Stocks

How to Survive the Zombie Stockpocalypse

By John Del Vecchio  |  January 4, 2019

I don’t watch a lot of television. But my two favorite episodes of any show I’ve ever seen have one thing in common: They feature Anthony Bourdain.

You probably know of Bourdain. He gained fame by writing a tell-all book about what it’s really like to work in the high-pressure environment of a restaurant kitchen. Kitchen Confidential propelled him into his TV role, where he traveled around the world telling interesting stories and experiencing a variety of cultures.

Now… back to my favorite episode.

My favorite episode is when Anthony visits Quebec, Canada. Two of his companions are the proprietors of a restaurant called Joe Beef, in Montreal. I’ve never eaten at Joe Beef. It takes at least two months to get a table there. I don’t have that kind of patience.

However, these guys are awesome!

They do it right. There’s a scene where they’re in an ice fishing hut on a lake perched above three feet of frozen ice. In that hut they sipped wonderful French wines, ate lobster, seared foie gras on a mini stove, and ate like kings.

Anyone who knows me will confirm that’s how I’d eat if I were hunkered down in an ice fishing hut! That’s why it appealed to me. It was right out of my own “living well” playbook.

So, what’s that have to do with the stock market?

Not much, except that they recently wrote a book. It’s called Joe Beef: Surviving the Apocalypse: Another Cookbook of Sorts.

It’s a fun read, with a mix of stories and recipes. It’s not just food recipes, either. They show you how to make soap! These guys aren’t living through the apocalypse eating green beans!

They’re doing it in style.

That title made me think about the markets.

I believe we’re either in a bear market or close to one, and it could turn into something that might feel like… the apocalypse.

At the very least, before it gets resolved, it could be pretty nasty. We’ll have many sharp rallies in 2019… and likely as many selloffs. It’ll be volatile.

Eventually, people will get wiped out, and the buying opportunity of a generation will present itself. Big returns with low risk will be staring right back at us from the abyss.

We’re not there yet.

In the meantime, I write a stock-picking newsletter. So, I continue to scan my Forensic Accounting Stock Tracker (FAST) for stocks I think will do well even if the market hits the shitter.

This is the “Zombie Apocalypse” strategy.

Which companies will survive, no matter what?

Which stocks may go down a bit with the market, only to bounce back faster?

Which stocks might go up, regardless of the market?

Which stocks will allow investors to sleep softly at night, even as the zombies come knocking on their door?

FAST helps me make a list names that answer those questions. And I recommend one every month…

It’s a company with a durable brand. A massive moat surrounds its business. Its customers are truly fanatics. They blindly hand over gobs of money with smiles on their faces. It has tremendous pricing power. Even in a down economy. Cash flow is spewing all over the place.

The valuation is cheap. And that’s still a significant claim in early 2019, after the market entered the fourth quarter of 2018 at nosebleed levels.

It hits all the criteria of an “apocalypse” stock. What’s more, my FAST model has identified several stocks just like it. That’s what we’ll be doing over the first several issues of Hidden Profits of 2019…

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John Del Vecchio

John Del Vecchio is the author of the bestselling book, Rule of 72: Compound Your Money and Uncover Hidden Stock Profits and What’s Behind The Numbers: A Guide To Exposing Financial Chicanery And Avoiding Huge Losses In Your Portfolio.

As the in-house stock market guru and forensic accountant for Dent Research, John stood on the shoulders of the great David Tice, James O’Shaughnessy and Dr. Howard Schilit, and built a framework of algorithms and a multi-factor grading system that has made him one of the more successful short-sellers around.

John is also the executive editor of our Hidden Profits newsletter and our trading service Small Cap All-Stars.

He graduated Summa Cum Laude from Bryant College with a B.S. in Finance and was awarded Beta Gamma Sigma honors. He earned the right to use the Chartered Financial Analyst designation in September 2001.MORE FROM AUTHOR