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It’s a trip worth taking – for a couple of reasons.
There’s an interesting cast of characters, including a powerful American broadcaster, a quarterback with a killer nickname, a family-oriented movie, and (amazingly enough) Walt Disney.
And there are some nifty lessons.
Indeed, in an ironic little twist, this tale from football’s past will shed a predictive light on the stock market’s near-term future. And it will even give you a bit of intelligence about what stocks to grab now to cash in before 2022 comes to an end.
So let the journey begin with the simple lesson of the story we’re about to share: Be careful not to give up too early – the costs can be high, and the fallout can be stunning.
More specifically: A lot of folks want investors to give up on the 2022 fourth quarter before it even gets started.
Their Bearish Forecast Conflicts with Our Bullish OneInvestment bank Morgan Stanley is predicting a fourth-quarter free fall in stocks, one that will chop the S&P 500’s value by more than 16% by the end of the year.
Hedge fund manager Michael Burry, who was immortalized in the feature film “The Big Short” for correctly “calling” the housing crash of 2008-2009, just reiterated his prediction that we’re already navigating what will turn out to be the “mother of all crashes.”
The European Central Bank (ECB) just boosted its benchmark interest rate by an unprecedented three-quarters of a percentage point, and some economists fear that the U.S. Federal Reserve could do the same later this month, creating some tough sledding for share prices.
And the economic backdrop continues to create major headwinds for stocks: Inflation remains at a half-century high, the once white-hot housing market has cooled, corporate earnings are expected to skid, and several “wild cards” could deliver another gut punch to the already-scrambled global supply chain.
That’s a truckload of uncertainty.
And with the fourth quarter barreling toward us, it’s almost enough to get you to sprint for the sidelines – and forget about stocks altogether.
But TradeSmith’s newest guru – a quantitative-investing strategist whom scores of top hedge funds quietly employ as their “secret weapon” – says that would be a huge mistake.
This expert has made the following predictions:
- U.S. stocks will stage a major rally in the fourth quarter.
- Tech stocks and consumer-discretionary shares – already pounded to bargain levels by this year’s sell-off – will lead the charge.
- Folks who retreat to the sidelines will get left in the dust.
One of America’s biggest media companies made that mistake 50 years ago – and it’s still remembered today…
Thanks to the so-called Heidi Game.
Football and InvestingIt was Nov. 17, 1968, and the New York Jets were hammering helmets with the Oakland Raiders.
The game itself was a real score for NBC, the broadcaster. Recent contests between the two teams were highlighted by trash-talking, big hits, and scuffles on and off the field (Al Davis, the Raiders’ colorful owner, added kindling at every opportunity). And both teams were stacked: The Jets’ roster included future Hall of Famers “Broadway Joe” Namath and Don Maynard, while the Raiders countered with future Canton residents Fred Biletnikoff and George Blanda.
Execs at the peacock network were stoked about that evening’s entire broadcasting slate: After the ball game itself (slotted for three hours of air time), NBC had dedicated the next two hours to broadcast the classic family flick “Heidi.”
Remember, this was the “old days” – before 900 cable channels, video streaming, DVRs, and iPhones. You had ABC, NBC, and CBS, plus a smattering of local UHF stations. Films like “Heidi,” “The Wizard of Oz,” and “Rudolph the Red-Nosed Reindeer” aired once a year and were prized as “family events” (with pricey commercial slots).
NBC predicted it would own the day: It figured folks would watch the three-hour game, then spend the next two hours watching the movie.
NBC promoted the heck out of its windfall-to-be. In addition to the commercial spots during the football game, the network sold the entire two hours of “Heidi” sponsorship time to Timex so the company could promote its line of popular watches.
To pull off that sweet deal, NBC promised that “Heidi” would begin promptly at 7 p.m., and agreed the flick couldn’t be delayed or “joined in progress” for any reason.
NBC had no fears about making such a promise:
After all, kickoff was at 4 p.m. – and three hours was plenty of time (in those days) for an NFL game.
