Category Penny Stocks

Trade wars continue to roil the stock market … good news on the semiconductor front … an AI Applier recommendation from Eric Fry … more jobs losses due to AI

Earlier today, all three major stock indexes found themselves deep in the red as President Trump’s trade war escalates.

This morning, 25% tariffs on imports from Canada and Mexico went into effect, as did 20% levies on Chinese goods.

In response, China will impose new 10%-15% tariffs on certain U.S. imports next week… Canada is applying 25% tariffs on more than $20B of U.S. imports immediately … and Mexican President Claudia Sheinbaum said she will announce her tariff plans this weekend.

Stepping back, brief levies used as a negotiating tool are one thing… extended tariffs as a “new normal” for U.S. trade policy is another.

Today’s market upheaval reflects fears that we’re slipping into a “new normal” that would weigh on corporate earnings and the U.S. consumer.

The related economic uncertainty is creating a “batten down the hatches” mindset for corporate managers that’s slowing business activity.

For more on this, let’s jump to our hypergrowth expert Luke Lango. From yesterday’s Innovation Investor Daily Notes:

The U.S. economy is clearly buckling under the pressure of heightened policy uncertainty.

GDP grew by 2.3% in the fourth quarter of 2024. Real-time estimates for GDP growth in Q1 have fallen to -1.5%.

In other words, U.S. economic growth has fallen off a cliff over the past two months from steady growth (2.3%) to fairly meaningful contraction (-1.5%) …

According to the February ISM Manufacturing Report released [yesterday] morning, the U.S. economy is moving in all the wrong directions right now.

Business activity is collapsing, with the New Orders index falling from 55.1 to 48.6 – its lowest level since October 2024.

Labor conditions are deteriorating, with the Employment index falling from 50.3 to 47.6 – its lowest level since October 2023.

And inflation pressures are spiking, with the Prices Paid index surging from 54.9 to 62.4 – its highest level since June 2022.

Everything is going in the wrong direction.

Before we get too bearish, Luke remains optimistic that these tariffs won’t become permanent

He sees stocks roaring back when today’s uncertainty dissipates. And that point is approaching.

Back to Luke:

Policy uncertainty will abate in the coming weeks. It may even be replaced by policy optimism as the new administration shifts its focus from tariffs and federal spending cuts to deregulation and tax cuts.

As that happens, stocks should rebound…

Aside from policy risks, the fundamentals underlying the stock market remain positive and strong. That’s why we believe that as policy risks ease, this market will blast higher.

I’ll note that stocks are trading off their morning lows as I write early afternoon. The Nasdaq has jumped from “2% down” to less than half a percent lower.

Who knows where we’ll close, but this is encouraging, and has shades of Luke’s forecasted rebound.

Circling back to tariffs, Trump will likely defend/promote his policies tonight when he delivers the first joint congressional address of his second term. In the meantime, mind your stop-losses…and look for great stocks that are now selling at panic prices.

I’ll share one stock to consider below.

Following the trail of innovation…

Let’s follow the steppingstones.

AI is the future…

The nation that leads the AI race will gain a significant edge – both economically and militarily – over its rivals…

At the heart of this competition lies cutting-edge semiconductor technology…

And that places Taiwan Semiconductor Manufacturing Co. (TSMC) squarely in the global spotlight.

According to The Economist, Taiwan produces more than 60% of the world’s semiconductors and over 90% of the most advanced ones. And most of them come from TMSC.

To make sure you’re not confused, Nvidia designs the most advanced AI chips, but it does not manufacture them. Instead, it relies on TSMC to produce its cutting-edge chips, including the latest GPUs used for AI.

With this context, yesterday brought important news.

From The Wall Street Journal:

Taiwan Semiconductor Manufacturing Co. intends to invest $100 billion in chip-manufacturing plants in the U.S. over the next four years under a plan expected to be announced later Monday by President Trump, according to people familiar with the matter.

The investment would be used to build out cutting-edge chip-making facilities.

Such an expansion would advance a long-pursued U.S. goal to regrow the domestic semiconductor industry after manufacturing fled largely to Asian countries in recent decades.

This is a big next step in our AI war with China

Taiwan – particularly TMSC – is a potential flash point between the U.S. and China.

China has increasingly asserted its intention to reunify with Taiwan, using both military posturing and political pressure. Recent activities include intensified military drills and frequent incursions into Taiwan’s air space. Experts suggest this signals a readiness to use force if Beijing deems it necessary.

Here’s The Guardian:

China’s military launched a record number of warplane incursions around Taiwan in 2024 as it builds its ability to launch full-scale invasion, something a former chief of Taiwan’s armed forces said Beijing could be capable of within a decade.

TMSC – being the world’s largest contract chipmaker and a key supplier of cutting-edge semiconductors – is critically important to both China and the U.S., making the news of the $100 billion investment even more significant.

Domestic chip production would be critical if a worst-case scenario plays out between the U.S. and China over the coming years.

We’ll keep you updated as this story unfolds.

