Forget the markets, today we’re fighting for Snoop Dogg.
Because maybe he’s right.
Maybe there was a conspiracy.
We, for one, have never noticed the Snoop Cereal brand in any store.
No “frosted drizzlerz,” no “fruity hoops with marshmallows,” and no “cinnamon toasteez.”
Snoop Dogg (real name, Calvin Broadus) is suing Walmart and Post Foods for allegedly hiding boxes of Snoop Cereal in the store room… rather than on the shelves.
The lawsuit claims it was retaliation for Snoop Dogg’s company rejecting a takeover offer from Post Foods.
We have no idea about the merits of the case. The cynic in us wonders if the suit is a last-gasp effort at publicity to rescue the brand.
If that was the goal, it worked!
But looking at the cereal box, the cereal’s nutritional value seems a little sketchy. But whatever, we’ll keep watching the case with a keen interest.
It gives us something to do while there isn’t much happening in the markets.
Except, hold that thought. With the S&P 500 at a record high, now isn’t the time to take your eye off stocks. One clue we share below may explain why…
The S&P 500 closed up 0.1% to end the day at 4,997.91… the NASDAQ gained 0.2% to close at 15,793.71.
In commodities, West Texas Intermediate crude oil trades at $76.47, up $2.38…
Gold is $2,048 per troy ounce, down $2…
And bitcoin is $45,375, up $1,205 since yesterday.
Now, back to our story…
It’s Not in Their Nature
Last week, we showed you the latest survey from the American Association of Individual Investors (AAII).
We mentioned how it’s often seen as a “contrarian indicator.” That is, when investors become more negative about the outlook for stocks, it often means the market is cheap.
And when investors become overly positive about the outlook for stocks… it often means the market is due to fall.
It all makes sense. After all, that’s human emotions for you. Although investors have access to more information, data, and analysis than ever before, they don’t necessarily know what to do with it.
And even if they do know what to do with it… human emotion can get in the way. “Fear of missing out” (FOMO) is a common phenomenon during the last stages of a bull market.
The investor who held out for months, perhaps years, because they thought the market was too expensive suddenly loses the willpower (or stubbornness) to hold out any longer.
They buy… too late. And then the market drops.
And then, the poor souls, when they should buy stocks as the market hits a low point, they just can’t bring themselves to do it. Now they believe the market isn’t cheap enough. It needs to get cheaper… then they’ll buy.
Except they don’t. Because it’s not in their nature to buy cheap. It’s in their nature to do what they always do… and wait until the market is high again. That’s when they actually buy.
And so the cycle repeats.
But that’s on the investor side. What about on the business side?
The Best to Come for America?
It warms your editor’s heart when we read such stories as this from Bloomberg today:
An index of sentiment among chief executive officers of U.S. companies has turned positive for the first time in two years, according to the Conference Board.
The group’s Measure of CEO Confidence rose to 53 in the first quarter, up from 46 in the final three months of 2023… Readings above 50 indicate more optimistic than pessimistic responses.
Looking at the longer-term data, it seems the CEOs of America do a better job of predicting the economy’s future than the country’s investors.
If we check out the chart below, you can see the peaks and troughs, and in your mind, how that lines up with stock market performance:
America’s CEOs started feeling more optimistic in 2002 just before markets started to head higher again in 2003.
They became more bullish in 2009… while many investors (pros and amateurs) still fretted about ballooning debt, money printing, and the government’s and Federal Reserve’s “alphabet soup” of bailout programs.
And CEOs got on the bullish bandwagon again in late 2020… while many folks on Wall Street and Main Street figured the pandemic would keep the economy in the doldrums for years.
Now, they’re feeling more optimistic than pessimistic again… even though (or perhaps, because) the S&P 500 is at a record high.
All talk of recession has pretty much disappeared from everyone’s thoughts. Interest rates? Sure, people are worried about the Fed keeping them too high for too long.
But if America’s CEOs are telling us they feel more optimistic… the most optimistic in two years… we shouldn’t ignore it. After all, they’re signing off on their companies’ financial reports…
They’re getting feedback from customers and suppliers. Maybe, just maybe, they’re hearing things the regular investor can’t hear or doesn’t want to hear.
That is: the American economy’s best years could be ahead of us.
Do with that idea as you see fit!
New to Legacy Research
For the past couple of weeks, we’ve teased the arrival of a new trading expert who is joining the Legacy Research team.
