It’s Friday… That means it’s time for our mailbag edition of The Daily Cut.
This week, we saw a lot of volatility. But both the tech-heavy Nasdaq and the broader S&P 500 traded sideways.
Both indexes are still down heavily this year. So far, the Nasdaq has dropped 21%. And the S&P 500 has fallen almost 12%.
Crypto investors have fared even worse.
Look at the two biggest cryptocurrencies, bitcoin (BTC) and ether (ETH).
This year, bitcoin is down 35%. Ether is down 50%.
But unlike folks in the mainstream press, we’re not panicking here at Legacy Research.
And we’re not throwing in the towel on our mission to help you really move the needle on your wealth.
Instead, Jeff Brown, Teeka Tiwari, Dave Forest, Nomi Prins, and the rest of the team have been hard at work figuring out the best opportunities to profit from deeply discounted stocks and cryptos.
Coming up, Jeff shares his top five tech stocks to buy now.
You’ll also hear from Teeka and Nomi on why President Biden’s recent executive order on cryptocurrency isn’t a cause for alarm.
Then, your fellow readers share their thoughts about our Memorial Day dispatch…
Let’s start with that list from Jeff. Grab a pen and paper. It’s time to write a shopping list…
Reader question: Hi Jeff, I’m a member of Brownstone Unlimited [Jeff’s top subscriber tier] who’s doing his best right now to hang in there.
I keep hearing people say now is the time to buy. If that’s true, could you publish a list of your top recommendations from among all your services that you would double down on?
I love the service and all the updates.
– Frank B.
Reader question: Jeff, I am currently in most of your recommendations, and I understand your recommended strategy to invest the same level of money in each stock. However, assuming I had a few dollars to add to a few positions, it would be great if you could offer a short list of the stocks in the portfolio that you think have the best chance to outperform in the future – kind of a buy-first list if you will. Thank you.
– Gregory T.
Jeff’s response: Hi, Frank and Gregory. Thanks for writing in. You asked similar questions. So I’ll address them together.
In this bout of heightened market volatility, it can be hard to figure out the best places to put your money.
But short-term pullbacks like these are excellent opportunities to buy over-punished stocks. Fears about rising interest rates have dragged down stock market valuations. Many great stocks have sunk to irrationally low levels.
With the number of stocks I recommend across my seven paid advisories, it can be a challenge to pick which ones to buy more of at discounted prices.
So I’ll offer a few suggestions based on the model portfolio at The Near Future Report. It’s where I recommend large-cap tech stocks appropriate for more conservative investors. These are blue-chip companies that will grow for years to come and dominate their respective fields.
These larger, more mature companies tend to be resilient in bear markets. So this may make them more comfortable to invest in until this bout of selling pressure passes.
Here are my top five picks:
Illumina (ILMN) – The undisputed king of genetic-sequencing technology
Corning (GLW) – A high-tech powerhouse that makes everything from fiber-optic cables to the chemically strengthened Gorilla Glass in smartphones
Advanced Micro Devices (AMD) – A maker of semiconductors critical to artificial intelligence, machine learning, and gaming
Taiwan Semiconductor Manufacturing (TSMC) – The largest and most bleeding-edge semiconductor foundry in the world
Adobe (ADBE) – A software company at the forefront of digital publishing and the creator economy
Each of these stocks is a great investment right now. Opportunities to buy shares at big discounts are rare.
Just remember that you never want to go all in on a single investment. That’s especially true when there are relatively high levels of volatility like there are today.
I know these volatile times can be stressful. But my team and I are working hard help you weather this storm and take advantage of fantastic buying opportunities it’s presented.
Much better times are ahead!
Switching gears, Washington recently took a big step toward mainstreaming cryptocurrencies.
In March, President Biden signed a groundbreaking executive order. It directed federal government agencies to set up a framework for regulating crypto.
Now, one reader wants to know if it’s a conflict of interest to have the federal government, which issues the U.S. dollar, to regulate bitcoin and other dollar competitors.
Standing by with an answer is the newest addition to the Legacy Research team, Nomi Prins.