Meanwhile, a reminder to invest in “AI Appliers” – even more so today while the markets are panic selling

If you’re new to the Digest, “AI Appliers” are the companies using AI to grow revenues, cut costs, and beef up bottom lines. Here’s a bit more color from our global macro expert Eric Fry, editor of Investment Report:

AI Appliers take foundational tech breakthroughs – like Nvidia AI chips – and profit off utilizing them.

Some companies use AI to enhance businesses, while others provide the energy AI needs to run.

These are the companies now set to produce strong investment gains in the coming years.

In recent weeks, we’ve highlighted various AI Appliers recommended by our experts. Let’s highlight with another one, courtesy of Eric:

Coupang may not be a household name here in the United States, but the company is well known in every South Korean household. Coupang is South Korea’s go-to provider of Amazon-like services.

In his analysis, Eric highlights the company’s Q1 2024 earnings call in which founder Bom Suk Kim spoke to Coupang’s AI initiatives.

I’ll include a snippet of it below, as this is the exact type of commentary that we should be looking for from the CEOs of the companies in which we’re investing today.

From Kim:

Machine-learning and AI continues to be – have been a core part of our strategy. We’ve deployed them in many facets of our business from supply chain management to same-day logistics.

We’re also seeing tremendous potential with large language models in a number of areas from search and ads to catalogue and operations among others.

There is exciting potential for AI that we see and we see opportunities for it to contribute even more significantly to our business.

But like any investment we make, we’ll test and iterate and then invest further only in the cases where we see the greatest potential for return.

This focus isn’t new. Eric notes that Coupang’s e-commerce platform already utilizes AI and advanced robotics.

Meanwhile, the company’s other patent-protected AI-related tech can predict future order volumes, alert product managers when prices fluctuate significantly, optimize Coupang Eats delivery, and enhance search accuracy.

And if this isn’t enough, there’s one final reason to consider Coupang…

Stanley Druckenmiller – arguably one of the greatest traders of all time – is heavily invested.

For newer Digest readers, “the Druck” is a market legend. He’s credited alongside George Soros as “breaking the Bank of England” when the two made $1 billion from shorting the pound. He has perhaps the best long-term investment track record of any investor alive.

As of mid-November 2024, Coupang was one of his top five holdings.

Bottom line: If you’re looking for a top AI Applier that’s not already in the average U.S. investor’s portfolio, give Coupang a hard look.

By the way, the stock is down about 10% over the last two weeks as this selloff continues.

For additional AI Appliers that Eric is recommending in Investment Report, click here to learn about joining him.

Finally, maintain a big-picture perspective on why you’re investing in AI

Unfortunately, it’s not just about investment gains…

It’s about being on the right side of history and securing your future.

Right now, in closed-door business meetings around the country, executives are having the same conversation…and it’s leading to the same action step…

The most effective way for companies to increase profits today is by letting go of expensive, error-prone human workers and replacing them with inexpensive, near-perfect AI workers.

Here’s a tiny sampling of what’s been happening in the corporate world recently:

• Salesforce: Management announced layoffs due to artificial intelligence, indicating a strategic move towards automation to enhance efficiency.
• Autodesk: The software company will cut approximately 9% of its to increase efficiency and focus on growth areas such as artificial intelligence.
• Workday: They’ll be laying off about 8% of its workforce as part of a shift towards more AI-driven solutions and investments.
• Duolingo: In January last year, it offboarded 10% of its contractor workforce as the company pivoted to AI for content translation.
• Siemens: It’s considering cutting up to 5,000 jobs globally in its factory automation sector due to ongoing challenges, with a focus on integrating AI to enhance efficiency.

I could list dozens of these stories, but they all point to the same takeaway…

AI is replacing a growing number of the corporate workforce

Executives will do all they can to avoid directly stating this reality. After all, it looks terrible in the headlines. So, they’ll mask it with business jargon, using words like “efficiency” and “streamlining.” But the takeaway is the same…

More jobs lost to AI/automation.

To be clear, this isn’t about struggling companies using AI as a lifeline to right the ship and return to profitability. Most of the companies incorporating AI today are profitable. But AI can help them become even more profitable.

Here’s Forbes making this point yesterday in an article highlighting corporate job cuts coming in March:

Michael Ryan, a financial advisor, says that AI is a big driver in the announcements…

“It’s not like these companies are struggling to stay afloat. They’re making these cuts while their bottom lines look good.

“I think what we’re seeing isn’t just a normal economic hiccup. It feels more like companies are using this moment to fundamentally reshape how they operate.

“They’re thinking, ‘Well, if we can replace these positions with automation, why wouldn’t we?’”

This is the direction corporate America is headed. Here’s how I put it in our Oct. 7, 2024, Digest:

Imagine a billiards table with its pool balls spread about the table randomly…

Now, imagine hoisting up a corner of the table so that all the balls roll into a single pocket.

This is the financial impact of Artificial Intelligence (AI) on global wealth.

AI is lifting the billiards table… the pool balls are global wealth/investment capital… and the one pocket receiving all the balls are the owners of the businesses that wisely and effectively implement AI technologies.

