Friday Mailbag: GoPro, the Zika Virus, Inflation… and More

During the tumultuous 1960s, the influential futurist Marshall McLuhan predicted that technology would transform human society into a “global village” of instantaneous communication that transcended national boundaries. McLuhan would recognize today’s online world.

Just as the printing press of the early Renaissance empowered individuals, the Internet is giving voice to the average person. Accordingly, the readership of Investing Daily functions as an interactive, highly integrated community.

Let’s see what the villagers have to say.

GoPro is a “no go”…

“What are your thoughts regarding wearable camera maker GoPro?” — Mike B.

Resist the Siren’s Call of GoPro (NSDQ: GPRO). This volatile stock is poised for a day of reckoning.

You should be wary of small companies that become instant Wall Street darlings by making flashy consumer gadgets. Unless the company has a deep bench of unique products, the fad invariably fades and the stock burns overly hopeful investors.

This dynamic describes GoPro, which has seen its fortunes wax and wane according to the fate of its product launches. The action camera maker still claims a cult-like following among consumers, but consider yourself warned: it remains a highly dangerous stock that you should avoid. 

GoPro’s gizmos were all the rage at first, but the potential of the action camera market has attracted bigger competitors with greater financial wherewithal, such as consumer icon Apple (NSDQ: AAPL). There are better places for your money than GPRO.

Race for a Zika cure…

“We don’t hear much about the Zika virus anymore, but it still seems to be a global problem. Is there a biotech opportunity in fighting the disease?” — Larry R.

The Zika virus has faded from the headlines, but it certainly hasn’t gone away.

One company is in the lead to develop the first vaccine for the Zika virus: Sanofi (OTC: SNYNF). Headquartered in Paris, Sanofi is a global pharmaceutical company with a market cap of $106.2 billion. About one-third of the company’s revenue already derives from emerging markets, where a Zika vaccine would be targeted.

The Zika pandemic as yet can’t be prevented or treated by drugs or vaccines. Zika fever in pregnant women can cause abnormal brain development in their fetuses.

Researchers in Sanofi’s vaccine division, Sanofi Pasteur, are working on a Zika vaccine that would prevent both the infection and concurrent illness. Sanofi has a leg up over its competitors because it has already developed and received approval for vaccines to address viruses from the Zika family, notably vaccines for yellow and dengue fever.

The U.S. Army is collaborating closely with Sanofi to develop a vaccine and the government has granted the company funding. In December 2016, the Army announced that it planned to grant Sanofi exclusive license for large-scale manufacturing of an eventual vaccine.

Inflation rears its head…

“The new numbers from the Bureau of Labor Statistics point to rising inflation. Should I be worried?” — Gary C.

The experts at Investing Daily disdain the Federal Reserve-bashing, “hard money” zealots who constantly preach doom-and-gloom.

However, the latest data suggest that the inflation beast is stirring from its long slumber. Last week, the U.S. Bureau of Labor Statistics reported that the U.S. Consumer Price Index (CPI) posted its largest increase in nearly four years in January, spiking 0.6% last month after gaining 0.3% in December. January’s increase in the CPI was the biggest since February 2013.

As I’ve detailed in previous issues, now’s a good time to hedge your portfolio, preferably with gold and real estate.

Singin’ the investment blues…

“I’m afraid to pick up the newspaper these days. The world seems to be in turmoil. Should I sell my stocks?” — George G.

Whenever I scan today’s worrisome headlines, I’m reminded of a lyric sung by my favorite blues singer, Mose Allison: “I don’t worry ’bout a thing, ’cause I know nuthin’s gonna be alright.”

George, when hasn’t humankind faced worry? America survived the Civil War, the Great Depression, two World Wars, the Cold War… and disco. We’ll get through today’s tribulations. Here’s a tip for the prophets who repeatedly predict apocalypse: the end of the world only comes once.

I remember getting letters from readers who were upset that Obama had won election in 2008. These investors hated and feared the new president so intensely, they ignored my counsel to be patient and dumped all of their stocks. The result? These nervous Nellies missed the second-longest bull market in history.

The surest way to make money over the long haul is to control your emotions and see the world the way it really is, not the way you want it to be. Dispassionate analysis, not wishful thinking or fear, is the true path to investment wealth.

Yes, just reading the headlines these days is enough to make you gnash your teeth. Investors are anxious and with good reason. But at Investing Daily, we don’t rely on gut instincts, hunches or raw emotions. You won’t get rich by rolling the dice. We apply time-tested empirical data to cold, hard reality. And that’s how we find hidden value.

The corridors of power…

Trump plans to massively boost infrastructure spending. Should I pile into construction stocks?” — Jennifer K.

Not necessarily. To be sure, Trump’s ambitious promises to fix America’s crumbling roads, bridges, highways and sewage treatment plants will boost construction companies, but you need to be selective. First of all, his plan is predicated on tax breaks and subsidies, not conventional federal spending. It’s also likely that firms with political clout will get the juiciest contracts.

That brings us to Fluor (NYSE: FLR), a construction giant that’s poised to reap the lion’s share. Fluor is well connected in the corridors of power in the nation’s capital and has been adept at beating out its rivals for lucrative contacts. For example, the company has its fingers in many mammoth transportation projects along the eastern seaboard. Look for Fluor’s prospects to get rosier as the building contracts get doled out in coming months.

Got a question or feedback? Send me a letter: mailbag@investingdaily.com — John Persinos

The future starts here…

Have you seen this video? It demonstrates an emerging technology that you’d expect to see on the USS Enterprise.

But get ready for a shock: this technology actually works and it’s available today.

Hundreds of billions of dollars worth of R&D is pouring into the development of this capability, which has the power to change our lives forever. One small-cap company is driving the technology… and early investors are positioned to get rich.

The word is getting out but there’s still time to get into the action. Click here before it’s too late.