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Investors' addiction to this drug will send these shares higher than ever!

by , 23 May 2013

The world's currently like an addict, hooked on drugs.

You see, investors, consumers and business owners the world over are now dependant on cheap money and its maker, artificial stimulus, in order to survive.

And the longer it gets it, the more it needs it. Like an addict searching for a bigger fix, the markets crave more stimulus.

How did this happen?

Well, when times were tough in 2008 and 9, and the US economy was stalling, the US Federal Reserve Bank (Fed) needed to take action to avoid economic collapse.

And the action the bank took was to inject billions of dollars into the US economy. Effectively, the Fed provided artificial stimulus to maintain the US economy.

This has now left the Fed in a tough spot…

Simply put, the Fed has created a stimulus drug the markets are demanding more and more of. And the addiction to this drug has now reached such epic proportions; even the Fed itself doesn’t know how to put a stop to it without causing a crash.

And this means one thing for you…

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As long as the market gets its fix of the stimulus drug, shares are heading higher

Right now the stimulus drug injection has reached $85 billion dollars per month. And on top of this US stimulus, Japan is injecting $75 billion each month with its own stimulus programme.

Combined, that means there’s more than R1,520 billion rand being pumped into the markets each month.

That’s one and a half trillion rand looking for a place to be spent or invested each month. Or another way to look at it is, you could buy all of SAB Miller and BHP Billiton, two of the JSE’s biggest global companies, and still have R100 billion in change… Every month!

This amount of stimulus is so big and the markets are so dependent on it, the Fed’s top brass has openly said they don’t know how to stop it.

On Wednesday, Federal Reserve Bank of New York President, William C. Dudley said, “I don’t really understand very well how the tug-of-war between the fiscal drag and the improving economy are going to sort of work their way out.”

In plain English, he was saying he simply doesn’t know what will happen if the Fed stops stimulus. And he went on to say he expects it will take at least another three to four months before we’re even able to decide whether the Fed can even consider slowing the stimulus, let alone stopping it.

That tells you, these massive amounts of money will continue to flow into the markets.

It means, for now, shares are only going one way… Up.

And if you buy the right kind of shares, you could really see your profits jump.


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These shares will bring you big gains on the back of the markets stimulus addiction

To really cash in on all this market stimulus, you want to get into shares known as growth shares. These are companies with massive growth potential and markets they can expand into.

And it’s these companies that will run the hardest as investors, looking for growth, funnel all this stimulus money into them.

I’m talking about companies like Naspers, Pinnacle, and Invicta.
These are the kinds of companies that will reward investors as the stimulus money drives their profits higher and higher.

To learn more about how you can invest to take advantage of whatever the markets throw at you make sure you’re getting your monthly newsletter from the South African Investor. For details click here.

Investors' addiction to this drug will send these shares higher than ever!
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