Moderna & Biotech Trade Near 2-Year Lows.
Is the industry diseased, or has Fast Money just gone crazy with profit taking?
Let’s start with an analysis of Moderna. The company made headlines on Wednesday when it was revealed that the new CEO Jorge Gomez was canned after just one day of work (but would still receive $700,000 for a full year’s worth of salary). Gomez forfeits his signing bonus and bonus eligibility, according to CNBC.
 
Moderna says they had no prior knowledge of an internal investigation into accounting problems at Gomez’s former employer Dentsply Sirona. Dentsply was unable to file its quarterly report with the SEC on time. The notice of the late filing was filed on May 9, 2022, the first day of work for Gomez at Moderna.

Is the CFO Embarrassment a Problem?
Whenever a company sacks the CFO, it raises a red flag. What happened to the due diligence? Why was the former CFO leaving in the first place? As it turns out, David Meline, the former CFO, had actually come out of retirement in order to help Moderna scale up their COVID vaccine quickly. He joined Moderna in June of 2020, after his consultation period at Amgen ended. (He had retired from Amgen effective Dec. 31, 2019.) So, it’s completely understandable that after getting Moderna off to the races, Meline was ready to retire for a second time.
 
When the issue with the newly hired CFO came up, Meline stepped up and committed to staying on until a replacement is found. (He had already committed to a period of transition as a consultant.)
 
It appears that Gomez might have been a former friend of Meline from General Motors back in the day. At any rate, the departure doesn’t appear to be a red flag or a lack of due diligence on the part of Moderna. In fact, it appears that they were fortunate to learn of the news when they did. The histrionic headlines on this should fade soon.
 
So, now let’s look at Moderna’s business, including:
 
Revenue & Sales Growth
M&A & Cash on Hand
The NIH Patent Claim
 
Revenue & Sales Growth
Moderna’s revenue more than tripled in the 1Q of 2022, from $1.9 billion to $6.1 billion. Advance Purchase Agreements for 2022 total approximately $21 billion. This represents an increase of 13.7% over 2021, if that turns out to be the total revenue. So, the annual growth expectation is much more muted than the 1st quarter was. When you factor in the 1st quarter revenue, you are left with $14.9 billion for the remaining three quarters – or just under $5 billion per quarter. Further, 2Q is the seasonally weak quarter, which takes the expectation down to the $4.5 billion range (per the earnings call). That would be flat year over year.
 
With a P/E of just 3.83, the expectations for a weaker 2Q are already factored in. If the news is better than expected that might be great for investors (unless macro market weakness drags this company down with the crash).
 
The bulk of vaccine sales is expected in the second half of the year. The pandemic is transitioning into an endemic. The expectation is that people will be interested in vaccinating and boosting in October in anticipation of the winter seasonal surge in sicknesses. The summer season (2Q 2022) is when most people have already gotten their booster for the summer holiday.
 
Moderna has a footprint around the world – in Asia, Europe, Australia, Africa and Latin America. They also have a healthy pipeline of therapies for oncology, HIV, Epstein-Barr and other diseases, and a booster targeting Omicron in a Phase 2 Study.
 
 
M&A & Cash on Hand
Moderna has $19.3 billion in cash, cash equivalents and investments. That kind of cash puts the company in a great seat for mergers and acquisitions, especially as weakness continues in the biotech space. This industry has been sacked by sellers and some very attractive, compatible biotech companies might be far more affordable today than they were just a few months ago. According to the earnings call, Moderna has “never been so busy” looking at partnerships and M&A.

The company repurchased $623 million of their stock in the 1st quarter of 2022, and have a $3 billion buyback authorization from the board. This could help keep their share price more buoyant if there is continued weakness in the larger marketplace.
 
NIH Patent Claim
Last October 2021, it was reported that the NIH wanted to stick its hand in Moderna’s patent claims on the mRNA sequence of their vaccine. On December 17, 2021, Moderna issued a statement that they were working with the NIH to resolve the matter. (Click to read their statement.)
 
There haven’t been any details released on how that was resolved. However, Moderna disclosed in the 1Q 2022 earnings call that they are paying “third-party royalties.” The net income for the quarter was $3.7 billion.

Is Now a Good Time to Add a Biotech Fund to Your Wealth Plan?
Biotech funds like Ishares (symbol IBB) are trading near their three-year lows. Many profitable companies have historically low price-earnings ratios. Biotechnology is the only industry that Liz Ann Sonders, the chief investment strategist of Charles Schwab, has an overweight on. Visit YouTube.com/NataliePace to watch my entire interview with her from Jan. 30, 2022.
 
If you’d like to receive my Biotech Stock Report Card, simply email info@nataliepace.com.

Macro Problems
A rising tide lifts all ships. A sinking tide can ground them. The first quarter of 2022 saw a contraction of -1.4%. If the second quarter has a contraction, we are in a recession. How likely is it that we’ll have a recession this year (or next year)? Analysts peg the likelihood at about 35%. Click to listen to my podcast, watch my webinar or read my blog on the “Warning Signs of a Recession.”

What happens in a recession? Asset prices can plunge. We’ve already seen a -16.5% correction in the S&P500 from its high of 4818.62, set on January 4,2022. In the Great Recession, the Dow Jones Industrial Average plunged -55%. During the Dot Com Recession, the NASDAQ Composite Index bottomed out with -78% losses and took 15 years to recover. In other words, now is the time to make sure that your wealth plan is properly protected and diversified, and that you know what is safe in a Debt World where bonds have interest rate, credit, duration, principal loss and liquidity risks.

Real estate prices are also a concern. The National Association of Realtors has warned that home sales are expected to contract by 10% in 2022. As interest rates rise, fewer people qualify for a mortgage or can afford the payments. Home prices in the U.S. are at all-time highs. In the most recent Financial Stability Report, the authors wrote, that home prices had “stretched valuations,” and that “a negative shock to house prices might hurt homeowners.”
 
Buying high in real estate and having the value fall beneath your mortgage is hard on your wealth, your wallet, your relationships and your credit score. It can take a decade or longer to recover. I’ll be discussing this in my free webinar this week. If you’d like to join us live, simply email info@nataliepace.com with VIDEOCON in the subject line.
 
I’ve noticed that Jerome Powell‘s most recent definition of a soft landing has changed. A soft landing is typically referred to as raising interest rates without triggering a recession. Powell now defines it as “Getting back to 2% inflation, while keeping the labor market strong.” When asked by Marketplace’s Kai Ryssdal to describe his priority in 5 words or less, Powell said, “Get inflation back under control” (not avoid a recession).
 
Could the U.S. already be in recession? This is something I’m going to be addressing in my podcast and webinar this Thursday at 5 PM Pacific. If you’re on our list you will receive the logon instructions automatically. If you’d like to join the webinar simply email info@nataliepace.com with VIDEOCON in the subject line.
 
Bottom Line
Moderna has a global reach, APAs of about $21 billion and a solid pipeline. The company, along with many biotech stocks, has been beaten up by investors, and might be oversold. If you think biotech is still hot, consider adding a slice of the industry to your nest egg. Measure this against a backdrop of economic contraction in the 1st quarter and a potential recession on the horizon (if it’s not already here). Remember that a healthy wealth plan doesn’t try to market time or jump all in or all out. It’s a carefully designed (but easy!) system of proper diversification and regular (but not obsessive) rebalancing.


If you'd like to learn 21st Century time-proven investing strategies for protecting your wealth  from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
​

Check out my Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

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​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Bitcoin Crashes.
Answers to 6 Common Crypto Questions.
 
If you were getting your altcoin tips from a young trader on Tiktok or Youtube, you probably loved listening/watching in November and are now ready to unsubscribe. A spot check on a few of the Youtube gurus reveals that at Bitcoin’s high, views were in the hundreds of thousands. The same self-proclaimed prophets are now seeing about a quarter or less of that traffic. Is crypto flawed? Are these gurus inexperienced? Do charts work? I’ll answer these questions and more below.  
 
