A Deadly Virus is Targeting Your Portfolio. Here’s How to Stop It…

This post A Deadly Virus is Targeting Your Portfolio. Here’s How to Stop It… appeared first on Daily Reckoning.

There’s a virus ripping through the stock market right now… and it could be heading right for your portfolio…

And it’s coming from a source you’d never expect.

The virus is zapping stocks left and right. It’ tearing through multiple sectors. If you own any of the stocks facing contamination, it’s time to cut ‘em loose.

You’ll see the names of the infected in a second. But before I reveal the symptoms you should look for, let’s get you up to speed on how these stock viruses operate…

You should first know these market viruses can lay dormant for long periods. Some market “doctors” will even argue that certain viruses pose no threat at all. They even start to look like benefits eventually. Instead of a nasty infection, investors think they’re jumping onboard a hot new trend.

That’s when the symptoms start to present themselves.

We’re seeing a new infection spreading through the markets right now. Worse, this one involves a popular technology—so it’s no telling how quickly it will spread. That’s why you must quarantine your portfolio immediately to avoid any nasty side effects.

The viruses I’m talking about are things you’ve seen many times before. You might even own a bunch of ‘em. They’re called gadgets. That’s right, gadgets. And they’re killing stocks left and right.

The worst hit names are the one-trick ponies. These are the pure-play gadget stocks. They focus on one particular niche for their products. God help you if you’re stuck in one of these stocks right now…

Take Fitbit (NYSE:FIT). Fitbit makes, well… Fitbits. For the uninitiated, these are those little vibrating bracelets people wear to tell them how many steps they’ve taken every day. For the record: I’ve got one. It was given to me as some sort of health promotion program and I keep it as a joke. It says I’ve taken 9 steps today. That’s actually more than I thought…

Anyway, there’s a bunch of different Fitbit products at various price points that can help users track their health and fitness goals. And Fitbit decided to become a public company last June for some reason.

But the gadget virus attacked just a couple months after Fitbit’s IPO. Wearable tech was once an exciting idea to investors. Not anymore. Fitbit stock is now 60% off its highs…

Fitbit Flops

That big drop at the beginning of 2016 comes courtesy of Fitbit’s announcement of a new gadget that hopes to compete with the Apple Watch. Analysts and investors aren’t buying it—and their skepticism has made the ailing stock sicker.

The next company infected with gadget-itis is GoPro (NASDAQ:GPRO). GoPro is also one-trick pony, a la Fitbit. It makes cameras for the extreme sports crowd and other wannabe daredevils. But unlike Fitbit, GoPro shares aren’t down 60% from their highs. Not even close. They’re down 85% from their late 2014 highs.

Take a gander at the last six months of GoPro’s pain:

GoPro Plunges

Don’t expect GoPro to snap back anytime soon. Shares are set to drop another 25% this morning after the company announced terrible sales and layoffs last night…

But the most insidious part about the gadget virus is its ability to infect companies outside the tech industry. Just look at Under Armour (NYSE:UA).

Under Armour is still in the early stages of illness right now compared to GoPro or Fitbit. Just some sniffles. But make no mistake: UA’s got the gadget bug.

“Under Armour is turning to a new lineup of wearable technology products and digital apps in its long-term play to overtake Nike Inc. atop the global sports apparel industry,” Fox Business reports. “Kevin Plank, Under Armour’s founder and chief executive, was on hand at the Consumer Electronics Showcase in Las Vegas last week as Under Armour unveiled the first major products in its ‘Connected Fitness’ series.”

With a major gadget announcement like that, it’s no wonder Under Armour shares have gone nowhere but down so far this year…

Under Armour Sinks

Now’s the time to get your portfolio tested for the gadget virus. If even one stock gets infected, your portfolio could spend the entire year in the sick house.


Greg Guenthner
for The Daily Reckoning

P.S.  If you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, for FREE, right here. Stop missing out. Click here now to sign up for FREE.

The post A Deadly Virus is Targeting Your Portfolio. Here’s How to Stop It… appeared first on Daily Reckoning.