Dear FutureMoneyTrends.com Member,
A lot of people are worried about the stock market right now, is it overvalued or undervalued. My answer is yes, it is overvalued in the sense that the FED’s monetary policy has more to do with rising share prices than does actual growth and earnings. However, it is also undervalued due to the FED’s monetary policies. As the FED creates more and more currency, suppresses interest rates and other competing currencies like gold, owning solid businesses seems more and more appealing.
What is your alternative? Holding cash, okay I get that and agree, we should always have some emergency and opportunity cash, but cash isn’t an investments nor is it a store of value.
I think the best thing to do in this market is to find undervalued companies based on their fundamentals, ones preferably that have been around for decades and are gushing with cash flow because they have a business that is in high demand and will continue to be in high demand.
Companies that add value to yours and others’ lives, businesses that solve problems will inherently continue to grow and make profits.
Same goes for you in your own life whether you are an employee or a business owner, adding value to someone’s life equals money.
When it comes to owning shares of publicly traded companies, I feel great about owning companies like Apple and Becton Dickinson, they are both undervalued, have a sound business model, and have been around for decades. Remember volatility doesn’t equal risk, as noted many times by Rick Rule of Sprott Asset Management. Is it possible for Apple or Becton Dickinson’s share price to fall, yes of course, but is it likely that they go out of business? In my opinion no, this is extremely unlikely, which is why when it comes down to it, I would rather own shares in a sound business than some worthless paper note backed and supported by a Federal Reserve who is printing $85 billion a month to purchase bonds and a federal government who is borrowing nearly $100 billion a month in order to pretend we have a functioning economy.
My recommendation to members would be to tread lightly in the markets, become a stock picker or sign-up for our Forever Stock Portfolio through our Smart Money Membership. Just last July we profiled Apple at $398, today AAPL trades for $565, 42% higher and in my opinion it’s still undervalued. Although we currently have another tech giant that is even more undervalued than AAPL was when we profiled it 6 months ago. I will personally be a very happy buyer of this company and will email it out tonight to all Smart Money Members, if you still haven’t joined us for these exclusive picks, click here.
Silver looks to be a nice buy here in the $19 range in my opinion, I have personally bought silver 3 out of the last 4 days. I am getting it for about 75 cents to $1.20 over spot at SilverSaver.com and DBScoins.com who I have no affiliation with. MilesFranklin.com currently has free shipping if you mention FutureMoneyTrends.com, their service is excellent, but I still encourage everyone to check out a few places to get the best price. I strongly encourage everyone to purchase in 100oz increments in order to get the best price; if you can’t afford that by yourself, then try teaming up with a few friends who also want to get a good deal on physical silver.
I have also purchased gold, but dollar wise, I have purchased silver 6 to 1 in dollar value. Gold trades for 64X the price of silver, so silver is without a doubt the better buy in my opinion. When it comes to mine production, silver production is 9X higher than gold. For above ground available supply, gold is actually 5X more abundant than silver. So the fact that gold trades for 64X the price of silver tells me that silver is way undervalued against the price of gold.
For those looking for more short term speculation, I defer to the TF Metals Report who wrote today that JPMorgan Chase has cornered Comex gold futures and is taking delivery of December contracts and that this ensures a rising gold price.
For the long term holder and accumulator, both the metals are selling for below the cost of production, which is great because it gives us all a margin of safety, though these scenarios with commodities often last for years. I also like that they are selling for below the cost of production because it is destroying the mining sector, which will only make our profits in both the metals and high quality juniors that much more dramatic when we do see a turn around. Exploration is at a standstill and production is being delayed for many mining companies, this will cause the supply line to shrink, which is good for investors and speculators who are longthe metals now.
Have a prosperous week!