Update -

More Evidence That It’s Time to Buy

Here’s an oddball fact that shows why I’m so worried about the fate of the American economy… and why I’m telling anybody who will listen that now is the time to buy like hell.

Get this…

Roughly one-tenth of 1% of companies in the United States are publicly traded. Out of the 6 million or so companies with a payroll, nearly all of them are privately owned.

And yet… more than 40% of all sales and 80% of pre-tax profits go to publicly traded companies.

Size certainly matters here. There are no trillion-dollar companies that are privately owned. The big boys of the S&P 500 are certainly swaying the numbers.

But that’s not the point.

The point is that there is a lot of investor confusion out there. The media’s talking heads continue to debate why the stock market is surging at the same time as Congress is rushing to pass yet another huge stimulus deal.

How can stocks soar when the economy – in America and abroad – needs one shot of adrenaline after the other?

The answer lies in those numbers above.

We can see them in the earnings reports from Amazon (AMZN), Home Depot (HD) and Walmart (WMT).

In mid-May, retail sales fell by more than 90% from the same time last year. In April, the number soared as high as 98%.

The small shops that make up the downtown area of Hometown USA are suffering badly. The stimulus dollars created by Congress’ rule of law and printed by the Federal Reserve can’t help these companies. Their doors have been forced closed.

But Walmart, for example… it’s essential.

Its sales have soared – up nearly 10%. Things haven’t been this good in 20 years.

All those unemployment checks and stimulus dollars have found a place to go.

And I’m not the only one who has noticed.

“The stimulus might as well be called the Amazon and Walmart shareholder act,” said Scott Galloway, a business professor at NYU. “There are some unintended consequences here. The strong are getting stronger.”

We’ve seen the trend growing over the last 20 years or so.

The Next Bull Market Stampede

But now, after several boom-and-bust cycles, we’re seeing quite a remarkable pattern. Congress stimulates, the Fed prints… and the bulls stampede down Wall Street.

It pushed tech stocks to sky-high levels. It led to a seemingly unstoppable 11-year bull market. And now it’s leading to another fast charge that is likely to be bigger and faster than anything we’ve seen before.

Painting with broad strokes, the nation’s private sector has been slammed during this economic crisis. The smaller the company, the more pain it’s seen.

But huge swaths of the publicly traded sector are seeing enormous strength. Again, the bigger, the better.

If you’ve scratched your head and wondered where all of those trillions of freshly printed dollars will ultimately end up… scroll up and read those numbers again.

More than 80% of the nation’s profits come from the public sector. And with trillions of dollars of fresh funny money getting dumped into the economy… you don’t want to be stuck on the sidelines.

The news isn’t great. It’s not fun to be the messenger of such a dire trend.

But the takeaway is clear. It’s time to buy like hell.

And before we dive into our portfolio, I want to share a note I received from one of my Alpha Money Flow subscribers late last week.

It’s quite good…

Hey, Andy! I just wanted to write in and tell you, I got my first 1,000% bagger from one of your recommendations in a special report. I bought it in January for $4.59 and it has traded as high as $61.50 in the past few days. You need to claim this! I can’t believe I haven’t seen anything about it. My only complaint – I wish I bought more!!! – Subscriber D.A.

Not bad. And as a reminder… those are not options gains. The stock has soared that much in the last six months!

Like I said, it’s a great time to own stocks!

Long America, Short China

One play within our model portfolio to watch this week is the ProShares Short FTSE China 50 ETF (YXI). Since I mentioned this trade in last week’s market update, the bad news for China’s economy has continued to pile up.

The biggest story, though, is that folks on Capitol Hill are pushing for a potential delisting of Chinese stocks from American exchanges. If the idea gets traction, our play that profits as China falls could see a strong boost.

Washington is pushing the notion as a way to force more transparency into the market. Most Chinese stocks listed on American exchanges are not audited the way domestic firms are. It creates ample room for inflated or simply false numbers.

If delisting becomes reality, it will send shock waves through China’s market that will surely push shares of this inverse ETF higher.

In similar news, China fixed its yuan at its weakest level to the dollar in 12 years. It’s a sign that times aren’t all that great for the country and it’s expecting more trouble as trade tensions begin to flare up once again.

It’s a story to keep an eye on.

I’ll let you know what I find.

Finally, our shares of KBR (KBR) jumped out of the gate this morning, surging by more than 8%.

The play ties handily to the idea above – that publicly traded stocks will get an outsized portion of government handouts. As a construction company with efforts spread across the globe, it’s in a great position to tap into stimulus efforts from governments around the planet.

In a world where government seems to be the only thing keeping the economy moving forward… a stock like this is quite powerful.

Proving the notion, the company recently announced another $0.10-per-share dividend, keeping pace with recent payouts. It’s a strong sign that management doesn’t see any major obstacles ahead.

When so many dividend payers are cutting… KBR is proud to keep writing checks to shareholders.

It’s good news all around.

Be well,

Andy