Momentum Investing: The Secret to a Red-Hot Stock Portfolio
by Alexander Green, Advisory Panelist
Thursday, June 25, 2009: Issue #1026
The investment landscape isn’t pretty right now.
The federal deficit is ballooning. Credit is tight. Home prices are still falling. The dollar is weak. Fuel prices have jumped. The economy is in the tank. And last year the stock market experienced its worst year since 1931.
Who in his right mind would buy stocks now?
I would. In fact, it’s only because so many investors keep repeating the mantra in the paragraph above – as the national media does endlessly – that they don’t.
And when they realize how many momentum investing opportunities they’ve missed, they’re really going to regret it.
So do yourself a favor and turn off all the talking heads on TV. They don’t know any more than you what the economy will do in the second half… or where interest rates will go… or where the S&P 500 will finish the year.
Momentum Investing: Taking the Guesswork Out of Stocks
Fortunately, when choosing stocks through momentum investing, you don’t have to know. And you don’t have to guess, either.
If you want to make money in the stock market, stop thinking about the economy and the market and start thinking about business.
Not just any business, of course …
- Think about businesses that have tens of thousands of new customers beating a path to their door.
- Businesses that are reporting record sales and profits.
- That have huge order backlogs.
- That have double-digit profit margins.
- Businesses that are growing so fast they don’t know if they can keep up with demand.
In this economy, of course, businesses like these are a rarity. Most businesses are doing lousy. For instance, this is a terrible time to be a banker… or a steelmaker… or a homebuilder… or an auto manufacturer… or retail merchandiser.
But there are other businesses out there that are enjoying the best of times.
Let me give you an example…
Great Earnings Momentum & Double-Digit Profit Margins
I’ve been recommending a small but rapidly growing company with great earnings momentum and double-digit profit margins. It has more than 17 million customers in 120 countries.
Sure, it has competition. But as its CEO says, “We’re way ahead of everyone else.”
- The recent financial collapse has only hastened its business. The company is receiving more than 43,000 new orders a day. In fact, it picked up more than 1.5 million new customers last quarter.
- The company has posted earnings growth of 24% or better every quarter since the recession began in December 2007. It has the technology, the customer base, the market niche and the profit margins to really blast off in the months ahead.
In fact, look at the chart below:
Chart: http://www.investmentu.com/images/iu062409chart.jpg
While the market did a belly flop last fall and is also down for 2009, this stock is up over 230% in the last seven months alone.
Why aren’t you hearing about momentum stocks like this? Because the media thrives on bad news, not good. It specializes in heartbreak and cynicism.
Momentum Investing – Forget The Economy & The DJIA
I, on the other hand, spend my days screening for companies just like the one I just mentioned. It’s called momentum investing for a few reasons:
- It requires you to forget about the economy, “most businesses” and the Dow Jones Industrial Average.
- Instead, you focus solely on companies that are knocking the cover off the ball – and likely to report sharply higher profits in the weeks ahead.
Incidentally, when you’re fortunate enough to uncover companies like this, there’s one thing you really ought to do… Buy them.
Good investing
Alexander Green
Editor’s Note: Alex’s subscribers have known about the red-hot stock he mentioned above for a while now – as well as a number of other double-digit growth companies. If you’d like to get all of his latest picks, take a look at Alex Green’s Momentum Alert.
- Cerner Corporation: Big Stock Market Winner
- Aaron’s Inc (NYSE: AAN): Stock of the Day
- Return On Equity (ROE): Find Explosive Momentum Stocks With This Financial Ratio
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11 Responses to “Momentum Investing: The Secret to a Red-Hot Stock Portfolio”
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June 25th, 2009 at 6:05 am
will you stop it to mail me continue which are meaning less for me and investing my time to only delete
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Sky Reply:
June 29th, 2009 at 8:11 am
Right on ATUL! (Proverbs 28: 19,20)
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June 25th, 2009 at 9:01 am
It truly takes a lot of moxi to write an advertisement for a newsletter and package it like an article, while providing no meaningful information what so ever. Loved the chart with no name on it!! Keep up the good work Alexander…this is really a terrific service to the investing public!
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June 25th, 2009 at 9:40 am
If what you say is true then why don’t you give the name of ONE of your predictions for us to try before paying for this service. If it is what you say it is, everyone would jump at the chance and gladly pay for continuing this kind information. People are hurting enough now without someone trying to rip them off with false promises and we know there are lots of them out there. So prove yourself, and help someone like you say you want to do, by giving them something to try for free. If you can do all this, then you obviously are making tons of money and can afford to give this help to people that need it. Thanks, Sherry
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June 28th, 2009 at 6:58 am
Hey give Alexander a break, he’s hurting for business just like everyone else. More money is made selling investing products then the investment itself. It’s just like it’s better to provide service at a casino then to bet there.
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June 28th, 2009 at 7:53 am
far too many promises from far too many newsletter
writers just trying to sell their newsletters.
if the write is so successful and so rich they
would not have time or interest in writing the news
letter…cut out the hype and give a real idea
away for free, let a customer prospect win with your
real idea and then you will have a customer for life
dare to be different and honest and build trust and
a loyal customer.
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June 28th, 2009 at 8:25 am
like sherry said JUST ONE free ,$1000 is alot to pay ,
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June 28th, 2009 at 1:46 pm
I agree to a degree with the above but when you are employed by a publishing company the goal is to make money. Agora Publishing provides much free information that has proven to be reliable as well as entertaining like The Daily Reckoning which gave a trade of the decade which was to short the Dow and buy gold. Investment U. also supplies lots of free imformation. Alex’s Spiritual Wealth is provided for free and is very good. His recent article about possessions and clutter was excellent. Search the free information at Investment U. and learn to find the stocks yourself and if you don’t have time, then subscibe. I am sure that they will offer a free money back trial period.
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July 11th, 2009 at 9:27 pm
Alex, I enjoy every artile you write. Thanks.
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July 21st, 2009 at 3:59 pm
vague and not specific and of little benefit
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July 24th, 2009 at 12:04 pm
This one’s easy, it’s Vista Print(VPRT)
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