420K Bitcoin in 60 Days!
Worst Crash in Crypto History!
SUPER BULLISH PREDICTION! LUNA COULD HIT $200+ IN 30 DAYS!


Guess which headline was popping up everywhere around November 9, 2021, when Bitcoin hit $69,000/coin, and which one is circulating today. Bitcoin sank to a one-year low today of $28,122.44 (May 12, 2022). The Luna prediction was made last November. In all fairness, Terra (LUNA) did go up after the prediction to a high of $119.18. However, today it is virtually worthless. Not all coins are what they are hyped up to be. Coin clubs can be even riskier. Some are outright scams.
 
Good marketers lure you in with headlines like those above. However, hype-monster marketers are not necessarily great analysts. Remember to always grade your guru before you listen to their advice. (This is true of your financial planner/broker-salesman, too. Be sure to check out my webinar and podcast “Is Your Conservative Plan Safe?” and the chapter in Put Your Money Where Your Heart Is entitled “Brokers are Salesmen.”)
 
Will Prices Keep Plunging?  
We’ve seen a few crypto crashes over the years. In December of 2017, Bitcoin hit $20,000 in mid-December of 2017, and then crashed to $11,000 on January 19, 2018. That was the beginning of a plunge that sank to the $3,000-range by the end of 2018. This wiped out many crypto millionaires. This kind of devastation is not just hard on a wallet. There were suicides.
 
Bitcoin had a reasonable recovery in 2019, but never came close to $20,000 and stayed mostly in the $7,000-$10,000 range. However, in the pandemic, the price plunged again to under $5,000.
 
While the waves of Bitcoin can run independent from stocks, we’ve seen that stock market corrections can drag down safe havens. The recovery of Bitcoin, gold and silver can be more robust and speedier than stocks after a crash. However, in the early stages, everything tends to fall.
 
That’s why having a capture gains strategy is key with this volatile investment. You can’t do that when you are drinking the Kool-Aid that cryptocurrency will be the only thing of value when the dollar collapses. What does a “capture gains” strategy look like? Keep reading.

​Does the Crypto Crash Mean Crypto is Doomed?
No. However, it does reveal a fundamental aspect of all cryptocurrency. It’s a trader’s delight, not a currency (at this time). If you’ve got Diamond Hands and are HODLing (Holding On for Dear Life), the whales are going to eat your lunch. The average hold time of most crypto is less than 4 months. (You can easily see these statistics on Coinbase.) Statistics show that the beginning of crypto crashes are sparked from hedge fund and large investors selling. As the fallout becomes unbearable, Main Street investors might be forced to sell low just to pay their housing costs. Volatility favors sophisticated traders, not Diamond Hands (Buy & Hold investors).  
 
That’s not to say that isn’t a place for crypto in the monetary system. NFTs are gaining in popularity and most are paid for in Bitcoin, Ethereum or altcoins. (There is not a lot of crypto purchasing outside of this sphere at this time.) However, you can’t have a currency that loses half or more of its value every year or two. That’s not a currency. It’s a casino, which means you should limit your betting to something you can afford to lose.
 
Is Crypto a Good Safe Haven Investment?
As I mentioned, in the beginning of a correction/recession, even safe haven investments are vulnerable to losses. There does come a point, however, when the bad news on the status quo makes alternative investments look like Nirvana. Things can pick up steam fast when people feel like they are in an Apocalypse. However, the volatility of cryptocurrencies and the exceptionally weak returns of gold over the past decade are reminders that these safe haven investments work best as a slice of our strategy – not the entire plan.

 
Using our pie chart system will also help you to capture gains at the high and buy back in at the low (without day-trading). You can learn this system by reading The ABCs of Money (5th edition), or you can learn and implement this system now by attending our June 10-12, 2022 Retreat. Email info@NataliePace.com to learn more.
 
Is Crypto an Energy Hog (Like Elon Musk Warned)?
Yes. According to the University of Cambridge’s Cambridge Centre for Alternative Finance, Bitcoin’s annual network power demand is 147 Twh. That is more electricity than the countries of Sweden, Norway or Ukraine burn.

​​Some Altcoins are designed to be faster and greener, in order to compete with VISA and Mastercard, and to meet the social demands of climate action. The altcoins are in a crash, too. However, in a future that is getting ever more concerned about energy efficiency and reducing CO2 emissions, the altcoins have a potential to become a meme hot topic, once the recovery starts generating some steam. Here are some of the altcoins with interesting stories: Cardano (ADA), Solana (SOL), and Polygon (MATIC). You can access their descriptions and white papers on Coinbase.com.
 
Can a Main Street Investor Surf the Waves of Crypto Successfully?
A well-designed investment plan allows you the freedom of investing in a few hot industries, like cryptocurrency – within reason. The 21st Century has proven itself to be volatile over and over again. So, it’s important to have a time-proven plan that you rebalance regularly (at least once a year) that also prompts you to capture gains and buy into weakness.

The pie chart plan does just that. Again, you can read about it in The ABCs of Money. You can learn and implement it at our next Financial Empowerment Retreat. You can also consider getting an unbiased second opinion from me – particularly if you were too aggressive about your belief in crypto and/or purchased near the top. This easy, time-proven plan is the life math that we all should have received in high school. The sooner you learn and implement it, the faster your life transforms.
 
Should You Transfer Your Retirement Plan Into an LLC IRA That Invests in Crypto?
IRAs have tax advantages. Betting your entire IRA on an investment that has a history of shooting the moon and then sinking into the sea is not worth the tax advantage. If you have enough in your nest egg that a couple of slices can be put into an LLC IRA that allows you to invest in crypto, then you might have the best of both worlds. If your slices are still a bit small, then it’s a better idea to build your wealth on a traditional, reliable platform like Coinbase. When you pay taxes, it’s only on the capital gains. If you’ve held the position for longer than a year, it could be taxed at 15% or less (for most people).
 
Bottom Line
Cryptocurrency is better thought of as a hot slice of a well-designed system, not the entire wealth plan. Regular rebalancing is key to being on the right side of the trade and to successfully riding the waves of volatility. This is still a highly speculative play.
 
Capturing gains and buying low is not day-trading. Ideally, you’ll have 2-3 times a year on the calendar to consider your positions, while also having a strategy to deploy if the volatility lands in between those dates. If you’re invested in crypto, you’re going to hear when it soars and crashes. It makes headlines. The trick is being on the right side of those headlines, rather than being crushed by them. Proper diversification with regular rebalancing is your bunker.
 

​If you'd like to learn 21st Century time-proven investing strategies to protect your wealth from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
​

Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The Power of 8 Billion: It's Up to Us and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 5th edition of The ABCs of Money was released on September 17, 2021. 
​
Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.

Check out my Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

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​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Crypto, Gold and Stocks All Crash.
6 important ways to protect yourself now. 3 Common Investing Mistakes.

Why are crypto and gold crashing, along with stocks? Shouldn't they be strengthening as equities weaken? Are you befuddled and confused about what to do? Below are 6 important ways to protect your wealth, with 3 additional reminders on Common Investing Mistakes.
 
1. Get a Performance Chart of Your Current Stock and Bond Portfolio for the Past 15 years
It’s easy to earn gains in a bull market, and it is easy to lose money in a recession. (Click to read my blog, “6 Warnings Signs of a Recession.”) We’ve been in a secular bull market for so long, since 2009, that many people have gotten complacent. We might sincerely believe that we (or our financial advisor) are doing a great job. However, it is never a good idea to confuse a bull market with wisdom. Feeling complacent could actually put us at risk of losing up to half of our portfolio.
 
Knowing whether your plan is truly designed to protect you is actually quite easy (and a lot less expensive than having blind faith). Simply ask your financial advisor for a performance chart of your portfolio compared to the S&P 500 for the last 15 years. Most people shadow the returns of the general market, performing about 2% under, due to fees. If this is you, that’s a red flag. Plans that simply ride the volatility of the stock market are subject to losses of more than half in 21st Century recessions. Be careful of being lured into a plan that you’re told will protect you better. You need to learn the basics of what a time-proven, 21st Century plan looks like, and why bonds are risky in today’s Debt World. (“Conservative” plans are typically overweighted into bonds.)
 
