Are You Missing Out on the Best
Trade of 2006?
by Dr. Steve Sjuggerud
July 31, 2006
It looks like we’re finally here…
In recent weeks, we’ve talked about the return of Big Tech… the return of Big Pharma… and the likelihood of a strong rally in stocks in the short run.
It now appears that we got it right. We believe there’s much more to come. Let me explain, and show you where you can profit…
On June 12, I wrote this in DailyWealth: “Microsoft is getting darn close to 8-year lows! It’s getting a bit absurd… Microsoft is a near-monopoly that earned an enormous 32% profit margin last year. Yet it’s trading at a forward P/E of 15… the cheapest it’s been in twenty years. You can’t find a business anywhere with that kind of long-term profit margin, for that cheap a price.”
Microsoft shares bottomed the very next day, and are up over 10% since then. And it’s not just Microsoft offering such a good deal. I also said:
“Look at the other old tech lions. Intel, for example, has a profit margin in excess of 20%, and a forward P/E of 14.
“Some day, investors will return to these tech shares and ones like them. The old kings of the dot-com era – which were so loved then, and so ignored now – will no doubt have their day again.”
Intel bottomed the day I wrote that letter… June 12.
It’s not just Big Tech that’s starting to get moving. In yesterday’s Market Notes, we showed a chart of Big Pharma stocks, which are breaking out. And Big Telecom stocks are breaking out too.
Smaller “value” stocks have beaten the larger “growth” stocks for many years now. That may be changing. Big Tech, Big Pharma, and Big Telecom have been money losers for over six years. Their time may finally be here.
In my monthly newsletter True Wealth, we’re now buying stocks…
In the latest issue, I told my subscribers to BUY STOCKS NOW. It’s not a “fundamental” call… it’s a call based on sentiment, as fear in the market hit an extreme, and it’s time to buy.
I said we could see the market do extremely well over the next six months… and the Nasdaq could do even better – we’re talking about a rise of 30% or more. I then recommended a simple fund that I expect could make us 60% in six months.
Sure, the big old stocks like Microsoft could do well… I don’t expect you’ll get hurt buying them now. But I do think you’ll do much better if you do what I recommended in my newsletter instead…
If you’re not yet a subscriber to True Wealth, I urge you to get on board. This month’s recommendation alone could make you many times the subscription price.
If you are a subscriber, and you haven’t gotten on board with this trade yet, what are you doing? We’re up about 7% already from last Friday’s close (the 21st), when I first told you about this relatively safe idea.
If you’re a speculator, now might be a good time to speculate in stocks, big or small… Do it on your own, or do it with us in True Wealth.
Good investing,
Steve
Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
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