The Deep Woods: Hey Jimmy, It’s Your Birthday

You are receiving this email because you signed up to receive our free e-letter The Deep Woods, or you purchased a product or service from its publisher, Eagle Financial Publications. [The Deep Woods] [Successful Investing]( [Bullseye Stock Trader]( [About Jim]( In This Issue: • Hey Jimmy, It’s Your Birthday • ETF Talk: Finding our Footing in Finance with this ETF • Political Pugilism and the Markets • My Favorite Birthday Wish Hey Jimmy, It’s Your Birthday by Jim Woods Editor, [Successful Investing]( and [Bullseye Stock Trader]( 08/14/2024 Sponsored Content [AI's Seven Wonders: The New Tech Titans]( The original tech giants delivered 15,000%+ returns over two decades. Now, the analyst who spotted NVIDIA early says "AI's new leaders could eclipse that - and faster." [Click to unveil the 7 AI stocks reshaping our world.]( Last week, I celebrated another successful trip around the sun, as the calendar ticked “August 8,” marking the day of my birth, and of another year of existence well lived. Indeed, another year of life lived by my own mind and for my own sake, and for that, I had to celebrate in the most rationally selfish way possible -- by reflecting on the meaning of existence, and the small, but important dent I’ve placed in the universe. That dent comes via this publication, and all of my investment advisory newsletters. It comes via my intellectual projects, such as the [Way of the Renaissance Man podcast](, and my latest musical venture, the recording of a new collection of songs I’ve composed and performed. In fact, the way I celebrated my birthday weekend this year was by going into the recording studio and laying down two new tracks, which will be released publicly soon (you’ll be the first to know when and where). When I told a friend what I was doing on my birthday, he asked me if I had planned it that way. The answer, of course, was yes. I mean, what better way to celebrate the day of your birth than to go into the studio and birth the music that’s deep within you? Your editor celebrating his birthday at the great [4th Street Recording]( studio in Santa Monica, CA. You see, doing what you love, and loving what you do, is the best reason to celebrate. And doing it on the day of your birth just makes the taste of life all that much sweeter. Now, interestingly, this celebratory occasion got me thinking about one aspect of life that, if I could, I would love to change. You see, why do we just celebrate someone’s existence on the anniversary of their birth? Why don’t we choose to live every day as if it was everyone’s birthday? Of course, I realize that if every day was cause for a birthday celebration, then the unique occasion would inevitably blend into the norm, and that the meaning and special nature of the day would be lost. Yet, what if we can use the feelings of goodwill and love and the celebratory mood of the birthday occasion as a sort of meme that can reorient our disposition toward others every day? Think about how you feel when you give someone a birthday gift (or when you give yourself a birthday gift the way I did this year), and when they smile back at you with gratitude, warmth and affection. That’s just about the best feeling one can have, and the best thing about that feeling is it’s open to all of us right at this moment, if we choose it. To prove this point, I challenge you to do a little experiment. Pause for a moment, close your eyes and try to recall a time when you gave someone a birthday present, and they looked back at you with eyes that involuntarily divulged profound happiness. Now look within yourself at how you feel right now, this moment. I suspect you’ve already felt a wave of happiness wash over your spirit (see, I told you I could prove it to you). The next step is to take that feeling you have and harness it toward the people that matter most to you, and not just in theory, but right at this moment. Here, I challenge you to do another little experiment. Think of someone that matters to you (husband, wife, boyfriend, girlfriend, child, grandchild, co-worker, friend, neighbor, etc.). Now pretend that it’s their birthday, and that you are going to greet them with a “happy birthday” disposition. I suspect negative thoughts such as anger, fear, jealousy, envy, etc. are not part of that happy birthday disposition. Rather, I suspect that positive thoughts such as gratitude, joy, delight and pleasure now animate your spirit. Now, take that duly animated spirit and contact one of those people right now and wish them a great day. Heck, why not even wish them an early happy birthday? I mean, even if their birthday just passed, the way mine did, there will likely be another one in no more than 364 days. So, today, I challenge you to channel that positive disposition that comes with celebratory well-wishes and go out and make every day someone’s birthday. And if today happens to be that special someone’s birthday, then make sure you treat that person with the love and kindness they deserve. Because in addition to making them feel great, you will make yourself feel equally great -- and that’s a present you can give yourself any moment you want. [China’s Global Conspiracy to Destroy the American Dollar]( China is nearing the end of its 40-year plan to dominate the world’s economy. Only one obstacle remains: The U.S. dollar. But not for long... because China has enlisted many co-conspirators to sink the dollar: Russia, India, Brazil, Argentina, Germany, and even Canada. And – no surprise – the International Monetary Fund (IMF) wants to jump in to help China win. This means China now has the power to crush the dollar almost overnight... and bankrupt America. But there’s still time to protect the money and retirement of investors. [Click here now to find out how... before it’s too late.]