by Ian Cooper
There’s a lot of fear in the market.
The Federal Reserve is getting far more aggressive in its fight against inflation. There are fears we’re already knee-deep in recession. Consumers are struggling with prices we haven’t seen in 40 years. And investors are terrified. But it’s creating big bargains in the process – for contrarian investors who are taking full advantage of the chaos and fear.
Remember, one of the best ways to make money is by trading fear – just like famed investors have done. Sir John Templeton taught us to buy excessive pessimism. Warren Buffett says that a “climate of fear is your friend when investing; a euphoric world is your enemy.”
Even Baron Rothschild once told investors, “The time to buy is when there’s blood in the streets, even if the blood is your own.”
It’s ridiculous how oversold some of these stocks have become.
Look at Target (TGT), for example.
With a dividend yield of 2.72%, TGT is incredibly oversold.
Yes, the company fell on hard times. Supply chain issues caused a headache. The company was forced to cut its guidance twice, and missed on recent earnings.
But it appears most of the negativity has been priced into the stock. Now, not only is it over-extended on RSI, MACD, and Williams’ %R, analysts are back with upgrades.
According to TheFly.com: Jefferies analyst Corey Tarlowe upgraded Target to Buy from Hold with a price target of $185, up from $170, after taking over coverage of the name. Amid a “challenging macroeconomic backdrop,” a “subdued” valuation and improvements in supply chain and inventory positioning support a bullish stance on Target. The analyst believes second half of 2022 risk exists but says 2023 will likely realize margin improvement. Target is better positioned than the broader retail set at present.
Or, look at Amazon (AMZN).
At $116 a share, AMZN has been severely beaten down.
But it’s likely to rebound, heading into the 2022 holiday season. Granted, there are fears that inflation could damage sales, but it may not be as bad as feared.
According to the National Retail Federation: “Many consumers plan to prioritize holiday gifts and celebrations even if it means cutting back in other areas or shopping early. An NRF survey of 2,000 consumers conducted in late September found that 62% of holiday shoppers agree that it is important to spend on holiday gifts and celebrations. And they will do what they need to, even cutting back in other areas, so their loved ones can celebrate like they always do.”
Or, consider electric vehicle stocks, like Blink Charging (BLNK).
At $15.08, BLNK is sitting at triple bottom support dating back to May. If it can hold support, it could push back to $25, near-term.
For one, according to Fortune Business Insights, “Governments worldwide are contributing towards setting up the charging stations. For instance, the Chinese government has approved the development of fast-charging stations by national policies. Similarly, in the United States, the government is offering all its support and funds to develop EV charging stations.”
Two, California is set to prohibit the sale of gasoline-powered calls by 2035. Three, the Biden Administration is committed to build a national network of 500,000 EV charging stations by 2030, with a goal of every new car sale being electric by 2030.
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