We started today with a huge pile of cash plus large hedges and a long list of stocks and ETFs to potentially buy on weakness. As my long-time readers know, our adaptive algorithms turned very bullish in February 2009 and mostly stayed bullish until October 2015. Since then, we have been cautious. I have continued to advocate holding good positions combined with appropriate hedges and high cash levels. Right now, our subscribers have up to 42% cash plus 40% of the portfolio hedged and many short positions. This morning, our call was to slowly start deploying cash, and we have three stocks we like here.
Let us start by looking at a weekly chart comparing three British stocks to ETF iShares MSCI United Kingdom EWU, S&P 500 ETF SPY, and gold ETF GLD. The chart shows the period from 2009 when the markets bottomed during the financial crisis, this is a good reference point.
Please click here for the chart.
GlaxoSmithKline
GlaxoSmithKline GSK, is one of the largest pharmaceutical companies in the world. The company employs roughly 101,000 people in over 150 countries. About one-third of these employees are in emerging markets, which is where the growth is. Nearly 11,000 employees work in research and development (R&D).
AstraZeneca
AstraZeneca AZN, is also a major pharmaceutical company. The company employs about 61,000 people and operates across the globe. As with GSK, the Brexit will have no material impact on its revenue, but on the positive side its costs will go down as British pound weakens…Read more at MarketWatch
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