John Carl,
Editor
June 14, 2022
I just returned from a trip to New York City’s financial district, where I had a chance to visit Charging Bull, the statue created by artist Arturo di Modica in 1989.
The statue is far more impressive than I’d expected…
It’s sculpted from 7,000 pounds of bronze and is more than sixteen feet long.
This big guy also attracts quite the crowd of tourists.
I had to wait more than 20 minutes for my turn to take this obligatory photo.
This big guy is getting tired.
The size and strength of his bull are certainly the perfect analogy for the markets we’ve enjoyed these past 156 months.
It’s been quite the run — by far the longest bull market in American history.
But times are changing, and investors need to face up to the hard reality:
The bull market is over.
Inflation is now over 10%, companies are reporting dismal losses and heavy loads of debt, and any market runs keep falling back to lower lows.
Bloomberg just published this headline: “Don’t be fooled by the daily drama. The stock market is in a rut.”
And The Economist wrote: “Do not underestimate the perils that lie ahead.”
But despite the warnings, many investors are buying the dips as if nothing has changed — they’re still clinging to old habits.
And I get it.
It’s hard to give up the good times, especially when they’ve lasted so long.
But trying to hang on too tight is foolish.
Case in point, when I visited the bull statue, there was a line of people who were waiting to see the bull from the other side… from behind.
(The line to take your photo with the back end of the bull was twice as long as for up front… I’m not sure what that says about America.)
Don’t be like this guy… holding on too tight to the very last of the bull gains.
Anyone investing in the wrong sectors right now is doing the same — they’re riding the bull from the wrong end.
Make sure you’re not one of them.
3 Stock Sectors You Need to Drop Immediately
1. Consumer Retail Stores
It’s the worst of both worlds: stores are stuck with supply chain delays AND too much inventory. They have little of what buyers do want and too much backstock of what consumers can’t afford or won’t buy. Any profits are being squashed between those two competing forces.
When you add in soaring labor costs, showdowns with management over unionization, and continued shipping woes, this sector is likely to suffer for much longer than many expect.
2. Restaurant Chains
It’s an unsafe time to be holding restaurant stocks, plain and simple. Soaring food prices are gobbling up what are already razor-thin margins. Most restaurants are also stuck in long-term leases that limit flexibility during the downturn.
Just like consumer stores, restaurants are seeing higher labor costs than ever before. But restaurants are also having trouble finding new workers, at any price. They’ve grown tired of the long hours and lack of benefits, including health insurance.
While it’s true we’re seeing new growth for comfort-food restaurants with drive-thrus (like Starbucks, Chic-Fil-A, and Dunkin’ Donuts), that’s not going to be enough to ensure safe growth. We can no longer count on America’s growing waistlines to fatten the bottom line.
3. Alternative Finance
I’ve always been a fan of the innovation that companies like PayPal have brought to the financial space. But now isn’t the time to invest. The financial world is already a dangerous place to play during a market downturn, but now Uncle Sam is barging in with new rules — making things even worse.
For example, new rules now require PayPal subsidiary Venmo to report all financial activity to the IRS, which will likely scare away young consumers who’ve never seen a 1099 before and are already leery of tax complications. And the SEC is pursuing crackdowns and tougher oversight on popular financial apps like RobinHood. It’s not clear how these rules will benefit anyone but the wealthy establishment. All the new regulations we’ve seen so far do little to protect consumers and a lot to dampen usage.
So with all this in mind, where should you put your money instead?
My recommendation: American uranium.
It’s an essential commodity that won’t be affected by the end of the bull market.
It’s the answer to the global energy mess we’re in at the moment. It’ll get us away from expensive and morally fraught imports and into a home-grown solution we can be proud of.
And as much as the government bungles most initiatives, we’re seeing the right kind of support from the Biden administration, bipartisan legislation in the house and senate, and renewed efforts from the Department of Energy. Billions are on tap for anyone who can get the job done.
Here’s the complete story on why uranium demand is skyrocketing (and rewarding investors).
So don’t get caught clinging to the wrong side of the bull. If you’re smart, retreating markets don’t have to ruin your future.
John Carl
Editor, Daily Profit Cycle