Bulls Are Coming Back On Wall Street

JOIN OUR LIVE SESSIONS! Our LIVE session starts when the big institutions and elite traders do before the opening bell. We'll look at real-time dark pool data as the market movers position themselves for the trading day in secret off-market exchanges. [JOIN OUR LIVE TRADING SESSION @ 6am PT / 9am ET]( [Shadow] Hello investor, “Fear of missing out” is back on Wall Street, as money managers are starting to buy stocks again, so they don’t miss out on a potential rally. Take Andrew Slimmon of Morgan Stanley Investment Management. He said his price target for the S&P 500 Index at 4,200 is now too low. He thinks the index could hit 4,600 by the end of the year. Why? Markets could start pricing in a comeback in earnings in 2024 – and perhaps a case of FOMO. The reason is simple -- money managers are measured by their performance. Unfortuantely, they often don’t have a luxury of being measured by decades. Nope, they don’t want to be seen as the underperformer for a single year, so they might feel anxious to stay in cash if the markets jump from here on. - “If I were a financial advisor and it gets to October, November and I haven’t made money for my clients because I’m heavily in cash, I would start to get nervous,” he said. “My conjecture is that cash starts to get back into the market later into the year.” Andrew Slimmon of Morgan Stanley Investment Management (Photo: Bloomberg) Bank of America equity strategist Savita Subramanian also raised her year-end price target to 4,300 from 4,000. It is remarkable how the markets are holding up. We’ve got plenty of worrying signals. We witnessed a big collapse in regional banks. We could be headed to a recession. But, the S&P 500 is up by more than 7% in 2023. The Nasdaq did even better with a 24% gain. Sure enough, investors added $21 billion in new long positions last week on the S&P 500, said Citigroup. It was one of the largest weekly flows of new longs in recent years. Goldman Sachs also said hedge fund managers bought US shares for two straight weeks at the fastest pace since October. Could it be ripe for a rally? Slimmon thinks so. - “If you look back on the history of when we had drawdowns like we had last year, the behavioral element is consistent over time,” Slimmon said. - “After big drawdowns, people get bearish but then as the market begins to lift — and we’ve had two straight quarters now of positive returns — behaviorally, it starts to suck investors in and you begin to see a progression of fear to FOMO.” Copy Warren Buffett’s Method Of Building Wealth By Investing In This High-Return Stock Almost everyone praises Warren Buffett’s track of record and calls him one of the greatest investors ever. Now, let’s take a quick peek at why he amassed such praise. Amazon is a stock market darling in the last two decades. Amazon’s stock price had a 37% annual gain from its IPO in 1997 to the end of 2021. People wished they invested in the company from the start. Now, how would Berkshire Hathaway compared during its early years for a two-decade period? Believe it or not, Berkshire actually grew as fast as Amazon. Berkshire Hathaway grew its book value (which is based on assets, not a stock price) by 30% annually for a decade from 1975 to 1984. (Source: The Complete Financial History of Berkshire Hathaway) Then Buffett followed up the next decade with another 25.4% book value CAGR. (Source: The Complete Financial History of Berkshire Hathaway) However, if we look at the stock price of Berkshire Hathaway, the returns were even more remarkable. The average annual return was above 36% during these two decades: - 1975-1984: 5% annual market value per share gain - 1985-1994: 36% And he achieved these numbers without being in a fast-growing industry and without taking on big debts. It’s simply incredible. So, how did he do it? You can copy his method, and it’d work for you as well. The primary thing Warren Buffett pays attention to in any stock is return on invested capital. That’s the metric that he obsesses over. The reason is simple. It’s the single best way for a company to grow its value. Today’s stock pick has one of the best return on invested capital metrics of any industry. Today’s Stock Pick: Mastercraft Boat Holdings, Inc ([MCFT]( MasterCraft Boat Holdings Inc. designs and manufactures recreational powerboats through its brands – MasterCraft, NauticStar, Crest, and Aviara. Mastercraft averages a return on equity of ~50%. What does that mean? Any capital invested into the