Money Morning https://moneymorning.com Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. In fact, we believe this is where the only real fortunes will be made in the months and years to come. Money moves markets. But Money Morning lets you move first. en Thu, 19 Sep 2019 21:40:20 +0000 Thu, 19 Sep 2019 21:40:20 +0000 5 How to Trade the Fed's Rate Cuts for the Biggest Gains https://moneymorning.com/2019/09/19/how-to-trade-the-feds-rate-cuts-for-the-biggest-gains/ Predicting what the Federal Reserve will do at any of its regular meetings has turned into a cottage industry. But honestly, no one can predict the Fed's next move.

That hasn't stopped Money Morning Quantitative Specialist Chris Johnson from devising a strategy to profit from the Fed's mixed signals.

The central bank's latest move came Wednesday, with an interest rate cut of 25 basis points. And even with President Trump breathing down their necks, the tone is hesitant with regards to future cuts.


From the inverted yield curve to presidential tweets, you would think a bigger cut was on the way. But with the economy firing on all burners, despite recent softness, critics are wondering why the Fed does not raise rates.

The general outlook was that the Fed would cut rates by 25 basis points then possibly repeat that one or two more times this year.

Well, we got the first part. But the language of their statement seemed to tone down the need for more cuts. In fact, little changed in their statement between July (their last rate cut) and now. Federal Reserve Chair Jerome Powell simply called it a "mid-cycle adjustment" and said the Fed will continue to be "highly data-dependent."

The market did not like that. A 200-point loss on the Dow Jones Industrial Average followed the morning's modest loss.

A half-point drop might be politically expedient. But with the yield curve no longer inverted, the urgency is gone. And though seemingly temporary, the weekend attacks on Saudi Arabian oil fields did send oil prices higher. They still remain elevated today.

On the other side of the coin, negative interest rates around the world give the Fed plenty of cover for lowering rates more than once.

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The so-called experts and Fed-watchers were really not so sure what would happen. Even the market itself seems confused as the initial post-Fed sell-off reversed itself to the upside.

But investors don't need to be this lost. They can protect themselves, and even profit, by the next Fed meeting.

Don't Fall for Mr. Market's Head Fakes

As Chris Johnson puts it, the market is "decidedly indecisive" right now.

For starters, an accommodative Fed, even with a small rate cut, is bullish for stocks. That's part of the reason they've been creeping higher.

With China trade talks still up in the air, the central bank already said it will stand at the ready to protect the economy with additional Fed rate cuts if it gets worse.

Still, that's a double-edged sword for the market. No trade deal means the Fed will be there to help out, and stocks remain firm. If there is a deal, the market will rally big-time no matter what the Fed does.

Just not yet. Chris Johnson is waiting for a few more pieces to fall into place before shifting to bullish-neutral.

One of those pieces is the CBOE volatility index (VIX). It's fallen below 15. That happened just last week. And despite its recent blip above that level, an overall lower VIX is still promising for a buyer's market.

Another piece is that small-cap stocks are moving higher. This, too, happened just a few days ago. And now, the Russell 2000 index of small-cap stocks has outperformed the S&P 500 substantially.

Healthy small-cap stocks, which are naturally more speculative, point to a healthy bull market.

So why not just back up the truck and buy stocks? Recent losses in the Dow Jones show the broader market still perceives the Fed as dovish.

We should leave some time for knee-jerk sentiment to loosen its grip on smaller stocks. Then we can decide if there are any meaningful signals.

But Chris is not just sitting on the sidelines waiting for the "bull bus", as he calls it. Even as the major indexes inch their way higher, we can make good money while the Fed decides what to do.

In fact, here's what Chris recommends you do right now.

How to Profit from the Fed's Uncertainty

Chris recommends buying options on two exchange-traded funds.

The SPDR S&P 500 ETF (NYSEArca: SPY) and the iShares Russell 2000 ETF (NYSEArca: IWM) track the performance of the broad S&P 500 and the small-cap-centric Russell 2000.

Why options and not the ETFs themselves? Because ETFs will crawl higher for little profit as we wait for the Fed's next move at their October meeting. Options, due to their built-in leverage, can move many times faster and multiply profits.

And we don't have to take on excessive risk to do it.

While it's too late to profit from the September rate cut, we can still position for the October cut. There's still time for the Fed to change its tone and make another move then.

The IWM Nov. 15, 2019 $160 calls (IWM|20191115|160.00C) make for a cheap bet as lower volatility brings out the all-important small-cap buyers.

The SPY Nov. 15, 2019 $305 calls (SPY|20191115|305.00C) get us exposure to stocks that want to go higher but might not.

Both of these options now have strike prices above breakout levels for their respective ETFs. That means they will become "in the money" if the market breaks out.

And that's when profits really multiply.

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You've probably seen stories about this person or that person making an absolute fortune from some unknown startup suddenly becoming a household name... like Uber, Airbnb, SpaceX, or Bird.

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Shark Tank's Robert Herjavec is showing how easy it is for anyone to turn as little as $50 into what can be life-changing windfalls... all from investing in startups.

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Thu, 19 Sep 2019 19:39:39 +0000 https://moneymorning.com/2019/09/19/how-to-trade-the-feds-rate-cuts-for-the-biggest-gains/ One of the Top Cannabis Stocks to Buy Is Helping California Boost Revenue 50% https://moneymorning.com/2019/09/19/one-of-the-top-cannabis-stocks-to-buy-is-helping-california-boost-revenue-50/ It looks like California lawmakers missed the mark in some areas with full-on marijuana legalization. But the industry is charging forward anyways.


And the new wave of business will be a windfall for one of the best cannabis stocks to buy now.

In 2016, California voted in the full adult legalization of cannabis. Unfortunately, this state hasn't handled its legalization process well.

You may be worried as a cannabis investor, but there is hope. Private entities are now helping sort through the most glaring issues.

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This is what Money Morning Director of Cannabis Investing Research Greg Miller calls "California 2.0." It's a second wave of cannabis profits up for grabs.

And if you know the best marijuana stocks to buy before the wave rolls in, it could mean big profits.

Where Mistakes Were Made in California

After California voted in favor of legal marijuana, the state legislature took over to iron out the details. This has been common among states that make this move. It's also where things tend to get mucked up. And California is no exception.

Lawmakers in Sacramento left rules up to the state's 58 counties and 482 cities and towns. These entities were given the power to control marijuana as they saw fit.

The result was a patchwork of regulations. So, an unincorporated city could let a licensed marijuana business within its limits, but the surrounding county's regulations may not allow businesses in the area.

Legal marijuana laws change at the street level. So, a law-abiding citizen that buys marijuana in one place could go into another jurisdiction and find themselves breaking the local law.

This means pot is illegal in two-thirds of the state. And it's terrible for business.

So, there's been a big boost in California's already huge weed black market. Instead of going the legal route, most people would rather continue to buy from a trusted dealer.

And it's not surprising since the state has made it crazy difficult.

Obviously, black markets don't benefit marijuana stocks.

Plus, the state has over-the-top taxes on legal cannabis businesses. In some parts of California, excise, local, and state taxes reach 40%.

When you're paying a 40% tax rate, it's no wonder people are turning to dealers.

Likewise, many buyers are jumping state lines to buy legal pot from Nevada.

It's too bad California didn't think things through. And its mistakes are bleeding revenue away from the state, legitimate businesses, and shareholders.

But something is in the works that will change the game. And it could boost the state's marijuana revenue by more than 50%.

