Postcards: When the Financial Markets Burn... Buy This Stock

History doesn't repeat... but it rhymes. For that reason, Ternium (TX) has been a reversion winner when the central banks start pumping QE like mad. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: When the Financial Markets Burn... Buy This Stock]( History doesn't repeat... but it rhymes. For that reason, Ternium (TX) has been a reversion winner when the central banks start pumping QE like mad. [Garrett {NAME}]( May 8   [READ IN APP](   Market Update: It’s very odd… our S&P 500 signal is bouncing back and forth today. There is still a large undercurrent of selling in this market - especially on the Russell 2000. Weakness in healthcare is apparent. Be careful in these final hours today. This feels like it could roll over to yellow very quickly. --------------------------------------------------------------- Dear Fellow Expat: On the way to the office this morning, my daughter started crying. My wife ran down the steps and said, “Can you come say Goodbye to her… again?” I already had. But it turns out that she was “half asleep” the first time I said goodbye. This comes a day after she got mad at the dog at 8 am for sneezing on her. Crank-y. It seems she inherited my love for mornings. Do they have children’s coffee? I had my first espresso about 30 minutes later. I was digging into insider buying activity over the last two months. It’s been weak, with a handful of buys on Intel Corp. (INTC), MSCI (MSCI), Walgreens (WBA), and Energy Fuels (UUUU). But while looking at our traditional screens for reversion momentum, an interesting name appeared on the list. It isn’t a stock that’s underperforming. It isn’t a stock that had a bad quarter and might attract some big hedge fund. No… it’s just a stock that, when things get BAD… becomes a screaming buy. Why? Because it benefits from the never-ending tap of central bank easing to abate ongoing global economic crisis. Let’s discuss. When Crisis Unfolds I’ve long described this chart as finance's most important macroeconomy image. It shows insider buying and selling among executives at companies over the last 15 years. As you can see, insider buying has been strong during six periods… - 2008-09: After the Great Financial Crisis. - 2011: After Europe’s austerity crisis mixed with a crisis in the U.S. debt ceiling - 2015: After China’s economic policies imploded, fueling a dramatic expansion of the Peoples Bank of China intervening. - 2018: From September to December, buying rose over concerns about 2.5% interest rates, the threat of recession, and the impact on bond prices. - 2020: During the COVID crisis. - 2022: The GILT crisis and the bottom of the most recent global liquidity cycle (Howell). Each time we had a correction or a “crash.” But then, we witnessed dramatic support offered by the Federal Reserve, Bank of England, European Central Bank, Bank of Japan, and/or People’s Bank of China each time. Each time, those periods were marked by lows in the market. As we layer over the dips with strong buying patterns, we can estimate when the worst is ending. The insiders love to tell us. So, massive levels of insider buying tend to complement a shift in policy that benefits the market. We want to buy back into the market when insiders' collective wisdom results in them slapping down their own cash for stocks. However, not every company will see rampant levels of insider buying. Below, you’ll see that Ternium SA (NYSE: TX), a South American steel producer, has recovered VERY nicely with each round of central bank intervention, which coincides with insider buying. Here’s Ternium’s chart, which shows what aligns with insider buying strength and the market bottoms of the last 16 years. Ternium is a solid company historically, but its international nature doesn’t really drive a lot of insider activity—there is just a focus on 13D and 13G filings. Ternium typically maintains a high F score, signalling financial solid discipline, improving profitability, and increasing operational efficiency. It typically has a high earnings yield, and analysts tend to be bullish. This is the ultimate CRASH STOCK. Buy it with both hands when the markets bleed. Pay very close attention to the long-term conditions of the market. When equities get oversold, likely, Ternium is as well, and a 12- to 18-month reversal looks possible. History doesn’t always repeat… but it’s rhyming here. Please keep it on your watch list… always. Finally We’re beating the S&P 500 on the year with our Model Portfolio. We’re outpacing the average S&P 500 stock by more than 600 basis points while topping the S&P 500. We announced a new stock last week, arguing there’s at least a 10% upside over the next month. Meanwhile, our shipping portfolio continues to dominate - with my favorite stock up 31% this year since January. Learn how we find momentum stocks for a defensive portfolio. We’ll dig deeper into this portfolio tomorrow. [Upgrade to paid]( Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()