{"id":523,"date":"2019-03-18T20:07:17","date_gmt":"2019-03-18T20:07:17","guid":{"rendered":"http:\/\/www.apisbull.com\/blog\/?p=523"},"modified":"2019-02-04T08:09:13","modified_gmt":"2019-02-04T08:09:13","slug":"dig-your-heels-into-serious-value","status":"publish","type":"post","link":"https:\/\/www.apisbull.com\/blog\/?p=523","title":{"rendered":"Dig Your Heels Into Serious Value"},"content":{"rendered":"\n
Despite a decidedly green January, the wall of worry in the U.S. stock market is getting harder to climb with each passing day. The age-old strategy of buying and holding an index fund simply won\u2019t cut it anymore \u2013 stock picking is the only path forward, and it must be done very carefully.<\/strong>
 
It\u2019s gotten to the point where I literally can\u2019t open up the financial news without finding a worse crisis story than yesterday and the day before. We all know about the massive American debt Ponzi scheme that\u2019s been perpetuated by the Federal Reserve since QE was set in motion a decade ago, but here\u2019s a discovery that doesn\u2019t bode well for the house of cards we call an economy:<\/td><\/tr><\/tbody><\/table>\n\n\n\n
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Since the time when QE tapering officially ended in September of 2014, we\u2019re seeing U.S. Treasurys (i.e., debt notes) predominantly being held not by the Federal Reserve and banks generally, but by mutual funds and the mysterious \u201cother\u201d category.
 
Much of the bizarre \u201cother\u201d category includes retail investors like you and me, and many investors have their holdings in the mutual funds category as well. In other words, the Fed and the banks aren\u2019t holding America\u2019s debt anymore: that burden has been shifted from the 1% to the 99%.<\/strong>
 
Evidently, the Fed isn\u2019t just \u201cunwinding their balance sheet\u201d; they\u2019re outright handing the debt over to the rest of us. Perhaps they\u2019re hoping we won\u2019t notice that the Federal Reserve has been unloading mid-maturity Treasurys like last week\u2019s trash:<\/td><\/tr><\/tbody><\/table>\n\n\n\n
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Apparently the Treasury would like us to believe the narrative that \u201cother investors\u201d have come up with over $3 trillion in cash since 2015 to gobble up government debt notes that yield next to nothing post-inflation. If anything\u2019s \u201cunwinding,\u201d I\u2019d say it\u2019s the Ponzi scheme that\u2019s been holding up the markets for the past decade.
 
If that\u2019s not enough to wake everyone up, consider this: Secretary of State Mike Pompeo has recently confirmed that the U.S. is suspending its participation in the Intermediate-Range Nuclear Forces Treaty, effective February 2.
 
Furthermore, Secretary Pompeo threatened that \u201cif Russia does not return to full and verifiable compliance with the treaty within the six-month period by verifiably destroying its INF-violating missiles, their launchers and associated equipment, the treaty will terminate.\u201d
 
If this doesn\u2019t all sound eerily familiar, then you might not be old enough to remember the decades-long, costly, and potentially cataclysmic Cold War that destabilized the world order and threatened humankind\u2019s very existence.
 
The U.S.\u2019s withdrawal from the INF Treaty was precipitated by Moscow\u2019s unveiling of a missile at a public event in late December \u2013 a missile which the U.S. claims is in breach of the treaty. Russia\u2019s Deputy Foreign Minister, Sergei Ryabkov, has denied all accusations, asserting that much of the U.S.\u2019s evidence against Russia has been \u201cfabricated.\u201d
 
Get Focused Like a Laser<\/strong>
 
It really is just one unsustainable crisis after another. And I must say, as it pertains to the equities market, selective stock picking is the way to go, and my watch list only consists of companies with strong growth potential and a compelling valuation.
 
One Company to Weather the Storm!<\/strong>
 
One that I\u2019m looking at right now is a teen discount clothing chain called Five Below Inc. (NASDAQ:FIVE). Jim Cramer once touted this company as having a \u201cperfect balance sheet,\u201d and while I don\u2019t agree with everything that a guy like Jim will say, I tend to agree with that assessment.
 
I consider Five Below to be the ultimate retail play this year, as the company\u2019s revenues are expected to grow by 22% to $1.56 billion this year, while their earnings are projected to increase by a whopping 48.6% to $2.66 per share.

It\u2019s a growth story that should continue well beyond 2019, as over the next five years the company plans to grow their revenues and earnings by 28% per year. Five Below also plans to have 2,000 stores in the U.S. at some point \u2013 an ambitious goal, but entirely possible given the company\u2019s current growth rate.