So far, it’s been a tough year for investors.
Since January 1, we’ve seen a drop of 5% in the S&P 500, our stand-in for the overall stock market…
The tech-heavy Nasdaq has tumbled even harder, falling more than 9%…
And the price action in crypto has been gloomier still. Just last month, this sector’s overall value plunged 29% – from $2.4 trillion to $1.7 trillion.
Crypto prices have bounced back slightly within the past two weeks. But they’re still down more than 24% since the beginning of this year.
When your portfolio is bleeding so much red, it’s hard to keep cool. But it’s our job here at Legacy to help you do that.
So in today’s dispatch, we’ll share details on an elite group of stocks you can feel confident owning – no matter what’s happening in the market.
Here at The Daily Cut, we find profit trends early on. This lets you access the life-changing gains that Wall Street elites normally keep to themselves.
But helping you grow your wealth is only part of our mission.
We also help you protect your nest egg.
We do that by bringing you the best wealth-protection ideas from Teeka Tiwari, Jeff Brown, Dave Forest, Nomi Prins, Jason Bodner, and the rest of the Legacy Research team.
And our Friday mailbag edition is where you get to ask our experts your most pressing questions.
You can do that by writing to feedback@legacyresearch.com.
Coming up… Jeff, our in-house tech guru, reveals why we don’t need to fear that robots will take our jobs.
But first, we turn to Palm Beach Research Group’s senior investment analyst, Grant Wasylik.
Before joining our team, Grant was a lead portfolio manager and head research analyst for a billion-dollar wealth manager.
At Legacy, he’s developed a “bulletproof” stock-picking method. And over the past 20 years, it’s delivered positive returns… even during the market’s worst crashes.
Grant calls it the “Untouchables” strategy. That’s because in the long term, these stocks are so safe and profitable… you won’t want to sell them. So you won’t touch them once they’re in your portfolio.
Today, one of your fellow readers wants to know more…
Reader comment: I’ve read about the long-term value of the “untouchable” securities… but you don’t say what they are!
– Ken G.
Grant’s response: Thanks for your message, Ken.
Out of consideration to our paying subscribers at The Palm Beach Letter, I can’t name all the stocks in our model portfolio.
But I’m happy to share one of them with Cut readers. It’s one of the world’s biggest healthcare companies… it pays a dividend… and it’s constantly innovating and growing.
Before I reveal this company, I’ll recap for readers who are just joining the conversation…
At Palm Beach Research Group, we studied the two major bear markets over the last two decades.
And we combed through over 19,000 publicly traded stocks in North America using multiple data subscriptions that cost over $50,000 per year combined.
The goal was to spot stocks that won’t suffer during big drawdowns in the market and will also easily outperform over the long term.
Only 13 stocks made the cut.
These “bulletproof” investments stayed afloat even in the worst downturns. The Untouchables strategy cranked out positive returns in all the last 21 calendar years.
Here’s how our strategy performed:
It was up 26.4% in 2000 when the S&P 500 was down 9.1%.
It was up 20.1% in 2001 when the S&P 500 was down 11.9%.
It was up 12.6% in 2002 when the S&P 500 was down 22.1%.
It was up 3.9% in 2008 when the S&P 500 was down 37%.
It was up 12.6% in 2018 when the S&P 500 was down 4.4%.
And over the long run, the Untouchables not only outperformed the market… they also outperformed investment legends like Warren Buffett and Carl Icahn. You can see this in the table below.
In the same 21-year period, the S&P 500 had a cumulative total return of 283%. The average Untouchable returned 3,419% – more than 12x the market.
That’s why you’ll never want to panic sell these stocks.
If you want to find Untouchable stocks yourself, look for these five traits:
Simple business models
Dividend payments
Ultra-low volatility
Positive returns when the broader market declines
Long-term market outperformance
One example of an Untouchable is Johnson & Johnson (JNJ).
It has three key business lines: consumer products, pharmaceuticals, and medical devices. And it yields 2.5%.
On top of that, it now trades near its all-time high of about $180, which it set last August. It’s up more than 55% from its March 2020 pandemic bottom.
And the company has a history of outperforming when the broader market falls…
In 2000 and 2001, JNJ ended each year 14% higher. The S&P 500 ended the years down 9% and 12%, respectively…
And in 2008, when the S&P 500 ended the year down nearly 40%, JNJ was down only about 8%.
If history is any guide, an Untouchable stock like JNJ is one that’ll do well no matter where the market goes… even in volatility like we’ve seen in recent weeks.
To sleep better at night, make sure you bulletproof your portfolio with Untouchables. They’ll profit in the good times… and protect you in the bad.
Switching gears… With Jeff’s help, your fellow readers have been profiting from the biggest tech advances of our lifetimes – including 5G, self-driving cars, artificial intelligence (AI), gene editing, and blockchain.
His model portfolios have closed out gains of 332% on CRISPR Therapeutics (CRSP)… 340% on Ambarella (AMBA)… and 448% on Nvidia (NVDA).
One of the megatrends Jeff has been tracking is robotics.
In our January 7 mailbag edition, he weighed in on how robots will affect the future of work. Below, he returns to this theme to address readers’ concerns…
Reader question: If they make too many robots that are taking away people’s jobs, what are we humans going to do?
– Marko L.
Reader question: Your technological advancements will be the downfall of this country. Taking thousands of truckers’ jobs away, only to replace them with these automated vehicles!
You see this as such a great thing. I see this as a major loss for America. What do you expect people to do for work when automation replaces all their jobs?
This is not a world I want to be in. It sounds like something out of an insane sci-fi movie!
– Kathy R.
Jeff’s response: Hi, Marko and Kathy. Thanks for writing in.
Self-driving vehicles, contactless shopping, and factory robotics will all affect job markets globally.
Some jobs will fade – but not completely disappear. Many of them will evolve. And the nature of work in some fields will change.
These kinds of transitions have happened many times in history. The shift to automation is like the Industrial Revolution.
During that period, steam power and mechanization automated many repetitive physical tasks. That dramatically changed the workplace. Machines took over many of the grueling jobs humans were ill-suited for.
And many people had similar fears to the ones you’ve both expressed.
Many expected mass unemployment. But the opposite happened. The Industrial Revolution ramped up productivity and economic growth. It ultimately created far more jobs and opportunities than we lost.
I believe we’ll see something similar with this new “automation revolution.” We’ll need millions of people to build bleeding-edge factories with new tech… and others to service and maintain the equipment.
This will require workers with various skill sets, from construction workers to those with advanced degrees in robotics.
So I predict the old days of studying one thing and staying in that line of work for the rest of our lives are over.
In a world of rapid tech development, we’ll need a more flexible mindset about work and our careers.
We’ll need to think about our education and skills as things that evolve and grow over time… and proactively expand them.
Part of the workforce will refuse to change or upgrade its skills, as we’re experiencing now. The U.S. has millions more job openings than people willing to work.
This labor shortage has led more companies to turn to automation to fill roles people are reluctant or unwilling to do.
So automation is changing our world even faster than we expected. And right now, it isn’t taking human jobs away… it’s filling the gap in human labor.
We’re entering a world of abundance. Automation and robotics let us avoid repetitive and physically demanding work. It’ll also result in fewer workplace injuries and deaths.
On top of that, it’ll create so many new jobs. We’ll need humans to employ, manage, and maintain these new technologies.
I’m confident we have a lot to look forward to as the world adapts to these changes.
That’s all for this week.
If you’d like to put a question to the Legacy experts, write us at feedback@legacyresearch.com.
Have a great weekend.
Regards,
Chris Lowe
February 4, 2022