What about the five other empty pockets?

Well, they’re the businesses that fail or are unable to adapt to next-gen AI technology or business models. They’re also the “regular Joes” who get shafted financially as AI steps in to do their jobs faster, better, and cheaper…

In the era we’re entering, there will be just two types of people: the owners of AI, benefiting from the lopsided flow of capital, and everyone else, who are watching AI swallow their former economic productivity like light into a black hole.

So, what do we do?

From an active income perspective, become proficient at whatever AI tools are most relevant to your industry (if applicable), and use them to make yourself more effective.

From a passive income perspective, your best defense is a good offense of well-placed AI investments.

That’s what we’re trying to help you achieve here in the Digest with recommendations like CPNG.

Bottom line: Make sure you’re ready for what’s coming…because it’s already begun.

Have a good evening,

Jeff Remsburg

February was a bumpy month for the overall stock market and our stocks.

Distractions like Trump 2.0’s latest tariff threats, the German elections, DeepSeek’s AI claims, weak consumer confidence and elevated inflation caused some wild market swings. As a result, all of the major indices ended the month of February lower, with the S&P 500 down 1.4%, the Dow down 1.6% and the NASDAQ down nearly 4%.

March has gotten off on equally volatile footing. Yesterday, markets began to sell off as deadlines approached for President Trump’s threatened tariffs against Canada and Mexico. As a result, the S&P fell 1.7% on Monday to post its worst day of the year. Meanwhile, the Dow lost 1.5% and the tech-heavy NASDAQ dropped 2.6%.

The stock market threw another hissy fit over tariffs today, with all of the major indices opening sharply lower this morning. At one point, they were all down by more than 1% before moderating those losses in afternoon trading. As investors digested the tariff news, they began to worry about how they will impact the U.S. economy now that they are in place. 

So, in today’s Market 360, let’s review the latest tariff news. I’ll explain why we shouldn’t worry and what we need to remember during market selloffs. Simply put, good stocks will bounce. I’ll share an example of one such stock… and why quantum computing should serve as a catalyst for it in the future.

Most investors expected stability, but cryptocurrencies have delivered spectacle…

After touting his support all along the campaign trail, President Trump initially had cryptocurrencies tearing higher. But as with the rest of the financial markets, cryptos have been stuck on a rollercoaster that would test even the most iron-stomached investors since November’s election.

Indeed, Bitcoin (BTC/USD) rallied 60% in the month after the election on hopes for pro-crypto policies out of D.C. Then, worries about reinflation sent Bitcoin crashing 15%. 

As those inflation worries abated, BTC rebounded 15%… only to crash 20% on tariff fears. 

Most recently – just this past weekend – Bitcoin popped 10% in a hurry on news that Trump is set to create a strategic national reserve for cryptos. But when the president subsequently announced more tariffs on Monday, BTC gave back all those gains. 

It has been a violent and volatile ride over the past few months. The natural question on everyone’s mind is: What’s next?

We think a rally – and a pretty big one at that… 

This Week’s Bullish Development

Perhaps surprisingly, considering what we’ve just outlined, our bullishness stems from Trump. 

As we mentioned, shortly after the election, Bitcoin surged from $60,000 to $100,000 on the idea that the president would enact a series of pro-crypto policies that would support innovation and growth in the industry. Since then, however, BTC has stumbled on concerns that the president was de-prioritizing cryptos. 

That is, in his first few weeks in office, Trump hit the ground running with tariffs and federal spending cuts. But he moved rather slowly with his crypto-related promises, creating worries that his action would be less than hoped. 

That could all change later this week. 

This Friday, March 7, Trump is set to host the first-ever White House Crypto Summit. Attendees will include prominent founders, CEOs, and investors from the industry. 

We think he could announce more big things at this summit. 

Trump is well-aware of how crypto markets have struggled – and of how some crypto investors who supported him on the campaign trail may be disappointed with how the markets have fared so far during his presidency. 

That’s why we think he tried to ‘save’ the crypto markets with the announcement of a crypto strategic national reserve on Sunday… 

Editor’s Note: A lot of folks know I recommended NVIDIA Corporation (NVDA) back in 2019.

And since then, that stock has soared more than 3,000%.

I still consider NVIDIA my Stock of the Decade. But I don’t love the stock. Because after more than four decades in the market, I’ve learned not to “fall in love” with any particular stock.

Instead, I let the fundamentals speak for themselves. And that’s why I rely on my proven quant system to be my guiding star.

After all, it doesn’t have an emotional connection to a stock. It lets the numbers do the talking.

My friend and colleague Keith Kaplan, operates the same way.

Keith is a gifted computer programmer and fintech pioneer. He’s the CEO of a company called TradeSmith, which produces some of the most powerful stock-trading algorithms I’ve seen. More than 60,000 people use Keith’s algorithms to track some $30 billion in assets. And they’ve reported making millions in the process.

For the past three months, Keith’s team has been working on a highly secretive project.
It’s a new kind of algorithm designed to do one thing: detect the start of technical melt-ups before they happen.

