Markowski: ​Predictions and Top Pick for 2017

Michael Markowski  |

With the onset of the New Year it’s time to take a moment and reflect on what happened in 2016 and what will likely happen during 2017. Negative and historically low interest rates and yields dominated 2016’s Headlines. My prediction is that high interest rates and a stronger U.S. Dollar will dominate for 2017. My top stock pick for 2017 is Live Ventures (LIVE).

Negative interest rates and yields at their all-time lows was the theme that will be remembered for 2016. From February to when Trump was elected, I was extremely defensive and was prepared for a crash. My primary recommendation during the period was to effectuate a black swan or a 90/10 crash protection strategy with 90% of liquid assets invested into short term U.S. Treasuries and the balance into high risk stocks or venture capital.

My article, “Digital Transformation Creates Industrial Graveyard” stands up best. The argument made was that the digital economy was immune to recessions and depressions since its business model is based on disrupting the brick and mortar economy. All six of the buy recommendations that I made in the article appreciated by 4% to 52%.

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There will be three dominant themes for 2017. My November 21, 2016, article “Trump Brings Small Company Tailwinds, Big Company Headwinds” covers items 1 and 2 below:

I am recommending a defensive posture and that a significant portion of liquid assets be invested into short term Treasury securities. There will be an opportunity to buy long term bonds during the first half of 2017.

The big risk for 2017 is a U.S. recession that could begin in the second half of 2017. The recession would be caused by an appreciating U.S. Dollar and higher U.S. interest rates.

My primary focus for 2017, is on the deeply undervalued micro-cap companies which are the most undervalued that I have witnessed though out my 40 years in the markets. The Dodd Frank Act, which for the first time ever made brokers criminally liable for recommending speculative shares culminated with the micro-cap market crashing in 2016. The crash was the impetus for me to begin my hunt to find the 100 best microcaps and for my decision to launch the Trophy Investing 100™ premium research offering.

For the first half of 2017, I am also recommending large cap digital economy companies which are undervalued based on their Free Cash Flow Yields. This includes Microsoft (MSFT). See “Microsoft Now Favored to Win ‘1st to Trillion’ Sweepstakes” , December 24, 2016. Finally, I predict that the S&P 500’s close at the end of 2017, will be lower than its 2016 close. See my December 2, 2016 article, “Hangover from Trump Market Party to Cause Recession; History Repeats Itself”.

Throughout 2017, my focus will be to utilize my cash flow expertise and analytics to identify and recommend the shares for those companies which are extremely undervalued to be bought. Conversely, I will utilize my cash flow expertise and analytics to identify and recommend the shares of those companies that are great shorts. When the next recession arrives, I predict that there will be many short selling opportunities.

My pick, Live Ventures, Inc. (LIVE), was one of the micro-caps that I recommended in my November headwinds and tailwinds article. I am also predicting that LIVE shares will be the top performer for the stock market in 2017 even though its share price has already increased by 50% since being recommended. See also, my, “Live Ventures Diagnosed With Second Rare Cash Flow Anomaly” December 30, 2016. LIVE shares rank as my best ever micro-cap find ever for the following reasons:

Throughout 2016, I recommended a total of 11 companies in all of my articles that were published by equities.com. All of the companies were recommended in either my “Digital Transformation Creates Industrial Graveyard” or my “Trump Brings Small Company Tailwinds, Big Company Headwinds” article.

Performance for Trump Brings Small Company Tailwinds, Big Company Headwinds Equities.com 11/21/16 article recommendations

Company

Price @ 11/21/16

Price 12/30/16

% Change

Live Ventures (LIVE)

$15.30

$24.02

57%

First Choice Healthcare Solutions (FCHS)

$1.17

$1.60

37%

Accelerize (ACLZ)

$0.40

$0.52

30%

Intellicheck Mobilisa (IDN)

$2.56

$2.75

7%

CopSync (COYN)

$1.00

$0.82

-18%

To benefit from my sifting through the aftermath of the crash to find and recommend the best 100 micro-caps as soon as possible, I recommend a subscription to the Trophy Investing 100™which includes a free two-week trial. A subscription includes access to ongoing research coverage for the named companies including Live Ventures. My policy is to provide continuous research coverage on every company named to the Trophy Investing 100™ for a minimum of three years.

The 4 minute 34 second video below titled "Diverging Market Creating Rare Investing Opportunities" is about the divergence of the markets, which was created by Dodd Frank.

For an overview about me and access to links to the subjects that I cover, including the digital economy, negative rates, perfect shorts, and micro-cap stocks please go to www.michaelmarkowski.net.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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