Preserving our wealth means our money is protected from recessions, while profiting from the bull markets. That plan is not rocket science, or day-trading. Nor does it require sophisticated economics training. It’s as easy as a pie chart, which is why we call it the life math that we all should have received in high school.
 
2. Keep a Percentage Equal to Your Age Safe
I was recently included on a conversation that a 72-year-old retiree was having with her broker-salesman. She was worried about the volatility in stocks and wanted to make sure that her investments were protected. The broker-salesman recommended that they change the allocation to 50% bonds and 50% stocks. What the retiree didn’t know is that her broker was having her act like a working 50-year-old. As you get older, you can’t risk having that much of your principal investment. A 72-year-old should have 72% of her wealth protected from losses, as a general rule – more if she is risk-averse (not 50%).
 
Also, bonds lose value when interest rates rise, meaning there is a potential for wealth depletion in 2022 from bonds, too. Typically, interest rates are cut in recessions, which helps bonds. We are currently in a monetary tightening cycle, with interest rate hikes projected to take the Fed Fund rate to up to 2.85% this year (from zero at the beginning of 2022). The more rapidly rates are raised, the more probability of continued economic weakness. There are many other problems with bonds this year, which you can learn about in my webinar at YouTube.com/NataliePace or in my Spotify podcast.

Getting safe these days is tricky. Safe haven investments, like gold and crypto, typically tank with stocks in the early stage of recessions. (They also tend to recover more quickly, and even shoot the moon.)  That’s why we spend a full day discussing “What’s Safe in a Debt World” at our Investor Educational Retreats.
 
3. Overweight 10 to 20% Safe
Another thing that 72-year-old was missing, is that if she’s really worried about things she should be overweighting safe and acting older than she is. If this 72-year-old overweighted 15% safe, then her loss exposure could be limited to 6% or less. When you’re not actively earning income, it’s quite important to protect your wealth. You’re not going to be able to work longer while you wait to recover losses.
 
4. Know What Is Safe in Today’s Debt World
When interest rates rise, bonds lose value. There are multiple risks with bonds in 2022, including interest rate risk, credit risk, liquidity risk, duration risk, opportunity costs and much more. We must be selective about choosing creditworthy bonds with a short duration. The patient investor who focuses more on liquidity than yield should be in a position to purchase creditworthy, better performing bonds in 2023 and 2024.
 
Don’t be sold into an illiquid, negative-yielding investment that could have you losing principal, as well as buying power. A lot of folks are falling for the “your money isn’t keeping up with inflation” sales pitch, without realizing (until it’s too late) that they are at risk of losing actual money, in addition to purchasing power. Bonds are very vulnerable in 2022. Be sure to listen to my podcast and/or watch my webinar on this topic.
 
5. Get Control and Be the Boss.
You’re the boss of your money. Now is the time to know exactly what you own and why. Don’t trust that anyone else is protecting your wealth without knowing the forensics. It’s easy to like our financial advisor in a bull market, and easy to resent them (or fire them) in a bear market. You’re the boss. No one loses your money without your consent.
 
Also, if you’re over the age of 59 1/2, roll over your 401(k) or RSP into a self-directed IRA or TFSA, so that you have greater choice of what you invest in. This is an important tool for protecting your wealth. Those limited-choice retirement accounts don’t offer the safest options, and the limited choices make it difficult to include safe haven investments and other potentially hot industries that might keep your portfolio more buoyant.
 
If you have any retirement plans that are still being hosted by previous employers, roll those over into self-directed plans as soon as possible as well, so that you can take appropriate action to be properly diversified and as safe as possible. If you would like additional information on what kind of brokerage is going to offer you the safest investments and greater freedom of equity choice, consider attending our Investor Educational Retreat June 10-12, 2022 (attend online from anywhere). I also offer an unbiased second opinion through my private coaching program. Email info@NataliePace.com for pricing and information.
 
6. Safe Haven Strategies
Are you tempted to buy into something you think is going to shoot the moon? A lot of people are being sold into cryptocurrency, gold, silver, etc. under the premise that those assets will be the only thing of value when the dollar becomes worthless. With Bitcoin trading at under $31,000/coin (after hitting a high of $69,000 on Nov. 9, 2021) and with gold performing the worst of any investment of the last decade, it’s pretty clear that hot slices are a better strategy than betting the farm.

​What’s a Hot Slice?
Our easy-as-a-pie-chart system with 1-3 times a year rebalancing is a buy low, sell high system on auto-pilot. If you think something is super hot, then assign a hot slice or two of that strategy in your nest egg (liquid assets).
 

The system itself prompts you to capture gains when crypto shoots the moon, and to buy low when it crashes. This well-designed wealth plan assists us in surfing the waves of volatility that are inherent in every asset class – particularly when economies contract. I cover these safe haven investments in the 5th edition of The ABCs of Money. You can get updated with the most current research and information at our June 10-12, 2022 Retreat. I will also be discussing Bitcoin and other meme stocks in my free webinar and podcast on Thursday, May 12, 2022. If you’d like to join me live, just email info@NataliePace.com with WEBINAR in the subject line. (If you’re already on the VIDEOCON list, you’ll automatically receive the logon instructions the day before the webinar.)
 
3 Common Investing Mistakes
 
1. Market Timing Doesn’t Work
Whenever there are signs of a recession, there are some of us who think we can outsmart the system by selling everything, and then buying back in when the market crashes. Market timing is statistically proven not to work. One of the biggest problems is that what feels like the Apocalypse is often the market bottom, when we should be buying low. At this point, many investors get fed up and instead sell low. Many people who tried market timing in the Great Recession sold for losses (near the bottom), missed most of the bull market and were then wanting to buy in (high) in 2019 (or only a year or two earlier).
 
Another reason market timing doesn’t work is that there is a lot of financial engineering that goes on from the central banks. We would have been in an economic crisis to rival the Great Depression in 2020, if the Feds hadn’t saved the day with their lending programs, while the U.S. Treasury handed out cash like candy. (FYI: that’s not likely to happen in 2022.)
 
Our easy-as-a-pie-chart nest egg strategy with regular rebalancing is a time-proven 21st Century plan. Learn and implement it now, while we’re still in the early stages of the current correction.
 
2. Emotions Are Not an Ally of Investing
As you can see in the chart below, emotions often prompt you to do the exact opposite of what you should be doing. At the point when you think you’re in the Apocalypse, that’s usually the best time to buy low. At the point when you think the party is going to rage forever, like a lot of people felt in 2021, that’s typically when you should be selling high. Rather than be at the mercy of your emotions, it’s far better to be driven by the data and have a well-designed, well-diversified plan that can protect you from recessions and also prompts you to trim high and add low (Liz Ann Sonders’ term). You can learn and implement this plan by joining us at our June 10-12, 2022 Retreat (online, from your living room).


​3. Limit Hot Investments to 4 Slices
One of our more seasoned investors wanted to take on a lot more risk in cryptocurrency, even though he knows investing most of his assets in crypto runs against a well-diversified plan. He took about half of his nest egg and bought high in Bitcoin at about $55,000 a coin. There are many problems with this, in addition to the obvious one of losing almost half of his money.
 
When we assign our sure shots to hot slices in our pie chart strategy (rather than going all in), the system itself will help to prompt us to sell high and buy low. When your slice gets too large, trim it back to where it should be. Capture gains. If we buy high and the slice gets smaller, it prompts us to buy more at a lower price. The fact that we are overweighting safe means that we still have a substantial amount protected from losses. That liquidity will help us to buy low. The reason most people don’t buy low is that they can’t. There’s no money to access for the transaction.
 
When we take a large portion of our nest egg and dump it into one idea, then it’s difficult to have the emotional fortitude or the liquidity to take advantage of volatility. If we lose half of our wealth investing in Bitcoin at $55,000, we have to hope and pray that we recover from the losses. At that point, if we have a life partner, they might become angry with our choices. Losses can be very hard on relationships.
 