And right now, it’s pointing to an ultra-rare event poised to disrupt the market…
In fact, it has only been seen twice before going back to the year 1900. And that’s why Keith is making what he calls “the biggest prediction in TradeSmith’s 20-year history.”

And just days from now, he’ll reveal his full prediction for the first time ever.

On February 27 at 8 p.m. Eastern, Keith will take you behind the paywall of his powerful $5,000 software to reveal 10 tech stocks poised soar as this event unfolds.

Either one could become the Next NVIDIA in terms of potential gains.

You’ll get his full list – and his full prediction – when you join his briefing next Thursday. I suggest you go here and get your name on Keith’s attendee list right now.

**************************

I love stocks and the market. I love reading about, thinking about it and, best of all, profiting from it.

But year after year, I found the same thing happening to me over and over again.

I was great at buying the right stocks… but I was a terrible investor.

If you’re anything like the average investor, this has happened to you too.

Ask yourself this: How many times have you bought a stock, then sold it, just to find out that it rose much further?

This happens for a few reasons. And chances are, if you’re anything like me, it’s happened to you in the past… a lot.

To help prevent this kind of impulsive decision making, I made it my mission to develop a system that prevents me from doing that to my portfolio…

It has worked wonders for me!

And it can help you too.

And today I’m going to show you how it works…

The Right Way to Buy and Sell

In October 2016, I bought Advanced Micro Devices (AMD).

This action makes me look like a genius; AMD has gained more than 1,000% since I bought into the stock.

But I’m not a genius because I sold nearly right away …

Why did I sell?

I trusted my gut. The same gut that I trust to judge right and wrong and who to be friends with. You know, the emotional being in me that makes all my decisions.

Clearly, that didn’t work out well for me. And you probably have a lot of these types of examples too.

So how is it that we can buy the right stocks, but we wind up being terrible investors?

Well, because we make quick decisions when we trust our gut.

Do you have a regimented process for understanding exactly when to buy a stock, how much to buy, and when to sell it?

I do NOW, and it all starts with this formula below …

Before I unpack this for you, let me tell you about the findings of two Nobel Prize winners in behavioral economics.

You may have heard about Richard Thaler and Daniel Kahneman. Their groundbreaking studies of behavioral economics and investor psychology ultimately won them both the Nobel Prize.

Their first finding was that we are “risk-seeking when we’re losing.”

This is simple. And I bet you’ve had this happen plenty of times. I call it “rationalizing your decision after you make it.” When a stock is falling, you say to yourself:

• I’m going to buy this on the dip.
• This stock will come back, and my break-even price will be lower.
• It’s just a paper loss.

Really, what you’re doing is adding more risk to your position. You are “seeking out more risk” by buying more OR holding on to a falling stock.

Momentum is the single most important factor in investing. MSCI Inc. has studied this factor and labeled it one of the most important in reference to a stock’s rising or falling. Here’s what that means in plain speak: When a stock has a confirmed uptrend, it is more likely to rise in the short term. When a stock has a confirmed downtrend, it is more likely to fall in the short term.

And by buying more of a stock as it’s falling, or by “waiting” for that stock to turn around, you are taking on risk and even increasing risk. You are setting yourself up to lose more money.

So how do you combat that? You cut your losses when a stock is in a confirmed downtrend. Stop the bleeding.

But what Thaler and Kahneman found about winning is even more important to understand. They found that when a stock rises, we are “risk-averse when we are winning.”

Here’s what that means, and I’m sure you’ve been there with me. Typically, when a stock is rising, we get excited. We have a winner! So we decide to sell our stock to “lock in our gains.”

Folks, that’s lowering our risk. That’s taking money off the table.

But we’re winning!

When a stock is rising, and it is in a confirmed uptrend, you are winning. Here is where you want to take more risk, folks!

This is the BEST TIME to either ride the winner higher or even add more money to the position to take advantage of its short-term rising outlook.

And that leads me to our (TradeSmith’s) discovery of the single most important number in investing AND why it works.

This number is the formula I showed you above for the “VQ,” which stands for Volatility Quotient.

And it solves so many problems that individual investors face today. Certainly people like me, and likely you as well.

It’s a measure of historical and recent volatility – or risk – in a stock, fund, or crypto. And that measurement is really focused on the moves a stock, fund, or crypto makes.

Here’s what it tells you (I’ll just refer to stocks, but it covers everything we track):

• How much of a stock to buy.

• And how risky that stock is – how much movement you should expect.

To show you an example, here are the VQs of some popular stocks:

Let me leave you with a single nugget that may change your investing life forever. It certainly has changed mine …

The trend is your friend.

If the confirmed trend is up, stay in your stock. Ride the winner! If the trend is a confirmed downtrend, cut your losses.

The best way to get the most out of a winner and cut the loser (and of course, winners become losers at times) is to deploy a trailing stop. A trailing stop acts as a point at which you sell a stock (or any other fund, crypto, etc.).

