12 Shocking Stocks Making New Highs

When it comes to stock market and economic analysis and predictions, it’s been a perennial broken record of fear and loathing for the last five years…

• We’re in another great depression
• We’re in a great recession
• This is the new normal
• There’s no place to hide
• Investors are frozen with fear

And it’s not just John Q. Retail Investor who’s bewildered by the stock market. Legendary investors are stumped, too.

On August 1, hedge fund legend Louis Bacon, fund manager of Moore Global Investment, announced he was returning $2 billion to investors. $2 billion represents roughly 25% of his investment fund.

You may not recognize the name Louis Bacon. Along with George Soros, Bacon has come to define the Wild West nature of macro-global investing by hedge funds.

Bacon cited 18 months of what he called “disappointing” investment returns — and a rather tough second quarter that saw his fund down 3.18%.

At the same time Bacon announced he was giving $2 billion back to investors, another investment legend was echoing similar sentiments…

Bill Gross — the King of Bonds and head of the largest bond management firm in the world — wrote in his monthly investment letter for August:

The cult of equity is dying. Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of “stocks for the long run” or any run have mellowed as well.

I “tweeted” last month that the souring attitude might be a generational thing: “Boomers can’t take risk. Gen X and Y believe in Facebook but not its stock. Gen Z has no money.”

When not one but two investment giants like Bacon and Gross announce the stock market is finished, my contrarian alarms go off like a tsunami warning.

You see, the prediction that stocks are dead is nothing new…

You might remember the now famous BusinessWeek cover from August 13, 1979. The headline on the cover read: “The Death of Equities.”

On the day the issue ran, the Dow closed at 875.

Now fast-forward 33 years: Last Friday, the Dow closed at 13,207.

Do the math. The Dow is up over 1,400% since that ominous prediction ran in BusinessWeek.

In fact, the Dow is up 6.5% this year!

The market actually looks good. The Dow is making higher highs and higher lows — the very definition of an uptrend.

But you can’t convince people that things are actually good. And the reason for this is simple…

It has to do with how we’re hardwired.

You see, we’re slaves to a thing called the amygdala. The amygdala is a small part of the brain that is responsible for primal emotions like fear.

When it’s a competition between pain and pleasure, pain wins out every time.

And that’s because we’re built to survive first — to avoid situations that would cause pain or death.

According to authors Peter Diamandis and Steven Kotler in their excellent book, Abundance: The Future is Better than You Think:

These days, we are saturated with information. We have millions of news outlets competing for our mind share. And how do they compete? By vying for the amygdala’s attention. The old newspaper saw “If it bleeds, it leads” works because the first stop that all incoming information encounters is an organ already primed to look for danger. We’re feeding a fiend.

Pick up the Washington Post and compare the number of positive to negative stories. If your experiment goes anything like mine, you’ll find that over 90% of the articles are pessimistic. Quite simply, good news doesn’t catch our attention. Bad news sells because the amygdala is always looking for something to fear.

Now, I’ve been telling you about sectors in the market that are actually making multi-year and, in some cases, all-time highs…

Housing, biotechnology, railroads, and pharmaceuticals are making record highs as you read this.

But there’s a group of stocks that you should really pay attention to. These stocks are the very definition of discretionary spending.

And if these stocks are making YTD and 52-week highs, things can’t be all that bad.

I’m talking about entertainment and leisure stocks.

Disney recently announced the greatest quarter in the company’s history. Amusement park stocks Six Flags Entertainment and Cedar Fair are sitting at all-time record highs.

Needless to say, these stocks are having a great recession.

Here’s a list of 12 stocks I’m tracking to gauge the health of the American consumer:

It’s hard to feel bad when an amusement park stock like Cedar Fair has outperformed the Dow this year by a factor of 5.75.

Remember, there’s always a bull market somewhere.

The original bull on America,

Brian Hicks

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Brian is a founding member and President of Angel Publishing. He writes about general investment strategies for Wealth Daily and Energy & Capital. For more on Brian, take a look at his editor’s page.