By Matt McCallMar 18, 2020
Last week, I wrote that the market plunge felt like a punch to the gut.
After this week’s trading, it feels more like a kick to the head.
Stocks fell sharply Monday, rallied yesterday, and are down again today as volatility remains near historic highs.
If you’ve been in the markets for 20+ years like I have, you’ve lived through bear markets before… and you know how bad they can feel.
Times like these call for sober analysis, and I’m proud to continue to provide that through MoneyWire and my paid subscription services.
I know that tensions are running high, and you probably have lots of questions. I took many of those head on last night in a special Crisis and Opportunity Investment Summit.
I reviewed what has been happening in the markets and what lessons the past can teach us about how long this volatility will last, why now is not the time to lose your nerve, and how you might be able to pick some bargains along the way.
In fact, I highlighted several blue chip stocks that I think are incredible bargains right now.
Here’s just one example of a stock that’s way oversold… and I didn’t even mention this one in the summit.
Square (SQ) is at the forefront of mobile payment technology. I first saw it in farmer’s markets where a small piece of hardware plugged in to an iPad or iPhone could connect to an app and process credit card payments.
Mobile services, such as taxi cabs and Uber drivers, use Square to process payments, and you see its card-swipe technology in more and more brick-and-mortar establishments.
The company’s CashApp competes with Venmo and PayPal to provide financial tools for individuals to send and receive money.
During the sell-off this month, Square dropped more than 50%.
But… electronic payments aren’t going anywhere. The coronavirus isn’t going to stop that over the long term.
The mobile payment market was valued at $897 billion in 2018. It is projected to grow 300% to $3.6 trillion by 2024, according to Orbis Research.
Square is led by one of the most brilliant minds in mobile technology, Jack Dorsey, who also is the CEO of Twitter (TWTR).
Square did not suddenly lose half the market or see the value of its assets drop by half… but that’s what’s happening in the market today.
History tells us that stocks will go through a typical recovery cycle that should look something like this:
Phase 1: Stocks take the gut punch and pull back. As the maps in the malls say, “You are here.”
Phase 2: Stocks move sideways for a few weeks/months. Then stimulus is injected into the economy. In fact, we’ve already seen steps by the Federal Reserve and the government to help offset the economic impact from the coronavirus.
Phase 3: Stimulus starts to take effect and stocks react, rallying big time.
Phase 4: We reach new highs.
I don’t know how long Phase 1 and Phase 2 will last.
Frankly, the market is so volatile that I wouldn’t trust anyone who tells you they know exactly when this is going to end.
What I do know, based on all the market history I’ve studied and lived through, is that it could turn to Phase 3 at any time. And when it does, stocks will almost certainly move quickly.
If you’d like to hear more about how I see the market reacting and moving going forward, I invite you to watch the replay of my Crisis and Opportunity Investment Summit.
The event is absolutely free. No strings attached. I simply want to speak to you directly about the recent market turmoil and coronavirus crisis and provide a roadmap for how to react to the volatility. I describe what’s going on in the market and what I think the future will look like. I also discuss 10 other stocks that look just like Square because it’s time to start building your buy list.
You can click here to watch the summit replay now. All you have to do is enter your email address and you’ll receive instant access. I think you’ll find the research valuable at this critical juncture in the markets.
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt talks about everything from past pullbacks to recessions to the coronavirus and its role in the stock market emergency. We headed into this new bear market fast. Fear and panic selling are at all-time highs – but fear isn’t the answer. And that’s why Matt is sharing his top five tips for profiting during a bear market. He also shares advice for millennials investors, his thoughts on the Robinhood trading platform, and possible growth opportunities for long-term investors.
You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.
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