Stansberry Research

Where to Find Stocks Bucking the Bear Market

Marc ChaikinLegacy Daily Cut

Chris’ note: Here at the Cut, we believe the right strategy can help you thrive in any market. And even in this historically bad year, opportunities are still out there. That’s why, today, I’m keeping the spotlight on a major new prediction from investing legend Marc Chaikin.

Marc started his career on Wall Street more than 50 years ago. But he rose to fame after creating stock selection models for money managers in the 1980s. To this day, hedge funds and investment banks use them to determine if a stock is “bullish” or “bearish.”

And these models now point to a bullish market shift next year.

Marc’s not predicting a bottom for the entire stock market. But he says certain stocks will surge 100% or more off their lows. And colleague Nomi Prins has been urging her subscribers to hear what he has to say.

Check it out here. Then read on below for more from Marc on two bullish opportunities right now… even as the bear market drags on.


When I started on Wall Street, Lyndon B. Johnson was president… and we hadn’t yet landed on the moon.

That was a long time ago. And I’ve learned a lot along the way. But the most important lesson came early in my five-decade career…

In 1966, I joined brokerage firm Shearson, Hammill & Co. I was 23 years old. And I wanted to learn the ropes as a broker.

The stock market was the most interesting thing in the world to me. I wanted to understand what made it tick.

Even more important, I wanted to make money.

And my timing couldn’t have been better…

I earned my license on October 7, 1967. That was right at end of a bear market that had begun in February of that year.

It had taken the S&P 500 down 22% peak to trough. And I started on that day that descent ended… and a new bull market began.

For the first two and a half years of my career, it seemed like every day was an up day.

Life was good. I was bringing on new clients and making great returns for them as a broker. It felt as though I had life – and the markets – figured out.

Everything went great… until late 1968.

That’s when the first bear market of my career struck. It lasted nearly two years. And it took the S&P 500 down roughly 36%.

Instead of every day being an up day, they were now almost all down days.

As tough as that was, it taught me an invaluable lesson… I wouldn't be able to survive in this business without “something different.”

That something different turned out to be technical – or chart – analysis.

And it changed my life…

It’s what led me to build the computerized stock selection tools that are now on every Bloomberg terminal in the world.

It also allowed me to pioneer the first real-time analytics workstation for portfolio managers and stock traders.

And as a newsletter editor, it’s let me identify stocks that buck the terrible trend we’ve seen this year of falling stock prices.

And today, I’d like to share a few of those opportunities with you.

Introducing the Power Gauge

Most investors had a miserable year in 2022.

The broad S&P 500 is down roughly 16%. The tech-heavy Nasdaq is down about 28%.

And crypto markets are down much more than that.

But subscribers who follow the recommendations in my Power Gauge Investor newsletter aren’t suffering as much.

The Power Gauge is one of the computerized models I developed based on technical analysis.

It’s a 20-factor model that evaluates stocks across four categories – Financials, Earnings, Technicals, and Experts. Then it puts out a simple reading from "very bearish" to "very bullish."

Once we check that box, the next step is figuring out the best time to buy.

So, my system also looks for large inflows of money into our favorite stocks. When those money flows light up, it’s time to buy.

I’ve closed four positions in the “Industry Monitor” portion of the model portfolio this year.

The average return was about 8%. And the remaining nine open positions are outperforming the S&P 500. On average, they’re up 1.4%.

That doesn’t mean it’s time for me to take a victory lap…

I would prefer much higher returns. Here’s a list, for instance, of the money-making opportunities the Power Gauge identified in 2020…

  • 782% gain in 12 months on (W)

  • 462% gain in 12 months on (PENN)

  • 302% gain in 12 months on (BE)

  • 292% gain in 12 months on (PLAY)

  • 174% gain in 12 months on (REGI)

  • 169% gain in 12 months on (VAC)

  • 228% gain in 12 months on (PVAC)

  • 262% gain in 12 months on (CWH)

  • 219% gain in 12 months on (APPN)

  • 141% gain in 12 months on (ELY)

  • 146% gain in 12 months on (TUP)

  • 246% gain in 12 months on (DLTH)

But even our 2022 performance is a lot better than losing double digits like most folks this year.

And as I mentioned, my system is flagging some bullish opportunities right now… even as the bear market drags on.

Two Bullish Opportunities

First, I’d like to call your attention to health insurer Cigna Corporation (CI).

Chart

It earns a “very bullish” rating from the Power Gauge. And it’s kept a “bullish” or better rating for most of the year.

Unsurprisingly, Cigna’s stock has been soaring.

It's up roughly 41% since early February. But the Power Gauge sees further opportunity here.

My system also has good news for investors in biotech stocks.

Measured by the iShares Biotechnology ETF (IBB), the sector plunged as much as 40% from its peak in September 2021 to its low in June this year.

But now, the Power Gauge reports that 5 of the 10 stocks in the Best of the Nasdaq category are biotech stocks.

Even better, they’re not flash-in-the-pan stocks. Most investors would recognize all five of them.

Said another way, my system has spotted a trend. And using a tool that only my highest-level subscribers can access, I’ve confirmed that the biotech sector is “bullish” right now.

I hope the takeaway is clear…

Most investors have endured an awful year in the markets. But that doesn't mean you can’t find any opportunities.

When the S&P 500 is down roughly 16% like it is this year, just preserving capital can be a strategic win. And the Power Gauge is helping us find opportunities to do just that.

Even better, it can identify opportunities in outperforming stocks, such as Cigna.

The Power Gauge can help us spot trends as they’re getting started. That’s the case in the biotech sector today.

The Best Year of Your Financial Life

My system tells me we’re about to see a several opportunities to earn 100% or more in certain stocks… as early as January 2.

That means 2023 could become the best year of your financial life.

I know that’s difficult to believe, given the terrible trend the stock market has been on all year.

But there’s a pattern that repeats at the end of bear markets. And every time it happens, my system points to a particular kind of stock that can double… even triple or quadruple… your money.

It’s almost impossible to find on your own. It only emerges as a buy in the wake of selloffs… when huge money flows go into it.

It happened at the end of the dot-com crash. Over the 12 months after the market bottomed, utility company PG&E (PCG) shot up 215%. And Hanover Insurance (THG) went up 200%.

And something similar happened after the 2008 crash bottomed. Following my strategy would have handed you in a 782% gain in online furniture retailer Wayfair (W).

And over the 12 months after the bottom of the COVID-19 crash in 2020, battery company Enphase Energy (ENPH) skyrocketed 527%.

That’s where that “something different” I learned about comes in handy.

These were seemingly random companies that get little attention from the press.

But they all had a specific cash-flow pattern. And nothing else I know of can spot it as accurately as the Power Gauge.

If you’re interested in learning more, I aired a major new prediction for 2023 recently.

I explained how this year's crash has opened a tactical new way of using the Power Gauge to potentially double your money in 12 months.

I’ve already reached more than 8 million Americans with this prediction online and broadcasted across 30 TV channels.

I’ve also reached my 750,000 subscribers with the same message.

But my publisher is taking it down at midnight tonight… as it will soon be too late to profit from this opportunity.

So before it’s too late, make sure to watch it here.

Good investing,

Marc Chaikin
Founder, Chaikin Analytics