Bottom Line
 
Now is the time to be the boss of our money and to make sure that we are adhering to time proven, 21st-century investing strategies. Most financial plans soar in bull markets and crash in bear markets. Buy & Hope doesn’t work in the 21st Century, when the recessions are resulting in market crashes of 55% or more. As discussed above, we can see what’s at stake with a simple 15-year chart of our portfolio performance. Learning what a better plan looks like will require financial education. However, that is an investment that always yields better returns, and could save your assets.
 

Check out my Podcast on Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
The Economy Contracted -1.4% in 1Q 2022.
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Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
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Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
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​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
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From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
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Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

The 1Q 2022 GDP report will be released tomorrow morning at 8:30 am ET. Last year’s 1Q was an outstanding 6.3%. This year is predicted to be a barely-breathing 0.4% (source: GDPNow). If the number is negative, Thursday could be a blood bath on Wall Street.

The low expectations are one of the biggest reasons why the S&P500 is already down -12% year to date. There are at least 6 other concerns that are also weighing on wealth. If you haven’t already read my blog “Recession Risks in 6 Charts,” click to access.

Have You Lost More Than 6%?
Here’s an important equation to factor in. The S&P500 is down -12%. However, if you’re 50 and you have a properly protected and diversified plan, then you should only be down about -4%. If you are over 30 and your losses are more than -6% total, then that is a giant red flag that your wealth plan is not properly protected and diversified.
 
As you can see in the sample pie chart below, we began overweighting 20% safe in January of 2022, and actively encouraged everyone to rebalance (take profits) at the end of December 2021. The all-time high of the S&P500 was on January 4, 2022. I first announced the overweighting in my December 1, 201 blog. (It’s a good idea to follow my Twitter feed, which is conveniently located on the home page at NataliePace.com, to ensure that you don’t miss important emails of this nature.) If you haven’t already subscribed to my YouTube.com/NataliePace channel, you might be missing out on my free videoconferenes and webinars.

​2021 was a gangbuster year of 5.7% GDP growth – largely as a robust recovery from the pandemic recession. 2022 faces inflation, rising interest rates, war, leverage, elevated equity prices, churn and an inverted yield curve. The forecast is for 2.8% GDP growth in 2022.
​

Losses Yesterday
Tesla is down 30% from its 52-week high. The company lost -12% (about $121/share) yesterday, and has clawed back about 3% of the losses today.
 
AMD is down 48% year to date. The company dropped 6% yesterday.
 
Both Tesla and AMD are still experiencing impressive revenue growth at 80% and 50% respectively. (AMD is projecting 45% revenue growth in the 1st quarter. Earnings will be released on May 3, 2022 after the markets close.)
 
So, what gives? Expensive stock prices. Even with the share price pullbacks, Tesla’s P/E is 118 and AMD’s is 33. The historic average of P/Es is about 17. Yes, growth companies can take a higher P/E. However, as we’ve been highlighting, stock prices entered the nethersphere in 2021.
 
Why did Google Drop Yesterday?
Alphabet (Google) announced earnings yesterday. The company is still growing revenue, with $68 billion being 23% higher than the same quarter in 2021. However, net income dropped -8.3%, to $16.436 billion. There’s nothing disastrous about this – if the P/E weren’t 22, and if there weren’t so many headwinds impacting the outlook for the 2nd quarter, including foreign exchange rates (a stronger dollar), the war in Ukraine, a suspension of activities in Russia and a “tough comp” compared to a robust 2Q in 2021. Alphabet shares were down 6% yesterday, including after-hours trading (after the earnings report and call took place).
 
Microsoft was a bright spot. After dropping 3.74% before the earnings report, investors raced back in for 4.51% gains in after-hours trading. Microsoft saw an increase in revenue of 18% to $49.4 billion in the last quarter. GAAP net income also increased to $16.7 billion (up 8%). The company is projecting a solid next quarter, even with the challenges of mark-to-market adjustments for their equity investments (potential losses), a rise in COVID cases in China (production and supply disruptions, particularly for OEM, Surface, and Xbox consoles), FX headwinds and a 1% impact on suspension of new business in Russia.
 
Microsoft’s P/E is also inflated at 30. However, the company’s share repurchases continue to be robust, with $23.9 billion invested in buybacks over the past nine months ($8.8 billion in the most recent quarter).
 
Email info@NataliePace.com if you’d like a Big Tech Stock Report Card.

It’s Easy to Make Money in a Bull Market
Recessions tell us who has been swimming naked, as Warren Buffett is fond of saying. Do you have your swimming suit on? Are you properly protected and diversified? Now is the time to know what you own and to be the boss of your money. Today’s rally might bring a little hope to Buy & Hope investors. However, it’s better to have wisdom and time-proven strategies underpinning your wealth plan, rather than rely upon blind faith that someone else is protecting you – particularly when the longest bull market in history is trending in the opposite direction.  
 
​If you'd like to learn 21st Century time-proven investing strategies to protect your wealth from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
 

Other Blogs of Interest
The Dow Dropped 2000 Points.
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

The Dow Jones Industrial Average has dropped almost 2000 points since Thursday. The S&P500 is down 12.1% on the year.
 
Are There More Losses to Come?
Based on the last three recessions and the current economic trends, yes, there could be more pain to come. The S&P500 dropped about 38% in one month in 2020. The Dow Jones Industrial Average dropped 55% in the Great Recession. The NASDAQ Composite Index plunged up to 78% in the Dot Com Recession.
 

Source: MSN.com. (c) Microsoft. 

Are We in a Recession?
Not yet. However, experts, including Goldman Sachs, have put the possibility of a recession in the next two years at 35-40%.
​
Should We Just Buy and Hold?
That worked pretty well in the pandemic. However, that was an anomaly. The U.S. had a debt ceiling suspension which allowed the Treasury Department to print up $5 trillion and give away free money to a lot of people, and pad corporate coffers with cash. On September 30, 2019, U.S. public debt was $22.7 trillion. By September 30, 2021, the public debt had soared to $28.4 trillion. As of April 25, 2022, public debt was at $30.4 trillion, with a cap of $31.4 trillion. That limits the ability of the Treasury to send out “Stimmy” checks to keep stocks and bonds artificially buoyant.
 
Borrowing rates were historically low during the pandemic. With interest rates rising, high debt levels, elevated asset prices, inflation, war, expensive gasoline and an inverted yield curve, there are many signals that a recession is on its way. Recessions are usually preceded by stock market downturns. You can check out my blog “Risks of a Recession in 6 Charts” for additional data and information.  
 
Buy and Hold investors had to wait 15 years for the NASDAQ to crawl back to even. During the Great Recession the wait time while your wealth was underwater was almost 6 years. Riding that kind of Wall Street roller coaster, and using the bull market to crawl back to even, can be disastrous. It tanks your credit score, drains your liquidity and could cost you your home.
 
How Can You Protect Yourself?
Below are just a few important things to take action on now, with regard to your nest egg (your liquid assets).
 

1. Keep a percentage equal to your age safe.
2. Overweight 10 to 20% safe due to the risk of a recession.
3. Know what’s safe in a debt world where bonds are losing money, illiquid and negative yielding.
4. Be the boss of your money. Do not have blind faith that somebody else (your financial planner) is doing this for you.

 
If you aren’t sure how to ensure that a Wealth Protection Plan is in place, then consider some of the tools below to help.
 
How Can You Be the Boss of Your Money?
 

• Join us at our 3-Day Financial Empowerment Retreat June 10-12, 2022. There you will learn time-proven, 21st Century strategies that earned gains in the Great and Dot Com Recessions and outperformed the bull markets in between. Get the best price when you register by April 30, 2022.

 

• Consider getting an unbiased second opinion from us. In this analysis, you’ll learn exactly what you own and what a safer plan looks like. Our two cents are unbiased because we don’t sell financial products. Our service educates you to be the boss of your money because, as Joe Moglia, the former Chairman and CEO of TD AMERITRADE likes to say, “No one cares about your money more than you do.”

