Guest Post: Chris’ Bear Market Money Makers

Hi, all!  I’m turning the floor over on this final day of 2018 to Wealthy Joe contributor Chris Pascale, who is going to share with us what he’s buying these days.  Take it away, Chris! ~Eric

BEAR MARKET MONEY MAKERS
By Christopher Pascale

If you were following Eric’s advice of buying stocks and holding them, you had huge gains through most of the decade.

2018, however, was a bear year, as you can see in companies like dividend-paying
General Electric (NYSE: GE) and Ford (NYSE: F).

In this article, I’m going to discuss how to get long-term gains of 7% or more.  Then I’m going to talk about four specific stocks that I’m buying right now, and plan to hold through the bear cycle.

The Smart Money: 7% Long-Term Gains

People smarter than me (Eric Milton, JL Collins, and Warren Buffett) will tell you to just invest in the entire US market.

Eric favors wisely chosen single stocks, and offers the service to others practically for free; JL Collins prefers Vanguard’s VTSAX fund, which has historically returned great gains; and Warren Buffett says to “buy a little piece of America,” which means Coca-Cola stock and a house for your family.

And they all agree that you need to avoid things you do not understand, like cryptocurrency in 2016 and websites with no revenue in 1998.

They are right, and you should do those things.  I am doing them, too, by owning a home and investing for retirement. But I’m also investing on the side to try and score bigger returns.

2 Safe Stocks & 2 Gambles

The 4 companies I’m going to discuss, and am investing in, are:

1. Fannie Mae (OTCMKTS: FNMA)
2. Rite Aid (NYSE: RAD)
3. GrowLife, Inc. (OTCMKTS: PHOT)
4. Hemp, Inc. (OTCMKTS: HEMP)

Fannie Mae (OTCMKTS: FNMA)

As a result of taking on the loans for subprime lenders in 2007, Fannie Mae destroyed itself, and should not be in business today.  The stock was well over $60 per share, and had even neared $90 during the tech boom. And then it became a penny stock.

In 2013, it rose from roughly $0.20 to more than $2.00.  In 2014, it went above $5.00, but is now at a 5-year low around $1.00.

If  a) this is truly a bear market, and b) Fannie Mae is not going out of business, you would be wise to invest what you can afford.

I currently have 196 shares of Fannie Mae, and will be buying $200 worth on a bi-monthly basis. If the stock goes down further, then I’ll be happily picking up hundreds of shares at a time that will definitely be worth much more in the coming years.

Having said this, if Fannie Mae goes away, then everything I invest will be gone, which is why we must not invest more than we can afford to lose.

Rite Aid (NYSE: RAD)

Rite Aid has been in the crapper, and the market has taken a giant dump on top of it.

Personally, I think it’s a good thing.  Why?  Because the stockholders aren’t taking any chances, which is why they recently voted to deny the CEO his $3,000,000 bonus and replace the Board of Directors.

Also, according to a Rite Aid employee I spoke to this week, half the company has been purchased by Walgreens, and the other half may be owned by Albertson’s in 2019.  As for the latter, we’ll see.

If a) Rite Aid stays in business through the bear market – on its own, or via corporate takeover – and b) medical marijuana is prescribed through its Walgreens pharmacies, the stock should do very well in 10 years or less.

I currently have 1,100 shares of Rite Aid, which was the result of buying before the recent shareholder vote, then offloading most of that purchase when the stock price jumped afterward. I’m going to do the same thing with Rite Aid that I’m doing with Fannie Mae – invest $200 bi-monthly.

GrowLife, Inc. (OTCMKTS: PHOT)

Before even considering this stock, read Eric’s post Don’t Be Penny Foolish.

This company sells equipment for home and commercial cannabis production. If you think you’d like to start a small business in the marijuana industry, check out their cube product kits.

However, if you want to simply buy some shares and see what happens, you should note a few things.

First, this company has done millions in sales, but has had more millions in losses every year.

