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The Best Play for a Scary Market

U.S. blue chips suffered their biggest drop in five weeks recently because the latest round of economic reports are fostering a lot of uncertainty about the prospects for continued global growth.

For most investors, it's been that kind of year.

But I continue to believe that the tech sector – especially here in the U.S. – still has a lot of fuel left in its tank.

Because I know a lot of you folks are concerned, I thought we'd take the time to alleviate some of those fears… and make some money along the way.

And the best way to alleviate fears is to initiate a plan of action.

So that's just what we're going to do.

Today I'm going to show you a strategy that will help you put the odds in your corner.

And I'm even going to give you a tech stock that will get you started.

When you're done reading this, you'll be ready to laugh at the next sell-off.

Beware of the Bears

The volatility we've seen over the last few weeks has many of you feeling like you're on a wild roller-coaster ride – and probably has you thinking about getting off.

I understand that.

And you're not alone.

The American Association of Individual Investors (AAII) found that bearish sentiment – at 18% at Christmas – doubled to 36% of investors by the first week of February.

But then stocks rebounded and bearishness plummeted. Just as things got comfortable, however, stocks turned tail and sold off again.

As of yesterday, one-quarter of all investors were back in the bear camp.

In a market as uncertain as this one, you really have three choices.

You can continue on, and ignore what's happening, which is a bit like flying through a fog bank without radar.

You can cash out and retreat to the sidelines – which means you'll lock in your losses and will miss out on any gains should the market – or at least the best stocks – march north.

Or you can reduce your risk and increase your odds for success by looking for investments that stack the odds in your favor. During my three decades in the markets, I've found that one of the best ways to achieve this is to look for stocks with multiple "catalysts" – which I define as any factors that can make the stock surge in price.

In fact, the mere perception that there are multiple catalysts can prop up a company's stock price.

With multiple catalysts, you've got yourself an insurance policy against corrections. And you increase the odds for market-beating gains.

The stock that I'm going to tell you about today gives us three key catalysts that will help it continue on its market-beating run…

A "Triple Crown" of Catalysts

The company I've identified is involved with a fairly broad range of the global high-tech ecosystem. It's a leader in advanced materials as well as in the automation technology for offices, homes, and industrial centers that can be remotely controlled with mobile devices.

The company also makes turbochargers that work with gas, diesel, and hybrid-engine systems – as well as other clean-tech products, specialty fibers, and advanced-wireless sensors.

And it just happens to be one of the world's more important aerospace concerns.

I'm talking about Honeywell International Inc. (NYSE: HON). This is one of those rare big-cap tech leaders that manages to be both widely diversified and highly focused.

It positioned itself so well over the past several years by dumping non-strategic operations – while also refocusing by acquiring several other firms.

Here's the really exciting part for tech investors: Honeywell recently announced a strategic growth plan that creates the three catalysts that should push the stock much higher from here.

Join the conversation. Click here to jump to comments…

About the Author

Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.

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  1. Gabriel O. | March 22, 2014


    My name is Gabriel. I am a Canadian and live in Canada.

    Thank you for sharing your investment wisdom with new and amateur investors. Reading yous materials, sometimes it becomes it too difficult to chose or where to invest when your cash flow is under 20,000.

    Having too many options but limited cash, makes it very difficult where to put your money.
    For example, some company's per SHARE PRICE is between $80.00-$200.00.
    Is it better to look into companies where the share price is under $20.00 ?

    I also like about what you have written about the Bit coins. But the price is over $600.00 per share. with less cash flow, it is hard to make money for Bit coins even if I like them.

    Can you suggest some options where to start?

    Please help


    • EVAN | March 25, 2014

      EVAN C.

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