Reversing Years of Bad Policy Related to Drugs

One of the biggest social benefits of marijuana legalization is that it's given people a chance to get in on the ground floor, many of whom have been impacted by years of bad policy.

There is strong bipartisan agreement that the "War on Drugs" has been a massive failure.

Weedmaps, an online marijuana dispensary directory, has tried to even the playing field by letting unlicensed sellers advertise on its platform. It did this because strict government rules make it hard for anyone to jump into the legal market.

The firm has recently reversed this policy and said it will remove unlicensed operators from its platform later this year. Some estimates say this could hit as much as half of the business going to black market providers. Plus, it could boost profits going to legitimate companies.

Instead, the firm will support unlicensed businesses to become licensed. In fact, it will offer training for owners. Beyond that, it'll show them how to complete the licensing process.

After going through the process, companies will get free advertising on Weedmaps for up to one year. This is also going to open new opportunities for the best weed stocks to buy.

Now, legal businesses can expect their revenue to soar. This is especially true for firms like Origin House (OTCMKTS: ORHOF).

But one cannabis stock to buy could help boost California's revenue by 50%. And it could even jump by as much as 147.3% in the next 12 months...

One of the Best Cannabis Stocks to Buy Now

Our pick for one of the best pot stocks to buy is Cresco Labs Inc. (OTCMKTS: CRLBF). Cresco purchased Origin House this past April, but the sale has yet to close.

One of the primary focuses of Origin House is acquiring distribution assets.

All marijuana sales in California must to go through licensed distributors.

So, only a distributor can transport cannabis products. They must also label, package their products, and collect all taxes for the state.

Through key distribution licensees in California, Origin House and Cresco Labs are positioned to turn the chaotic market into a lucrative opportunity.

Weedmaps' new strategy to benefit legal distributors could rocket Cresco and Origin House's revenue.

Cresco Labs currently trades for $7.33 per share. But it has a target high price of $18.13. That's a potential 147.3% upside in the next 12 months...

If you're looking for even more cannabis investments, we've got you covered, too.

These 3 Stocks Could Bankroll Your Early Retirement: It may sound too good to be true, but trust us, these three stocks are tapped into the biggest "gold rush" since, well, the gold rush. If they take off, you could be set for life. Read more here...

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Thu, 19 Sep 2019 14:50:25 +0000 https://moneymorning.com/2019/09/19/one-of-the-top-cannabis-stocks-to-buy-is-helping-california-boost-revenue-50/ The Dow Jones Industrial Average Is Sliding as the Fed Injects Emergency Cash https://moneymorning.com/2019/09/19/the-dow-jones-industrial-average-is-sliding-as-the-fed-injects-emergency-cash/ The Dow Jones Industrial Average is pointing down a day after the U.S. Federal Reserve cut interest rates by 25 basis points. It signaled that additional cuts could come in the near future. The central bank also announced plans to cut the rate for excess reserves to bolster liquidity.

Today is the third consecutive day that the Fed has injected cash into the U.S. financial system. More on this below.

Here are the numbers from Wednesday for the Dow, S&P 500, and Nasdaq:

Index Previous Close Point Change Percentage Change
Dow Jones 27,147.08 +36.28 +0.13
S&P 500 3,006.73 +1.03 +0.03
Nasdaq 8,177.39 -8.62 -0.11

Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.

The Top Stock Market Stories for Thursday

  • Yesterday, the Federal Reserve slashed its benchmark rate by 25 basis points to a range of 1.75% to 2%. Fed Chair Jerome Powell painted an optimistic picture of the U.S. economy, citing buoyant labor markets and inflation nearing targets. However, the 25-basis-point rate cut addressed ongoing risks such as tepid global growth and trade wars. In what is termed a "hawkish" rate cut, Powell insisted that rate cuts were still up for
    debate: "We are going to be highly data-dependent... We are not on a preset course." But he did say that the Fed stood ready with "a more extensive sequence of rate cuts," should the economy wobble. The Fed voted 7-3 on the decision to lower the overnight rate to a range of 1.75% to 2%. The central bank had previously cut rates in July.

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  • This morning, the Federal Reserve announced plans to inject billions of more dollars into the U.S. money market to prevent another spike in interest rates. The Fed will push another $75 billion into the overnight repurchase agreement operation (commonly referred to as repo), which is where Fed member banks go to obtain short-term cash to fund their operations. The expansion of excess reserves is a byproduct of the 2009 financial crisis. However, these reserves have declined as the Fed raised the IOER borrowing rate to encourage banks to lend money. The only problem is that the money market paralyzed early this week and the critical interest rate surged, which created a short-term cash crunch. To be honest, I don't think that markets have taken this story seriously, and it's a signal of something very dangerous. I'll be discussing it later this morning at Money Morning, so please check back very soon.
  • Global markets are reacting negatively to news that the OECD has slashed its growth forecasts. The OECD projected its lowest global growth rate in a decade, concerned about the U.S.-China trade war. In addition, the group suggested that the international economy is suffering from late-cycle factors and that governments still don't know how to respond properly. The OECD said that the international economy would expand by 3.6% in 2019 and 3% in 2020. Those figures are the lowest levels since the Great Recession.

Stock to Watch Today: DRI, MSFT, T, DISH

  • Shares of Darden Restaurants Inc. (NYSE: DRI) fell more than 2.5% after a disappointing quarterly earnings report. Though the firm beat earnings per share estimates by a penny, revenue fell short of forecasts. In addition, the firm reported same-store sales of 0.9%, a figure that fell short of Wall Street expectations. The company continues to struggle to generate foot traffic to its restaurant locations like Olive Garden, despite aggressive marketing practices.
  • Microsoft Corp. (NASDAQ: MSFT) announced a big plan to return money to shareholders. The company plans to expand its buyback program by as much as $40 billion. It will also increase its dividend to $0.51, representing an 11% jump.
  • Activist hedge fund Elliott Management recently built a large stake in AT&T Corp. (NYSE: T) and demanded that the company explore strategic options. Now, AT&T might spin off its acquisition of DIRECTV into a separate company with Dish Network Corp. (NASDAQ: DISH). This story is just developing, so check back with us later today and tomorrow as details develop.
  • Look for additional earnings reports from Eros International Plc. (NASDAQ: EROS), Steelcase Inc. (NYSE: SCS), and Scholastic Corp. (NASDAQ: SCHL).

America's Favorite Angel Investor Shows How Easy It Is for Anyone to Invest in Ground-Floor Startups

You've probably seen stories about this person or that person making an absolute fortune from some unknown startup suddenly becoming a household name... like Uber, Airbnb, SpaceX, or Bird.

Now, it's your turn.

Shark Tank's Robert Herjavec is showing how easy it is for anyone to turn as little as $50 into what can be life-changing windfalls... all from investing in startups.

Click here to learn more...

Follow Money Morning on Facebook and Twitter.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Thu, 19 Sep 2019 14:03:31 +0000 https://moneymorning.com/2019/09/19/the-dow-jones-industrial-average-is-sliding-as-the-fed-injects-emergency-cash/ Here Are the Best Stocks to Buy for Q4 2019 https://moneymorning.com/2019/09/18/here-are-the-best-stocks-to-buy-for-q4-2019/ Our latest list of the best stocks to buy now includes picks that offer cutting-edge technology as well as those that provide blue-chip reliability.

In some cases, they do both.

