Posts filed under 'Most Read Posts'
People have often asked me how I always pick stocks that end up with 20% gains in a couple of months or triple-digit gains in a year. They ask me is it luck? Maybe with a couple of stocks it may have been luck, but luck doesn’t play a role in buying ten or more stocks in the same year that earn more than 80% returns. The key is not to follow the herd, stop listening to the investment talking heads, and to learn an investment system and then be unwaveringly courageous in applying your system. There have been times family and friends have asked me for advice, and I have told them, “Buy this stock. I guarantee you, you will not lose money.” Now I know that there are no guarantees in the stock market, but if you follow certain strategies, you can be 90% sure that the stock will appreciate. With this particular agricultural stock, it was almost the perfect stock, and I was 99.9% sure that the stock would produce monumental gains. Sure enough, the stock exploded almost 130% higher in about a year. And this stock was not some risky penny stock trading at less than a dollar a share. This stock was trading at about $70 a share at the time I advised my friends to buy it. So below are the 10 surefire rules I employ to build enormous gains in investment portfolios.
(1) Buy When Fear is Rampant, Sell When Mania is the Greatest
Every investing course should be accompanied by a psychology course as well. The most difficult thing to do in investing is to buy more when fear and panic is rampant and to sell when mania is the highest. Stock markets and asset classes cycle in peaks and troughs. Most people will not buy stocks until after stocks are plastered all over the news and after they have just risen by 30%, 40%, 50% or more, believing that they will rise higher forever. Buying at the troughs when nobody is talking about a stock or during steep corrections provides a low-risk/high-reward setup for your portfolio.
(2) Learn What Your Neighbor is Doing, Watch Investment Shows on MSNBC and Bloomberg on TV, Listen to the Recommendations of Your Financial Consultant – Then Make Sure that You Don’t Have a Single Thing in Common With Their Strategies
If you are one of the thundering sheep herd and perpetually follow the mindless actions of others, you are virtually guaranteed to lose money or forever relegate your portfolio to average to below-average returns. The surest way to build an investment fortune is to buy asset classes and stocks when nobody is discussing them and to sell them when everyone is talking about them. This requires a nose for market timing. Is market timing impossible Read more …
September 25th, 2007
September 19, 2007 - “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights” - Alan Greenspan, 1966, more than 20 years before he served as Chairman of the U.S. Federal Reserve from 1987-2006. Obviously, Alan Greenspan’s feelings regarding deficit spending experienced a 180º reversal once he became the U.S. Federal Reserve Chairman. However, one only need to understand the truth in that comment to understand where your money should be invested and why this mini-rally in global markets spurred by the Fed’s decision to cut the Federal Funds rate by 0.50%, even if it should extend into a larger rally, should cause you to be scared, and very scared at that.
Overshadowed by the Fed’s decision to cut interest rates and the subsequent rally in global stock markets was a much more critical story. U.S. Secretary of Treasury Hank Paulson recently urged Congress to raise the national debt ceiling, stating that the U.S. would reach the current national debt ceiling by October 1st. Read more …
September 19th, 2007
September 15, 2007 -
Everybody is waiting now for this Tuesday’s decision by the Feds to finally learn how much the Feds slash interest rates. This decision is truly not that important for a number of reasons. (1) The Feds have already slashed interest rates in a couple of manners. One, by already injecting billions and billions of dollars into the banking system, they have already expanded monetary supply (which is the effect lower interest rates would have); and two, they have already slashed the discount rate (the rate at which banks can borrow from the government) again expanding money supply. True, the fed funds rate is what matters to the end consumer, but the actions the Feds already have taken will be harmful on the value of the U.S. dollar. It’s just a sneaky way of doing it without announcing to the world that they’ve slashed interest rates.
