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| | | Monday, October 3, 2016 | Issue #2901 |
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Get In on "Hyper-Growth" Companies Starting With as Little as $100
Our research team has spent the past year vetting more than 2,500 exciting young new businesses. They've been on the hunt for the next "hyper-growth" winners like GoPro, which would have turned a $100 stake into about $133,000... Airbnb, where a $100 stake from 2009 is now worth $797,000... and Uber, which turned $100 into $1.25 million over the past 7 years.
Today, their research is READY and waiting for you. If you've ever wanted to get in on the fastest-growing private companies, usually starting with as little as $100, you'll want to see what they've uncovered. Details here. |
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Why You Shouldn't Fear the "Earnings Recession" Alexander Green, Chief Investment Strategist, The Oxford Club
 A story on the front page of last Monday's Wall Street Journal noted that companies in the S&P 500 are set to report their sixth consecutive quarter of lower earnings.
That would the longest slump in over a decade.
The paper asked just how much longer stocks can rise without earnings themselves moving higher.
It's a good question. But the answer is a bit more involved than you might imagine.
We are indeed in the midst of an "earnings recession." To define our terms, an economic recession is two or more consecutive quarters of negative GDP growth. An earnings recession is two or more consecutive quarters of negative corporate earnings growth.
Why the recent downturn?
There are a couple reasons. The first important point is that U.S. firms in the aggregate have reported lower earnings because energy, commodity and basic materials companies have seen their profits decimated by lower prices.
The Dollar's Bull Run Is Over
One of the world's premier currency experts says the dollar's almost unprecedented bull market is coming to a dramatic close.
"I'm moving significant amounts of my personal net worth in anticipation of what's to come," he says.
To find out the four steps he's taking... and how a dollar bear market will hit the stock and bond markets... just go here. | |
That's why these have been among the worst-performing stocks over the past year and a half - and their lousy results have tarnished total corporate earnings.
The energy sector, in particular, is projected to yet again report the largest | "Remember, what's most important is not what earnings have done for the last six quarters. It's what they will do for the next six. That's what will determine where share prices go." | |
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year-over-year decline of any sector, with an expected drop of 66%.
Another thing weighing on corporate earnings has been the U.S. dollar. As it has strengthened over the past few years, it has adversely affected the profits of U.S. multinationals.
A strong dollar makes our exports more expensive overseas. Conversely, it makes foreign imports more attractively priced here at home. Both effects crimp U.S. sales and corporate profits.
Yet there is a flip side to this negative story...
For starters, what is bad for energy, resource and basic materials companies is good for just about everyone else.
I'd guess you aren't terribly upset with how lower natural gas prices have made it cheaper to heat and cool your home or office.
You probably don't mind that lower oil prices make it less expensive to fly - or to fill up at the pump.
Nor are you angry that lower materials prices make it less expensive to build a new home, remodel your existing one or put on an addition.
And it's not just you and other consumers benefiting from lower prices. So are public companies. All else being equal, lower costs mean higher earnings. Yet these lower prices are still working their way through the economy.
Remember, what's most important is not what earnings have done for the last six quarters. It's what they will do for the next six. That's what will determine where share prices go.
And we have reasons to be optimistic.
The U.S. economy has created more than 200,000 net new jobs a month over the past year. Wages are rising. Consumer confidence is up. And the so-called "problems" of low energy prices and a strong dollar have abated somewhat recently.
Commodity prices are up substantially from the lows of mid-February. (Oil is about where it was a year ago.) And the dollar - which rose 8.6% last year - is down 4% this year.
So things are getting better - not worse - for commodity companies and U.S. multinationals.
The U.S. market is not near all-time highs due solely to the Fed's easy-money policies and investors' hunt for yield. There are clear signs that future earnings will indeed be up.
That's something to keep in mind when lackluster third quarter results start trickling in next month.
Good investing,
Alex
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Is Your Dividend Stock Safe?
Dividends are the last place to get decent income.
Savings accounts... Treasurys... bonds... they all pay next to nothing.
Dividends are all that's left. But 2016 could be the year of the dividend cut. That's why we've created a tool to help determine if your dividends are safe. Just type in a company name to find out. Details on how you can access our tool here . | |
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The Zero Economy nailed its first big victim. Shares of Deutsche Bank fell to record lows on Friday. No doubt others in the sector will soon have the same woes. Read On... | |
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Today's home rental market is huge. We're looking into the best REITs to capitalize on this trend. Read On... | |
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For the last decade, Argentina has been the best-performing emerging market in the world. Poland has been the worst. Here, we examine why. Read On... | |
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The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. 
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