Here's a preview of what you'll find below:


  • This Japanese tech "investment vehicle" could be the next Berkshire Hathaway.
  • Believe it or not, the smart money is investing in banks right now, and we've got the best play to capitalize on it.
  • A new wave of cannabis profits is coming in California. One company in particular is in a great position to benefit.
  • We've got a stock to buy and own forever that provides a solid dividend and potential for huge gains to boot.
  • We're now finding out the Equifax settlement is a lousy deal. However, there's one opportunity in cybersecurity that offers a big payout.

And now our latest list of best stocks to buy now...

Best Stocks to Buy Now, No. 5: Hitch Your Wagon to the Warren Buffett of Tech

At more than $300,000 per share, Class A stock in Berkshire Hathaway Inc. (NYSE: BRK.A) is among the most in-demand in the world.

It's easy to see why.

Who wouldn't want to ride the coattails of an investment visionary like Warren Buffett? The Oracle of Omaha began with $9,800 in savings when he finished college and has amassed a fortune worth $82 billion.

For those who can't afford those Class A shares - that's most of us - Berkshire does have a Class B option that currently trades at a little more than $200.

But we've got an option even better than that - and right now, it'll cost you less than $50 a share.

That's SoftBank Group Corp. (OTCMKTS: SFTBF), a Tokyo-based firm that operates largely as an investment vehicle in a similar fashion to Berkshire Hathaway.

SoftBank's CEO, Masayoshi Son, is a visionary a lot like Warren Buffett. He invested $20 million in a little online shopping startup now known as Alibaba Group Holding Ltd. (NYSE: BABA) back in 2000. By the time that company went public 14 years later, Son's $20 million investment had turned into $70 billion.

And Son is nearly 30 years younger than Buffett. That means he can keep delivering returns for SoftBank shareholders for decades.

In fact, Son recently predicted that SoftBank's investment portfolio would grow to ¥200 trillion over the next 20 years. That's $1.85 trillion, roughly 33 times the current value.

Money Morning Executive Editor Bill Patalon thinks that might be a lowball estimate. SoftBank's $100 billion "Vision Fund," a private equity portfolio that invests in cutting-edge technology, has returned 62% in its first two years.

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It seems that Son still has the magic touch that he showed with his Alibaba investment two decades ago. So don't be surprised if SoftBank delivers similar returns over the next two decades.

"Grab some of these shares now," Bill says, "to establish a 'foundational' position in the stock. Then look to add shares on pullbacks or as you get additional cash."

Best Stocks to Buy Now, No. 4: Think It's Not a Great Time to Buy a Bank Stock? Think Again.

Speaking of Warren Buffett, you might have heard that the mega-billionaire has been buying bank stocks recently.

In July, Berkshire Hathaway disclosed that it had upped its stake in Bank of America Corp. (NYSE: BAC) from 896.2 million shares to 950 million shares. That gave Berkshire a stake of more than 10% in the bank. It's a level the investment firm almost never reaches for public companies.

That stake comes in addition to Berkshire's holdings in several other banks - including Wells Fargo & Co. (NYSE: WFC), Goldman Sachs Group Inc. (NYSE: GS), and JPMorgan Chase & Co. (NYSE: JPM), among others.

Buying bank stocks might seem counterintuitive in a shaky market with falling interest rates. But banks have gotten into much better financial health in the decade since the financial crisis. Meanwhile, their price/earnings (P/E) ratios have been falling, making them a great bargain right now.

But while Berkshire Hathaway tends to buy shares in large corporations, the real opportunity right now is in regional banks.

These mid-size banks benefit from the same developments that are helping their behemoth counterparts. Plus, they also benefit from a growing trend: consolidation.

By buying up smaller banks and increasing their footprint, a number of regional banks have been able to increase efficiency and boost their profit margins.

And one regional bank in particular is the most profitable pick in this space...That would be Home BancShares Inc. (NASDAQ: HOMB).

Founded in 1998 as First State Bank in Arkansas, the firm began acquiring banks all over the southeastern United States in 2003. Under its newer name, Home BancShares is now a holding company with over $10 billion in assets.

We're not talking about acquisition for the sake of acquisition here, either. Co-founder John W. Allison focuses on acquired banks with low return on equity. That way Home BancShares can buy at a discount, boost performance, and collect the profits.

"I'm not a banker, I'm a businessman," Allison says. "I run it like a business. I don't run it like a bank."

Allison says he's aiming for $50 per share for Home BancShares stock - about 150% higher than its current price.

There's reason to believe he can get there too. HOMB has a top score from the Money Morning Stock VQScore™.

"That figure puts HOMB squarely in the 'Strong Buy' zone," says Money Morning Behavioral Trading Specialist Garrett Baldwin, "with a high probability the stock will take off much like Allison has projected."

Best Stocks to Buy, No. 3: This Weed Stock Is Your Best Profit Play on "California 2.0"

It's no secret legal cannabis is one of the fastest-growing sectors in the world right now.

One reason is increasing acceptance by legislatures and consumers. And there are also new innovations introduced nearly every day.

Another reason is that the legalization process is messy. Inefficiencies in new regulations are inevitable. And as those inefficiencies are smoothed out, it creates new opportunities for first movers.

Take California, for instance, which passed a law to legalize adult use of cannabis in 2016. That law went into effect in January 2018. But the process hasn't been without its hiccups and frustrations.

The state left it up to its counties and cities to determine what cannabis activity would and wouldn't be allowed within their borders. That might not sound like a bad idea in theory. But with 540 different jurisdictions effectively setting their own cannabis laws, it's a nightmare for Californians to navigate.

No wonder a lot of them have decided to stick with black market dealers, who offer a competitively priced, tax-free product. It might not be legal, but at least it's not a hassle.

But that's about to change. Weedmaps, a popular online directory of cannabis dispensaries, announced recently that it will no longer connect users to unlicensed dispensaries.

In order to make the transition easier, the company will help those dispensaries navigate the web of regulations to get themselves licensed. And once they get the license, they can advertise on Weedmaps for free during their first 12 months.

It's going to mean a lot more revenue going to legal dispensaries. So much more that Money Morning Director of Cannabis Investing Research Greg Miller refers to the phenomenon as "California 2.0."

That's especially good news for California's licensed distributors. Those are private entities in the state that can legally package and transport the product, as well as collect taxes on them.

And that's where our next pick comes in...

Origin House (OTCMKTS: ORHOF), formerly known as CannaRoyalty Corp., is the distributor for more than 50 brands in California. As new legal dispensaries go up and more customers turn to them rather than the black market, Origin House is going to have its hands full delivering products throughout the state.

That means if you grab it now, you can expect a nice short-term gain in addition to the long-term growth that the entire industry benefits from.

Cannabis Is the Next Gold Rush: Don't miss your chance to make YOUR fortune on these little-known startups with billion-dollar potential. Click here to learn more...

As Money Morning Director of Cannabis Investing Research Greg Miller puts it, "Investors, keeping their goals and risk tolerance in mind, would do well to own Origin House before the surge that 'California 2.0' will bring."

The firm has been acquired by Cresco Labs Inc. (OTCMKTS: CRLBF). But it's still listed under its own ticker symbol until that deal closes.

Best Stocks to Buy, No. 2: This "Forever" Stock Combines Big Gain Potential with Blue-Chip Stability

For a lot of stocks, you buy them when the timing is right.

For certain special stocks, though, the timing is always right.

That's the case with SoftBank, which we mentioned above. You can buy shares, and then keep buying more over time. That way, any dips in share price along the way work out in your favor, because they offer an opportunity to get more shares at a lower price.

The same principle applies to our next pick: Constellation Brands Inc. (NYSE: STZ).

