April Newsletter Part II ALERT: Our "Tweet Offense is Defense" Portfolio
OK, this week has been batshit crazy, and my 18-hour days have been a HUGE time suck--it is what it is.
This April newsletter is going out to ALL current and former subscribers. It's important.
I will have this short Part I and a long Part II which needs to be long to address the vast destruction of the economic and geopolitical norms we have used to very successfully invest in stocks over the last 25 years with ChangeWave Research and now Transformity Research.
First, the one day of hope on April 9 with the 90-day pause on tariffs ex-China does not mitigate the insanity of Donald Trump’s tariffs and their meltdown effects on the global economy. The shock and awe of starting a Global Tariff War with our sacred NATO Allies in 2025 and the second-largest GDP in the world, aka China, has most investors and money managers tearing up our investing playbook.
And oh yeah…the multiple texts and email leaks from the White House last Monday suggesting positive news on tariffs that quickly get recalled only serve to shatter investor trust and confidence even more.
The way oversold high beta stocks were POISED to take off IF Trump came to his senses on tariffs, aka “The Art of The Deal,” which I initially assumed he would—until the 145%+ tariffs on China imports plan was announced. 10% on EVERY other trade partner comes to an effective 27% TOTAL tariff rate, which is the highest rate since 1903 and higher than the 1930 Smoot Hawley global tariffs that to the United States from a recession into a DEPRESSION
Remember, the term tariff is just a euphemism for a tax paid by American consumers after the tariff is paid by the importing company. Thus, a 27% tax paid on imported goods is INFLATIONARY and that higher level of inflation will keep the Federal Reserve on HOLD until they see an actual GDP Recession and job destruction.
Second, In the stock market, the term "beta" refers to a measure of a stock's volatility in relation to the overall market. Here's a breakdown of what beta signifies:
Understanding Beta
Definition: Beta is a numerical value that indicates how much a stock's price is expected to move in relation to movements in a benchmark index (like the S&P 500).
Interpretation:
Beta = 1: The stock's price moves with the market. If the market goes up or down by 1%, the stock is expected to do the same.
Beta > 1: The stock is more volatile than the market. For example, a beta of 1.5 means that if the market goes up by 1%, the stock is expected to go up by 1.5%, and vice versa.
Beta < 1: The stock is less volatile than the market. A beta of 0.5 suggests that if the market increases by 1%, the stock will only increase by 0.5%.
Beta < 0: This indicates an inverse relationship with the market. Such stocks typically move in the opposite direction of the market.
Importance of Beta
Risk Assessment: Investors use beta to assess the risk associated with a stock. A higher beta indicates a higher risk and the potential for higher returns.
Portfolio Management: Beta helps construct a diversified portfolio by balancing high-risk and low-risk investments.
Key Point: We are NOT adding our normal high-beta growth stocks until we get a tradeable bottoming event—my target is the S&P 500 4400 as our target tradable bottom. But check in with me on Monday—because the whole Trumponomics chaos may change for the worse over the weekend. (Gosh, isn’t it fun today to be your own portfolio manager??)
I think my old pal Carol Schleif has it right: “Markets are telling us there are buyers waiting in the wings for the faintest whiff of constructive news on tariffs, as we have seen in this week’s intraday movements. While valuations have been reset, investors can’t tell if they’ve reset to the right levels." Carol is the chief market strategist at BMO Private Wealth.
Here is the key point both Carol and I are making: “There’s no recent playbook to operate from—President Trump has invented a whole new game, and the players —investors—have not been provided with a new playbook--especially when US economic policy could take a new 90-degree turn as I write this note.”
Note: Shortly after the market opened on Tuesday, President Donald Trump urged investors to remain calm in a post on Truth Social. Trump also added, “This is a great time to buy.” And THEN the 90-day tariff freeze was announced? Gee, do you think anyone in the Trump orbit had prior knowledge?
The Reality Today
In reality, as we all know now, MASS UNCERTAINTY at the corporate and portfolio management biz has global stock markets tanking; economists are inflamed, dazed, and confused, and money managers like me who saw this shit show coming THANKFULLY have our portfolios in ultra-stable bond funds/gold and silver ETFs (precious metals rise in price as the US $dollar tanks in value) and are SHORT the most overvalued Qs via call options on $SQQQ 3x short the QQQ ETF.
Our Chaos Defense Is The New Offense Portfolio
Let's use a $100k portfolio.
Market Assumption: The US bond market and the US dollar will continue to slowly lose value and gold and silver will continue to be safe havens unless Trump "settles" for 10% tariffs across the board and comes to an agreement with China far below the 145% tariffs.
1) Portfolio Allocation A--30% ZERO RISK Short Term Bond Funds with a yield of approximately 5-7% and almost ZERO BETA RISK: $JBBB $GGN $ZTR $SRLN $BILL $BOXX $USFR $SGOV
Or Vanguard Bond Funds (very low management fees): VBIL VGUS VPLS VBIL VCRB
2) B 30%+ yield: $CRSH $NFLY $YQQQ $GGT $GLDI (30%+ dividend) that averages out to +25% annual dividends, with none related to China except for the short position on TSLA $CRSH (as TSLA sales are declining there).
