. However, the simple fact is that less spending, even if wasteful, translates into a lower GDP.

These economic surprises may be good in the long-term. It can mean a shift away from soaring debts and deficits. But in the short-term, it means that markets face a belt tightening. And markets aren’t  fan of that.

So far, markets are unlikely to see a major crash. But a pullback or even healthy correction could be in the cards as the news headlines turn negative.

 

To see the full video, click here.

Cryptocurrencies

Bitcoin Magazine: The Future of Bitcoin: Scaling, Institutional Adoption, and Strategic Reserves

Posted on by Andrew Packer

The cryptocurrency market has gone sideways the past few months. Part of that looks like a healthy trend, following a big move higher at the end of 2024. Such pauses have been normal in prior crypto rallies as well.

So far, investors are waiting on the next big move higher. And as a result, much of the froth in the market is gone. That could be setting up for the next move nigher.

So far, bitcoin dominance remains intact. The largest cryptocurrency by market cap continues to gain market share. Smaller cryptocurrencies have yet to take off.

Part of that may be due to bitcoin’s increasing institutional adoption. In the first year of bitcoin ETFs, those funds have acquired record amounts of capital. And governments are discussing how to hold bitcoin on their balance sheet, as well as how much to own.

Meanwhile, new technologies are being created to better unlock the full potential of bitcoin. That includes ways to make bitcoin easy and simple to buy, hold, and sell. Or to use for transactions and not just a store of digital value.

Given bitcoin’s capped supply, it remains attractive relative to most altcoins out there today. In a strong rally for bitcoin, a catch-up rally could unfold in the altcoins. But for now, with bitcoin consolidating ahead of its next move higher, investors may want to stick with the industry leader.

 

To see the full developments underway in bitcoin now, click here.

Stock market strategies

Martin Shkreli: A Lot of People Don’t Understand Growth Stocks

Posted on by Andrew Packer

Investors tend to lump their stock investments into either growth or value. And most investors have an idea of what each of those terms mean. But they’re also investor-specific. One investor’s value play may be a more of a growth play to another.

It’s also easy to call a stock growth based on one or two factors. But it may be a confluence of factors that make an investment truly a growth story compared to a lucky trade.

For instance, some growth investors look for a company that’s building customers and revenues, but may not be earning a profit yet. Others may look for a company that can grow beyond cash flow to actual profits.

One component to identify growth stocks is a company with a high net profit margin. That can show what a company brings in before its expenses, before growth profits. That may be more important than the current valuation of a growth stock.

But no matter what metric an investor prefers for growth, understand that good investments compound. A company with compounding growth will be better than a more cyclical company that oscillates between growth and contraction.

Companies that can deliver long-term compound growth offer the best returns over time. Adding those companies to your portfolio gives you compounding wealth as well.

 

For the full read on why growth matters, click here.

 

Commodities

Kitco News: The World Is Being Repriced Right Now

Posted on by Andrew Packer

President Trump is off to a rapid start in his second term. Markets are a bit skeptical about the impact of tariffs. However, investors remain on board with polices like deregulation and low taxes.

But Trump is looking at ways to make big changes in how the U.S. government manages his assets. He’s signed an executive order to create a sovereign wealth fund. Such a fund could better monetize the country’s assets.

That includes assets such as land. The U.S. government owns most of the land in the Western United States. Selling off some of that land, or extracting the resources from that land, could generate billions annually that wouldn’t need to be taxed or borrowed.

That move couldn’t come at a better time. Many nations are sitting on record debt levels. And issuing new debt isn’t having the same impact on GDP that it used to. Over the past 20 years, nations have created $185 trillion in interest-bearing debt. That debt has only generated $46 trillion in GDP growth.

The creation of a sovereign wealth fund could lead to a revaluation of U.S. gold holdings. Currently, the metal trades over $2,900 per ounce. However, it’s still listed on the government’s books at just over $40. And a sovereign wealth fund could also own digital assets such as bitcoin.

 

To see the full ways the United States could better reprice its financial assets, click here.

 

Stock market

Heresy Financial: This Always Happens Right Before a Market Crash

Posted on by Andrew Packer

Markets continue to hover near all-time highs. However, several market indicators are known as leading indicators. They can signal a shift in the economy before that move is apparent and the stock market sells off.

By understanding these indicators, and where they are now, investors can be well-positioned ahead of a selloff. While it may not mean avoiding an investment loss entirely, it can mean avoiding the bulk of a loss during a market downturn.

One indicator investors can look for is signs of market euphoria. Today, there are several indicators that measure the fear and greed in the market.

Currently, that reading is near neutral after stocks have been slowly grinding higher. However, at market peaks the reading may soar to over 80 out of a possible 100.

Another indicator is high stock market valuations. Investors have been watching Magnificent 7 stocks rally hard.

But their growing earnings and revenues are keeping their valuations stable right now. So it’s not fair to compare these stocks to the dotcom bubble that burst in 2000 quite yet.

A better recent example was the valuation in SPAC companies in 2021. Those companies were valued at multiples of revenues that they may not have even reached for several years. When valuations rely on a perfect future unfolding, an investment may be at an overly high valuation.

 

To see the full list of indicators that occur before a market crash, click here.

Economy

Macro Optics: Shadow QE Has Been Going On For 2 Years

Posted on by Andrew Packer

Most investors have had some caution over the past few years. Why? Rising interest rates. That’s because interest rates represent the cost of money. And those rates rose from near zero percent to their highest level in 15 years.

Consequently, the cost to borrow money has increased significantly. However, that’s just the headline news. Behind the scenes, the banking system has continued to create money. That has expanded the money supply.

As the money supply expands, asset prices generally rise. So even though interest rates have been rising, it’s the increased money supply that have kept markets high.

Rising bank credit indicates that the economy is likely to keep trending higher for now. That’s also a sign that the stock market can trend higher. Improving credit market conditions continue to lead the financial markets.

Signs of financial stress have been on the decline as well. That’s another sign that borrowers and lenders are sitting comfortably right now. But the current read of financial stress is at its lower bound, and could see a spike higher given the current low levels.

Meanwhile, central bank demand for gold continues to rise. As does demand for physical gold by major non-government banks. That could be a sign that markets are preparing for a rainy day now, even while conditions are calm.

 

To see the full analysis behind today’s market conditions, click here.