When you buy a stock, you specify what your trailing stop is – most people pick a “generic” number like 25%. That means that from the moment you own a stock, there is a stop loss number at which you will then sell the stock, and the trailing stop trails the highs (but not the lows) that the stock makes.

If you buy a stock at $100 and it goes down over time by 25% and never makes a new high since you purchased it, you sell at $75.

If that stock rises to $200 and never falls 25% from a high, you’re still in that position, and your stop out point is $150.

So you ride your winners and cut your losers.

But NO TWO stocks, funds, or cryptos are the same. That’s why you can use the VQ number for each stock you buy to determine exactly what the right stop loss would be.

Looking at the table I posted above with popular VQs, that means your stop loss for Johnson & Johnson would be about 12%. But for Tesla, your stop loss would be around 49%.

Tesla moves around more than three times as much as Johnson & Johnson. Now you know that if you were to buy Tesla, you would have to suffer through a lot of thrashing around, but it may be worth it.

And on my AMD trade, had I followed a 25% trailing stop, I would have made nearly 50% instead of losing 3.5%!

And had I used a VQ-based trailing stop, well, I could have followed the signals and made more than 1,300%. I would have known that AMD is risky and moves around a lot.

So… the VQ is important. It sets expectations and gives you a framework for making better decisions.

It turns great stock pickers into great investors!

I honestly believe it’s the most important number in investing.

On Feb. 27 at 8 p.m. Eastern, I’m going to unveil the biggest prediction in my company’s 20-year history. And I’ll explain how anybody can use the VQ to make data-driven decisions about their investments. It’s free to attend; all you have to do is register.

Happy investing!

Keith Kaplan

CEO, TradeSmith

Earlier this week, I caught myself daydreaming about what it would be like to have $215 million.

I was driving on I-95 near our Baltimore offices when I saw one of the billboards for the Powerball lottery.

It’s easy to get lost in the fantasy of having that much money and imagining how your life would change.

New houses, new cars, exotic vacations … and definitely no more work.

Of course, I don’t play the lottery. The odds of winning are about one in 300 million, and to me that sounds like wasting money.

To put those odds in perspective:

• The odds of dying from a shark attack are 1 in 3.7 million, according to the International Shark Attack File.
• The odds of dying from hornet, wasp or bee stings is about 1 in 54,000, according to the National Safety Council.

I don’t worry about those remote risks, and the odds of winning the lottery are even longer!

Sadly, too many investors treat the stock market like a lottery – putting money into “cheap” moonshot stocks that generate no earnings in the hope that they’ll get lucky, pick the right one, and retire tomorrow.

While that strategy might work for the luckiest of investors, if you want to put the probabilities on your side, you need to know about the Iron Law of the Stock Market…

The Best Road to Growing Your Wealth

Right now, we’re finishing one of the most pivotal times of the year when companies report their quarterly results.

Market legend Louis Navellier has always called earnings season “my favorite time of year.”

That’s because he focuses on fundamentally strong companies … the ones that are expected to post superior earnings.

And that’s what’s at the heart of the Iron Law of the Stock Market: If a company massively grows its sales and earnings, its stock price will grow, too.

Yesterday, Louis provided an earnings season update to his Growth Investor subscribers.

The majority of stocks are beating analysts’ earnings expectations, including our own Growth Investor stocks. According to FactSet, of the S&P 500 companies that have posted results, 76% have exceeded analysts’ earnings estimates and 62% have topped analysts’ sales forecasts.

If we stay focused on companies with accelerating earnings and sales momentum, as well as positive analyst revisions, the vast majority of our stocks will knock it out of the park and rally strongly. And that has been the case during the fourth-quarter earnings season.

We’ve had 40 Growth Investor companies release quarterly results so far, with 28 of these companies topping analysts’ earnings estimates. Our stocks have achieved an 8.5% average earnings surprise, versus the S&P 500’s 7.3% average earnings surprise.

No One Bats 1,000 – But Data Provides the Edge

Of course, no strategy is perfect.

Some of Louis’ recommended stocks missed estimates and saw their prices pull back.

But the data provided during earnings season is what provides the crucial input for Louis’ Stock Grader system.

At the end of every earnings season, Louis uses this data to refine his recommendations, ensuring that he remains invested in the “crème de la crème” of the market.

Next week, market leader – Nvidia (NVDA) – reports earnings as a sort of grand finale to this earnings season. Growth Investor subscribers can use Louis’ Stock Grader tool to see how Nvidia rates any time.

Below is a Stock Grader sample complete with a price chart from the last two years.

In the picture above, you can see the horizontal-colored bands provide a grade history over the last two years.

This is the system Louis used to recommend NVDA in 2019 … before it went on to gain more than 3,000%.

Another benefit of Stock Grader is the ability to compare stocks with its Analyze feature. Here is NVDA compared to other semiconductor stocks.

Growth Investor subscribers can run their own stocks through the system and then save those picks to track their grades over time.

Recently, Louis’ Stock Grader system flagged a remarkable improvement in one semiconductor stock’s fundamentals. The company’s grade jumped from D to B, signaling potentially significant upside…

You can learn more about this opportunity here.