( ETF Talk: Finding our Footing in Finance with this ETF The pendulum, dear readers, has swung out and is now due to inevitably swing back in and potentially allow us all to breathe a bit easier. Word on the “Street” is that the Fed is likely to cut rates at its next meeting in September, as inflation has hit the Fed’s 2% target. Now, with interest rates currently at the highest they’ve been in 15 years, the idea of investing in the financial sector may not sit so well with everyone. But to quote a fellow Renaissance man and investor, Rob Arnott, “In investing, what is comfortable is rarely profitable.” But we are not focusing on the financial sector as a whole, we are focusing on a sliver of the financial sector: U.S. banking institutions. Like any sector or subsector of the market there are risks involved in investing in U.S. banking institutions, but there are also some noteworthy strengths and one in particular -- that would be the heavy regulation of all banks, which, thanks to the financial crisis of 2008-2009, is even more strict. Further, banks are now required to maintain certain minimum capital levels, which act as somewhat of a failsafe and larger institutions are even required to submit to “stress testing” to determine their ability to survive in adverse environments, i.e., periods of inflation or recession. This type of heavy regulation can help to mitigate some of the risk associated with bank-stock investing. But let’s delve even more specifically into one particular exchange-traded fund: SPDR S&P Bank ETF (NYSE: KBE). KBE tracks an equal-weighted index of U.S. banking securities and generally will invest at least 80% of its total assets in such securities. The index represents the bank segment of the S&P Total Market Index and comprises the following sub-industries: Asset Management & Custody Banks, Diversified Banks, Regional Banks, Other Diversified Financial Services and Thrifts & Mortgage Finance. As this fund is focused on such a narrow space, it may not be of much appeal for long-term investors, but it can be useful for establishing a tactical tilt toward financial stocks and provide investors with an efficient way to “bargain hunt” after large selloffs in financial stocks. KBE has $2.03 billion in net assets, $1.8 billion in assets under management and a manageable expense ratio of 0.35%. Further, KBE has an impressive dividend yield of 2.73% and paid $1.35 per share in the past year. Its dividend is paid every three months, and the last ex-dividend date was June 24, 2024. Courtesy of [stockcharts.com](. As the chart above shows, KBE is in a consistently upward trend. In mid-July, the stock hit an all-time daily high of $54. Currently, it is trading a bit lower, but nothing it cannot recover from. On Tuesday, Aug. 13, its price gained 1.23% and its volume increased as well, which is a positive technical sign for this ETF. Further, 683 more shares were traded than the day prior, and in total, 2 million shares were bought and sold for approximately $112.21 million. Since this is such a concentrated fund, its top 10 holdings equate to 13.09% of its total assets, and these holdings include: The Bancorp, Inc. (TBBK), 1.48%; BankUnited, Inc. (BKU), 1.33%; Columbia Banking System, Inc. (COLB), 1.33%; Axos Financial, Inc. (AX), 1.31%; SouthState Corporation (SSB), 1.30%; First Financial Bankshares, Inc. (FFIN), 1.30%; Western Alliance Bancorporation (WAL), 1.29%; Independent Bank Corp. (INDB), 1.28%; Community Financial System, Inc. (CBU), 1.25%; and Ameris Bancorp (ABCB), 1.22%. Ultimately, the financial sector, and more specifically U.S. banking institutions, can feel like a heady investment arena to jump into. And, while there is risk with any type of investing, we must ask ourselves if it feels like the right risk and KBE seems like it might have the potential to pay off well. As I often do, I will leave you with a quote -- one from a man who knows how to take a punch and understands that being knocked out does not equate to losing. Marlon Moraes, a Brazilian former professional mixed martial artist, once said, “If you don’t risk, you can’t win. I don’t fear taking risks.” As always, I’m happy to answer any of your questions about ETFs, so do not hesitate to [email me](mailto:askjim@successfuletfinvesting.com). You may see your question answered in a future ETF Talk. [This A.I. Spots Trades Like a Spy, See it Live]( If you want to trade smarter, not harder, and be prepared for this week's markets, you won't want to miss this. Join us live as we reveal which stocks and commodities might explode in the next few days and how to conquer volatility and avoid losses. Anticipating market changes is crucial, and nothing is more rewarding to us than helping you steer clear of potential losses. [Secure your spot now](! In case you missed it… Political Pugilism and Markets “There are many men of principle in both parties in America, but there is no party of principle.” --Alexis de Tocqueville At this year’s [FreedomFest](, I had the privilege of being on a panel with my esteemed colleagues Dr. Mark Skousen, George Gilder and Roger Michalski. This was a Q&A panel, and the ostensible subject was how would markets perform for the remainder of the year. Now, one of the questions we wanted to address, but didn’t get a chance to, is what impact the presidential election would likely have on markets. In retrospect, I am glad we didn’t get to that question, because shortly after our panel we learned of the assassination attempt on former President Trump. Then, just one week later, in a dramatic twisting of the tale, President Biden decided to remove himself from the race (more accurately, he was forced out by Democratic elites). In the immediate aftermath of President Biden’s announced withdrawal, Vice President Kamala Harris was essentially anointed by the party to be its