But the best laid plans of mice and men often go awry.
And awry they went – for NBC.
The Jets/Raiders game was the showdown everyone expected. Heck, there was a penalty flag thrown on the opening kickoff, and there were lots of hits – and lots of penalties. As the third quarter wound down, Oakland held a narrow 22-19 lead.
Then came that all-important fourth quarter – a future-changing gunfight on the gridiron. A flurry of scoring, including a nifty 88-yard drive by the Raiders, had the game knotted at 29 with less than four minutes to go. But then, with just 65 seconds left, New York’s Jim Turner kicked a 26-yard field goal – giving the Jets a 32-29 lead.
The Raiders’ Charlie Smith returned the subsequent kickoff out to his own team’s 22-yard line.
With 50 seconds left, Raider quarterback Daryle Lamonica, nicknamed “The Mad Bomber,” hit Smith on a 20-yard screen play. With a 15-yard facemask penalty tacked on, the ball moved to the Jets’ 43.
That’s when NBC, needing to keep its promise to Timex, decided to “cut away” from the football game – and start rolling the movie.
When NBC cut away to “Heidi,” the Jets were winning and seemed to have the game in hand.
It was, after all, late in the fourth quarter, with that game clock relentlessly ticking away.
But while NBC was okay with giving up on the fourth quarter, the Raiders decided to hang on and fight to the finish.
And, it turned out, the fans who’d viewed the first 178 minutes of this broadcast weren’t ready to give up either; they were livid after learning what they missed.
What they missed was this: a single nine-second span during that fourth quarter that changed the outcome of the game – and made TV history.
Lamonica, Oakland’s QB, lived up to his “Mad Bomber” moniker and tossed a 43-yard smart-bomb strike to wide receiver Smith to give the Raiders a 36-32 lead. And on the ensuing kickoff, the Jets’ Earl Christy fumbled – and the Raiders ran it in for a touchdown.
In short, the Raiders scored two touchdowns in a mere nine seconds, snatching victory from the jaws of defeat.
Final score: Oakland Raiders 43, New York Jets 32.
And the fans who’d been switched to “Heidi” missed it all.
As syndicated columnist Art Buchwald later wrote, “Men who wouldn’t get out of their chairs during an earthquake rushed to the phones to scream obscenities.”
And the network certainly felt the heat of their rage. As The Los Angeles Times reported in 1998 on the 30th anniversary of this event, “The venomous reaction to the network’s switch to “Heidi” was so instantaneous that NBC’s switchboard couldn’t handle the calls. According to legend, its fuse was replaced 26 times.”
That’s the risk of giving up on the fourth quarter.
Fifty-four years after the fact, the mere mention of the “Heidi Game” will prompt most longtime football fans to laugh out loud.
Back then, however, the national furor forced the network president to apologize. And it gave sporting-event broadcasts a new-and-lasting cachet: From that moment on, even award-winning news programs like “60 Minutes” would take a back seat to NFL broadcasts, which aren’t preempted for any reason.
Lots of lessons here, to be sure.
The key one: Don’t walk out on a fourth quarter.
Not in football, and certainly not in stocks.
Morgan Stanley and other market mavens survey the current “score” in the stock market – and figure investors are headed for a year-end defeat.
Our new guru sees it differently. He wants you to be like the Raiders – to fight back in the closing quarter and cash in on the late-game rally he’s predicting. He wants you to grab victory from the jaws of defeat.
His system – which analyzes more than 6,000 stocks each morning and boils them down to a single, simple-to-understand Buy/Sell score of 0-100 – has some massive, audited wins, including:
- 3,600% on NVIDIA (NVDA), including a peak gain of 5,900%.
- 2,300 on SolarEdge (SEDG).
- 1,400% on The Trade Desk (TTD).
- 1,200% on Broadcom (AVGO).
Don’t walk out on this year’s fourth quarter. It’s a move you’ll regret – maybe even for 50 years.