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A New Bull Market

This Stock Has Outperformed the Dow by 285% since Dec. 17

Written by Brian Hicks
Posted March 4, 2013

The Dow is about 100 points from last Friday's close to making an all-time record high.

The last record high in the Dow occurred way back on October 11, 2007. On that day, it hit an intraday high of 14,198.

Mark my words: Stocks are headed for new highs. And we're in a new bull market.

It's time to get super net long the market.

I told you this on December 17, 2012... and again on January 7 of this year in a Wealth Daily article titled, "Billionaire Says 2013 Will Be Good."

In my Dec. 17 report, I gave you my top 10 investments for 2013 that were about to rocket higher.

With the exception of gold, silver, and mining stocks, all are up. And one specific recommendation — gun stocks — have destroyed the averages: Ruger is up 27% since December 17 compared to +7% for the Dow in that period.

Let's review some of those investments...

Here are the top 10 investments I gave you:

  1. Housing – and everything associated with it, like timber

  2. REITs

  3. MLPs – especially oil and gas pipelines

  4. Gold and silver – the Fed is doubling its bond buying, which should dilute the dollar, further raising the risk of inflation again

  5. Mining stocks – both large and junior miners have been beaten into the dirt with the Venture Exchange down 50% in two years... this group is hated, which makes it attractive as a contrarian investment

  6. Utilities – borrowing costs are low, so utilities will continue to enjoy a large spread

  7. Gun stocks – for obvious reasons

  8. Biotechs – the aging of America is a boon for this industry

  9. Agriculture

  10. High dividend-paying stocks – like Pfizer, Verizon, and AT&T

First, let’s look at housing represented by the S&P Homebuilders ETF (XHB):

chart_1_brian_0304

Homebuilders are up 8% since December 17. But some individual homebuilders are up much more. DH Horton, for instance, is up 14% in that period.

In addition, everything associated with housing starts should remain robust. Plum Creek Timber Co. (PCL) is up 12%.

As you know, I run The Wealth Advisory with Briton Ryle. The focus of TWA is income...

We love high-yielding REITs, MLPs, and dividend-paying stocks.

Given the fact the United States is experiencing a bona fide energy boom in oil and gas thanks to the fracturing revolution occurring in shale formations, MLPs (master limited partnerships) have to be a part of your income portfolio.

According to a Wall Street Journal article last week called, "Gas Boom Projected to Grow for Decades":

U.S. natural-gas production will accelerate over the next three decades, new research indicates, providing the strongest evidence yet that the energy boom remaking America will last for a generation.

chart_2_brian_0304

The shale-gas boom has led to a reorientation of the U.S. energy economy. This has led to a steep decline in coal consumption for electric generation and prompted companies to announce or consider multibillion-dollar investments to export gas and build chemical, steel and fertilizer plants that will consume enormous quantities of gas.

Now, all of this production means it has to be shipped to refineries, to market, etc.

That’s where MLPs come in...

You can make quarterly — even monthly — income from the transportation of oil and gas with pipeline MLPs. The Alerian MLP ETF (AMLP) is a good representation of the overall MLP market:

chart_3_brian_0304

It’s up 8%, not including dividends.

Another great source of income is REITs (Real Estate Investment Trusts). REITs are partnerships that own and invest in physical real estate, like office buildings and shopping malls, or they investment in real estate financial instruments, like mortgages.

They collect rent or the mortgage payment and distribute the profits to their partners.

Here’s a chart of the Vanguard REIT ETF (VNQ):

chart_4_brian_0304

It’s up 7%, not including dividends.

Utilities have been on fire...

Why? A few reasons: 1) low natural gas prices; 2) higher demand due to lower natural gas prices; and 3) low interest rate environment.

Here’s a chart of the SPDR Utilities ETF (XLU):

chart_5_brian_0304

It’s up 5%, not including dividends. Utilities are a great way to add consistent and safe income to your portfolio.

But if you want to swing for the fences, we just nailed a home run with guns...

Ruger (RGR) has been a moonshot since I recommended it on December 17. Take a look:

chart_6_brian_0304
Ruger is up 27% in that period — and has outperformed the Dow by 285%.

I still maintain my Top 10 Investments for 2013. I won’t change my outlook...

Keeping doing it until it stops working.

Forever wealth,

Brian Hicks Signature

Brian Hicks

Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Wealth Daily and Energy & Capital. Known as the "original bull on America," Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor's page.


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