It can be fun to fantasize about winning the lottery and getting rich quick. But, investing using the Iron Law of the Stock Market – investing in stocks with growing sales and earnings – is likely to provide a higher probability outcome.

Enjoy your weekend,

Luis Hernandez

Editor in Chief, InvestorPlace

Why Jeff Clark says it’s time to buy on weakness … the sector Eric Fry is recommending today … Trump fuels a bitcoin rally … Bitcoin’s incentive structure

Despite the market’s pullback that’s continuing as I write Monday, let’s get bullish.

On Saturday, fellow Digest-writer and InvestorPlace’s Editor-in-Chief Luis Hernandez highlighted the latest AAII Sentiment Survey showed only 19.4% of respondents are bullish.

This is the most lopsided report we’ve seen in several years…which makes it a contrarian’s dream.

Let’s jump to master trader (and frequent contrarian) Jeff Clark, editor of Jeff Clark Trader:

Back on November 13, 2024 – following the large, post-election rally that pushed the S&P 500 above 6000 for the first time ever – bulls outnumbered bears 50% to 28%.

From a contrarian perspective, that was bearish. And stocks have struggled to make any headway since then.

Now, with the S&P 500 still stuck near 6000 and trading down just 2% from its all-time high, the vast majority of investors have turned bearish.

It’s remarkable that two months of choppy, back-and-forth action can create that drastic a shift in sentiment. This is the sort of bearish reading we’d typically get following a 10% to 15% decline in the market.

So, there’s plenty of fuel to power the stock market higher from here.

Jeff highlights three indicators: Moving Average Convergence/Divergence, the Relative Strength Index, and the Commodity Channel Index, all of which have been trading recently in neutral territory.

While such readings mean the S&P could break lower, Jeff believes it’s more likely that bulls will reassert their dominance:

We are entering the seasonally bullish month of March. And the Volatility Index just generated its first buy signal of 2025. So, the bulls have a slight edge here…

Returning to the AAII Sentiment Survey, remember, the emotional pendulum swings both ways.

Excessive fear always gives way to new bullishness…eventually. And recent, heightened levels of fear suggest that a bullish reversal could be fast approaching.

Back to Jeff for what he’s doing about that:

If stocks start to move higher, then we could see a dramatic rally over the next few weeks as bearish investors flip to bullish and chase stock prices higher.

Traders should use any weakness over the next few days as a chance to add long exposure to the stock market.

One sector to be bullish on today

Solar.

Before we dive into those details, for newer Digest readers, Eric is our global macro expert and the analyst behind Investment Report.

He’s also one of the most successful analysts in the newsletter industry, having identified 42 different 1,000%+ returning investments over his multi-decade career. That’s more than anyone we know of in our business.

In Eric’s latest issue of Investment Report, he made the case for why it’s time to add solar stocks to your portfolio.

From Eric:

No other domestic energy source is growing faster.

Last year, solar installations accounted for a record-high 64% of all new U.S. electricity-generating capacity – up from 36% three years ago and 23% six years ago. This renewable energy source now produces enough electricity annually to power one quarter of all U.S. homes.

Meanwhile, domestic solar-module manufacturing capacity is also ramping higher.

During the last two years, manufacturing capacity has quadrupled, from less than 10 GW to nearly 40 GW. This year, capacity is on track to surge again to 66 GW.

But what about President Trump’s disdain for what he’s called the “Green New Scam” and his plans to “Drill, baby, drill” for fossil fuel energy? Is that not a headwind to solar?

Back to Eric:

Most of this new [solar] manufacturing capacity is popping up in “red states,” which is one of many reasons why the Trump administration might treat the industry kindly…

[Plus, Trump] has stated several times that he “hates wind.” By contrast, he famously stated last year that he’s “a big fan of solar.”

Eric goes on to highlight a second reason why solar power will continue to thrive during the current Trump administration…

Growth is the path of least resistance.

The U.S. desperately needs more power. The nation’s soaring demand for energy – led by the data center construction boom – will require an all-hands-on-deck solution.

Remember, last week, Nvidia CEO Jensen Huang said that next-generation AI will need 100 times more computing than older models due to new reasoning approaches.

From Huang:

The amount of computation necessary to do that reasoning process is 100 times more than what we used to do.

Solar is one of the cheapest ways to power such computing needs. So, even if Trump favors policies that encourage oil and gas development, he’s unlikely to enact policies that actively discourage solar.

As usual, Eric includes far more details that make the case for why he’s bullish on solar today. If you’re an Investment Report subscriber, click here to log in to read your Monthly Issue.

For an easy way to play the solar opportunity, check out the Global X Solar ETF, RAYS. It holds leading solar stocks including Enphase Energy, First Solar, and Sunrun. Just be aware that of your top 10 holdings, six are Chinese companies. So, watch out for trade wars.

As to how Eric is playing it, his preferred investment is trading near a four-year low, and Eric believes “a double is well within reach.”

