In this week’s Hypergrowth Investing Podcast, Aaron and Luke discuss the murky topic of predicting a bottom in the markets. Now, it’s nearly impossible to predict a stock market bottom. But one universal truth? Eventually, every bear market ends, and a new bull market begins – facilitating new stocks to buy.
And though Luke may not be able to predict this bear market’s exact finale, we can follow the data today to prepare for that new bull market tomorrow.
Since 1929, the median bear market decline has been 29% over 12 months. Currently, we’re at a 30% decline over 11 months – almost exactly in line with that historical average. Valuations are washed out, near levels that marked the bottom of previous bear markets.
The S&P 500 has collapsed to its 200-week moving average – and nearly every bear market of the past 70 years has bottomed at or around that level. Not to mention the index has fallen into oversold territory, which – you guessed it – usually marks its bottom.
Market breadth, investor sentiment, cash positioning, the put/call ratio – the list goes on and on. Indeed, these signals are flashing everywhere. And absent a “Lehman moment,” stocks will be higher in 12 months. As Luke notes, we don’t need to time a bottom here – we just need to prepare for that new bull market. That’s why we’ve gone on a major shopping spree in Innovation Investor and Early Stage Investor. Find out which types of stocks we’re buying in this week’s episode!
Elsewhere in this episode, Aaron and Luke discuss the following:
Mark Zuckerberg’s Metaverse
The metaverse – it’s been buzzing in the news lately. In fact, Meta had an enormous breakthrough debut… legs. Will Zuckerberg be leading this space? What does the future of the metaverse actually looks like?
As Luke puts it, this is one of those industries that got way too overhyped and then deflated, and now it’s trying to find its niche. Make no mistake, there is a value add there. Indeed, Luke is still bullish – and no, it’s not because of what Zuckerberg is building.
The metaverse allows for the creation of a digital world, and it can be whatever you want it to be. The creation of digital twins would allow us to plug in and visit the Coliseum, the Eiffel Tower, the Great Pyramids of Giza – all from the comfort of our own homes. We could try on clothes virtually to decide if we want to buy them. Business owners could check up on their spaces around the country or around the world without needing to travel at all.
The reason we’re bullish on this industry is because the opportunities in the metaverse are nearly limitless. It reminds us of the internet. Regardless of what it is, we’ll all find some utility in it.
Our “Big Three”: the Best Stocks to Buy
Let’s check in on our “Big Three” themes – space, robotics, and climate tech! And as you might be able to guess, Luke is still as bullish as ever.
Jeff Bezos may have already taken space flight with Blue Origin, but now Amazon (AMZN) itself is jumping into the space race with its own version of Starlink satellites. While in robotics, we continue to see mainstream media coverage about how robots are saving the day for the labor industry right now. While in clean tech, a lot of firms are starting new solar and energy storage projects. And EV companies like Stellantis (STLA) are massively increasing production of electric vehicles.
There are a ton of bullish developments happening in these spaces. And Luke believes these three sectors will the biggest market winners over the next 12 months. They’ll likely prove to be the best stocks to buy for 2023!
To hear more, watch our full episode on YouTube now!
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.