 

• Another quick way to check-up on what is at risk for your current plan is to request a chart of the performance of your portfolio over the last 15 years compared to the S&P500. Most portfolios shadow the returns of the S&P 500, but are 2% under due to fees. If this is what your portfolio is doing, then you are at risk of losing half or more of your nest egg if there is a recession in the next two years.

 
If You Wait for the Headlines, It Will Be Too Late
It’s tempting to wait and see. However, if you wait for the headlines that the economy is in a recession, or to learn that the stock market has plunged by 50% or more, it’s too late to protect your wealth. You’ll then be in a position of having to hope and pray that you make up losses. So, now is the time to get educated, get protected, be the boss of your money and adopt time-proven, 21st Century strategies. (Again, Buy & Hope worked well in the last century, but has been a disaster in 21st Century recessions.)
 
 
Now is the time to know what you own and why.

If you'd like to learn 21st Century time-proven investing strategies to protect your wealth, or how to pick stocks from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
 

Other Blogs of Interest
Is Plant-Based Protein Dying?
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

According to ResearchandMarkets.com, the plant-based protein market was $13.18 billion in 2021. It is expected to grow to $14.58 billion in 2022 (+10.8%) and reach $21.29 billion in 2026 (9.9% CAGR). Of course, if Meatless Monday takes hold in the hinterlands, things could escalate even faster. There is an environmental push for this to occur.
 
So, if the future for plant-based protein is so bright, why are investors so disenchanted? Beyond Meat (symbol: BYND), the Very Good Food Company (symbol: VGFC) and Oatly (symbol: OTLY) are trading near all-time lows. Former meme stock darling the Very Good Food Company hit a low of 34 cents this week, after canning their CEO and Chief Product and Research Officer. These kind of routs leave a bad taste in your mouth. However, do delicious returns lie ahead?
 
Churn
It’s important to realize that part of the issue is churn – wild Wall Street rides that were quite common last year. Even before Russia invaded Ukraine, we were seeing unprecedented levels of volatility. As Liz Ann Sonders, the Chief Investment Strategist of Charles Schwab, revealed in our conversation in January of this year, “More than 90% of the NASDAQ’s members had at least a 10% correction at some point in 2021. The average maximum drawdown last year was -43% across all 3648 stocks. As of the first few weeks of 2022, 45% of NASDAQ stocks were down at least -50% from their 52-week highs.” You can watch my entire conversation with her on YouTube.com/NataliePace.

What is going on? Money is very hot and fast. Everybody is trying to get rich quick. Meme stocks shoot the moon posting astronomical gains, and then just as suddenly crash down to Earth again. We’ve seen it happen with the cannabis stocks. We’ve seen it happen with GameStop and AMC. And we certainly are seeing it happen with the young plant-based protein companies.

Beyond Meat
Why is Beyond Meat trading near an all-time low? During the pandemic, Beyond Meat benefited from a shortage of animal-based protein products and stockpiling fever. However, last year, retail sales slumped by -19.5% in the U.S., with year-over-year revenue down -1.2%. Some of this had to do with less interest in plant-based products, as well as robust competition in the space. Beyond Meat’s president and CEO Ethan Brown believes there are “sporadic yet promising signs of a resumption of growth in U.S. retail.” Beyond Meat retained the title of the No. 1 brand in the category of refrigerated plant-based meats.
 
While retail was weak, foodservice was up 35-36% both nationally and internationally. Beyond Meat has Beyond™ The Original Orange Chicken™ at Panda Express, Beyond Meat Nuggets at all A&W Canada stores nationwide and Beyond Fried Chicken® at KFC locations throughout the US. McDonald’s McPlant partnership with Beyond Meat is being tested in San Francisco and Dallas. In the coming weeks, we’ll learn more about Beyond Meat’s PLANeT partnership and products with Pepsico.
 
On April 6, 2022, Beyond Meat announced that they are now offering burgers and meatballs in Rite Aid stores. I did a spot check when I was passing through Davis, California, and the products were in the store there. The question is, “How popular will these products be?” Beyond Chicken Tenders are expanding their retail footprint into 8000 new U.S. stores, including Albertson’s, CVS, Sprouts and Whole Foods. Beyond Chicken Tenders were awarded a FABI Best New Product Innovation Award in 2021.

The company is still in expansion-mode, with losses of -$182.1 million in 2021. There is plenty of room on the runway, with $733.3 million cash on hand and $1.1 billion in debt. Two former Tyson executives were hired in December of 2021 with the goal of streamlining costs and operations. The company will continue to face cashflow headwinds in the first quarter of 2022 with transportation costs and high productions costs, particularly for newer product offerings. The 1Q 2022 earnings report should be released mid-May.

The Very Good Food Company
The Very Good Food Company is definitely having growing pangs. The fourth-quarter revenue grew 70% year-over-year. However, the founder CEO Mitchell Scott and Chief Research and Development Officer James Davison got the boot on April 4, 2022. The company hasn’t provided much color on the termination. However, it likely has to do with the fact that these founders left the Very Good Food Company with only 3 to 5 months of run-time on their cash, while taking out personal loans. You always want to stockpile the treasury before you get that close to flying in the trees, and you definitely shouldn’t be depleting it by using it as your own parachute.
 
The new Executive Committee hasn’t provided a lot of details on how they’ll improve the cash-flow situation. However, both debt and equity are on the table. They also believe that organic growth will get them back into compliance with the NASDAQ requirement of having their share price over $1.00, which must be done by July 10, 2022 (unless the period is extended).
 
While VGFC is out of favor with investors, their year-over-year sales growth and rave reviews of their flagship restaurant in Victoria, BC, show that customers are still fans. Mmm Meatballs were nominated for a NEXTY Award in the Best New Frozen Product category, but lost to the Plant-Based Seafood Co. In the April 14, 2022 VGFC earnings call, in response to a question as to why the Very Good Food Company had not yet landed a “major grocery deal,” Kevin Callaghan (VP, Sales, North America) reported that he’s excited to announce some new partnerships in retail very soon. VGFC is currently available at Erewhon and 1,651 other stores in North America. According to Callaghan, U.S. retail is a focus for the company in 2022.

With annual sales of $12.3 million, which increased 164% in 2021, the current price to sales ratio is just 3.8 for The Very Good Food Company, compared to 5.88 for Beyond Meat. If the popularity of their products continues to work in their favor, then bargain hunting investors could be rewarded. However, it’s certainly high risk. The Very Good Food Company must raise capital or they’ll run into very serious problems, which could impede their progress into U.S. retail. The 1Q 2022 earnings report should be released at the end of May.
 
Bottom Line
Plant-based protein just wasn’t as popular in 2021 as it was in the pandemic, when animal protein products experienced COVID-related production bottlenecks. The vertical is still predicted to be one of the bright spots going forward, however. Competition is certainly heating up, with even the old-school food companies like Kellogg, Conagra and Tyson Foods offering their own versions of plant-protein products. However, sometimes when a company’s share price has been hammered, and good news shows up, there can be a delightful resurgence in the share price. If you have an appetite for risk, the leading plant-based protein companies, like Beyond Meat, Oatly and The Very Good Food Company might be on your menu, even though the general market place is tightening up for all the reasons outlined in my 6 Red Flags of a Recession blog.
 
Full disclosure. I own shares in Beyond Meat and The Very Good Food Company.

​
If you'd like to learn 21st Century time-proven investing strategies to protect your wealth, or how to pick stocks from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
​

Other Blogs of Interest
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​

Win a Seat at the Retreat
 
Everyone is a winner in our 2022 The Power of 8 Billion: It’s Up to Us Sweepstakes. (See the full list of prizes below.) The Grand prize is a complimentary seat at an Online Financial Empowerment Retreat, valued at $895.
 
Simply email info@NataliePace.com with the subject line Power of 8 Billion Sweepstakes! You will be automatically entered to win.
 