You can learn more about it as an Investment Report subscriber by clicking here.

Finally, has Bitcoin bottomed?

Bitcoin rallied over the weekend after President Trump announced the creation of a “strategic crypto reserve” that will include bitcoin, ether, XRP, Solana’s SOL token and Cardano’s ADA.

From Trump on Truth Social:

A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA. I will make sure the U.S. is the Crypto Capital of the World.

In a follow-up post, Trump added:

And, obviously, BTC and ETH, as other valuable Cryptocurrencies, will be at the heart of the Reserve. Bitcoin popped over $93,000 in the wake of the news though it has pulled back to about $90,000 as I write Monday morning.

Stepping back, Bitcoin has fallen sharply in recent weeks

After notching an all-time high in December near $108,000, the grandaddy crypto fell below $85,000 last week. Meanwhile, many leading altcoins have full-on crashed 50% or worse.

Despite the sector gains over the weekend, many bears continue to predict Bitcoin’s demise. Perhaps they’ll be right (though they’ve all been wrong so far).

But if they’re going to be right, they’re fighting an uphill battle against today’s incentive structure.

Consider this…

Who is incentivized for Bitcoin’s price to rise? Simultaneously, who is in a position to help create the conditions for that rise to happen?

We got a clue over the weekend.

Trump.

But he’s not the only one. Here are a few other such individuals…

• Vice President JD Vance: He’s recognized as the first Bitcoin owner to hold the vice presidency
• Secretary of the Treasury Scott Bessent: This former hedge fund manager and multi-millionaire is known for his pro-crypto stance
• Secretary of Commerce Howard Lutnick: He’s the former CEO of Cantor Fitzgerald, where he invested significantly in crypto. He is quoted as saying, “Do I own Bitcoin? Of course, I do. Does Cantor Fitzgerald own Bitcoin? A shitload of Bitcoin.”

Bottom line: Whether you love or hate Bitcoin… whether you love or hate the current administration… when you follow the incentive structure… you’ll see a reason to remain bullish on Bitcoin.

And it’s not just Bitcoin. We expect select altcoins to reward investors handsomely here in 2025. Trump mentioned a few in his post, but there will be others.

In fact, our crypto expert Luke Lango believes this could be the year of huge altcoin gains, similar to 2021 when dozens of altcoins rallied more than 5,000% in a single year.

To help him identify the most lucrative opportunities, Luke is using a quant-based trading algorithm he and his team recently created. It puts the focus squarely on the one thing that matters when you’re trading altcoins – price.

Specifically, the tool is engineered to identify price breakouts that suggest a continuation of gains based on momentum. To learn more, click here.

We’ll keep you updated on all these stories here in the Digest.

Have a good evening,

Jeff Remsburg

Well, folks, with NVIDIA Corporation’s (NVDA) earnings report now in the rearview mirror, earnings season is winding down. So, it begs the question: Is it time to buy or sell? That’s the question my friend Jason Bodner and I answer in this week’s Navellier Market Buzz.

We preview earnings estimates of a few companies that are set to report over the next few days and review the results of some companies that announced last week. I also explain why certain stocks go down despite beating expectations and give my thoughts on Warren Buffett’s stockpiling of cash.

This week, a number of key economic reports are scheduled to be released. They include the Institute of Supply Management (ISM) manufacturing and services reports, the ADP and February payroll reports and the U.S. trade deficit. I explain what I expect from these critical reports in this week’s Market Buzz.

Click the play button below to check it out now!

Hello, Reader.

Geopolitical uncertainty abounds… tariffs are on the menu… earnings results are mixed… price action has stalled out… and so much more is throwing a wrench into the works.

But our partners at TradeSmith couldn’t be more certain about what’s coming.

And what’s coming is not a crash or a bear market.

What’s coming is the continuation of an epic melt-up that officially began in April of last year… and will likely only accelerate over the next 12 months.

Today, I’d like to share a special conversation between TradeSmith CEO Keith Kaplan and Michael Salvatore, the editor of TradeSmith Daily. In the video, Keith and Michael share exactly how the research team at TradeSmith reached that conclusion. (Hint: They did so by looking at the data – not the headlines.)

The conditions we’re seeing today, they say, mirror the biggest melt-ups in history… the kind that come around once or twice every 100 years. So, when they occur during your lifetime – you might not see another one again.

And when the TradeSmith team realized the gravity of this opportunity, they knew they had to develop something you could use to profit on the way up… and avoid the inevitable meltdown.

What they created is a strategy with an 80% win rate and 16% average returns over a 21-day hold time on hundreds of backtested trades.

Click here or on the video below to watch the conversation between Keith and Michael to see how they built it – and take a look at a fresh signal that flashed just seven trading days ago, on a stock you might not hear about anywhere else.

Plus, last Thursday, Keith hosted a research presentation that covers all this in much greater detail. You can watch a replay of the event here.

As part of his demonstration, he shared 10 stocks he thinks will dominate through the melt-up… and 10 more that are destined for the bargain bin.

