Editor's note: The market and our offices are closed Monday, September 4, for Labor Day. Because of this, we won't be publishing Altimetry Daily Authority. Please look for your next edition on Tuesday, September 5.

In mid-2009, it seemed like everyone was panicking about the economy... except Joel and me.

Some folks wondered if the economy would ever recover. They thought it was the end of the market as we knew it... that stocks couldn't possibly bounce back again.

But in the middle of all that, Joel (my colleague and the founder of Altimetry) left a very successful job at Credit Suisse. And I left my own very successful job at a hedge fund.

Essentially, we saw that the market had entered rough seas – and dove in headfirst. But we had a good reason...

In the middle of a once-in-a-generation crisis, we saw an opportunity. A big part of the upside would come from ditching the safety of the ship while investors were in a panic.

And a big part of that panic was because folks didn't understand what was happening... or where the risk was.

Back in 2009, there was complete lack of quality investment research to paint the way for Wall Street. Joel and I knew we could fill that void. Thus, Valens Research – the institutional arm of Altimetry – was born.

This isn't intended as a history lesson. And while I'm proud of our achievements, I'm not telling you this story to brag about our business.

As I'll explain today, the ability to reframe a market crisis is invaluable as an investor... and it's what will set you apart in the next downturn.

Quite frankly, Wall Street was totally upended by the financial crisis...

And yet, Joel and I were incredibly bullish.

Our macroeconomic data showed that right as the market reached its point of maximum pessimism, investors should have been buying.

In March 2009, just as our clients were most panicked, we instructed them to buy as much as they could.

We recommended industrial cooking supplier Middleby (MIDD). Within five years, the stock had soared more than 1,000%. Likewise, apparel maker V.F. Corporation (VFC) was dirt-cheap in 2009. By 2014, the stock had more than quadrupled.

The same was true early in the pandemic. Just a week or two after the U.S. shut down, investors were tripping over themselves to get out of stocks.

We saw a massive opportunity.

Corporate balance sheets were strong. The U.S. was stepping in to support businesses and individuals with stimulus. So we started to look for the kinds of companies that would do best in this new environment.

Everyone was stuck at home. They couldn't pursue their usual hobbies... or even work or go to school in the usual way. They'd need more things in their homes to support this new way of life.

So we compiled a list of "At-Home Revolution" opportunities – stocks that would benefit as folks found new ways to entertain themselves, work, and learn at home.

We recommended companies like speaker maker Sonos (SONO) and at-home health business Teladoc Health (TDOC) in our Altimetry's High Alpha advisory. Within about a year, subscribers who followed our advice had booked gains of 211% and 87%, respectively.

If we'd been busy focusing on the negative, we never would have found these winners. The key was to reframe the pandemic as a "change point"... to look for new opportunities being created by the crisis.

The next big opportunity is coming soon...

When I think about many of the ideas that Joel and I have pursued, they've really been about being patient and tactical. When danger hits, turn that danger a change point. And turn that change point into an opportunity.

Through the ebbs and flows of the news cycle, we've kept our opinion straight – things don't look great for today's market.

Last October, the 10-year/three-month yield curve inverted. That's a reliable indicator of a coming recession... typically about 18 months in the future.

We're still well within that range. And yet, the market seems to be getting too comfortable with the idea of a "soft landing" for the economy.

Stocks are still chugging along for now. But considering the data we're seeing from the credit market, we don't expect that to last forever.

Sooner or later, the market will come crashing down.

Many investors will panic... but those who have been preparing will see a massive, compelling opportunity.


Rob Spivey
September 1, 2023