If you’d like to up your odds, then write a review of Natalie Pace’s new book, The Power of 8 Billion: It’s Up to Us. Send us a link to your review on Amazon, and we’ll enter you 10 more times in the Sweepstakes. The Kindle version is available for just $2.99. The print edition can be purchased for $11.99.
 
Your review of The Power of 8 Billion: It’s Up to Us is important to us, and even more important for anyone who is interested in climate action. The more you share and review, the greater the chance that this important information gets into the hands of those who can help to heal our planet in time.
 
Act now. Entries must be received by April 22, 2022 (Earth Day). Winners will be notified on or before June 15, 2022.
 
List of Prizes
 
Retreat Seat (value up to $895).
½ off Retreat Seat (value $447.50).
2nd opinion on your current budgeting and investing plan (value up to $1495)
Three 50-minute private prosperity coaching sessions (value $900).
50-minute private prosperity coaching session (value $300).
Autographed print edition of The Power of 8 Billion: It's Up to Us (priceless)
 
Everyone is a Winner
Every person who enters the sweepstakes can choose to receive:
 
1. A complimentary 21-day Gratitude Game audio program: 21 days to a healthier, wealthier, more beautiful you, and/or
2. A 21-Day Sustainability Videoconference series, where you can learn how to save thousands of dollars annually with smarter big-ticket choices.
 
Thank You!
Your presence in our community, with a dedication to financial literacy and sustainability, means the world to us. We work hard to keep you informed and empowered, and you help us to spread the word of this important information. Thank you so much for your review of The Power of 8 Billion: It’s Up to Us! We need your help in getting at least 50 reviews up by Earth Day, and in spreading the word about this important book. You can read the editorial and reader reviews on the Amazon book page. I’ve highlighted just a few below.
 

In the pages of The Power of 8 Billion, Natalie Pace empowers the readers to realize how each one of us can, through deliberate small or big actions, affect the course of the survival of our beautiful Earth. With reverence, gratitude, renewed prayers and conscious actions, we can reverse the crisis we are in. This book will ignite your spark that you can make a difference.
Agapi Stassinopoulos, Author of Speaking with Spirit: 52 prayers to guide, uplift and inspire you.
 
 
Natalie Pace brings a message of utmost importance: that we can only solve today's environmental problems with an attitude of gratitude. A sincere sense of appreciation for what we have is the only path forward to reclaim the beauty of our natural world – not more anger, disappointment or blame. Natalie outlines so many small, practical ways for any individual to act for nature and not against, and references practical, living examples of those who walk, not just talk, the path. My journey started 5 years ago when I bought an acreage in Canada and built an off-grid house, with encouragement from Natalie herself. I am continually inspired by her relentless mission to assail the world with love and gratitude."
Alvin Tam, Filmmaker and Off-Grid Adventurer
 
What a phenomenal book. I couldn't put it down, and wanted to keep reading until the end. I read it in one afternoon/evening! The Power of 8 Billion: It's Up to Us is inspiring, engaging and informative. There are so many fantastic ideas in this book that schools can implement. Teachers can use the challenges and facts to teach young people to reduce their carbon emissions, and even achieve carbon zero by 2030.
Edd Moore, award-winning environmentalist, eco-coordinator and Level 3 teacher at Damers First School in Poundbury, England
 
This is an amazing book and, in a profound and literal sense, quite empowering. Natalie Pace draws from examples from around the world, of cities, schools, organizations, and especially people who are taking action to move our ways of life in positive directions. Powered by gratitude and the understanding that our small planet – each person – can make a difference, the book is both a manual for action and a reminder that despair and powerlessness are not options, given the stakes we face to preserve the beauty and diversity of all life on Earth. No action is too small; and the great news is that these changes are win-win solutions. They improve the quality of life of each individual, while also contributing to the paradigm shift humanity as a whole needs to make to create the future we want.
Mark Nelson, Ph.D., Chairman, Institute of Ecotechnics and a biospherian crew member in Biosphere 2’s first two-year closure experiment. Mark is the author of The Wastewater Gardener: Preserving the Planet One Flush at a Time, Pushing Our Limits: Insights from Biosphere 2, and Life Under Glass: Crucial Lessons in Planetary Stewardship from 2 years in Biosphere 2.
 
Grounded in gratitude, driven by facts, powered by hope. The Power of 8 Billion, by prolific writer, thought leader, advocate and insightful teacher Natalie Pace, offers a solution-based pathway forward into a future of personal and planetary sustainability. This must-read is written by someone who literally walks the path of personal accountability, sustainability, curiosity, and a daily investigation into economic systems, ideals, and ways of living that put health and wellness first.
Felicia Tomasko, Editorial Director at Bliss Network and Editor in Chief at LA YOGA Magazine, Faculty Lecturer, Loyola Marymount University Center for Religion and Spirituality. 
 
Planet Earth is our home. We have not been respectful. We have not been grateful. We take our beautiful, abundant planet for granted and abuse her. If planet Earth were a human being, most of us, including me, would be jailed for criminal abuse. Natalie Pace brings an acute awareness of the importance of showing gratitude to our planet in this wonderful book. Natalie offers dozens of concrete examples of how we can improve our behavior. It all starts with gratitude and respect. Reading this book and sharing the book widely can be your first step on the amazing journey that awaits us all to become the children and stewards of  the Earth we were meant to be.
William Gladstone, bestselling author and literary agent
 
As a young person who is passionate about all things eco, I enjoyed reading The Power of 8 Billion: It’s Up to Us because it made me reflect on the power that people can have when we all work together towards a common goal. I really liked Natalie’s suggestions, as they made me think more about what I can do. The book also helps others who want to start their own eco-journey and make the planet a better place to live.
Isla Lester, Aged 10, award-winning eco-champion, Jane Goodall’s Roots and Shoots School of the Year 2019, Young Volunteer Award and Green Blue Peter Badge (among others)
 
Progress doesn’t come from focusing on the environmental issues or problems – it comes from awareness that leads to solutions. In The Power of 8 Billion: It's Up to Us, Natalie Pace tells us why gratitude is more important than hope today. We need to act and commit to create a better world for our future generations. Let’s get inspired from the stories, people and organizations that are healing the environment.
Sainath & Sai Sahana Manikandan, award-winning student activists, Abu Dhabi
 
Having known Natalie for nearly two decades, there are three things she is obsessively passionate about: the need to protect our environment, the power of gratitude, and helping others achieve and maintain abundance. In this book she breakdowns what is happening, and why and how we can be proactive to shift the tides of change to what we want, instead of what we fear.  
Brianna Brown Keen, actress, producer, author of Manifesting Your Mission Guidebook, Founder/CEO of the nonprofit The New Hollywood
 
 
The book The Power of 8 Billion: It’s Up to Us is so important!!! At a time when politicians seem to come up with nothing else but promises, it provides sound information about climate change and clear descriptions how we as citizens can help to address the problem. It provides not only the facts, but also describes how individuals can reduce carbon emissions and climate change. Since both the challenges and solutions are described in an engaging and jargon-free language, it is ideal as a textbook for use in schools, in further education colleges and at universities.
Carlo Leifert, Organic farmer and Adjunct Professor, SCU Plant Science, Southern Cross University, Australia.  
 
​


The Retreat Sweepstakes entry period expires April 22, 2022. Anyone who has emailed us on or before April 22, 2022 with The Power of 8 Billion Sweepstakes in the subject line will be entered in the drawing. Winners will be chosen and notified on or before June 15, 2022. There is no cash value for the prizes.

​

​About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The Power of 8 Billion: It's Up to Us and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 5th edition of The ABCs of Money was released on September 17, 2021. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.