Constellation is a Fortune 500 company. It's made a name on highly popular alcoholic beverage brands such as Corona, Negro Modelo, and Svedka Vodka, among others.

More recently, Constellation has made a big push into the cannabis market. It owns a 38% stake in Canopy Growth Corp. (NYSE: CGC), one of Canada's largest growers.

For investors who are interested in cannabis but also want the stability and trustworthy management of a well-established company, Constellation is an ideal pick.

On the one hand, you get a stock that offers a 1.47% dividend yield - virtually unheard of in the cannabis investing world.

On the other, you get a company that could easily end up controlling the most dominant brands in the highly lucrative cannabis-infused beverage market.

In other words, Constellation has plenty to offer for adventurous cannabis investors and risk-averse money managers alike.

Case in point: Even the Retirement System of Alabama has invested $39 million in Constellation - a position the fund's managers recently increased by more than 200,000 shares.

We recommend you follow their lead. Constellation is going to be a stock to own for a long time. You can take any dips in share price as an opportunity to buy more.

Put simply, Greg Miller says, "This is a stock you are going to want in your portfolio forever."

Best Stocks to Buy, No. 1: This Cybersecurity Play Is a Much Better Deal than the Equifax Settlement

The dust has finally settled after the infamous Equifax Inc. (NYSE: EFX) security breach from 2017. The company settled its lawsuit for $700 million.

That might sound like a lot of money. But it doesn't mean much for the 147 million people who were affected by the breach.

If your identity was stolen, you can theoretically claim up to $20,000 to compensate for the time and energy spent reclaiming your identity. But if you didn't thoroughly document those efforts at the time, good luck.

You might have heard that everyone else affected by the breach can receive $125. But only $31 million of the settlement is set aside for those payments. Divide that by the number of people affected, and you end up with... $0.21 per person.

So for the people whose security was compromised, this settlement is not all it was cracked up to be.

We can't change the terms of the Equifax settlement. But if you're at all concerned about cybersecurity, we've got a pick that can offer far better "compensation" than this settlement.

The ETFMG Prime Cyber Security ETF (NYSEARCA: HACK) has outperformed the S&P 500 by 42% over the last two years since the Equifax breach. And concerns over cybersecurity are growing, especially considering the many local governments that have been attacked with ransomware recently.

That means this collection of industry leaders is only going to rise in value going forward.

HACK includes the big cybersecurity names you would expect, like Cisco Systems Inc. (NASDAQ: CSCO) and Symantec Corp. (NASDAQ: SYMC).

But it also holds stakes in younger firms that employ breakthrough technology. These are stocks that could take off like a rocket in the coming months and years.

That means firms like Proofpoint Inc. (NASDAQ: PFPT), which focuses on stopping a variety of online threats, and just collected 14 Cybersecurity Excellence Awards. That includes the gold for Most Innovative Cybersecurity Company and Best Cybersecurity Education Provider.

Or there's Zix Corp. (NASDAQ: ZIXI), which provides software encryption and is projected by Allied Market Research to grow 14% per year through 2020. Clients include 30% of U.S. banks and seven divisions of the Treasury Department.

Another holding, Mimecast Ltd. (NASDAQ: MIME), protects more than 15,000 global customers from phishing scams and other e-mail breaches. Its software scans every web link in an e-mail system and can even protect against delayed attacks.

Between the advanced technology offered by these companies and an ever-increasing need for individuals and companies to protect themselves, it's no wonder Money Morning Defense and Tech Specialist Michael Robinson predicts that HACK will rise another 40% over the next three years.

"HACK is the kind of investment that targets a massive, profitable tech trend," Michael says. "And it offers us outsized gains for many years to come."

Famous Angel Investor Shares "1,000x Formula" for Finding Unicorn Startups

Neil Patel is one of the most successful angel investors on the planet.

Today, he's walking everyone through his "1,000x Formula" for finding the most successful startup investments - the ones with unicorn potential.

With this formula at your disposal... investing in startups is about to get a whole lot easier. (In fact, you can act now with as little as $50.)

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Wed, 18 Sep 2019 17:20:37 +0000 https://moneymorning.com/2019/09/18/here-are-the-best-stocks-to-buy-for-q4-2019/ This Travel Stock Is One of Our Favorite Breakout Candidates of 2019 https://moneymorning.com/2019/09/18/this-travel-stock-is-one-of-our-favorite-breakout-candidates-of-2019/ Though the hot summer is over, travel stocks are heating up. The bounce-back in consumer spending is pushing airline stocks and related services higher.

And it's fueling our top travel stock of 2019.

In fact, with rock-solid cash flow and earnings growth, this might be one of our favorite breakout stocks in the year ahead. But there's plenty more driving it up.


This is the second fastest-growing sector in the world behind manufacturing. That means it beat healthcare, financial services, and information technology.

Numbers from the World Travel and Tourism Council (WTTC) say travel tourism grew 3.9% in 2018, providing $8.8 trillion and 319 million jobs globally. The WTTC predicts that it will be adding more than 100 million new jobs to the world economy in the next 10 years - that's 421 million total jobs by 2029.

A bigger travel industry means more booking. And trends in online booking and international travel will no doubt provide a windfall for our best travel stock.

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While investors glossed over this stock, we found it using the Money Morning Stock VQScore™ system.

This proprietary rating system digs deep into the balance sheets and fundamentals of thousands of companies. Then it assigns every company a rating of 1 to 4.9.

The score is simple. If it registers above 4, you buy the stock and prepare for the breakout.

Our travel stock pick has a score above 4. In fact, it's a near-perfect VQScore.

And we want to make sure you're in the know early, because it could rise quickly. It's in the "Buy Zone." But with the travel industry growing so fast, it might not be for long...

The Best Travel Stock in 2019

Booking Holdings Inc. (NASDAQ: BKNG) is a digital travel platform behind the bidding site Priceline and Kayak.com.

In 2019, the BKNG stock price has stagnated despite remarkable earnings growth. The leading provider in online travel, Booking operates in 230 countries and territories and 40 different languages around the globe.

A combination of organic growth and strategic acquisitions has cemented the firm's position atop its industry. In 2018 alone, it had $92.7 billion in gross bookings across all of its properties. And its earnings growth has been nothing short of exceptional.

During the first two quarters of 2019, the company reported earnings of $1.75 billion. That figure is more than double the $837 million it reported during the same period in 2018.

But its VQScore of 4.6 signals it is poised for even better earnings growth in 2020. Let's dig into the numbers and explore why.

First, the company continues to succeed at generating far more cash flow than the bulk of its peers. Year-over-year cash flow growth this year clocked in at 14.9%, a figure that easily tops its competitor average of 9.7%. It's also grown 17.1% over the last three to five years.

Expect the BKNG bottom line to improve dramatically.

Booking has used its strong cash flow to buy back stock and improve shareholder value. As cash flow continues to grow, look for the stock to receive additional boosts from buybacks.

Second, the firm's numbers continue to improve across almost all verticals. It reported 213 million rooms booked through its platforms in Q2 2019. That figure is an 11.8% jump from the same period in 2018. Also, it reported 1.2% growth in rental car days and 2.4% growth year over year in the number of airline tickets it sold.

Those latter figures should improve as the firm cuts back on advertising costs and technology investments.

Bottom Line

Booking Holdings isn't a cheap stock by any means. At $2,068 per share, it's one of the most expensive stocks on the S&P 500 by nominal price. But this price might actually be a bargain compared to its 52-week target.

With a VQScore of 4.6, we have set a price target of $2,450 over the next 12 months. That represents a potential upside of 18.5% from Friday's closing price.