By the end, he shared everything you need to understand just how bullish the next year will be.

Once again, you can watch a replay of the Keith’s special broadcast here.

Now, let’s take a look back at what we covered here at Smart Money last week…

Smart Money Roundup

It’s the Perfect Time for This Low-Risk, High-Reward Strategy

By targeting quality stocks in sudden, steep downtrends, the folks at TradeSmith have learned you can bank on a quick reversion to the mean that sends shares much higher from your entry. But why talk about it now? Read on as Keith Kaplan discusses the ultra-rare bullish signal his team is picking up… and the strategy perfectly suited to give you monumental gains.

Your Soaring Electric Bill Signals the Next Big Market Opportunity

A sky-high utility bill may have more to do with your portfolio’s potential profits than you think. And it has all to do with the solar industry. In last Thursday’s issue, Tom Yeung dives deeper into solar’s coming revolution, why we could see an uptick in solar spending, and how you can profit from it.

3 AI Stocks to Buy Before They Steal Nvidia’s Crown

Nvidia’srocky start to the year reminds us that investors should start considering companies that will eventually inherit the chip king’s momentum – the AI Appliers. Some of these companies use AI to enhance businesses, while others provide the energy AI needs to run. Continue reading to learn about under-the-radar AI plays set to produce strong investment gains in the coming years.

A Low Price to Pay for a Mega Melt-Up

Between Chinese AI breakthroughs, radical shifts in trade policy, the Federal Reserve’s rate-cutting cycle, and now a surge in inflation expectations, the headlines have been all over the place. All this chaos can’t help but make you wonder if we’re heading for a crash. Keith Kaplan is here to tell you how this isn’t the beginning of a bear market, but the setup for one of the biggest opportunities of your lifetime.

Regards,

Eric Fry

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Stock Grader recommendations for 164 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

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Article printed from InvestorPlace Media, https://investorplace.com/market360/2025/03/20250303-blue-chip-upgrades-downgrades/.

©2025 InvestorPlace Media, LLC

Editor’s note: “Stock Picking Mastery: Identifying Tomorrow’s Champions Today” was previously published in January 2025 with the title, “Stock Picking Mastery: An Exciting New Tool for Smarter Investing.” It has since been updated to include the most relevant information available.

I don’t know about you, but as someone heavily involved in stock analysis on a regular basis, I often feel like there must be a better way to approach the markets. Just imagine how much time you could save if, instead of poring over the details of each individual stock out there, you had a tool that could do so for you. Well, that’s exactly what we’ve aimed to create with Auspex, our latest stock picking system.

You may already be familiar. Indeed, in recent issues, we’ve offered glimpses into this tool’s inner workings. 

In short, Auspex leverages fundamental, technical, and sentimental data to help us find the stocks with the strongest possible setup. That way, we have the opportunity to get into the most promising stocks at the best time – before they go on to rise. 

We’ve spent several months developing, testing, even using Auspex to help us home in on such up-and-coming market winners. And today, we’re releasing the model’s top picks to buy for March. 

But… before you check out those latest trades… I would like to finish explaining just how this innovative model helps uncover the market’s future top performers.

That is, previously, we’ve discussed how Auspex uses a series of fundamental factors to narrow down a universe of ~14,000 potential picks to uncover just those that meet our very strict criteria.

And today, I want to explain how Auspex takes those fundamentally strong stocks and whittles the list down even further, ultimately landing on the best picks the market has to offer. 

Using Fundamentals, Technicals and Sentiment to Reveal Top Stocks

As we’ve mentioned previously, when we have Auspex scan the markets, it analyzes a universe of roughly 14,000 stocks. In our scan from early December, for example, only about 300 of those 14,000 stocks were deemed fundamentally strong, with accelerating sales and earnings growth and swelling profit margins.

But we don’t stop there. After receiving those results, we incorporate additional technical and sentimental parameters to continue paring down that list. And ultimately, only a few stocks make the final cut. For instance, out of 14,000 possible stocks, Auspex identified just 10 picks for the month of December.

OK… so, how does this system deem which stocks are worthy investments?

Well, when it comes to technicals, we’re essentially looking for stocks with strong upward price momentum.

We want to see the 200-day moving average (MA) sloping higher, indicating that the stock’s primary long-term price trend is positive. We also want to see the 50-day MA trading above the 100-day, as well as the 100-day trading above the 200-day MA. That indicates that short- and medium-term price momentum are both growing stronger. 

Additionally, positive action on the moving average convergence/divergence (MACD) line – with the MACD above the signal line – is also ideal. It’s another indication of strengthening price momentum. And, lastly, we want to make sure the stock isn’t “too hot” or overbought. That’s why we look for stocks where the relative strength index (RSI) measures less than 70. 

Now, on the sentimental side of things, we hope to find stocks that analysts are getting more bullish on and that have investors flocking to get positioned in. Specifically, we want to see earnings estimates moving higher and trading volume on the rise. 

Then we layer these technical and sentimental filters on top of the fundamental filters we’ve discussed to find the stocks that are strong in every way.