Other Blogs of Interest
Should You Sell in April? 
The U.S. House Decriminalizes Cannabis Again.
Chinese Electric Vehicle Market Share Hits 20%.
The Risk of Recession in 6 Charts. 
High Gas Prices
How Will Russian Boycotts Effect U.S. Multinational Companies?
Oil and Gas Trends During Wartime
Russia Invades Ukraine. How Have Stocks Responded in Past Wars?
Zombie Companies. Rescue, Rehab or Liquidate?
Spotify: Music to my Ears. 
​Cannabis Crashes. 
2022 Crystal Ball in Stocks, Real Estate, Crypto, Cannabis, Gold, Silver & More. 
Interview with the Chief Investment Strategist of Charles Schwab & Co., Inc.
Stocks Enter a Correction
Investor IQ Test
Investor IQ Test Answers
Real Estate Risks.
​What Happened to Ark, Cloudflare, Bitcoin and the Meme Stocks?
Omicron is Not the Only Problem
From FAANNG to ZANA MAD MAAX
Ted Lasso vs. Squid Game. Who Will Win the Streaming Wars?
Starbucks. McDonald's. The Real Cost of Disposable Fast Food. 
​The Plant-Based Protein Fire-Sale
​What's Safe in a Debt World?
Inflation, Gasoline Prices & Recessions
China: GDP Soars. Share Prices Sink. 
The Competition Heats Up for Tesla & Nio. 
How Green in Your Love for the Planet?
S&P500 Hits a New High. GDP Should  be 7% in 2021!
Will Work-From-Home and EVs Destroy the Oil Industry?
Insurance and Hedge Funds are at Risk and Over-Leveraged.
Office Buildings are Still Ghost Towns.
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
​Gardeners Creating Sanctuary & Solutions in Food Deserts.
2021 Company of the Year
​Almost 5 Million Americans are Behind on Rent & Mortgage. Real Estate Hits All-Time High.
Rebalancing Your Nest Egg IQ Test.
Answers to the Rebalancing Your Nest Egg IQ Test.
Videoconferencing in a Post-Pandemic World (featuring Zoom & Teladoc).
Sanctuary Sandwich Home. Multigenerational Housing. Interview with Lawrence Yun, the chief economist of the National Association of Realtors. 
10 Budget Leaks That Cost $10,000 or More Each Year.
The Stimulus Check. Party Like It's 1999. 
Would You Pay $50 for a Cafe Latte? Is Your Tesla Stock Overpriced?
10 Questions for College Success.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
Why Are My Bonds Losing Money?
The Bank Bail-in Plan on Your Dime.

​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

The Wall Street adage is “Sell in May and go away.” However, does it apply during times of war, rising inflation, tightening monetary policy and elevated asset prices? Or should you be doing your rebalancing session now?

Last week, I outlined the risk of a recession in 6 charts. (Click to access that blog.) The S&P500 has recovered some of its losses on the year, but is still down -6.9% from the high of 4818.62, set on January 4, 2022. March bloomed with 5.2% returns and April is often sunny on Wall Street. However, stocks have been sliding so far this month. Additionally, there is a 1Q 2022 GDP report waiting in the wings that could overshadow any Spring glee that investors might muster up. According to the Minutes of the Federal Reserve Board’s FOMC meeting March 15-16, 2022, “The first quarter [GDP] pace was slower than the rapid gain posted in the fourth quarter of 2021.”

The 4th quarter of 2021 posted GDP growth of 6.9%, with full-year growth of 5.7% in 2021 (source: BEA.gov). That’s the fastest the economy has grown since 1984. You might think, “Well, slower than 6.9% might still be pretty good.” However, according to the FOMC’s Summary of Economic Projections, the 2022 GDP growth is projected to be just 2.8%. GDPNow, offered by the Federal Reserve Bank of Atlanta, warns that the 1st quarter of 2022 might have slowed to just 1.1% GDP growth. Asset valuations are still far too high for that slow of growth.

​U.S. Prices Are Too High for Slow Growth
As you can see from the well-known Buffet Indicator chart (above), equity prices are higher than they have ever been. History teaches us that when valuations get this lofty, the correction can be steep and severe. As one example, the most recent all-time high was February 2020 – right before the 2020 Pandemic Recession. Between February 19 and March 23, 2020, the S&P 500 sank -38%. That was the fastest that a bull market had become a bear.
 

​In the Dot Com Recession, which was another period of lofty equity valuations, the NASDAQ Composite Index bottomed out with up to -78% losses.

History books can tell you what happened in the Great Depression.
 
Growth is Growth
The US is a pretty resilient economy because we are so well-diversified and have so many leading industries that we’ve invested in over the years, including technology, biotechnology, electric vehicles, clean energy products, and many other devices and services that the rest of the world really likes. It didn’t hurt that we printed up a lot of money and passed it out everywhere, and paused payments on student loans, rent and mortgages during and after the pandemic. Most of the support has seen its sunset. The pause on federal student loans was recently extended through August 31, 2022.
 
There are other countries in the world that also make things that all of us like. China is the world’s factory. Indonesia is the leading producer of nickel, which is used in batteries for electric vehicles, computers and other things. Copper prices are at an all-time high and that benefits Chile (the number one producer in the world) and Peru (#2). Many of these other countries are expected to have much higher GDP growth in the US. Be sure to check out my videoconference on Hot Countries from April 2, 2022. The other upside to these countries is that their equity prices are not as lofty as the U.S.
 
The Safe Side is Vulnerable
I still hear a lot of people saying, “I have to invest in something on the safe side. I have to get some sort of income. Otherwise, I’m losing money, due to inflation.“ I think a more apt attitude toward the safe side of your money is one proposed by Will Rogers, who said, “I’m more concerned with the return of my money than the return on my money.”
 
Why is that quote so appropriate today? Over half of the S&P 500 is at or near junk bond status. Bonds are illiquid and negative yielding. In order to get any income at all, you have to take on risk. With rising interest rates, the patient investor could get a good yield on a creditworthy, short or medium term bond, if they just take their foot off the gas and wait for interest rates to rise. Having money available to buy into bonds when interest rates are higher could be a lot more valuable and yield more than getting locked into a long-term high-risk low interest-rate investment at this time.
 
Yes, We Had a Recession in 2020
I hear a lot of people saying they’ve been waiting for the correction, and it just never came. However, we had a recession in 2020. It was the shortest in history. Just prior to the recession, we had the swiftest about-turn from bull to bear in history. Money moves very fast these days. The Treasury Department cannot just print up trillions to save the day every time we hit troubled times. In fact, we are now in a monetary tightening trend – the opposite of free, easy money. I encourage everyone to read our Warning Signs of a Recession blog to get caught up on why you want to be properly diversified, keep at least a percentage equal to your age safe and consider overweighting another 10 to 20% safe, based upon market conditions. It’s also very important to know what safe looks like in a Debt World, where bonds are losing money. You can learn and implement these time-proven, 21st Century strategies by attending our June 10-12, 2022 Online Financial Freedom Retreat. Email info@NataliePace.com to learn more.
 
Bottom Line
2021 was an outstanding recovery year, after the pandemic threw the economy into a recession with -3.5% GDP growth in 2020. 2021 started the first quarter off with a bang of 6.4% GDP growth. This year’s predictions are for 2.8% full-year GDP growth, with the first quarter’s growth potentially coming at just 1.1%.
 
April could get stronger simply because it’s a traditionally strong month, Spring is happening and people get a little more optimistic about things. People also receive their tax return. We’ve seen stimulus checks increase share prices, and tax returns could as well. However, on April 28th at 8:30 am ET when the 1Q 2022 GDP growth report is issued, the Jubilee could end very quickly.

​The best strategy will not be market timing, or trying to jump all in or all out. Buy & Hope is a last century strategy that has been quite a disaster in the 21st Century. If you'd like to personalize your own sample Pie Chart, email info@NataliePace.com. 

If you'd like to learn 21st Century time-proven investing strategies to protect your wealth, or how to pick stocks from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 

On April 1, 2022, H.R.3617 The Marijuana Opportunity Reinvestment and Expungement Act (the MORE Act), passed the U.S. House of Representatives. On April 4, 2022, the U.S. Senate referred the bill to its Committee on Finance, which is chaired by Ron Wyden (D: OR). Senator Wyden is one of the sponsors of another piece of cannabis legislation, alongside Senators Cory Booker and Chuck Schumer. Below are a few important things to note about whether or not a cannabis decriminalization bill is likely to pass the Senate, and why criminal justice experts believe it is so important to pass now.