America's Favorite Angel Investor Shows How Easy It Is for Anyone to Invest in Ground-Floor Startups

You've probably seen stories about this person or that person making an absolute fortune from some unknown startup suddenly becoming a household name... like Uber, Airbnb, SpaceX, or Bird.

Now, it's your turn.

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Wed, 18 Sep 2019 16:10:42 +0000 https://moneymorning.com/2019/09/18/this-travel-stock-is-one-of-our-favorite-breakout-candidates-of-2019/ This Retail Stock Is Poised for a 92% Rebound https://moneymorning.com/2019/09/18/this-retail-stock-is-poised-for-a-92-rebound/ The ongoing trade dispute between the United States and China continues to batter retail stocks.

This downward pressure has added additional uncertainty to a sector plagued by softening consumer confidence, wide-scale store closures, and even bankruptcies.


Several retailers, like Walmart Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT), defy the impact of tariffs. Their scale, e-commerce strategy, and store strategy give them a competitive advantage, while other retail stocks continue to bomb out.

Companies like L Brands Inc. (NYSE: LB), Macy's Inc. (NYSE: M), and Nordstrom Inc. (NYSE: JWN) have slumped heavily over the last few months.

Of course, some retail stocks are poised for a rebound heading into the holiday shopping season.

You Have to See This to Believe It: America's favorite "Shark" debuts the Angels & Entrepreneurs Summit. Watch now...

Predicting which retail stock will bounce back is tricky in today's environment. But we have a secret weapon that tells us when a stock is about break out in the coming months.

It's called the Money Morning Stock VQScore™ system. This proprietary algorithm tracks 1,500 of the most profitable companies in the world and assigns them a score from 1 to 4.9.

The score is derived from a deep dive into the company's EPS and demand for the underlying stock.

Any stock that scores 4 or higher means EPS is accelerating and demand for its underlying shares is increasing.

This means it's a "Strong Buy" and is likely to break out in the months ahead.

Today, we'll explain three reasons why this retailer is at the top of our list of stocks to buy now...

This Retail Stock Is Poised for a Huge Bounce in 2020

Today's top retail stock to buy is Gap Inc. (NYSE: GPS).

Now, let's start with the bad news. The stock has struggled in 2019. Shares are off 29% since the beginning of the year. Gap continues to face a lot of the pressure from struggling mall foot traffic and its late transition into e-commerce.

With the stock sliding, we're starting to move into a situation where the stock is oversold.

The Fisher family founded the company in 1969. Over 50 years, the company has survived market crashes, inflation, stagflation, and technological innovation. The firm has roughly 3,200 firm-operated stores and more than 470 franchise sites. Its brands include Athleta, Banana Republic, Gap, Hill City, Intermix, and Old Navy.

And unlike most of the competition, the company has actually opened stores in the last year instead of shuttering them. This is the first reason to own the stock.

The company has a strong cash flow figure of $676 million in 2019, a decent debt situation, and a slew of valuable brands. Buried in its balance sheet is its high-performing Old Navy brand. The company plans to spin off Old Navy into its own public company by next year.

The second reason to own the stock: the insider stock holdings.

The Fisher family still has board seats and owns about $1.5 billion in stock. As Money Morning Special Situation Strategist Tim Melvin said last week, "[the Fisher] family fortune and reputation are at stake."

Including executives, company insiders own $2.4 billion in stock. Keep in mind, the total market cap of the entire business is only $6.8 billion.

With this much skin in the game, the executives must have plans to entice investors to go along as they reshape the company. In addition to the 6% dividend offered, the company's executives are also expected to boost shareholder value through a series of stock buybacks in the year ahead.

Executives plan to shell out about $50 million per quarter through the end of the fiscal year. And even if the stock stagnates, one has to expect that the insiders will consider a deal from a private equity giant looking to secure these lucrative brands.

But the third reason to buy the stock is the most important...

Gap Inc. Has a Perfect Buy Signal

The Money Morning Stock VQScore is a proprietary rating system that tells investors when to buy a stock, when to hold a stock, and when to sell a stock.

The model incorporates a swath of fundamental and technical signals and assigns every profitable public company a rating from 1 to 4.9.

And Gap Brands currently has a 4.9 VQScore.

The combination of the holiday shopping season, the pending spin-off of Old Navy, the potential for a private equity deal for the firm's remaining brands, and the attractive yield and upside makes GPS a buy today.

Just how much could the stock break out in the year ahead?

GPS shares currently trade at $18.20 per share.

I believe the upside for this stock - especially if it went private - is $35 by the end of 2020.

That figure represents a potential upside of 92% in the year ahead.

America's Favorite Angel Investor Shows How Easy It Is for Anyone to Invest in Ground-Floor Startups

You've probably seen stories about this person or that person making an absolute fortune from some unknown startup suddenly becoming a household name... like Uber, Airbnb, SpaceX, or Bird.

Now, it's your turn.

Shark Tank's Robert Herjavec is showing how easy it is for anyone to turn as little as $50 into what can be life-changing windfalls... all from investing in startups.

Click here to learn more...

Follow Money Morning onFacebook and Twitter.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Wed, 18 Sep 2019 15:18:20 +0000 https://moneymorning.com/2019/09/18/this-retail-stock-is-poised-for-a-92-rebound/ The Best Penny Stocks to Buy in September Could Triple Your Money https://moneymorning.com/2019/09/18/the-best-penny-stocks-to-buy-in-september-could-triple-your-money/ The U.S.-China trade tensions have many investors on edge. But market-beating gains are still possible.

In fact, the best penny stocks to buy in September could triple your money.

The U.S. Commerce Department put an extra 15% tariff on $112 billion worth of Chinese goods on Sept. 1. By the end of August, the Nasdaq was down 2.5% for the month.

best penny stocks
Volatile conditions have become a norm on Wall Street. But this is a good sign for penny stocks.

The Volatility Index (VIX) shot up 102% in August. It went above 20 numerous times before settling around 15. And while volatility is rippling through the market, you can still profit.

You see, penny stocks thrive on volatility. One small share price move in these stocks could net you huge gains.

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And there are thousands of penny stocks to choose from. That's why we're going to help you find the best penny stocks to buy now.

We've put the Money Morning Stock VQScore™ system to work. And it's just found three penny stocks with breakout potential in September.

Each of these penny stocks got our highest score of 4.9. This makes them definite buys. And our top pick could jump as much as 147%.

Best Penny Stock to Buy in September, No. 3: BGC Partners

Our third best penny stock is BGC Partners Inc. (NASDAQ: BGCP).

BGCP is a New York City--based financial services firm that employs more than 4,600 full-time staff.

BGCP offers equities, commodities, insurance, foreign exchange, futures, and fixed income. It also offers back-office services like trade execution, clearing, information, and broker-dealer.

BGCP is also highly invested in technology. In fact, it has put $1.7 billion into electronic trading solutions.

Some of its most recognizable ones are Credit Match, BGC Trader, Capitalab, Fenics, and EMBonds.

In 2017, BGCP opened its first office in Seoul, Korea. Later that year, it was also the first inner-dealer broker to open an office in Istanbul, Turkey.

In 2014, BGCP reported $4 million in profits. Now, those profits have soared to $74 million. Between 2017 and 2018, it boosted its bottom line by 43%.

And it looks like BGCP plans to continue this growth. It's a global financial powerhouse, and it's at the forefront of its field.

IBISWorld research shows the digital brokerages could grow 6.2% over the next five years. This would create more than $313.4 billion in annualized return for the sector.