Also, the stock is worth less than a penny.  That means that you could buy more than 10,000 shares with $100, but only because the market does not even value a share of this company at more than the coins you step over.

I currently own over 3,400,000 shares of GrowLife, Inc.  On volume trading alone, it should go over $0.015 within the next year as it had in each of the past 3 years.  Also, since the company is making real sales of products that are necessary to an emerging market, it seems to me that the gamble (and it is a gamble, not an investment) should pay off, even if the company is not viable.

Hemp, Inc. (OTCMKTS: HEMP)

Hemp is not marijuana.

It is a high-fiber food with a full amino acid profile that I personally eat every day.  It is also a building material, and not only are homes being built with bricks made of hemp, but the Lotus car company used it in its body, just as Henry Ford once had.

But just because a company is called “Hemp” doesn’t mean that the hemp industry will raise up a company of the same name, so what does Hemp, Inc. do?

First and foremost, they self-promote, which, for me as an investor who wants real news (distribution deals, profitable quarters, etc.), is annoying.

Secondly, they sell their own line of goods, a HazMat absorbent called “Spill-B-Gone,” from in a factory in North Carolina that can also process the crops of other companies and farms.

These are both great things, but the financials stink.

Hemp, Inc. isn’t making many sales, and while the US has been very slow to legalize the crop, some states have, and hemp-based products have been in grocery stores for a couple years now.

I own 100,000 shares of Hemp, Inc.

If Hemp, Inc. a) stays in business through the bear cycle, and b) posts a profit ever, those who own even 100,000 shares (currently $3,300 worth) will become at least a little rich.

On the other hand, if c) Hemp, Inc. stays in business through the bear cycle, and d) just hangs in there with the next bull market, then it’s possible to at least double your money or more for the same reason you could with GrowLife – volume-based fluctuations.

My Current Positions in These Companies

As noted above, my current holdings in these stocks are:
 FNMA: 196 shares
 RAD: 1,100 shares
 PHOT: 3,421,695 shares
 HEMP: 100,000 shares

While this portfolio is worth over $30,000 right now, I have more than that invested in real estate and retirement funds {Roth IRA, 403(b), and a Thrift Savings Plan}.  Also, my passive income is fairly significant.

This is important to know because if you do what I am doing (gambling with stocks), it should be kept in perspective.

Eric Milton and Warren Buffett might pick up shares of the first two, but they would definitely not buy the second two, because the companies have repeatedly lost money, and revenues are not even going up every year, even though the market is emerging out of prohibition.  And as for JL Collins, he thinks single stocks are dumb and a waste of time.

Christopher Pascale is an author, accountant and adjunct professor from Long Island. He is the former CFO of Portfolios with Purpose, and is a current member of the IRS’ Office of the Chief Counsel.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

My Top Stock Pick For 2019!

invitae stock

My top stock pick for 2019 is a company called Invitae (NYSE: NVTA).

Invitae is one of the leaders in molecular diagnostic testing.

What this means in plain English: through your primary care physician, you can have your entire genome sequenced to determine which diseases you are at high risk of developing.

Invitae is a small company with a market cap of $879 million.

Its mission is to bring comprehensive genetic information into mainstream medicine to improve health care for billions of people.

Invitae wants to aggregate the world’s genetic tests into a single service with higher quality, faster turnaround time, and lower cost.

Invitae’s growth has been off the charts.  In the 3rd quarter of 2018, the company reported an increase in revenue of 106%, driven by 95% increase in volume.

Invitae ended 2018 up 40%, which was great given the carnage the market experienced the last 3 months of the year.

Genomics will play a huge part in in the future of health care.  And Invitae will be one of its leaders.

Invitae is not for the faint of heart, because it can be very volatile.  However – it is a stock with tremendous growth potential that you should definitely watch.

Disclaimer/Disclosure Statement: Information in this article is not intended to be a recommendation to invest in any stock.  Rather, it is presented for readers’ education and consideration when making their own investment decisions.  The author is long NVTA.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

How’s Your Net Worth?

