Bold Profits Daily
April 2, 2019
Hi. This is Paul with your Bold Profits Daily.
Today I am going to give you a great update on my three predictions that I had for you at the beginning of this year. If you go back and watch the video you’ll see that I told you that I believed that interest rates were going to go down.
If you think back to what was going on at the time, everyone was thinking that interest rates were going to keep going up and going up. Interest rates have gone down. In fact, they’ve gone down a lot.
For example, if you were planning to buy a house when I first made that video, you would have paid 5% for a 30-year mortgage. Today, that rate is 4%.
That’s because the rate for the bond that really sets interest rates for mortgages, car loans and so many things — the 10-year bond — the interest rate for that has gone down. Because of that, the price of the bond has gone up.
If you remember, I told you to buy the iShares 7-10 Year Treasury Bond ETF (Nasdaq: IEF), and it’s gone up by about 3% or 4%, which for bonds is really good.
I’m doing this update because I want to tell you that I think that with the size of the move …and the speed of the move that we’ve had, I believe that particular prediction has come true and it’s time to close that trade out.
If you were in IEF and expecting interest rates to go down some more, it could go down a little bit more. However, that trade is done because right now we’ve got all these recession fears, which I really consider to be pretty bogus. Just today, for example, when I’m recording this — and I’m recording this about a week early because my team is going to be away — the U.S. reported that its economy grew by 2.2%.
There’s really no sign there is a recession coming, a financial crisis coming or a bear market coming. What we do have is a lot of fear. That’s now been priced in by people buying bonds, it’s now been priced in by people buying defensive stocks.
It’s time to close the bond trade and expect interest rates to stay flat for a little while…which now gets me to the second two parts of my predictions and to give you my updates on those.
The second part of my prediction was I told you that FANG was going to come back. FANG represents Facebook (Nasdaq: FB), Amazon (Nasdaq: AMZN), Netflix (Nasdaq: NFLX) and Google (Nasdaq: GOOG).
The reason I told you FANG was going to come back is because there are always a set of stocks that represent the time and that people use as a shortcut to get into the market. FANG is as good a way as any because they represent companies of the new, growth companies, companies of our time, companies with huge growth profiles ahead of them.
Now, FANG hasn’t quite taken off yet. However, I believe with the recession scare mostly now behind us, we are going to see some or many of these stocks move up. So I still believe in FANG.
The last thing I told you in my prediction update was that I believe that Apple (Nasdaq: AAPL) was a sell. Apple peaked out over $200, then went down quite a bit and has rallied up from here on the basis of the fact that some people really think that Apple is going to magically transform itself into a services company.
I would tell you that is very unlikely to happen. And I still believe that Apple stock should be sold. It’s a company in decline, It’s got enormous competition, it’s behind in technology in virtually everything it does. This so-called pivot to services is ultimately going to fail because it depends on people buying their devices.
If their devices are no good and their devices aren’t selling, so that means it’s a problem for Apple. I’m still a seller of Apple. I’m still negative on Apple.
That’s my Bold Profits Daily for you this week. Please subscribe, share and like this video. I’ll have another one for you next week. Until then, this is Paul saying bye.