BGCP currently trades for $5.57. But it's forecast to grow another 60%.

That's a respectable gain, but our next penny stock pick could do even better.

Best Penny Stock to Buy in September, No. 2: Resolute Forest Products

Our second pick for one of the top penny stocks to buy now is Resolute Forest Products (NYSE: RFP).

RFP is a Canadian forestry products firm that operates around the globe. Its five segments include wood products, market pulp, newsprint, tissue, and specialty papers.

Resolute produces bleached kraft for diapers and packaging paper. It also creates tissue products, construction-grade lumber products, and paper for newsprint. Plus, it creates specialty items like bags, direct mailers, and books.

RFP also produces its electricity through seven hydroelectric dams and six cogeneration facilities.

It is a supplier in over 70 countries. And it's in a prime position to take over as one of the world's largest providers of sustainable goods.

In 2018, RFP profited $235 million. Beyond that, it boosted its operating income by 736%.

It has a 3.25 price/earnings (P/E) ratio. That's significantly below its historical average of 14.87. So, it's poised for breakout potential.

RFP shares currently trade at $5.29, but it's expected to shoot up another 70% in the next 12 months.

But our top penny stock to buy could jump 147%...

The Best Penny Stock to Buy in September

Our top pick for one of the best penny stocks now is Callon Petroleum Co. (NYSE: CPE).

Founded in 1950, this is a Houston-based oil and gas company. It focuses on finding, developing, and selling natural gas and oil.

It has reserves in southeastern New Mexico as well as the Permian Basin in West Texas. In 2018, its net proved reserves was 238.5 million barrels of oil. This also includes 180.1 MMBbls of oil and 350.5 Bcf of natural gas.

This firm has capitalized on the rise of oil demand. World Oil analysts assay oil drilling will jump 2.5% this year. That outpaces the 1.6% growth in 2018.

As of Q2 2019, Callon's production is up 20% year over year. Plus, it lowered its spending by $25 million.

This sort of aggressive growth will help its bottom line. And it's already showing. Profits have soared 149% in just the last year.

The company has a 3.95 P/E ratio compared to the industry average of 25.4. So, it still has plenty of room to grow.

It currently trades for $4.84, but analysts have given it a $12 price target. That's a potential 147% upside.

America's Favorite Angel Investor Shows How Easy It Is for Anyone to Invest in Ground-Floor Startups

You've probably seen stories about this person or that person making an absolute fortune from some unknown startup suddenly becoming a household name... like Uber, Airbnb, SpaceX, or Bird.

Now, it's your turn.

Shark Tank's Robert Herjavec is showing how easy it is for anyone to turn as little as $50 into what can be life-changing windfalls... all from investing in startups.

Click here to learn more...

Follow Money Morning onFacebook and Twitter.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Wed, 18 Sep 2019 15:02:35 +0000 https://moneymorning.com/2019/09/18/the-best-penny-stocks-to-buy-in-september-could-triple-your-money/ How the Saudi Oil Attacks Will Impact Crude Prices https://moneymorning.com/2019/09/18/how-to-profit-as-markets-scramble-to-fix-the-saudi-crude-oil-shortfall/ Investors on Monday digested news of the massive drone attacks on Saudi Arabian oil infrastructure at Abqaiq and Khurais. Stocks took it... pretty well, it has to be said; the Dow slid around 0.27% as an "oil shock" that would've sent indexes tumbling hundreds of points 10 or 20 years ago rippled through the broader markets.

Oil, on the other hand, is seeing virtually unprecedented volatility. Prices for crude have jumped by as much as $10 a barrel following the disruption of around half of Saudi Arabia's daily output. Prices then lurched lower yesterday when Saudi Energy Minister Prince Abdulaziz bin Salman suggested oil supply will be back online by the end of September. Whether that’s possible or not is an open question.

As we'll see in a second, the ground reality is probably more complicated than that, and traders are still deeply conflicted about the big picture.

The top priority for investors right now is to get a handle on the “ceiling and floor” for crude prices.

I reached out to Mark Russano - one of the smartest guys in the global "oil patch." Mark's a former hedge fund manager at Candlewood Investment Group and South Ferry Capital. He was recently Bloomberg's principal analyst in the upstream and downstream oil and gas segments.

Mark knows the sector, and he's managed money - he's the perfect source, and he sat right down with me on a call to talk about what's happening.

Here's an edited transcript of our phone conversation...

You Have to See This to Believe It: America's favorite "Shark" debuts the Angels & Entrepreneurs Summit. Watch now...

A Big "Fix" Is Needed - and Fast

Matt Warder: Thanks for talking with me, Mark. Why don't we start at the beginning, with what's really going on here in the oil market.

Mark Russano: Thanks for having me! The answer, as it turns out, is not as simple as the "5.7 million barrels per day" to which Saudi officials have alluded and the media has repeated ad nauseam.

Instead, the ultimate effect will be determined by not only the ability of Saudi Aramco to quickly repair its facilities, but also by a couple of other factors. The Saudi energy ministry says production could ramp back up to 11 million barrels per day by the end of September, but even setting possible “unforeseen events” aside, it’s not clear it can attain that goal.

First and most obviously would be just how much replacement supply producers can quickly ramp up, plus how much consumers can pull from storage.

But second - and perhaps more important - is just how much of that replacement supply matches the quality of what's been removed from the market.

MW: So it's a question of quantity and quality? Walk us through that, if you would.

MR: For that, we need a quick discussion of global crude grades.

For our purposes here, there are basically just two parameters to know.

The first is "API gravity," which measures the density of liquid crude oil. A number greater than 10 means the crude floats on water, whereas a number below 10 means it sinks. Accordingly, we refer to higher API numbers as "light" and lower API numbers as "heavy."

The second parameter is the percentage of sulfur in the crude, which typically ranges from as low as 0.1% to as much as 5% by weight.

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A low sulfur content is referred to as "sweet," whereas a high sulfur content is called "sour" - with the latter typically requiring some of the sulfur to be removed prior to processing in an oil refinery.

And that's it, really; every grade of crude in the entire world market can be at least loosely defined by those terms.

MW: So now we have enough of a framework to start taking a look at production, consumption, and storage. How big is the shortfall, and how can it be made up?

MR: Absolutely. Now, the Saudi complex at Abqaiq contains three separate facilities that have a total combined capacity of around 7 million barrels of oil per day.

Primarily, Abqaiq produces two separate grades - a middle-of-the-road spec called Arabian Light (32.8 API and 1.97% Sulfur) and a slightly lighter, slightly sweeter spec referred to as Arabian Extra Light (API 39.4 and 1.09% Sulfur).

Now, since most refineries are designed to take a narrow range of crude qualities, any replacement barrels will need to be pretty close in both sulfur content and in API. The easiest way to assess that is to plot every major grade on a scatter chart, like the one I've just sent you.


In this case, Arab Light is almost at the center of the chart, but plotting nearby - going from sour to sweet - is production from Kuwait, Iraq, and Dubai (Kuwait Blend); the United States (Mars Blend, from offshore drillers); Russia (Urals); Brazil (Lula); and Nigeria and Angola (Bonny Light).

In the event that the outage at Abqaiq lasts weeks or months instead of days, it's likely that any and all of these options will be called upon to offset longer-term production losses from Saudi Arabia.

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It has been reported that the combination of Kuwait, Iraq, and Dubai have just under 1 million barrels per day of spare capacity that they can bring back on if need be.