Today, we reveal him.
He’s got an incredible track record and has traded the markets for nearly 40 years…
He has trained more than 300,000 traders over that time frame…
He developed a wireless trading system in the 1990s… when less than 2% of the world population had a cell phone…
He’s traded stocks, futures, options, and cryptocurrencies… and even had a Bitcoin mining rig set up at home, long before most in the mainstream knew what Bitcoin was.
And, get this, his high school record for the two-mile run from 1982 is still unbeaten!
Our new trading expert is Tom Gentile. Here’s a screenshot of your editor’s Zoom call with him two weeks ago:
But most of all, we’re really excited about Tom’s track record. We’ve shown you a taste of that in these pages.
What impresses us the most is his track record with one of the toughest asset classes to trade: cryptocurrencies.
The biggest problem is that few traders seem to be able to outperform a simple buy-and-hold Bitcoin strategy.
But one of our colleagues has done some digging, unearthing the following impressive stats:
Since 2018, Tom’s crypto recommendations have delivered a win rate of 87%
They’ve generated an average return per trade of 117%
In 2022, when the Bitcoin price fell 64%, Tom’s crypto trades averaged gains of 64%
And the year prior, in 2021, his crypto trades averaged gains of 179%
That’s just on the crypto side. But that’s not the only thing Tom is bringing to Legacy Research.
Coming up soon (and by soon, it’s scheduled for next week), we’ll launch Tom’s brand-new, entry-level stock advisory service.
It will be a great way to meet Tom, understand what he’s all about, and, of course, to “test drive” his trading style.
We’ve had several conversations with Tom. He has great energy, he cares about producing results, and he cares about making sure he looks after his subscribers.
Anyway, stay tuned. You’ll see more on this over the next week.
Your editor is currently reading Heirs of the Founders by H. W. Brands. It follows the career paths of Henry Clay, John Calhoun, and Daniel Webster.
We mention it, after reading the two following passages from the book this past evening. The first:
For the presidential candidates, though, the contest was anything but easy. [Andrew] Jackson’s advocates howled for Old Hickory, proclaiming to all who would listen that [John Quincey] Adams and Henry Clay had stolen the last election and would steal this one if the honest people of the country didn’t unite against them.
And the second:
At the [White House] the crowd’s enthusiasm reached new heights and its behavior new lows. “What a scene did we witness!” Margaret Smith said. “A rabble, a mob, of boys, negros, women, children, scrambling, fighting, romping. What a pity, what a pity! No arrangements had been made, no police officers placed on duty, and the whole house had been inundated by the rabble mob.” Smith arrived too late to see the president, who had been nearly suffocated by well-wishers and been forced to flee to the safety of a nearby hotel. The celebration became a riot. “Cut glass and china to the amount of several thousand dollars had been broken in the struggle to get the refreshments. Punch and other articles had been carried out in tubs and buckets. But had it been in hogsheads it would have been insufficient.” The revelers stuffed themselves with cake and ice cream and clamored for more. “Ladies fainted, men were seen with bloody noses, and such a scene of confusion took place as is impossible to describe. Those who got in could not get out by the door again but had to scramble out of windows.”
Margaret Smith couldn’t decide whether the day augured well or ill. But it certainly augured something new. “It was the People’s day, and the People’s President, and the People would rule,” she said.
We don’t really have much more to say. Except that when one side of politics says they’ve never been treated so badly, and the other that such outrageous behavior has never happened before…
The odds are it, or something similar, has happened before.
So don’t let it get to you.
It’ll blow over.
It’s a lovely day outside.
Today’s top gaining ETFs…
Amplify Transformational Data Sharing ETF (BLOK) +4.2%
SPDR S&P Semiconductor ETF (XSD) +2.9%
Invesco Dorsey Wright Technology Momentum ETF (PTF) +2.7%
Invesco Dorsey Wright SmallCap Momentum ETF (DWAS) +2%
Invesco S&P SmallCap Information Technology ETF (PSCT) +1.6%
Today’s biggest losing ETFs…
First Trust Brazil AlphaDEX Fund (FBZ) -2.3%
First Trust Latin America AlphaDEX Fund ETF (FLN) -2.1%
iShares MSCI Thailand ETF (THD) -2.1%
iShares MSCI Mexico ETF (EWW) -1.9%
KraneShares MSCI All China Health Care Index ETF (KURE) -1.8%
Editor, The Daily Cut