business will return 50% per year. That’s a spectacular number. As a result, the total stockholders’ equity soared 28x in about five years from $5 million (beginning of 2017) to $144 million (end of 2nd quarter in 2022). You can see the quarterly growth in total shareholders’ equity since 2017 in the graph below: (Source: MacroTrends) Padding up Mastercraft’s income statement is the pricing power. For its flagship brand, Mastercraft, the net sales per unit rose from $106,000 to $130,000. The other two brands also saw growth. Indeed, raising prices is one of the secret sauces behind Mastercraft’s incredible ROI. (Source: MasterCraft) Strong market share: Thanks to its ability to ramp up production faster than our largest competitors after the pandemic, along with its signature quality, MasterCraft took a significant market share from the competitors. It is the number one and took market share over each of its closest three competitive brands by between 80 and 240 basis points, according to the most recent available SSI market share data as of the rolling 12-month period ended March 31. (Source: MasterCraft) Share repurchase: This is a big thing. MasterCraft believes its share price is so low that the Board authorized a $50 million share repurchase program in late June 2021. How much of an impact it’ll have on the market cap? Well, MasterCraft is trading at a $511 million market cap. This share repurchase program would shrink nearly 10% of its market cap. So far, Mastercraft has used up more than 80% of its program. What happened to its adjusted income per share? It grew by 9%. That’s a powerful growth driver. Mastercraft expects to continue buying back shares over time. Bottom line: MasterCraft has wonderful economies with high returns on invested capital, and you can buy it now at a P/E of only 8.39. Plus, they have plenty of authorization remaining to repurchase nearly 5% of its market cap. The stock is set up for a good run – cheap valuation, good earnings growth, and share repurchases. Add this to your portfolio today. FREE LIVE TRADING SESSIONS & TRAINING USING THE MOST COMPREHENSIVE DARK POOL MONITOR AVAILABLE TO THE RETAIL INVESTOR Join our LIVE Trading Sessions throughout the day where we will focus on how you can learn to master the markets through the use of advanced algorithms and AI to trade like the institutions. BEFORE THE BELL Starts 6am PT / 9am ET Our newest LIVE session starts when the big institutions and elite traders do, well before the market opens. We'll look at realtime dark pool data as the market movers position themselves for the tra ding day in the secret off market exchanges. LIVE TRADING SESSION Starts 8am PT / 11am ET Take advantage of Trade Algo's proprietary advanced algorithms for anticipating big market swings in our daily LIVE trading session. Trade Algo's Senior Analyst Luke Russell will walk you through the key tools and strategies that the institutional investors and top traders use to profit from high volatility in the market. THE FINAL HOUR Starts Noon PT / 3pm ET According to Wall Street Journal approximately 20% of the trading volume happens at the last 30 minutes of the day. Institutions make the majority of these trades in private dark pool exchanges -- away from the public’s eyes. The timing happens for two reasons: 1) Index funds make their trades to mimic the closing price of a stock. 2) Billionaires trade near the end of the day because they anticipate major news that will be released during after-hours. Because they trade in dark pools, the public doesn’t know about these trades until one day later. We’ve consistently spotted the correlation between a spike in dark pool volume at the end of the day and the next day’s price movement. In the Golden Hour we will identify and analyze these movements so you can trade with confidence. CATCH THE SPARK Starts 4pm PT / 7pm ET Catch The Spark is led by trading expert Luke Russell, starting at 4pm PT / 7pm ET. Open to all this session is a recap of the day and a prep for the next trading day with an emphasis on identifying and examining "spark" orders, those large institutional trades taking place behind closed doors in off-market exchanges, that drive stock movement. Bring the stock or options trade you've been waiting to make and we'll show you the information the hedge-funds, big institutions and top traders use to evaluate and time the trade. [REGISTER NOW! IT'S FREE]( OR [SCHEDULE A LIVE ONE-ON-ONE DEMO!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](