In addition, slowing global demand has recently forced both Angola and Nigeria to defer shipments by a month (10 and three, respectively), which indicates they have somewhere between 300,000 and 500,000 barrels per day that could find a home almost immediately.

Meanwhile, Russia has recently doubled its export capacity to China (a key consumer of Saudi crude), and Brazil is in the process of ramping up production - though the combination of the two is unlikely to be particularly large - in the neighborhood of 500,000 to 1 million barrels per day, tops - and would take around 30 days or more to come online.

And finally, offshore drillers in the United States could bring on another 500,000 barrels per day or so in about a month, bringing the world's total available response to around 3 million barrels per day. That's a sizeable - but not complete - replacement to the Saudi outage.

MW: Okay, now what's happening on the ground in Saudi Arabia in regards to maybe getting Abqaiq back on line?

MR: That's a good question, and the answer is... it's complicated. And fluid.

Aramco's initial plan was to try and restore around 2 million barrels of output from Abqaiq by the end of Monday. Reports from the kingdom indicate it may very well have done it, but of course there’s much, much more work to be done.

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MW: What's that process going to look like?

MR: First, workers will aim to turn equipment and any built-in redundant facilities back on in a "ramp up" fashion to ensure the integrity of the complex.

That is being done as we speak. Judging from damage shown in publicly available photos, it appears the brunt of the attack was borne by storage tankers and desulfurization units - neither of which were entirely destroyed.

That means that while full production won't be restored for some time, a partial restart will happen fairly soon - likely on the order of 1 million to 1.5 million barrels per day.


Next, the kingdom will look to ramp up any idle production - in particular, offshore assets and wells located in the so-called "neutral zone" shared with Kuwait.

Output from those assets - around 2 million barrels per day - will be routed to operational facilities and find their way to market within 30 to 60 days, meaning it's entirely possible that the country can gain back about 75% of production losses within a couple of months.

Reckoning with the "Oil Shock" and "Fear Premium"

MW: So that's the near-term picture on the ground in Saudi Arabia. How well are end users - customers - fixed for supply? It seems to me how much or how little end users might draw on their current stockpiles will tend to play into how oil prices behave in the short term.

MR: That's absolutely right, and it's a diverse picture. The key consumers for Arabian Light crude are China, South Korea, and Japan - and while the latter two are comparatively low on stockpiles at the moment, China appears to be relatively well supplied.

Chinese officials have already announced that Aramco will delay October shipments by up to 10 days, while September cargoes will be shipped on time - just with heavier grades of crude.

China also has the ability to release some of its Strategic Petroleum Reserve (called "SPR," estimated to be roughly 400 million barrels) if supplies become tight - a short-term measure South Korea and Japan could also take if necessary.

MW: It can't be that easy - what's the "catch?"

MR: There's always a "catch," right? So, it's completely possible Abqaiq's 5.7 million barrels per day could be fully replaced by a combination of a partial restart, idle spare capacity in the market, future ramp-ups, and drawing down stockpiles - all of those entities have competing interests, which lowers the overall likelihood of success.

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Moreover - maybe more importantly - Abqaiq was supposedly protected by a missile defense system purchased from the U.S. The Saudi armed forces are thought to have around six battalions manning American-made Patriot missile batteries, along with all sorts of radars. So much so that a successful attack on it was generally regarded as a "low-probability event."

Not anymore.

In fact, I don't see anything stopping the kingdom's enemies from launching another, identical attack fairly soon.


With tensions between the Sunni-led Saudis and the Shia-led Houthis and Iranians at an all-time high and another strike possible - if not imminent - and the U.S. at least threatening to respond with military force, the global oil market is being forced to have a long, hard think about the overall security of its supply.

As such, it's likely we'll see the about half of the $7 to $8 per barrel "bump" we saw at market close on Monday to remain indefinitely. In effect, there will be a $3 to $4 per barrel "fear premium" that accounts for that perceived increase in geopolitical and military risk.

MW: What's that mean for the pricing "floor"?

MR: Well, for West Texas Intermediate, that means the absolute bottom of its price range moves up from roughly $50 to $55 per barrel, with Brent's floor rising from $56 to around $61.

And if Aramco fails to get its facilities back on line for more than a month, expect the top end of those ranges to extend into the $70 or $80 per barrel range. Investors will have to contend with that.

Unprecedented "Effect" Could Turn a Small Stake into $2.2 Million

Regularly harnessing the V3 effect can turn a small stake into $2.2 million in remarkably short order - in a year's time. And get this: It's easy to do. As you'll see, you can make these "money grabs" yourself - again and again - in about five minutes a day. Take a look at how it works.

Follow Money Morning onFacebook and Twitter.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Wed, 18 Sep 2019 09:00:39 +0000 https://moneymorning.com/2019/09/18/how-to-profit-as-markets-scramble-to-fix-the-saudi-crude-oil-shortfall/ Online Angel Investing Can Help Any Investor Retire Early https://moneymorning.com/2019/09/17/online-angel-investing-can-help-any-investor-retire-early/ Do you read stories about people who retire early and wish you were one of them? You can be, with online angel investing.

Angel investing is when you invest in the very early startup stages of a company. Angel investors supply seed money for growing companies that need cash. But, the companies aren't public yet. So, you can't purchase them on the stock exchanges.

Startups are often very exciting companies with new products or services. Investing in one that hits a home run can set you up for retirement.


Just look at the early days of Amazon.com (NASDAQ: AMZN). In the 1990s, Jeff Bezos founded Amazon as an online book store. One of its selling points was that customers could find books they may not be able to find at the local bookstore.

It didn't sell any retail categories other than books, and it certainly wasn't the household name it is now.

In those early days, Amazon needed money to stay afloat.

Fortunately, 22 angel investors signed on. And many of them were family and friends of founder Jeff Bezos. Each put in $50,000.

Back then, that was 1% of Amazon.

Frankly, it may have seemed dicey to some of them. The Internet and the idea of online purchasing were still very new.

Nowadays, each of those $50,000 investments are worth more than $8.5 billion. That's a wildly successful angel investment, to say the least.

In fact, it's a return of 17,000,000%.

That's the kind of windfall you could see with angel investing.

Watch Now: Robert Herjavec is helping everyday Americans discover the next Airbnb. Click here now...

But maybe you don't have $50,000 to spare. Fortunately, you don't have to. And we're going to tell you how you can become an online angel investor for as little as $50.

Here's what online angel investing is all about...

What Is Online Angel Investing?

Angel investing was originally a term for wealthy backers of theatrical productions. These angel investors would keep a play going through personal donations or underwriting.

Then, the investing world adopted the term. Startups needed wealthy backers before they could apply for an initial public offering (IPO).

In exchange for their backing, angel investors own a part of the company. Online angel investing offers an equity stake through stocks or convertible bonds.

Eventually, some angel investors become venture capitalists.

And you may have heard of venture capital before. Venture capital is the later stage of angel investing. Angel investing is needed when companies are valued at less than $5 million. When they're valued over $5 million, venture capitalists come into the picture.

Yet, venture capital tends to come from venture capital firms. These are large companies that provide guidance and expertise as well as capital infusions.

They want to see startups brought public. Angel investors, by contrast, often work alone. They invest in interesting projects.

And this can make angel investing a lot of fun.

Online Angel Investing and Risk

Investors should know that online angel investing is speculative. Small startups can have great successes but are not guaranteed to succeed.

And, typically, there is more risk in startups than in established companies. But the possible rewards are also crazy high.

