An Opportunity to Convert Your Cash Into 'Rocket Fuel'

The Weekend Edition is pulled from the daily Stansberry Digest.


New Year's Day won't just mark a new year...

It will also bring a bullish "personality change" to the stock market. That's according to Marc Chaikin, our friend and founder of our corporate affiliate Chaikin Analytics.

This past Tuesday, Marc went live in a new online event and made this prediction in front of tens of thousands of viewers. And, importantly, he suggested a plan to put into action today that could make folks lucrative gains over the next 12 months...

After a brutal year for the markets in 2022, maybe this sounds refreshing to you... Or maybe you don't believe Marc's prediction and feel that the worst is yet to come. But ignore Marc's latest message at your own peril...

The risk here, he says, is missing out on potentially massive gains in certain overlooked individual stocks. These stocks could make you twice or even five times your money next year – even if the direction of the broader market is inconclusive, or if folks can't tell whether the bottom is in or not.

As Marc put it...

If you sit around trying to predict the exact top or bottom, you'll end up sitting in cash and miss it completely, or worse, hang on to the losers and get into the wrong stock entirely, like popular stocks that are supposedly on sale.

That's the biggest mistake people will make in 2023, hoping they've nailed the bottom on the best-known companies when in reality many of them won't go anywhere even after the bottom...

Marc suggested that many of the leading names of the past decade's bull market could take years to reclaim their former highs – if they do at all. Over the next year, he said, look elsewhere to make money instead...

If you're unfamiliar with Marc's work, just know he's a living Wall Street legend...

During a 30-year professional investing career, he worked with some of the biggest names on Wall Street... created a stock analysis tool used on every Bloomberg Terminal in the world to this day... and was able to retire early back in 1999.

Fortunately for us and his subscribers, after the 2008 to 2009 financial crisis, Marc decided to unretire and created a research platform for everyday investors to use. We partnered with the firm he created, Chaikin Analytics, in 2021.

As I've written before, I could listen to Marc talk about the markets all day long. He radiates investing wisdom. The depth of his experience is clear with nearly every word he speaks... And his recent presentation was no exception. I was blown away by his message about the opportunity he sees ahead. If you missed the event, click here to watch a replay for free right now.

And for today's essay, I will explain a few more details, starting with this observation Marc made...

Right now, a lot of cash is out of the game...

Marc began his presentation by showing that the amount of cash institutional investors have sitting on the sidelines – not invested in anything – has rarely been higher. Our Stansberry NewsWire editor C. Scott Garliss recently shared this, too...

Cash levels held by institutional investors have risen from 5.6% last month to 6.1% this month. That's the highest level since October of 2001...

If you've heeded our guidance since early this year that "cash is your friend," you might have behaved similarly.

But we want to look ahead... And the amount of cash on the sidelines today – be it from institutional investors or individuals – could be a contrarian bullish indicator for the future.

Eventually, that money will start going somewhere, Marc says. And during his presentation, he told his audience that next year, he predicts more of it will start flowing to a particular set of investments that tend to take off after a broad market sell-off.

We've obviously seen a bear market this year already. But you might remember the market "top" was irregular – with certain tech stocks peaking way back in February 2021, and others rising until the start of this year.

The "bottom" could look the same...

And it may already be happening.

Of late, market breadth – the number of stocks going up versus down – has strengthened...

A good measure of a long-term market-breadth trend is the percentage of stocks in the S&P 500 Index trading above their 200-day moving average. Over the past two weeks, that percentage has gone above 50%, its highest level since March.

At the same time, the U.S. dollar's relative strength has weakened significantly. A strong dollar has been a headwind for stocks all year. If that ends, it would help stock prices.

On the other hand, the 10-year/two-year Treasury yield spread hasn't been this inverted since the early 1980s. There's no more reliable indicator of a recession than a "yield curve" inversion.

So trouble for the economy could still be ahead, especially for companies that haven't seen their worst earnings hits yet. At the same time, though, certain stocks are already down 80% or 90%... and can't go much lower.

This is all to say stocks won't all "bottom out" on the same exact day... or rise in tandem over the same time period. This makes sense when you say it out loud, but many folks don't realize these concepts.

And that's why opportunities to make money are starting to emerge...

Over his five decades in the market, Marc has learned a thing or two.

He has seen patterns that repeat themselves throughout market history, including which stocks tend to take off first after market busts... and how to position yourself to identify them before they soar. As he said on Tuesday...

Has the market already bottomed? Perhaps. But does it matter? Not really... The important thing is to isolate which stocks will see the biggest moves and to get in before the market-wide shift is complete.

So, how do you do that? Well, we've told you before about the Power Gauge tool that Marc created... and why it's so powerful.

This tool combines all the important factors Marc considers for a stock and lands on a "bullish," "bearish," or "neutral" rating for roughly 5,000 stocks and exchange-traded funds. Part of the secret sauce is Marc's Money Flow indicator that tracks which stocks are seeing inflows or outflows of cash... and how much.

You can use this information a lot of different ways. Marc and his team have used it to identify the stocks that are positioned to take off by 100% or more after the types of market busts we've seen in 2022.

Marc shared a laundry list of examples in his new presentation...

After the dot-com crash, the tech-heavy Nasdaq Composite Index lost 76%. Cash piled up on the sidelines amid the sell-off. Yet in the ensuing 12 months, utility company PG&E (PCG) rose 215%... and Hanover Insurance (THG) went up 200%.

He found similar behavior in the market after 2008... and again in the 12 months after the COVID-19 bottom. In 2020 and early 2021, following this strategy could have resulted in a 782% gain in online furniture retailer Wayfair (W) and a 527% gain in Enphase Energy (ENPH).

These stocks might not have any obvious relation to one another, other than the fact that Marc's system has identified money flowing into them "ahead of 99% of other investors" noticing. That's enough to make a trade.

Now, this isn't a buy-and-hold strategy...

And it's not "buying the dip" in the conventional sense of the past 15 years, either.

It's more of a tactical, short-term trading strategy that can be applied to precisely this moment in the markets, which only comes up about once every 10 years. As Marc said...

I think of these stocks more as vehicles of storing and growing your wealth than as actual investments. It hardly even matters what business they are in.

It's the perfect thing to consider if you have cash to put to work today and want to dip a toe back into the market. The reward could be potentially huge gains as the market's "personality change" unfolds next year... and as more and more cash comes back off the sidelines. As Marc put it...

These bullish personality changes never happen overnight. Instead, they get started when you least expect it and slowly build in volume.

If any of this sounds interesting to you, hear Marc out. As he said in his brand-new presentation, after the market sell-off we've seen, this is a once-in-a-decade opportunity. If you follow this trading plan, he said...

It's like converting your cash into rocket fuel.

Again, if you missed Marc's must-see presentation, you can watch a replay for free right here. You'll hear more about his prediction for 2023 and how to find the stocks that will take off if he's right. You'll also hear his top bullish recommendation right now and his No. 1 stock to avoid.

If you've been following along with us this year, I think you'll find this message worthwhile... even if you don't buy into Marc's prediction or strategy.

All the best,

Corey McLaughlin


Editor's note: This past Tuesday, Marc went on air to warn millions of Americans about a historic financial reset that's on the way. He says now is the time to get out of banks... and pool your money into a new vehicle 50 years in the making. Even if Marc's prediction doesn't come true, this is a once-in-a-decade opportunity to make you twice or even five times your money... by following one trading plan. Click here for more details.