Chances Are Every Dollar You'll Make in 2019 Will Come from These

Most traders and market "experts" see gloomy times to come for U.S. stocks.

But not Keith Fitz-Gerald.

The Money Morning Chief Investment Strategist sees big opportunities for investors here in the New Year - thanks to a stock market "thesis" I've seen nowhere else.
Keith's identified three big catalysts for higher stock prices. And he's created an easy-to-use "profile" to help him target the next big stock market winners - the kind of winners that can make folks rich.

Here's an edited transcript of my talk with this down-in-the-trenches veteran of the global-investing boom...

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A Global Guru Takes the Long View of the New Year

William Patalon, III: So Keith... when we last talked in depth, it was as part of our mid-year outlook. You recommended BioTelemetry Inc. (NASDAQ: BEAT), a Malvern, Pa.-based medical-tech firm.

The stock zoomed more than 62% in less than six months.

And in one of our annual forecast reports several years before, you brought us Becton, Dickinson and Co. (NYSE: BDX), a medical-technology powerhouse. BDX shares doubled.

Keith... it's great to have you here - and to have you participating in our annual forecast series.

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Keith Fitz-Gerald: Good to be here, BP. Thanks, as always, for having me back.

WPIII: Before we proceed, I have to tell you something... we've been doing these annual forecast talks - and midyear updates - for a long time. And they're always good.

But I'm probably more excited than ever for this one...

KFG: [tilts head... look of surprise] Really, BP... and why is that?

WPIII: Well... for a couple of reasons.

First, for the obvious reason... we're at a critical juncture in the domestic markets... and in the global economy. And insights like yours are both welcomed and useful at points like that.

But there's a second reason...

Before we sat down, you were kind enough to share the annual outlook report that you put together for your own Money Map Report subscribers. I can't remember when I enjoyed reading one of these more. It was probably the best one you've done... deeply reflective... erudite... insightful... and just an engaging read.

And I know why it turned out so well... you gave me a heads-up when you were just starting to put it together... so I know how much time you devoted to it.

KFG: Well... that's nice of you to say, BP. Very kind. But the fact is... that time was required. Because you're right... we have reached an important juncture in this journey we're all taking together.
In fact, I've dubbed 2019 "the year of turning points... and big profit potential."

WPIII: Interesting... and what's prompted that tagline?

KFG: Look, BP... as you know from our earlier chats... I said that 2018 was a "year of continuation."

WPIII: Right...

KFG: But 2019 will be a year of "turning points."

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You see... I see three - count 'em, three - very specific catalysts that will ignite sharp upside market action... and because that rally is unexpected, it's going to catch most investors by surprise.

You'll notice that I didn't say "could ignite." That's rare because catalysts like the ones I'm describing can produce extremely violent upside action when the institutional money realizes that it's got to get on board or get left behind.

Anybody who is waiting for a pullback has a real problem on their hands because they're more likely than ever to miss the majority of the move. Effectively, they'll be playing for table scraps if they wait for a "pullback" or "confirmation" like they would have received in years past.

WPIII: So, what are the three catalysts?

KFG: Okay...

  • First - overwhelmingly negative trading that's based on emotion... on sentiment... rather than fundamentals. That's almost always a bullish signal... a contrarian bullish signal - something I know you'll appreciate, BP, given your contrarian bent and the contrarian book you co-authored.
  • Next, a trade agreement with China that would immediately - like a magnet - draw trillions of dollars in from the sidelines...
  • And finally, a U.S. central bank that "learns" from its mistakes... and either stops (or better still) - "walks back" the rate-hike foolishness we've already seen.

WPIII: Good stuff, Keith...

Okay... so it's a year of "turning points." You've ID'd these catalysts...

Let's get into some specifics...

If the market is going higher, that means there will be opportunities. And because you're making predictions, that means we're anticipating these opportunities, rather than reacting to them. What opportunities do you see?

KFG: A good question, BP... The fact is that I see five high-level themes we'll be watching - and looking to capitalize on - over the next 12 months.

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Let me run through them...