So, we suggest the 50-40-10 trading strategy. This means that 50% and 40% of your portfolio are in defensive and growth investments, with consistent long-term returns. The 10% is for speculative, high-risk investments. That includes angel investing.

Now, angel investors don't expect every pick to be a winner. There is a high failure rate for startups.

Instead, they place money into several startups. They want very high percentage returns on some, and they know others will likely lose money.

But the soaring returns of successful angel investments could make for a very profitable online angel investing portfolio.

What You Need to Watch for with Online Angel Investing

There are two major potential issues with angel investing. One is stock dilution. Small companies can sometimes plan for a new stock that dilutes the shares of the existing stock.

That's okay if your dollar value remains the same.

But some stock issuance is made for control of the company, and some shares are worth more. If that happens, the dollar value of your shares might be hurt.

That's a sign you should walk away.

The other issue investors need to be aware of is the need for an exit strategy. Just like other equity investments, angel investors don't see gains until the equity stake is sold.

The same is true of stocks and even your house. Appreciation is on paper only until the asset is sold.

So, when you buy as an angel investor, you decide when you sell. Don't be tempted to hold for longer.

The exit point may be the IPO. People participating in online angel investing can benefit from IPOs because stocks in demand rise in price before them.

It's very different than investing as a retail investor after the IPO, when you may see a falling stock as the excitement cools down.

A buyout of the startup can also be an exit point. Buyouts by larger companies are great for small startups.

Now that you know the risks, here's how you choose an angel investment.

How to Choose Your Online Angel Investments

It's crucial to realize that you don't need or expect success with every single angel investment. Soaring profits with just 5% to 10% of the firms you invest in can make up for the lost investments.

And we have two impressively successful online angel investors to help you find successful startups for only $50. You can check out how, here.

Anyone Can Become an Angel Investor with as Little as $50

Angel investing used to be off-limits to the average American... but Shark Tank's Robert Herjavec said it best during this live broadcast: "The walls have finally come down. You no longer have to be rich, famous, or powerful to become an angel investor!"

Congress has now made it possible for you to take advantage of these life-changing deals.

By becoming an angel investor, you can be right there - one of the first to invest in the next Steve Jobs, the next Bill Gates, or the next Elon Musk.

And because you're there at the beginning, the upside is infinitely greater.

For so long, regular folks have been locked out... but not anymore. Click here for details...

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Tue, 17 Sep 2019 19:25:06 +0000 https://moneymorning.com/2019/09/17/online-angel-investing-can-help-any-investor-retire-early/ The Dow Jones Industrial Average Is Down with Slim Chance of a Fed Rate Cut https://moneymorning.com/2019/09/17/the-dow-jones-industrial-average-is-down-with-slim-chance-of-a-fed-rate-cut/ The Dow Jones Industrial Average is down today as the odds of a Fed rate cut fall by 66%. But that's just one of many global economic worries.

News from the U.S. Federal Reserve, China, and the Middle East all point to recession. More on this in a minute.

First, here are the numbers from Friday for the Dow, S&P 500, and Nasdaq:

Index Previous Close Point Change Percentage Change
Dow Jones 27,076.82 -142.70 -0.52
S&P 500 2,997.96 -9.43 -0.31
Nasdaq 8,153.54 -23.17 -0.28

Now, here's a closer look at today's Money Morning insight, the most important market events, and stocks to watch.

The Top Stock Market Stories for Tuesday

  • On Monday, oil prices had their largest one-day jump in more than a decade. An attack on Saudi Arabia's crude production has some analysts projecting the idea of $100 per barrel later this year. The attacks knocked about 5% of global production offline, and new reports signal that the damage is more extensive than previously thought.
    The Trump administration blamed Iran for the attack but said Trump wishes to avoid military conflict with Tehran. Iran has responded this morning by stating it will not negotiate with the United States under any conditions. Both Trump and Iranian President Rouhini are expected to attend the United Nations General Assembly next month. However, a directive from the nation's supreme leader, Ayatollah Ali Khamenei, ruled out negotiations. The chatter only heightens tensions across the Middle East.

Watch Now: Serial entrepreneur Neil Patel reveals how to achieve the American Dream... for as little as $50. Click here...

  • The Federal Reserve kicks off its two-day meeting on monetary policy. For the last two months, traders have speculated that the U.S. central bank will slash interest rates for the second time this year. However, the odds of a rate cut - according to the market - have fallen to 66%. Expect a lot of speculation and big bets over the next two days.
  • While the markets expect a rate cut by the U.S. central bank tomorrow, the story has less to do with Jerome Powell and his team. Instead, the focus will be on U.S. President Donald Trump, an ardent critic of the Federal Reserve. Trump wants the Fed to cut rates to the bone, and some speculate that the president is cheering for negative interest rates. Trump has criticized the Fed while other major central banks like the European Central Bank, the Bank of Japan, and the Peoples Bank of China continue to slash rates and introduce new stimulus measures to bolster their struggling economies.
  • Things continue to devolve in Britain over the Brexit. On Tuesday, the United Kingdom's Supreme Court begins three days of hearings. The topic: Prime Minister Boris Johnson's case for suspending Parliament. The court will likely hear testimony and give its decision by next week. Johnson has been pressed to reach a deal to avoid a "Hard Brexit." The question is if he is even trying anymore.
  • A 2020 recession has many Americans worried about the economy. A new survey from ABC/Washington Post showed nearly the same result as the 69% opinion observed in November 2007, some months before the global financial crisis. Americans are worried about the U.S.-China trade wars. Pessimism is high despite an economic climate of low unemployment. Roughly 60% of people also felt that they would have to pay higher prices because of the trade wars.

Stocks to Watch Today: KHC, FDX, SNE

  • Warren Buffett's bet on Kraft Heinz Co. (NYSE: KHC) certainly looks weak. His partner in the deal that formed the company - 3G Capital - has sold 25.1 million shares, according to an SEC Filing. The private equity group still owns 245 million shares. However, KHC stock has underperformed. Shares of KHC were off 3.3% in pre-market hours.
  • FedEx Corp. (NYSE: FDX) announced plans to hike its shipping rates starting on Jan. 6, 2020. The firm said it will not hike rates ahead of the holiday shopping season. Overall increases are pegged at 4.9% average for jet-service delivery. Ground transport rates are set to increase by an average of 5.9%. FedEx will report earnings after the bell Tuesday.
  • Sony Corp. (NYSE: SNE) has rejected Dan Loeb's breakup plans. The Third Point Capital manager had pressed for the Japanese tech giant to spin-off its image sensors business and focus more on its entertainment business. Loeb built up a $1.5 billion stake in the firm and pressed the firm to conduct a large assessment of how it could unlock shareholder value.
  • Look for additional earnings reports from Adobe Inc. (NASDAQ: ADBE), Chewy Inc. (NASDAQ: CHWY), Apogee Enterprises Inc. (NASDAQ: APOG), and Apex Global Brands Inc. (NASDAQ: APEX).

America's Favorite Angel Investor Shows How Easy It Is for Anyone to Invest in Ground-Floor Startups

You've probably seen stories about this person or that person making an absolute fortune from some unknown startup suddenly becoming a household name... like Uber, Airbnb, SpaceX, or Bird.

Now, it's your turn.

Shark Tank's Robert Herjavec is showing how easy it is for anyone to turn as little as $50 into what can be life-changing windfalls... all from investing in startups.

Click here to learn more...

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Tue, 17 Sep 2019 14:02:19 +0000 https://moneymorning.com/2019/09/17/the-dow-jones-industrial-average-is-down-with-slim-chance-of-a-fed-rate-cut/