Will the U.S. become the Next Nation to Decriminalize Cannabis?
Is the bill likely to pass the Senate? The MORE Act passed the House largely on partisan lines. Three Republicans voted yes, and two Democrats voted no. Most political pundits believe that the act is destined to fail in the Senate. There it would require all of the Democrats voting “Aye,” plus at least 10 Republicans, for a total of 60 votes. Without that support, it is likely to fall under a filibuster.

Senate Majority Leader Chuck Schumer plans to introduce legislation that he, Cory Booker and Ron Wyden drafted “very soon.” They are currently seeking comments from senators on their draft legislation. Cannabis legislation is likely to be hotly debated over the next few weeks, as Senate Majority Leader Schumer seeks to prioritize cannabis legalization.
 
40% of U.S. Drug Arrests in 2018
 
According to the Pew Research Center, 40% of the U.S. drug arrests in 2018 were marijuana-related, mostly for possession. This is down from 52% of all drug arrests in 2010, largely due to the number of states that have decriminalized cannabis. The ACLU notes that “despite roughly equal usage rates, blacks are 3.73 times more likely than whites to be arrested for marijuana.”

Americans Favor Legalization of Marijuana
According to a Gallup Poll conducted in November of 2021, 68% of U.S. adults support legalizing marijuana. That’s way up from only slightly more than half in favor of legalization from a 2013 survey, and about 1/3 from 2001.

Which Companies Win if the U.S. Legalizes Marijuana?
Tilray is in an excellent position, not only with its many popular brands like Sweetwater Brewing, but also with its stake in MedMen, a retailer with a big footprint in California. There are a few other brands that could do well, including HEXO (through their Molson Coors JV brand Truss CBD USA). Check out my recent blog on cannabis for additional information. It’s worth repeating that decriminalization has many hurdles in The U.S. Senate that might trip up the legislation.

Meanwhile, Luxembourg is set to become the first European country to legalize weed. (The Netherlands has a “liberal” policy.) Germany has also promised to make recreational marijuana legal. Analysts believe the political process for legalization in Germany is at least a year out.

Bottom Line
Cannabis decriminalization is split on party lines in the U.S., which makes it vulnerable to a filibuster. Legislation would need to pass with 60 votes, rather than just a simple majority. Senate Majority Leader Chuck Schumer and Senators Booker and Wyden have made cannabis decriminalization a priority, and are trying to secure the votes for their bill. Americans are behind them. However, with 50 G.O.P. Senators (half of the Senate), there will need to be bipartisan support – something that has kept pot legalization a pipe dream in the land of the free and the home of the brave.


Full Disclosure: I own shares in a few cannabis companies, including Tilray and HEXO.

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If you'd like to learn 21st Century time-proven investing strategies to protect your wealth, or how to pick stocks from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 

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Chinese EV Market Hits 20%. Tesla Hits a Trillion (Again).
 
 
Sales of electric cars hit 6.6 million in 2021, more than tripling their market share from two years earlier, according to IEA.org. This amounts to 9% of the global market share, up from 2.5% in 2019.

China has the fastest EV sales growth, with 3.4 million sold in 2021, for 20% of the nation’s fleet in December – tripling the country’s sales of 2020. In fact, this year’s sales in China are more than all of the EVs sold in the world in 2020.
 
Europe’s 2021 EV sales were 2.3 million, with about half a million EVs sold in the U.S. Germany is the largest EV market in Europe, which is why Tesla just opened a factory in Berlin. Interestingly, however, Norway has the largest EV market share, with 72% of the country’s vehicles, followed by Sweden and the Netherlands, at 45% and 30%, respectively (source: IEA.org).
 
The growth of EVs in China and Europe bodes well for Tesla and the Chinese automakers. Sales have more than doubled for the Chinese car companies, with Tesla at 65% growth year over year. Meanwhile GM sales were down -10.5% year over year in the 4th quarter of 2021, and Ford was up a mere 4.8%. (Email info@NataliePace.com with Auto Stock Report Card in the subject line to receive that file.) Tesla sold 936,000 vehicles in 2021, with 480,000 produced in China. The company is expected to sell 1.5 million units in 2022, an increase of 60%. However, even with the wind at the back of EV automakers, that doesn’t mean that everything is smooth sailing.

Backlogs, Bottlenecks and High Commodity Prices
We are all feeling the pain of inflation, particularly anyone who still drives a gas-powered vehicle. However, so are our businesses. The auto industry has been hurt by rising costs of commodities, including nickel, and supply chain bottlenecks. Tesla favored auto sales at the expense of their solar and battery power businesses in 2021, which helped to keep their EV output robust. The question is, “Will that work in 2022?”

Tesla’s net income in the 4th quarter of 2021 was $2.3 billion. We won’t know how much these headwinds will impact Tesla’s revenue and profitability until they report on their quarterly Vehicle Production and Deliveries, likely on or near April 2, 2022, and their 1Q 2022 earnings report, around April 26, 2022. Nio’s February 2022 vehicle deliveries (6,131) were up 9.9% year over year, but were -36% below January’s (9,652). Ford also reported that total vehicle sales in February 2022 were down -20.9% year over year (and were flat in January).
 
The auto companies will report their March and 1Q 2022 production and deliveries tomorrow or Monday. Judging from what has already been released, the news is not predicted to be great, although it’s certainly better for electric vehicle manufacturers than for gas combustion engines.
 
Commodity & Nickel Prices
Profits are going to be under pressure for all auto manufacturers due to the increase in commodity prices, and particularly a nickel shortage due to Russian boycotts. On March 13, 2022, Elon Musk warned of this. Indonesia is the largest producer of nickel, followed by the Philippines and Russia.
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​As you can see in the chart below, nickel prices soared when Russia invaded Ukraine. According to S&P Global, about 70% of the world’s nickel production is used in stainless steel, with just 5% used to make batteries – the power behind electric vehicles. However, in order to increase range, more nickel is now being used in batteries, and it is a higher grade (Class 1, 99.8% purity). We’ll know just how pressing the situation is on the manufacturing side in the next day or two, when the vehicle deliveries reports are released by the automakers. Again, we won’t know how dire the pricing is until the earnings reports are released at the end of next month.

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Which Companies are the Most Vulnerable?
Electric vehicles are by far the fastest growing vertical in auto sales. Those newer EV-only companies are enjoying stellar growth. Those older companies that leaned into trucks and SUVs are suffering with sluggish growth and high costs. That competitive disadvantage is compounded by debt, liabilities, Other Post-Employment Benefits (OPEBs), and, in the case of Ford Motor Company, a junk bond rating.
 
Tax Credits
EV tax credits have helped Tesla and the Chinese EV automakers to incentivize consumers to buy. Tesla and GM no longer qualify for these credits in the U.S. China is cutting their NEV (new energy vehicle) subsidy by 30% in 2022 and will end the incentives at the end of this year. Click for a list of automobiles and their U.S. tax credits.

Valuation
Tesla stock is very expensive. The current P/E is 222, while the forward P/E is 104. An average P/E is about 17. Yes, growth stocks can take a slightly higher P/E. However, should a company with $5.5 billion in net income and $54 billion in revenue be worth over a trillion dollars? Are retail investors factoring in price or just following the memes?

​Bottom Line
It’s a risky time to be buying high in auto stocks, even EV auto stocks, particularly given the war, inflation, rising interest rates, negative yield curve and high gas prices – all of which can drag the economy into a recession. While Tesla is trading near its all-time high, some of the Chinese automakers with higher growth are trading near their 52-week lows. So, if there is an April rally, at least some of these can be picked up for a bargain.

​Full Disclosure: I own shares in a few Chinese EV makers.

If you'd like to learn 21st Century time-proven investing strategies to protect your wealth, or how to pick stocks from a No. 1 stock picker, join us for our June 10-12, 2022 retreat. Email info@NataliePace.com or call 310-430-2397 to learn more and to register. Click on the banner ad below to discover the 18+ strategies you'll learn and master. 
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