Nick’s Note: Last week, the market set a record for the longest bull run in history. While that worries some people, it doesn’t worry me.

But I wanted to get a Wall Street insider’s take. That’s why I called up Palm Beach Trader editor Jason Bodner, who spent decades as a trader for some of the world’s top brokerage houses. Jason has created a proprietary system that looks at over 4,000 stocks every day. If there’s anybody who can tell us if the bull run has staying power, it’s Jason.

By Nick Rokke, analyst, The Palm Beach Daily

Nick: Hi, Jason. Last week, the bull market broke a record for longevity, depending on how you count it. It’s now almost nine-and-a-half years old… Should we be worried that this market will soon die of old age?

Jason: No. I’m not worried at all about the length of the bull market. Age doesn’t matter.

What matters is the state of the economy and the profitability of companies. And right now, things are looking good.

The last time we talked, I told you I was bullish because 80% of companies were beating earnings estimates. And 74% of companies were beating their already high sales expectations.

The sales growth rate is 10%, and the earnings growth rate is over 24.5%—that’s the highest since 2010.

And more companies are guiding their earnings expectations higher. That’s the highest rate in five years.

So no, I’m not worried about this bull market ending anytime soon.

Nick: Why is all this happening now?

Jason: I think what’s coming out of Washington is behind a lot of it.

That might be hard to believe with all the craziness we see reported. But the media only reports what keeps viewers glued to their television screens—and that’s all the Beltway political intrigue.

From a market perspective, the Trump administration is reining in regulations. This cuts costs and increases profitability.

More importantly, Trump’s tax cuts are helping consumers and businesses. Everyone is keeping more of their own money.

Consumers are clearly spending more. Just look at the recent Walmart and Target earnings. Both increased sales at the fastest rate in years.

And with a lower tax rate, companies can keep more of their profits.

Last year—before I joined the PBRG team—Teeka said companies with lots of overseas cash would repatriate that money because of tax cuts… which would boost stock buybacks.

[Editor’s Note: See the October 24, 2017 Daily, “Teeka Tiwari on How to Benefit From President Trump’s Tax Plan.”]

He was right. We’re seeing money repatriated at record speeds. And we’re already seeing record-high buybacks this year.

If you’re a shareholder, buybacks are a good thing. One, it increases the demand for stocks. And two, it leaves shareholders a bigger piece of the profits.

Buybacks are for sure helping out stocks… And I think we’ll continue to see massive amounts of buybacks for the rest of the year.

It’s a great time to be a corporation in America.

Nick: That’s good to hear. So your new service, Palm Beach Trader, is about two-and-a-half months old right now. How is the portfolio doing so far?

Jason: Things are going just as expected. When I started the service, I told subscribers that around 75% of our portfolio would be winners… and the winners would gain more than the losers would lose.

Right now, we have nine open positions and seven are winners. So we’re at a 77% win rate. And the average winner is up 23.6%, while the two losers average out to 13%.

That’s how the game is won on Wall Street. You can’t win on every position. But you have to make sure your winners are bigger than your losers.

Nick: Your service also looks for what you call “unusual institutional” buying. That’s when you look for big institutions piling into a stock and pushing its price higher. Have you uncovered any unusual buying yet?

Jason: Yes. We just had our first big announcement of a large hedge fund buying into one of our positions.

Sometimes we find out who’s buying the stocks and other times we don’t. But this time, we found out.

On June 28, I told my subscribers to buy meal delivery service GrubHub.

On August 14, investment firm Jana Partners released its 13F filings. This is a position-disclosure filing that the Securities and Exchange Commission (SEC) requires of all investment managers that have north of $100 million in assets. Jana manages $13.9 billion.

In the release, Jana reported it had a stake in GrubHub.

GrubHub is up about 35% since I recommended it. It’s way past our buy-up-to price, so I don’t recommend buying it now. But it shows you how powerful our signal is.

Nick: I think your subscribers are pretty happy making 35% in just a couple of months. Do you have any other big winners you’d like to share?

Jason: My best performer right now is an internet marketing firm called The Trade Desk. When I recommended it, The Trade Desk was a small, $4 billion company.

As long as companies want to advertise on the internet, this company will be in business. In fact, because it’s so small, I think it’s still a potential takeover company.

Shortly after I recommended The Trade Desk, it reported knock-out sales and earnings growth. Subscribers are up 57% in under a month on this one.

Now, returns aren’t always going to be that great. But my system is built to zero in on stocks that have the potential for big gains over the next six to 12 months.

Nick: Glad to hear the portfolio is doing well. Are there any parting words you’d like to leave us with?

Jason: Just that I’m incredibly bullish right now.

But if there’s a time to be cautious in the market, it’s over the next month.

Earnings season is over. We’re in peak summer vacation period. The senior traders and execs on Wall Street are taking vacations right now. So we typically see a little less volume in the market this time of year. That can increase volatility.

But if there was time for fear to rip through the system, it’d be this time of year. I’m staying extra vigilant through mid-September… just in case something happens.

Right now, headlines are testing the market to see if they can push it down.

President Trump has had some bad news with the Paul Manafort and Michael Cohen cases. If the market had any weaknesses, I think we would have seen it go down on that news. But the market seems resilient. Overall, I’m long-term bullish.

I’d use any potential dip in the market to buy growth and domestic stocks.

Nick: Thanks for the insight, Jason.

Jason: My pleasure.

Nick’s Note: If you’d like to ask Jason a question about the markets, send it to us right here…

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