next forebearer, and I must say that from a strictly objective, non-partisan perspective, she has done so expertly. The race has definitely taken on a new tone since VP Harris acquired the reins, and according to the latest polling, the contest is now extremely close, with both candidates eyeing paths to an electoral college win. Last week, the [polling data website 538]( (the best in the business, in my view) had the average of all the national polls showing Harris at 45.2% while Trump was at 43.4%. That’s about as thin a margin as it gets, and I suspect that margin will shrink the closer we get to Election Day. So, what impact (if any) will the current political pugilism have on the stock market? Well, that’s the real question, isn’t it? I mean, A) It’s your money that matters most, which is why you read my work; and B) The market is a forward-looking discounting mechanism that will react in kind to the various policy and regulatory proposals emanating from Washington. To answer this question, I am going to elicit the help of my friends at Sevens Report Research, who recently dug up some interesting data on the markets over the past nearly eight years, and through most of the last two administrations. A look at how markets performed during the Trump administration versus the Biden administration will provide us with some kind of baseline when assessing what might take place in markets if Trump is re-elected or if Harris wins the presidency. The one caveat here when assessing the following data is that during the Trump administration, we had the COVID-19 pandemic and the economic response to it. That response, which included a flood of easy money from both the Federal Reserve and the Treasury, skewed market results (to the upside) in 2020. So, how did the major market segments perform last time during each respective administration? The table below tells us just that. As you can see, from January 20, 2017, when President Trump took office through January 20, 2021, all but two of the above S&P 500 sectors show a distinct advantage in favor of Trump over Biden. Now, if we back out the skewed performance in markets during the COVID-19 pandemic, then we still get a decided outperformance for Trump versus Biden, although as you can see in the far-right column of our table, that outperformance is not nearly to the same degree as it was when you include the pandemic period (remember that despite the pandemic, markets enjoyed a stellar 2020). One very interesting thing to note here is that when it comes to the performance of the broad domestic equity market, as measured by the SPDR S&P 500 ETF (SPY), we see a virtual tie in performance over the periods that don’t include COVID-19. So, Trump outpaced Biden by 50.74% to 49.59%. Here again, this is about as close as it gets (and hey, it’s even closer than the current tight gap between candidates in the latest national polls!). The bottom line here is that based on the history of past performance, Trump is likely to be better for equity markets than Harris. However, keep in mind that Harris won’t have the same policy agenda as Biden, and Trump 2.0 isn’t likely to have the exact same policies as he did in his first term. One additional thing to think about here is that if you are looking to take advantage of short-term winners and/or losers from this election, consider that this presidential contest is likely to be the most expensive ever in terms of candidate and Political Action Committee (PAC) spending on advertising. This is especially true if you happen to be in a “swing state” where the contest is extremely tight, and where the winning of electoral votes will, in fact, decide the election outcome. According to a report by research firm eMarketer, total political ad spending in the country this year is expected to rise about 27% from the election year of 2020 to $12.15 billion. That’s a whole lot of money shuttled into the coffers of media giants. One media giant likely to benefit mightily from this big political spend is Fox Corporation (FOXA), as both candidates advertise on the network to boost their respective profile and to take their case directly to the people. If you’d like to find out more about how my subscribers are positioned for this big political ad spending, please [check out my High Velocity Options advisory service]( today. ***************************************************************** My Favorite Birthday Wish “Everybody has birthdays. You just wear yours better than most!” --A friend who shall remain nameless I received a lot of birthday wishes last week, but this one was my favorite. Yes, I know the old bromide, “age is just a number.” But what’s really more important is how you wear your age. I wear it with pride, and you should, too. After all, you are here, right now, and reading this in full focus. And that is a gift to be cherished and celebrated. Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. [Click here](mailto:askjim@successfuletfinvesting.com) to ask Jim. P.S.: A new AI technology called the [AI Master Key]( just emerged on the market. Could it be the next big money-making tech for 2024 and beyond? In the name of the best within us, [Jim Woods] Jim Woods Editor, Successful Investing & Bullseye Stock Trader About Jim Woods: [Jim Woods]Jim Woods has more than 25 years experience in the markets, as a stock broker, hedge fund money manager, author, speaker and independent analyst. Today Jim serves as editor and investment director of the long-running newsletters [Successful Investing](, [Bullseye Stock Trader]( and a new Live Coaching service offered exclusively to his readers. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, and many others. About Us: Eagle Financial Publications is located in Rosslyn, VA. – Blocks from the Capitol. 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