Up 65%... With Room to Run

Certain small caps are rallying... [Total Wealth] BROUGHT TO YOU BY MANWARD PRESS This Small Cap Is Up 65%... With Room to Run [Robert Ross] Robert Ross Speculative Assets Specialist Small cap stocks have been on an incredible run. But you wouldn't know it by looking at the Russell 2000. As I've said to my audience many times over the last few years, the Russell 2000 is not a good barometer for the small cap market. How can that be? Well, unlike major indexes like the S&P 500 and Nasdaq, the "best" companies get kicked out of the Russell 2000 when the index rebalances. Essentially, when these small cap companies grow and succeed, they graduate out of the index. Investors relying solely on the Russell 2000 are missing out on some of the highest-quality small cap stocks that have room to run. This would be like if Nvidia (NVDA) went on a monster run and "graduated" to a "mega cap index." Those owning the mega cap index would be thrilled. But the S&P 500 index would no longer enjoy the fruits of Nvidia's upward trajectory. I say this because there are a lot of stocks working in the small cap space. And one of my recent recommendations has been a top one to own. SPONSORED [FREE War Room Open House During Election Week!]( [WAR Election - Open House]( Members have had the chance to make top 188% gains on FedEx overnight... Or 121% gains on Walmart in just over an hour. But election week could bring the BIGGEST opportunities ever. And... you can see for yourself... 100% FREE. [Join us for our FIRST EVER Election Open House (No Credit Card... No BS.)]( The Rate-Sensitive Names Are Rallying We talked a few weeks ago about where we are in the market cycle. While no one has all the answers, the [Merrill Lynch Investment Clock]( helps to put the chaotic market into stages: reflation, recovery, overheat, and stagflation... [Inflation and Growth - Rises and Recovers]( [View larger image]( With inflation back near the Federal Reserve's 2% target... inflation-adjusted GDP rising around 3% per year... the yield curve uninverting... and the Fed cutting rates, we're likely in the recovery phase of this cycle. And that's great news for small caps, as they are much more "rate sensitive" than other classes of stock. They tend to have higher debt loads relative to their larger counterparts, making them more responsive to changes in interest rates. As borrowing costs decrease, these companies can invest more in growth, leading to potentially higher returns for investors. And while small caps are sensitive to changes in interest rates, there is a subsector that is even more affected. And I expect them to continue rallying. SPONSORED [Buy these stocks BEFORE President Trump returns to the Oval Office]( [Trump in Oval Office]( Source: [Wikimedia Commons]( President Trump's first term set off a massive Stockwave on Wall Street, sending some stocks as high 3,480%... And now thanks to Trump's "Document 20"... One expert predicts a second Stockwave could soon make smart Americans rich. [See details on which stocks are poised to surge.]( This One Is "Starting" to Work When keeping my ear to the ground for opportunities to take advantage of where we are in the market cycle, I narrowed it down to rate-sensitive sectors like... - Real estate - Consumer discretionary - Financials. And Upstart Holdings (UPST) falls squarely into this category. Upstart is a fintech company that uses AI and machine learning to assess credit risk and underwrite loans. Its technology aims to improve the traditional FICO-based lending model by incorporating a wider range of data points, such as education, employment history, and other nontraditional factors. The company's core business thrives when rates are lower. Upstart leverages AI to assess creditworthiness and has disrupted traditional lending by allowing more borrowers to qualify for loans – especially in a falling-rate environment. Lower rates should be a boon for Upstart's business. When rates drop, borrowing becomes cheaper for consumers, leading to increased loan demand. For example, during times of low rates, a borrower with a thin credit file may qualify for a personal loan based on their education or job history - factors traditional lenders might overlook. This boosts Upstart's loan volume, revenue, and overall performance in a falling-rate environment. This is a key reason analysts are optimistic about the earnings picture for Upstart. In fact, Wall Street expects earnings growth of 30% per year as the company reaches its "breakout" to profitability by the end of next year. SPONSORED [Trump's "Document 20" Revealed: Smart Americans Could Get Rich]( [Trump's 'Document 20']( Details on a special dossier written by President Trump himself have just been revealed. One top investment expert expects this explosive document could soon send the market into a Second Trump Stockwave. The last time this happened, stocks surged as high as 3,480% in 4 years. [See if stocks could soar as much as 1,000%+ if history repeats itself.]( And while it doesn't have to do with the company's rate-sensitive nature, I also like how the stock is heavily shorted. The combination of a lower rates tailwind and a short squeeze was too appealing to pass up. Considering the stock is up 65% in a little over a month, I'd say my timing was impeccable. Another Rate-Sensitive Name in the Works While I'm obviously thrilled to see so much green in the Breakout Fortunes portfolio in a short period of time, I am always on the lookout for opportunities. And I have found another rate-sensitive name that fits squarely into the framework I laid out. These types of opportunities don't come around often. So if you've been on the fence about joining my investing service, [now's the time to learn more](. Because I've rarely seen more opportunities in the small cap space... even as the Russell 2000 has barely budged. Stay safe out there, Robert Want more content like this? [YES]( [NO]( Robert Ross Robert Ross' unique style of clear and direct stock analysis has helped him build a massive following in the investment research industry. He started his career at investment research company Mauldin Economics, where he quickly rose through the ranks to become one of the youngest chief analysts in the industry. Today, over a million investors turn to Robert every month for his take on investing, economics and personal finance. He now shares his unique insights in Total Wealth and Manward Money Report. You are receiving this email because you subscribed to Total Wealth. To unsubscribe from Total Wealth, [click here](. Need help with your account? [Click here](. Have a question or comment for the editor? [Click here](mailto:mailbag@manwardpress.com). Please do not reply to this email as it goes to an unmonitored inbox. To cancel by mail or for any other subscription issues, write us at: Manward Press | Attn: Member Services | [14 West Mount Vernon Place | Baltimore, MD 21201](#) North America: [1.800.682.5210](#) | International: [+1.443.353.4263](#) [Website]( | [Privacy Policy]( Keep the emails you value from falling into your spam folder. 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