  • Safety in Strength: The best investments will be companies with muscle - strong enough to chart their own path and control their own destiny.
  • Be Willing to Travel: Many of the best choices will be found in overseas markets, where new populations of consumers are opening wholly new wealth windows. Already, 54% of the world's fastest-growing large companies are based in China - while only 24% are found in the United States, according to Crunchbase data.
  • The New View of Value: It's no longer the tale of what a company is "worth," but rather how its shares are priced. I mean, BP, just look at Warren Buffett and Apple Inc. (NASDAQ: AAPL); the billionaire bought Apple because of the value of its "ecosystem" - something we... and you... have been talking about for several years now. Apple, incidentally, has retreated to the $150-per-share level I identified last fall during an appearance on FOX Business Network when asked when I'd reconsider buying it. Ideally, I'd like to see it hit $120-$125 a share via one or two more violent sell-offs to clear out the weak money - then it'll be off to the races.
  • The Amazing Allure of Adaptability: I've noticed a pronounced shift in annual report language over the past 12 months - a shift away from the financial lingo we're used to and toward a more complex concept... adaptability. Companies that mirror that are best positioned for huge profits. Alphabet Inc. (NASDAQ: GOOGL), for example, spends $20 billion a year on research and development. That's more than the combined profits of both American Express Co. (NYSE: AXP) and Coca-Cola Co. (NYSE: KO), according to Fortune Google and others do this for a reason... it's an investment in the future... an investment in adaptability... in customer access.
  • The Transition from "Broadcasting" to "Monocasting": This is exciting... and is something I know you've talked a lot about, too, BP. It's all about specialization - about giving each consumer what he or she wants... from retailing to video content. This is why we're seeing the shift away from mass retailing and why you're seeing the whole "cutting-the-cable" trend in broadcasting. Companies able to provide highly individualized choices - accessed through mobile technology - are poised to win big.

WPIII: That last point is especially interesting because it bolsters your points about "strength" - companies that are able to chart their own course - and adaptability.

KFG: Very good, BP.

WPIII: I also have to tell you, Keith... I also really liked that you're talking about artificial intelligence, or AI. I like how it fits so well into your broad thesis.

KFG: It does, indeed. You see... all these elements come together in a tapestry that illustrate our biggest wealth opportunities.
That's why we'll be targeting platform technology, artificial intelligence, and aerospace companies - all of which are capable of disruptive innovation.

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We're not chasing short-term fads here. My goal is to help my followers stake a claim to companies that can deliver huge profits - and meaningful wealth - three, five, even 10 years out. Every short-term dip - and this is something I want to come back to in a moment - gives folks a new chance to start anew... or to double down on existing long-term wealth opportunities.

Let me mention a couple of the areas of focus... including one that I know you've been all over - defense spending continues to rise, which means geopolitical uncertainty remains a certainty. This is especially true when it comes to space, cryptography, and hypersonic weapons (and defense against each). Companies providing AI and software related to these areas are going to be top profit generators, even as the competition in those segments gets tougher.

WPIII: Yeah, we've been talking about Boeing Co. (NYSE: BA) since our recommendation in 2011. Drones for years. And the whole "new reality" with new nuke threats... and hypersonic weapons... for years.

Next we're going to touch on a realm that I know - for a fact - you've been way ahead of the curve on... health technology.

KFG: Right, BP.
And the fact is... health tech is operating off a script very similar to the others we've described here. And the best opportunities will be those firms that remotely drive patient wellness with biotechnology or care. The global digital healthcare market will double by 2020, to roughly $206 billion, and virtual healthcare technology will drive the money move - regardless of the geographical relationship between patients and their doctors.

Meanwhile, we'll continue to avoid classic retailers, insurance companies, and more than a few household names poised to go the way of Sears, GE, or Kodak. Once public trust is shattered - for whatever reason - it's very hard to get back, and I think that will pressure already tenuous margins even further.

WPIII: Before we get to some specific recommendations, let's talk about the broader market.

I was fascinated by your scenario... by the portrait you painted.

I was gripped by this... I think... because it is a contrarian viewpoint... and isn't the mainstream view.

KFG: Well thanks, BP.
Quantitatively speaking, many big traders and investors are worried that the markets can go lower from here. But what they're really worried about - and they'll never tell you - is that they've made the wrong choices at a time when they can't afford the risks they're taking.

