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Family Controversy — and a New Shift in the Market

Posted November 22, 2021

Zach Scheidt

By Zach Scheidt

Family Controversy — and a New Shift in the Market

This time next week, I'm going to be off the desk in sunny Orlando, Florida.

I'm taking the family to Universal Studios where several of my kids will experience the World of Harry Potter for the first time.

I can't wait to see the joy on my kids' faces when they walk down Diagon Alley and see how closely the set matches the Harry Potter books and movies.

But even though I'm completely thrilled about this trip, the plans for this family adventure haven't exactly gone smoothly...

I'll let you in on a little family controversy. And I’ll also show you how our trip ties to your investment portfolio in just a minute.

By the end of today's alert, you'll have some new stock plays to consider. 

And hopefully, you'll share some of your personal wisdom to help me make the best fatherly decisions!

Family Controversy Leads to an Exciting Plan B

Last month, my twins had their 13th birthday. It's hard to believe that much time has passed!

You may remember me telling you the story about how Autumn and Emma were delivered during the peak of the financial crisis. 

On the day they were born, I remember barking sell orders into the phone while standing beside my wife's bed and urging her to push.

The day ultimately led to a major transition for our family. 

Now, instead of working long hours at a hedge fund, I get to share my investment and trading ideas with you. (And I also get to spend more time at home with them.)

A good trade to say the least!

A few weeks before the twins turned 13, my wife and I disagreed on what to get them for their birthday. Many of the twins' friends have cell phones and that's what the girls wanted for their birthday.

But given what we know about social media, our current culture and some of the risks in play for young teens, I was a little hesitant.

The twins can chat with friends and family on some of the devices we have at home. And they can play games and tap into educational opportunities through technology at home and school as well.

I just didn't feel comfortable giving them full access to a phone to have with them all the time. And so began the controversy.

After a few days of negotiations, my wife and I finally settled on a solution… we would take the girls to Universal Studios instead! 

And we would invite our kids who are grown and out of the house to join us as well. It will be a great chance for our family to make some special birthday memories with the twins.

I'm thrilled with the outcome. And I can't wait to get some quality family time together!

This weekend as I was getting the reservations and tickets arranged, I had a big realization tied to the market and your investment portfolio. 

I think we could be in for a major shift in the market this holiday season!

Supply Chain Challenges and a New Holiday Stock Surge

We've all seen the reports on how supply chain disruptions have created shortages. So as we head into the peak holiday shopping season, retailers are having a tough time keeping merchandise on their shelves!

Part of the issue comes from a switch from consumers buying services to a surge in shoppers buying stuff.

Many American households are flush with cash and demand for products has been extraordinarily high. We're talking about everything from electronics and gadgets to home goods to toys and even apparel merchandise.

All of this buying has helped drive retail stocks higher.

But what happens midway through December when favorite items are already sold out and holiday shoppers have to come up with alternatives?

My guess is that they'll make a similar decision to the one my family made for the twins' birthday!

Instead of buying stuff, we're going to see a rebound in spending on experiences. And that sets up a perfect investment play in the leisure and hospitality industry.

Ahoy, Rebound Ahead!

After surging earlier in the year, travel and leisure stocks have pulled back recently.

Part of the weakness is tied to a surge in Covid cases in Europe. And it also made sense that some investors took profits and sold shares after a big recovery run-up.

But this holiday season, I expect to see the travel and leisure industry get a second wind. 

Many of the original winners in this area could eclipse recent highs. And this current pullback looks like the perfect opportunity to start building new positions.

A few of my favorite areas are:

  • Cruise Lines: Cruise operators have taken major precautions to guard against a breakout and they have contingencies in play. The research that I've seen points to very strong demand with many new cruises selling out within hours of being listed.

    A couple of names on my watch list include Norwegian Cruise Line Holdings (NCLH) and Carnival Cruise Lines (CCL).

  • Hotel Chains: A rise in travel will create more demand for hotels. And many of the most well-known stocks in this area are holding up very well despite slight pullbacks.

    Two names to look at in this area are Hilton Worldwide (HLT) and Marriott International (MAR).

  • Attractions: Families like mine are looking for specific destinations to enjoy and make memories. Some trips will be more family-oriented and others may include destinations like casinos or vineyards.

    A few stocks you could consider in this category are Vail Resorts (MTN) or MGM Resorts (MGM).

One quick note of caution. Since several of these stocks are currently in pullback mode, I would be cautious jumping in right away. It may take a bit more time before these stocks start moving higher.

But keeping key stocks on your watch list can be a great way to prepare for a shift in the market. That way you'll be ready once these names start to trade higher!

That's all for today. But before I let you go I have a favor to ask...

Could you shoot me an email and let me know what you think about my decision about not getting phones for the 13-year-old twins?

I've got a lot of respect for our Rich Retirement Letter community. 

Our readers have a lot of great personal insight as well as financial savvy. So if there's something I'm missing or some suggestions you have I'm all ears!

My address is RichRetirementFeedback@StPaulResearch.com. I read every email that hits this inbox. And I look forward to any wisdom you can send my way!

Here's to living a Rich Retirement,

Zach Scheidt

Zach Scheidt
Editor, Rich Retirement Letter
RichRetirementFeedback@StPaulResearch.com

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