Thus, the news this Tuesday is likely to be less than overwhelming from the standpoint of the consumer that is looking for a substantial 50 to 75 basis point cut. Furthermore, the Fed has stated that inflation concerns are more worrisome than concerns of slowing U.S. economic growth. This is a curious statement as the Feds are primarily responsible for creating inflation through their easy money, monetary expansion policies. Their solution to any economic problem in the past has always to break out the printing presses and print as many dollars as is needed to provide a band-aid fix to the problem. And they probably will continue to sacrifice the dollar’s value for the sake of keeping up appearances in the future as well. Read more …
September 15th, 2007
August 20, 2007 - On Monday, October 23, 2006, reporter Deborah Solomon wrote in the Wall Street Journal:
“Mr. Paulson is chairman of the Working Group, which coordinates government policy on financial markets and includes the heads of the Federal Reserve, Securities and Exchange Commission, and Commodity Futures Trading Commission. Mr. Paulson has insisted that they meet about every six weeks. Before his arrival, the group met every few months and sometimes as infrequently as once a quarter.”
The Working Group on Financial Markets, consisting of the U.S. Secretary of Treasury, The Federal Reserve, the SEC, and the Commodity Futures Trading Commission, is also known in other circles as the Plunge Protection Team (PPT). The very existence of the Plunge Protection Team, and its supposed interference in stock markets, has been a hotly contested topic, with some people even doubting that it actually intervenes in markets altogether. The PPT has been accused of a widespread number of actions, from buying massive amounts of futures to prop up stock markets and prevent further panic during this recent correction to spurring Central Banks all over the world to release rumors about selling gold to artificially depress the price of gold and thus keep the dollar’s heartbeat, however feint, still alive. I for one, believe that it does exist and believe that it does manipulate markets to serve its own agenda. To what extent they manipulate markets is anybody’s guess however. If I had to guess, I would say it’s somewhat more than the disbelievers think but less than what the believers presuppose. Certainly we can conclude that the government is not forthright about its participation (or others may say, interference) in the markets. Read more …
August 20th, 2007
August 9, 2007 - Back in March, we had U.S. Secretary of Treasury Hank Paulson telling investors not to worry because the economy was “fine” as he put it. Then just the other day President Bush issued statements saying that the economy was fine again. However, don’t say that I didn’t warn you against such foolish talk and I’ll warn you again here. This current volatility is just a small speck on the screen compared to what is eventually coming. What is happening in today’s global markets is not the Peak Investment Crisis I speak of on my homepage, but it’s coming. This current fallout are just the cracks that serve as warning signs of a greater danger. Read more …
August 9th, 2007
August 9, 2007 - Once again, something we predicted months ago is happening and being reported by a major world newspaper. And yet, the foolishness in the U.S. Congress continues, illustrating that they “just don’t get it.” Thank God U.S. Congressman and women are not responsible for our nation’s fiscal policy though they really couldn’t possibly have done a worse job then the U.S. Federal Reserve has in the past couple of decades. In any event, on March 13th, I wrote in this entry the following:
“If U.S. Congress imposes prohibitive tariffs on Chinese imports, if China then follows that move by dumping dollars, this would be a double negative blow to the Chinese economy. So in imposing tariffs, such a move would in essence be a pre-emptive economic strike against the Chinese government that prevents them from offloading U.S. dollars.”
“However, such a short term victory would only cause a long term, much more significant defeat. Such actions would certainly alienate the Chinese government further, and any pleas by President Bush, U.S. Fed Chairman Ben Bernanke, and U.S. Secretary of Treasury Hank Paulson to the Chinese government asking them not to offload dollars in the future would almost certainly fall on deaf ears. I would guess that if tariffs do pass through Congress, that in the future, if the Chinese can dump massive amounts of dollars without such actions seriously hurting their own economy, then they will do so without concern for its effect on the U.S. economy.”