3) C 40% LONG GOLD & Silver ETFs: $SILJ $SLVO $GDXJ $GDXU $GDXY (30%+ dividend) + $GLDI +Short High Beta with $HIBS and SHORT Energy $WTID.
Market Assumption: The US bond market, stock market, and the dollar will continue to crumble in value unless Trump "settles quickly" and actually negotiates tariffs across the board and comes to an agreement with China far below the 145% tariffs.
1) Portfolio Allocation A--30% ZERO RISK Short Term Bond Funds near 5-7% ish yield and almost ZERO BETA RISK
$JBBB $GGN $ZTR $SRLN $BILL $BOXX $USFR $SGOV
Or Vanguard Bond Funds (very low management fees) VBIL VGUS VPLS VBIL VCRB
2) B --30%+ yield $CRSH $NFLY $YQQQ $GGT $GLDI (30%+ dividend) that average out to +25% annual dividends, and none related to China except the short position on TSLA $CRSH (as TSLA sales are cratering there).
3) C 40% LONG GOLD & Silver $SILJ $SLVO $GDXJ $GDXU $GDXY (30%+ dividend) + $GLDI +Short High Beta with $HIBS and SHORT Energy $WTID.
The LONG Part II of April Newsletter will be out either later today or early Monday
Finally here are some critical updates on your Transformity Research subscriptions.
1) We have extended the non-renewed subscriptions to April 20, since we had many problems getting our digital systems back up and running. We have renewed over 70% of our TR Ultra Growth and All-Access subscriptions—way above average for the investment research publishing world.
BUT that's it! As I have said 100 times--if our 354% return on investment since April 2023 does not earn us a $79 one-year subscription -- "Hasta La Vista, Baby."
The same goes for All-Access memberships—we will close the existing All-Access Discord Trading Room EOB on or near April 20 and send new invitations to those who have renewed their one-year or two-year All-Access Pro subscription (which now includes TR Ultra Growth and Ultra Monthly Income subscriptions!).
Here is the All-Access PRO subscription renewal link One Year
Here is the subscription link for TR Ultra Growth renewals --1 and 2-year subscriptions--gett'r done
Note: The renewal system is working perfectly now--but if you are still having a problem getting in, EMAIL Gary The Tech Support Guy at gary.hlusko@gridtech.io
2) We extended ALL 2024-2025 Ultra Growth renewal subscriptions to START April 1, 2025 (as recompense for our digital transfer nightmare!).
Here is the TR Ultra Growth renewal link to renew before the April 20 cut-off!
TR Ultra Income Service
But Here is The BEST Way To Greatly Increase The Value of Your Portfolio in 2025-2026(or your monthly income by $10-$12,000 per month) during the daily confusion of Government By Tweet --put a few hundred grand into our new TR Ultra Monthly Income advisory that now launch early next week!
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C) All while being hedged against a 10%+ correction with put options on 2-3X leveraged ETFs
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Here is the math for you math nerds (or just ask your favorite AI Chatbot--my fave by far is Google's www.MONICA.com )
Since you are receiving $12,000 a month, you can calculate how many months it will take to reach the additional $400,000 needed: Amount Needed=T−P=800,000−400,000=400,00
12,000≈33.33 months Months=D Amount Needed=12,000 400,000≈33.33 months
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And here is the TR Ultra Monthly Income PROOF! We have dozens of wealth management clients that look like my March Schwab Dividend Statement in my ROTH—and ALL THAT INCOME IN A ROTH is tax-free (and a few of our $1 million+ asset management clients are generating 3X-5X times this measly $12K--do THAT monthly dividend math!).
PS—In a Roth/IRA/Corp Pension Plan, we just reinvest the dividends tax-free until the client wants to start taking monthly income that THEY NEVER IMAGINED they would hit their checking account every month!
Capiche? Here is the subscription link for TR Ultra Monthly Income, which we launch this coming Monday: years for $149 one year/$197 two years OR $498 All Access PRO One Year, which includes TR Ultra Growth/Ultra Monthly Income and our All Access Discord trading room
Final Thought: Again, I strongly advise you not to confuse your politics with portfolio management. You may 100% agree with Tariff Trumpy that China and other countries are "ripping us off." But raising TOTAL import taxes to 27% for an economy that has been slowing its growth since March is unquestionably taking the US economy into either a GDP recession or worse stagflation.
And either a GDP recession or worse stagflation is the economic outcome of Trump's Terrible Global Tariff war—and it will take this bear market a lot lower than today!
Toby
Tobin Smith--Founder/CIO Transformity Research/Wealth Management/Transformity Capital Markets
Founder of ChangeWave Research (now part of S&P Global Research )/2X NY Times Best Selling Author ChangeWave Investing & ChangeWave Investing 2.0 published by Random House/Editor Transformity Ultra Growth/Ultra Monthly Income/All Access Trading Room/Managing Member TransMed One TSIG LLC/ 14-Year Contributor on Fox News' Bulls & Bears /Host @ Fox Business