Let’s take a step back and look at this market.
What I’m about to show you will blow your mind, and I’m only showing these two charts… one time.
There is a special group of investors who are the most bearish they’ve been in more than 35 years.
That level of bearishness is why I’m starting to buy stocks.
And if you’re not paying attention, then you must hate money.
The CEOs Are Bearish… So I’m Buying
Take a look at this chart.
This is the sentiment reading among CEOs in the U.S. today. CEO business confidence is now at its lowest level in decades, according to the Conference Board and Goldman Sachs.
As you can see, we now have lower business confidence than during the recession of 1991… the post-dot-com bubble… the Great Recession… and the 2020 COVID-19 crash.
Right now, executives are worried about the state of the economy. Interest rates are pushing higher. Consumer spending is slowing down. The housing market is facing strain. And businesses are pulling back on their spending.
What does that tell me?
Typically, investors would sell and run away. They tend to sell when the market has completely turned red. But let’s take a look at what happened to the markets in the year after executive sentiment was that low.
As you can see, the bear market environment has served as a clever pivot point for a market rebound after each major event I mentioned above.
As the saying goes…
“Buy on the sound of cannons, and sell on the sound of trumpets.”
That’s why I’m ready to turn my focus to the long term.
How I’m Investing in This Market
There remains a steep weakness in this market.
The technology and biotech sectors are still packed with companies trading at massive valuations. There are countless unprofitable companies that can weigh on the S&P 500 and the Russell 2000.
But there are also deep value opportunities that stand out to me. For example, I look at a company like Devon Energy Corp. (NYSE: DVN) as an incredibly inexpensive oil producer, trading at a steep discount to other stocks in the market. And it pays an attractive dividend north of 8.7%.
However, Devon is just one of many companies that stands out as a value stock in this market. In fact, it might be in the middle of the pack when I look at the current situation… I’m targeting stocks with rock-solid balance sheets, strong yields and significant upside.
For example, in my new Tactical Wealth Investor service, I have one energy stock trading at an incredible discount compared to Devon based on market metrics. The stock also has a Piotroski F-Score of 7 and a Z-score over 16.
This means the company has executives protecting the balance sheet and enhancing shareholder value. In addition, its EV-to-EBIT trades at a reasonable 8.6, and it has a price-to-earnings (P/E) ratio under 9.
Now is the optimal time to buy strong stocks and funds that pay attractive income levels. In Tactical Wealth Investor, I’m eyeing the Energy sector… and the Financials sector. My top banking stock trades at roughly half its tangible book value and offers an 8% dividend. Why does this matter?
Because you can tap into an incredible banking company with strong cash flow… and potentially see its conversion from a $13.50 stock to $30 in the years ahead. Why? Because the tangible book value of the stock — the sum of the parts — ranges higher than my price target.
Today, I’m offering Tactical Wealth Investor at an incredible charter member discount. I talked Senior Strategist Roger Scott into allowing me to sell this long-term letter for less than $40, and included six stocks that are poised for great, long-term growth and income upside.
This is an absolute no-brainer. And it’s how we can take advantage of this market without worrying about downturns in the weeks or months ahead… allowing us to sleep better at night.
To your wealth,
Garrett
P.S. And don’t forget to let me know if you have any feedback, questions about today’s issue or anything else. Just email us at hubfeedback@wealthpress.com.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
Market Momentum is Red.
The S&P 500 has charged toward the 3,900 level on low volume. It appears we could see a downturn on Thursday and Friday, in a similar setup to the April 20 market dump. I urge extreme caution in this environment.
