part #7 ,,,shortages,,,04/20/04
Our 4,200 members share their insights, evaluations and knowledge. We package all the individual research and share our micro and macro analysis with the whole business group. And we give this inside knowledge to our ChangeWave Investing subscribers -- often 30-45 days AHEAD of when that information finally becomes known in the popular press.
Our Clients Are Getting RICH on Early Alliance Forecasts:
Spring 2002: The Alliance identified a burgeoning demand for satellite radio. XM Satellite is up more 300% since December 2002.
January 2002: The Alliance predicted a huge boom for generic manufacturers once proprietary drugs like Allegra came off patent. Lannett Pharmaceuticals soared 365% in '02 alone. Teva Pharmaceutical jumped 35%.
May 2002: The Alliance uncovered an emerging trend away from AOL dial-up Internet access, and the stock was recommended as a short to ChangeWave institutional clients. Five months later those customers pocketed 39% gains...10 months later AOL formally announced significant losses in that very same division. We steered our ChangeWave Investing subscribers away from this disaster long before most investors got a clue.
Fall 2001: A holiday spending Alliance report identified digital cameras and flat panel displays as big ticket items that holiday season. Our clients went long on Photon Dynamics, Zoran and LSI Logic...and bagged quick profits of 10% or more on each stock.
And much more!
Right now, the Alliance has identified three more areas on the verge of EXPLOSIVE GAINS. Don't miss our next wave of profits -- accept a risk-free trial membership to ChangeWave Investing today.
Using our buy, sell, hold stock advice, our ChangeWave Investing members turn this "Alliance advantage" into cold, hard cash. So can you -- if you follow what I have to say today and buy the three stocks I'm going to reveal in this report.
NOT ANOTHER BUBBLE
Here's what I think is important for you to know right now.
1) In 2004, starts, the same momentum players will be back. And many of our favorite spaces and stocks that are getting crushed right now are coming back into very attractive valuations.
If our research is right on their fundamentals, these very same stocks will deliver the great earnings growth and stories that should make them BIG movers next year, too. Call these the "Do-Over" stocks. 2) All the talk about "this is another Bubble" is just plain crap. Let's look at today versus the winter of 1999.
TODAY: IPOs that pop on offering are the ones with BIG earnings. Zero-earnings IPOs flounder and are down 20% on average. 1999: IPOs with no earnings pop 200%-500% on the first day. There were no IPOs of companies with big earnings -- no one wanted them.
TODAY: Forward P/Es for S&P 500 stocks are 17-18. (At $61 a share consensus earnings including stock option expenses) 1999: Forward P/E for S&P 500 stocks was 40-50 due to the amount of stock option expensing.
TODAY: The classic bubble stocks now are single-digit stocks with 30%-50% of value in cash in most cases: Sun, JDS Uniphase, EMC, Human Genome Sciences, Ciena, Corning, Qualcomm, etc. 1999: Those stocks listed above were $100, $200 and $400 per share.
TODAY: Merger and acquisitions are for cash and almost all earnings are accretive immediately. 1999: Mergers were for "funny money" stock and hardly any were accretive.
TODAY: We are in a classic recovery-to-sustainable economic expansion. In other words, the early phase of the business cycle with 5%-6% productivity gains. 1999: We were in the absolute peak of a record business cycle expansion with 2%-3% productivity gains.
I could go on for another three pages, but you get the drift. To call this market another bubble is not only wrong, it screws up your investment strategy.
With ZERO inflation, negative bond returns, 75% manufacturing capacity (meaning there's still slack in the manufacturing world), 5.9% unemployment rates dropping to 5.5% by mid-year, and capital gains taxes DOWN from 40% to 28% to 15% now, the correct investment strategy is stocks -- not bonds or cash. (Especially if you are interested in building a lot of wealth over the next 12-18 months.) Thank goodness so many out there continue to NOT get it.
It is their combined ignorance, denial, despair, fear and loathing that will ensure that the right kinds of stocks will be significantly higher this time next year than they are today. Let's get ready to rumble.
Let's start with the overall market forecast and work from macroeconomics to the micro level. Our first-quarter sales projections from our 4,200 ChangeWave Alliance members correlates to about a 4.5% U.S. GDP growth number in 2004. These surveys suggest that the first and second quarters are going to positively surprise Wall Street forecasters and the "it's only a blip" school of naysayers. With accelerating business capital investment and increased hiring and job creation in 2004, the sweet spot of self-reinforcing phase of the boom-bust business cycle is now in full gear.
Thankfully many, many investors will continue to doubt this absolute fact until they can't stand the pain any longer and decide to add their cash to the markets. This fast start to 2004 is why I think we hit 11,000 on the Dow by April 15 and 11,500 by year end. I expect similar gains on the Nasdaq and S&P-I see a Nasdaq 2,200 by April 15 and 2,400 by year-end and S&P 500 1,180 by April 15 with 1,300 by the close of 2004. Interest rates look surprisingly stable as well. Those calling for huge spikes in interest rates continue to miss the obvious-interest rates are tied to inflation, not economic growth. If you look at the long term and compare rates of inflation to interest rates, it's obvious. Government debt, rates of GDP growth or consumer debt levels are poor interest rate indicators. My call for real chain-weighted inflation in 2004 is 1.8%-2%. This means we should expect slightly higher 10-year (4.6%-4.7%) and 30-year rates (5.3%-5.4%) while 30-year mortgage rates remain at relative historic lows (6.2%-6.3% maximum). All these numbers continue to say one thing: Own stocks for the next one to two years at least. If we can continue to earn 10 years of wealth every 12-18 months, it means you and I can make it to the end of 2005 with 20 years of new wealth on our personal balance sheets. Whoever said that retirement will be financially hard for the new generation of retirees is certainly not a ChangeWave investor!
A Higher Market And A 2004 Landslide Is On The Horizon
Let's get to the microeconomics and the spaces within the $50 trillion world economy that will grow fast enough to earn us 400%-500% MORE wealth than the overall averages. First-as we say on "Bulls & Bears"-predictions! Let's start with the ones we've already touched on:
Corporate earnings growth accelerates in the first and second quarters.
Interest rates rise slower than most project.
The Fed keeps a lid on interest rate targets until after the presidential election, which means inflation continues to be dormant.
The S&P 500 ends the year at 1,300.
Nasdaq Composite ends the year at 2,400.
The Dow closes 2004 at 11,500.
ChangeWave growth stocks beat the market by 400%-500% again (excluding our Ballast Income recommendations).
With all this great economic news, and the Saddam Hussein trial telling the REAL truth about why the U.S.-led invasion was necessary and just, the easiest prediction of all is that President Bush wins in a landslide. This would be good for the equity markets because Bush could use his victory to push a self-directed Social Security plan and continue to beat the drum for lower taxes on dividends.
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