Today, five months later, the London Telegraph reported that the Chinese are threatening to do exactly what I predicted. But there’s even more to this incredible story. Read more …
August 9th, 2007
July 24, 2007 - Hello, the topic this week is important enough that this is a rare occasion where I am posting the same article on my blog AND sending it out in newsletter format. This month, Business Week ran an article that examined that traits of the most successful investors in the world. The article actually could have made a solid advertisement for my company as it described all the important characteristics of my investment strategies and philosophies. The article stated that “Each saw opportunity well before the pack. John Templeton pushed international investing way before it was cool. Warren Buffett was buying up undervalued companies long before his brand of value investing became popular. David Shaw used high technology and smart PhDs to make money on countless split-second trades, now a common hedge fund strategy.” Read more …
July 24th, 2007
June 17, 2007 - Yes, we’ve trumped the so-called experts again, including the person everyone in the media turns to regarding the direction of U.S. bonds, PIMCO’s Bill Gross, this time by more than 6 months. On January 7th, I wrote an article titled, “Ten Reasons Dollar Denominated Bonds Aren’t as Safe as You Think”. This week’s June 16th issue of The Economist, more than 6 months later after we published the reasons why dollar-denominated bonds were not low risk, contained an article discussing reasons for the “surprising” plunge in the prices of dollar denominated bonds this past month, and discussed why U.S. bonds, typically safe havens of investment for older investors, are not so safe anymore. Of course, they wrote this article after soaring bond yields had already sent bond prices plunging. At SmartKnowledgeU, however, we weren’t surprised at all. In fact, we told you all the reasons why dollar denominated bonds weren’t safe six months ago and had you merely read the article I wrote here, many of you that own bonds could have saved yourself a lot of grief. In fact, our investment strategies that allow us to be ahead of the game by six months to a year of everyone else in knowing which way markets will turn is exactly what enables us to so easily make high double digit and triple digit returns on many individual stocks. Read more …
June 17th, 2007
1 May 2007 - I start this blog entry with ignored almost no more because though I know savvy investors have been on board with uranium stocks for quite some time now, even dating several years back, I still know from my conversations with long term investors that the great majority of investors, even as of today, have still never considered purchasing uranium stocks. Read more …
May 1st, 2007
27 April 2007 - Well today, when BIDU gapped up over 19% to $130 a share, I closed out the remaining BIDU May 100 Calls at 400% profits. Yesterday I took a little bit more off the table at 85% profits, and as you recall, I initially took 50% off the table at 50% profits. Not bad for less than 14 days, right? Read more …
April 27th, 2007
23 April, 2007 - A big story that made the rounds in the financial media last month was Jim Cramer’s (of the Street.com) statement that some hedge fund managers spread false rumors about a company to large trading desks and the media to drive a stock price lower. Many people found this admission shocking, but I’ve known all too well that these types of practices have been utilized against the retail investor for decades. Cramer said this practice is illegal, but easy to do “because the SEC [Securities Exchange Commission, the U.S. regulatory body] doesn’t understand it.” Read more …
April 23rd, 2007
20 April 2007 - Today, I’m sitting in for Kaeho, but have decided to keep the Friday theme of Zen and Martial Arts intact. This is perhaps one of the very best times for a blog entry about applying philosophies of Zen and the Art of War to investing. You must avoid the Art of War because investment firms apply the Art of War principles continuously and unyieldingly to get you to hand over more money to them. As such, you must counter and apply Zen philosophies to determine intelligent investment strategies that 99% of other retail investors will not apply. Read more …
April 20th, 2007
19 April 2007 - Recently, there was an article on CNNMoney that spoke about the “secrets” of the elite rich in the United States. For an article that proclaimed to contain secrets about building wealth, it contained some of the most ridiculous, deceptive statements about building wealth that I’ve ever read. In turn, several articles were written about this article, including one that stated that the richest of Americans “built their wealth with diversification, wealth preservation and strategic growth.” That is a ridiculous statement in itself because two of those strategies, diversification and preservation, do not help build wealth. Read more …
April 19th, 2007
Next Posts
Previous Posts
