A $40 Trillion Investment Committee Gambled and Lost

The world's most important investment committee made an odd choice last March... [Chaikin PowerFeed]( A $40 Trillion Investment Committee Gambled and Lost By Pete Carmasino, chief market strategist, Chaikin Analytics The world's most important investment committee made an odd choice last March... In short, it added an online gambling stock to the powerful index that it oversees. The gambling company was one of the COVID-19 pandemic's so-called "meme stocks." Outspoken Barstool Sports founder Dave Portnoy might've had some influence, too... Portnoy put the company on the investment map with his antics. And it made him wealthy... You see, the company had bought 36% of Barstool Sports from Portnoy in early 2020. In return, the digital sports media firm got $163 million in cash and stock. In March 2021, the company's stock peaked at more than $130 per share – up more than 250% from when the Barstool Sports deal closed. That's when the world's most important investment committee decided to add it to the world's most important stock index. It was a gamble... And the investment committee lost. Recommended Links: [Summary of This Week's Emergency Market Briefing]( 2022 has been a tough year for investors, but that stops today. Especially for you. Tune in now to hear from a chief analyst on how to survive and even thrive in today's turbulent market... including a bold new prediction you won't hear anywhere else. [Click here for details](. [Your Plan for 10% Inflation]( The market is deep into "bubble" territory. And no matter when the next crash arrives – out-of-control inflation is already here, right NOW. It's at the highest level in 40 years, and could soon surge past 10%. But there's ONE group of stocks that could protect your savings and likely outperform everything else for the next 5-10 years... including a unique gold play that could soar 1,500% from here. [Full story here](. The company we're talking about is Penn National Gaming (PENN). On March 22, 2021, a week after the company's stock peaked, the investment committee that oversees the S&P 500 Index decided to add it to the index. To be fair, Penn National doesn't make up a huge weighting in the benchmark stock index... But it's still a member. Folks, more than $40 trillion of market cap is pegged to the S&P 500. It's hard to understate how big it is when a company gets added to the index. And yet, the investment committee couldn't have had worse timing with Penn National. Take a look... [Chaikin PowerFeed] The takeaway is clear... The world's most important investment committee made a bad call. Now, this secretive group of folks didn't give their rationale for the pick. But their methodology states that they look for companies that meet certain criteria for market cap, revenue, and earnings history. We can't help but wonder what they were thinking, though... Maybe it was the call from Goldman Sachs (GS) on the projected growth of online sports betting. Around the same time, the investment bank said the industry could grow more than 40% annually through 2033. Or maybe it was the success of Portnoy and his followers. They pushed the stock up so high from the depths of the COVID-19 pandemic that the committee could no longer ignore it. No matter the reason, Penn National checked all the boxes for the investment committee. But not even a year later, the stock wouldn't qualify for the S&P 500 based on its published rules. Its market cap of roughly $8 billion is too small for the esteemed index. To be eligible for inclusion in the S&P 500 when Penn National was added in March 2021, a company needed a market cap of at least $11.8 billion. Today, the market-cap threshold is even higher – $13.1 billion. Now, the investment committee behind the S&P 500 might not have seen Penn National's plunge coming. But our Power Gauge system sure did... The stock hit its high on March 15, 2021. And our unbiased, non-human-interfering ratings system downgraded it to "bearish" a week later. It traded for about $113 per share at the time... [Chaikin PowerFeed] Penn National closed at a low of $40.92 per share on January 21, 2022. That's a 70% loss in 10 months. We'd call that a "dumpster fire" on my old trading desk. Of course, we'll never know how the investment committee that oversees $40 trillion in market cap within the S&P 500 got this so wrong. It could've been a combination of things. And frankly, it doesn't really matter. The point is, even the folks with all types of data at their fingertips can pick a bad stock. But in this case, our Power Gauge wasn't fooled... It saw Penn National's downfall coming. Even today, Penn National is still in a negative trend as it trades near its recent lows. In the end, market forces win every time. And if you don't use a solid process to identify those forces, you'll always be the last to know. Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -1.34% 5 22 3 S&P 500 -1.75% 65 359 74 Nasdaq -2.56% 8 70 20 Small Caps -1.88% 166 1165 544 Bonds -1.38% Energy +1.03% 17 4 0 — According to the Chaikin Power Bar, Small Cap stocks are more Bearish than Large Cap stocks. Major indexes are mixed. * * * * Top Movers Gainers [rating] TAP +4.57% [rating] CDNS +4.19% [rating] PSA +3.23% [rating] CTRA +2.88% [rating] CZR +2.76% Losers [rating] TSLA -7.00% [rating] MRNA -6.37% [rating] CCL -6.04% [rating] FRC -5.66% [rating] STT -5.63% * * * * Earnings Report Reporting Today Rating Before Open After Close OXY AMT, CBRE, DISCA, IRM, NEM, NRG, PWR DISH, ETSY, INTU, MNST, MRNA, UHS NCLH, PEG ADSK, AEP, EIX No earnings reporting today. Earnings Surprises [rating] LYV Live Nation Entertainment, Inc. Q4 $-0.96 Missed by $-0.44 [rating] EXR Extra Space Storage Inc. Q4 $2.00 Beat by $0.60 [rating] VICI VICI Properties Inc. Q3 $0.31 Missed by $-0.14 [rating] PODD Insulet Corporation Q3 $0.43 Beat by $0.10 [rating] BKNG Booking Holdings Inc. Q4 $15.83 Beat by $2.31 * * * * Sector Tracker Sector movement over the last 5 days Staples -0.64% Energy -1.37% Utilities -1.92% Real Estate -2.85% Health Care -3.03% Materials -4.51% Financial -4.70% Industrials -5.36% Communication -5.99% Information Technology -7.24% Discretionary -9.24% * * * * Industry Focus Health Care Equipment Services 3 38 43 Over the past 6 months, the Health Care Equipment subsector (XHE) has underperformed the S&P 500 by -16.38%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #18 of 21 subsectors and has moved up 3 slots over the past week. Indicative Stocks [rating] AORT Artivion, Inc. [rating] NEOG Neogen Corporation [rating] TMDX TransMedics Group, I * * * * Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities or any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness. Users bear sole responsibility for their own stock research and decisions. Read the full disclaimer at [(. You have received this e-mail because you subscribed to PowerFeed, published by Chaikin Analytics. To stop receiving PowerFeed daily, click to [unsubscribe](. 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