The way to fix this is by following our script... and focusing on companies with the size, scale, and savviness to defeat any obstacles in their paths ...

The other thing to think about - and this is crucial this year, given our forecast - is that big market drops are not the end of the line.

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WPIII: In fact, you'd argue that they're the beginning... in a way.

KFG: Actually, that's right.
In fact, here's a case in point: There have only been three non-recession market wipeouts of more than 20% in less than four months over the past 40 years. Moreover, there have been only four periods in history over the past 92 years - so we're talking nearly a century - where there were consecutive annual losses: 1929-1932, 1939-1941, 1973-1974, and 2000-2003.

WPIII: And the takeaway...

KFG: If you think about it, BP, market corrections are like a periodic, system-wide cleanout... a chance to "reboot," if you will. If you understand this, corrections are a welcome "restart" leading to bigger profits and life-changing wealth.

WPIII: You and I both understand... corrections are something to be welcomed - not feared.

They're opportunities...

KFG: Exactly right...

WPIII: Okay... let's talk recommendations... ways to capitalize on your prognostications.

And let's start with your current view of BEAT, the stock you recommended to our folks at midyear. It's a longtime favorite of ours, so I was heartened when you zeroed in on it. How do you like it here?

KFG: I think this stock still has plenty of runway. Stocks like this largely escaped the challenges that tanked other sectors late last year, which is why they are poised to run sharply higher. The intersection of healthcare and technology will be profitable for a very long time to come.

WPIII: What else do you like? What are some other stocks you're recommending... and that you believe will do well because of the catalysts you mentioned?

KFG: You mentioned Boeing. If folks aren't on board with Boeing, they'd better be rethinking that argument in light of the potential for a Chinese trade agreement. The backlog alone - combined with defense sector growth - makes this one compelling.
And of course, Becton Dickinson is a great play, too, for the same reasons we've just outlined.

Looking ahead, I think it's time to think about loading up on companies that have two key ingredients: global brand recognition and margin pricing power. This is relatively rare in today's world, where many investors think the game is all about revenue. The bottom line matters - which is why companies making products their customers cannot live without have plenty of power. These companies can pass any cost increases along to their customers in the form of price increases. I'm talking about cost increases in such areas as raw materials, wages, currency fluctuations, and more. Companies that can't pass these costs along have their margins get killed.

Incidentally, I just recommended two companies like this in the latest Money Map Report... and can't spill the beans just yet... out of deference to my paid subscribers.

WPIII: Totally fair point, Keith.

KFG: Well, I absolutely do want to give your folks one more stock pick... and I have one with an intriguing "investment case."

I'm talking about Visa Inc. (NYSE: V). There's been so much talk about the digital payment revolution... about digital currencies... about digital commerce - much of it energized by Bitcoin and other cryptocurrencies.

The trend is real. But the play isn't the one a lot of investors are spotlighting.

Visa is a heavyweight... an innovator... a leader.

WPIII: Any follow-up thoughts?

KFG: Yes... and this is super-important, BP.

Investors need to think very carefully about "investing versus speculating." Many people find out the hard way that they think they're doing the former when they're actually doing the latter.

And that's a miscue that nails 'em - and usually during the big sell-offs.

To underscore a point you've heard me make over and over and over during the years we've collaborated here: Growth may slow... but it will not stop.

So continuing to "play offense" makes more sense this year than at any other point in recent memory.

WPIII: This is good stuff, Keith... really good stuff. I really enjoyed this...

Thanks for being here, Keith... I know the folks always get a lot out of your visits with us.

Has the Stock Market Stopped Making Sense to You?

One day, good companies are tumbling while shoddy ones soar for no reason. The next day, the opposite occurs. Up, down, up, down. Wall Street seems trapped in a perpetual cycle of chaos.

But this isn't random. It's part of a bigger game that's being played - a game of supercomputers executing billions of algorithmic trades a day - creating MASSIVE price imbalances in stocks. But now a NASA-based technology can uncover these massive opportunities - and it could help you turn this mayhem into single-stock windfalls of $190,380... $242,174... $282,965... even $405,511 - over and over again! [Continue reading...]

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