Here's the question I asked all of our strategists recently:
What's the single stock you would buy now if you knew that the next
thousand trading days would turn out to be awash for the
broadermarket ? In other words, what stocks will rise, even if the
market is flat?
That's been the topic of conversation recently after one of our
researchers came across a chart of the "17.6-year wealth
Have you heard about this phenomenon?
Here's the premise: Every 17 to 18 years the stock market shifts
gears, going from a period of sideways movement to abull market
Then the pattern repeats.
And then it repeats again. On average, it's 17.6 years when not
much of anything happens to the broad market, followed by 17.6
years of better-than-average returns. Supposedly, this has been
going on for more than a century.
I was skeptical. Who wouldn't be?
After more than three decades in the markets, I've seen more
than my share of "can't miss" indicators.
Some market predictors are better than others, but sooner or
later they all prove fallible.
That's why I was hesitant when I first heard about the alleged
"17.6-year wealth cycle." Then I saw the chart below...
As you can see, the cycles occur virtually on cue, going back
112 years to 1900.
The credit for first spotting this pattern reportedly goes to
Art Cashin, director of floor operations for UBS Financial Services
and a frequent CNBC market commentator.
When stocks are in the growth cycle, Cashin says, "You can pick
almost any stock you want and it will go up."
But if the past is any indicator, you can see in the upper
right-hand portion of the chart that there's likely a little more
sideways movement to play out in the current cycle -- about four
years, or a thousand trading days.
There are always profits to be made, of course, even in the
sideways cycles. To name just a couple recent ones: The
Amy Calistri booked a gain of 29.8% since April in the country's
largest newspaper company,
Paul Tracy is celebrating a 31.9% year-to-date increase in
, the London-based distiller.
Overall, however, the pickings are slimmer in the "lean" times.
Since 2000, the beginning of the current cycle, the Dow Jones
Industrial Average has risen by a paltry 7%, for a meager gain of
just 0.5% annually.
Hence, my aforementioned challenge to the StreetAuthority
experts. What can our readers invest in right now, as we head into
the final stretch of this sideways market? Or, put another way,
whatinvestments look particularly attractive heading into the next
Their recommendations ranged from deeply discounted blue-chips
to a unique stock that essentially acts as ahedge fund , letting
investors tap into a luxury usually reserved for millionaires.
But one of the most intriguing "cycle" picks came from Nathan
Slaughter, stockmarket strategist for
Scarcity & Real Wealth
Nathan recommended a pure play on the fledgling U.S. housing
recovery. This is a company whoseshares are changing hands at less
than a third of what they were fetching five years ago.
A big reason for Nathan's vote of confidence is the unique
characteristic of this company's core product: wood.
To hear Nathan tell it:
"The housing bust and subsequent slump in new home construction
put a severe dent in demand for lumber, which meant fewer logs
being hauled out of the nation's forests. For other companies,
these types of slowdowns oftenmean thatinventory is collecting dust
in a warehouse somewhere, resulting in damagingasset
"But when a timber company sees orders dry up, it simply
defers its harvest. The 'inventory' remains standing and is
allowed to grow larger (and more valuable) with each passing
year. So during the lean times, a timber company may see a
temporary dip inaccounting profits.
But the intrinsicnet worth of the business (the value of
its trees) continues to grow.
"And those sales aren't lost -- they are simply delayed until
demand returns. When that day comes, the unharvested acreage will
contain bigger trees that fetch even greater profits than before.
I believe that time is now."
, areal estate investment trust (REIT) with interests in wood
products andreal estate in addition to timberland. This afternoon,
Weyerhaeuser closed at $25.38 a share; Nathan sees the stock
retaking $40 -- with a bona fide shot at $50 -- within the next few
years as pent-up housing demand gets satisfied.
Nathan's full write-up on Weyerhaeuser -- along with separate
"wealth cycle" picks from Amy, Paul, Andy Obermueller and Carla
Pasternak -- are being made available to new and existing members
StreetAuthority's Lifetime Wealth Alliance.
If you haven't heard of the Lifetime Wealth Alliance, it's
StreetAuthority's exclusiveinvestment club that offers access to
all current and future advisories and special reports for a
, StreetAuthority plans to drastically increase the price of this
service for new members.
But for the next few days you can still lock in the current
price... access all of StreetAuthority's publications... learn all
the details about the 17.6-year cycle... and receive the favorite
pick of each editor for the next 1,000 days.
Follow this link to learn more about this opportunity,
including more details about the 17.6-year cycle.
I just told you about my shot at the StreetAuthority stock
market strategists -- now it's your turn.
If you have aninvestment question for any of our
experts, please send me a note at
. I can't promise a personal response but we'll do our best
to address those questions of greatest interest to our
readership as a whole. Please include your first name and
last initial, and where you live.
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