Good morning!

As we close out the year and begin a new one, I wanted to revisit one of my first posts.  Net worth is the most important indicator of financial health and fitness.  Take stock of your net worth now, and reevaluate it at the end of March.

Here is the post: What’s Your Net Worth?

I wish you all a happy, healthy and wealthy 2019!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

 

What Happened In The Market Today?

If you haven’t already heard, the stock market had a massive rally today.

The Dow was up over 1000 points, which is the biggest one-day gain in history.

The S&P 500: up 4.96%.  NASDAQ: up 5.84%.

What was the reason for the move higher?

It was something called an oversold bounce.  When stocks go down at a fast rate, as they have over the last three months, they become oversold, and will rally in the way we’ve seen today.

Will this move last?  Unfortunately my answer is no, in the short term.  I’ve been watching the market since 1995; right now, we are still in a down trend.  Rallies like this almost never last, but they are part of the process.

I’m not trying to discourage anyone – far from it! –  but I want you to understand that the sell-offs are not over.

Now…if Trump announces that the trade war with China has been settled, all bets are off!

However, expect more selling in the immediate future.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

Let Your Stomach Be Your Guide!

Times of adversity are when we learn things about ourselves.

If you own individual stocks, you’re learning something about yourself right now.

The question you should ask yourself is: “Can I stomach owning individual stocks?”

Are you losing sleep at night thinking about the stock market?  Are you feeling physically ill, in a literal sense, when you look at your brokerage account?  If you answered “yes” to either of these two questions, you might want to go with an index fund.  It won’t make you immune to some pain, but it’s not as volatile as owning, say, Roku (NASDAQ: ROKU).  I talk about index funds in The Stock Market is For Everyone; they are one of the best vehicles to wealth there is!

As we approach a new year, this is something you definitely want to address.  Please only do what you are able to live with.

I happen to have a very high risk threshold.  It’s just the way I am, so it works for me.  Don’t get me wrong – I don’t like losing money any more than you do.  But I can sleep at night, and I can stomach the volatility.  That’s not for everyone.

Do what’s best for your peace of mind.  Wealth without health is, for all intents and purposes, useless.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

How To Invest $1000 Today!

Do not let the action in the stock market discourage you from investing.

I repeat:

Do not let the action in the stock market discourage you from investing!

Some people will tell you not to catch a falling knife.  But that’s not what you’re doing when you invest.

I go into more detail on this topic in The Stock Market is For Everyone.  Here are some quick thoughts as we end the week:

If you need your money in the next year or two, then leave it alone.  We have no idea where the market will be in two years.

However, if your time frame is five to 15 years, continue to buy.  I know it’s very difficult to do!  But these are days on which you have to do it.

Now, how would I invest $1000 today?  Here’s how:

1. Buy a low cost S&P 500 index fund and wait.

2. Take $100 and buy 10 different stocks.  (See my videos here and here for suggestions.)

3. Take $200 and buy five stocks.  Or $250 and buy four.

It’s entirely up to you.

When the market is like this, you will almost certainly be down soon after you buy.  That’s the nature of the current climate, and no one can predict the bottom.

I do know that on average, the market is up two out of every three years.

Just hang in there.

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *

Wealth And Credit!

Yesterday, the Federal Reserve announced that they would be increasing interest rates by a quarter of a point.

“How will higher interest rates affect me?”  If you’re wondering about this, read on:

First off, auto loans, home equity lines on credit, and some other loans will not be impacted by the Fed’s decision.

The biggest change you will likely see is that the interest rate on your credit card will go up by the same amount of the increase.  If you carry a balance from month to month, then this is obviously not a good thing.

What I would do in this situation is contact my credit card company and ask them if they could lower my rate.  Many people are not aware that you can do this, but you most certainly can!

And remember: debt is the enemy of wealth.

You should pay down your balance as soon as possible, and avoid carrying a lot of credit card debt.

Until tomorrow!

*  The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you. *