Nomi was an investment banker on Wall Street. But she left a seven-figure salary to show everyday investors how to follow the big money.
And one of the big themes she tracks is how cryptos are poised to take market share away from traditional finance.
Reader question: How would either the Fed or the federal government back a crypto strategy? It would basically destroy their dollar-printing capability.
That is, unless you change the rules so you can produce an infinite number of bitcoins.
– Frank W.
Nomi’s response: Hi, Frank. You bring up a great point. Bitcoin, by design, doesn’t allow for unlimited creation. I don’t see that changing.
But the folks in Congress are happy controlling U.S. dollar creation without any limit.
What’s happening is lawmakers are finally recognizing that cryptos will be part of the financial landscape. Burying their heads in the sand and hoping the crypto industry will go away is no longer an option.
The U.S. Monetary Policy Forum is an annual conference that brings together economists and policymakers. This year there, Fed governor Lael Brainard said the following:
If the past year is any guide, the crypto financial system is likely to continue to grow and evolve in ways that increase interconnectedness with the traditional financial system.
The recent White House executive order on cryptos recognized the “explosive growth” of bitcoin and other digital assets. It said the U.S. must “maintain technological leadership in this rapidly growing space.”
I know there are folks who are skeptical that Washington will allow cryptos to thrive because they could compete with the U.S. dollar. But don’t forget that politicians don’t want to miss out on tax revenue from the crypto industry.
At the start of 2020, the crypto market was worth $191 billion. Today, it’s worth north of $1.2 trillion. That’s a lot of tax revenue.
Nomi’s not our only investment guru monitoring events in the crypto sector.
Teeka Tiwari is one of the world’s most closely followed crypto investing experts. He was the first in our industry to recognize cryptos’ life-changing profit potential.
And he agrees Biden’s recent push to regulate crypto is nothing to worry about…
Teeka’s response: Even now, people are still freaking out about this executive order. They believe it’ll lead to restrictive rules that will stifle innovation.
But I’m not worried.
The order says exactly what you’d want it to say. The U.S. won’t get left behind on blockchain tech.
The U.S. government is now providing regulatory guardrails the industry can use to grow compliantly.
The decision to pursue a unified regulatory framework will propel the country into the Blockchain Age.
Why the sudden change of heart?
It comes down to something I’ve been saying for years – never bet against Wall Street greed. Global governments don’t stand in the way of the big banks’ desire to make money.
Think about this…
Bitcoin’s market cap is around $564 million right now. Before the recent pullback, it went up to $1 trillion. And it did this while operating outside the traditional financial system.
What do you think its value will hit inside the system? Ten trillion dollars… $20 trillion… $30 trillion… $40 trillion?
Do you think Wall Street will give up all the fees that will come from a run-up like that?
Do you think the federal government will give up all the tax revenue from that growth?
With that much money at stake, don’t be surprised to see the financial and government establishments defend cryptos.
The facts show me we’ve mostly likely moved past the risk of the U.S. government banning bitcoin.
Finally, in Monday’s dispatch, we brought you something different from our usual fare…
With markets closed for Memorial Day, we turned to master trader and friend of the Cut Jeff Clark.
He reflected on a visit to the American Cemetery in Normandy, France. It’s the resting place of thousands of young American soldiers who died storming Normandy’s beaches in World War II.
Jeff’s thoughts moved your fellow readers. They’ve been sharing their reactions with us all week…
I too have visited Normandy. My father took us. He left college to train to be a Navy pilot.
I try to honor the ones who served and died in tougher circumstances than ours. I encourage everyone to give generously to organizations that help them and their families.
– Susan C.
Thanks for sharing your family’s thoughts and experience in the American cemetery! God bless all those brave young American boys.
– Michael T.
Just returned from Normandy. Most emotional and beautiful site we have ever seen in our world travels.
– Stephen G.
I am forever grateful to those who fought so that we could be free, but we can never lose sight of the losses on both sides. Peace comes at a cost. May we never forget!
– Tom S.
That’s all for this week.
If you’d like to put a question to the Legacy experts, be sure to get in touch at [email protected].
Have a great weekend.
June 3, 2022