Because all investments carry significant risks, there’s no such a thing as a perfect trade. However, when investing – timing is everything.
The Perfect Trade focuses on two types of companies:
- Very small companies with significant stock price appreciation potential, and
- Very large companies that are likely to fall significantly.
Often, investors become overly optimistic or negative and drive stock prices to absurd levels. This is especially true for very large companies and companies that are highly promoted for their growth potential. Since every company you (or I) hear about is also known by many other investors, it is very rare to find exceptional opportunities at reasonable prices, let alone undervalued. It only happens when investors become overly negative about a company, a particular sector or the overall market. The best opportunities present themselves at time when they appear to have the greatest risk, after they’ve fallen the most! Investors (wrongly) conclude that companies with a rising share price must be a good investment and they always assume (in most cases, very reasonably) that when a company’s share price falls, the price decline is proof that the company’s future is poor. That’s just not the case. In my experience, on average, stocks are over-priced! The safest time to invest and the times when most true bargains are found is after major stock market declines. (I’ll share my evidence of this at another time.)
Stock prices are not reliable indicators of the worth or the value of a company, because stock prices rise and fall based on the emotions of investors. Most investors have little capacity to analyze corporate balance sheets and cash flows; make realistic appraisals of the competitive landscape for a company’s products. Nor do most investors possess the capacity to rationally interpret highly technical, scientific reports or epidemiological studies. Most investors are sheep, they trust and rely on Wall Street reports. Therefore, stock prices at most times, are grossly over-priced.
This site is focused on companies with explosive stock growth potential and very large companies that are very risky and should be sold. We’ll bring your attention to companies at those rare times when they have exceptionally low prices and great price appreciation. We focus our investing at times when “time is on our side”, after major declines in a stock, a sector or the overall market. We urge you to stay away from stocks after they’ve had major advances, and make most of your investments after the sheep have sold in a panic.
For the past 35 years I’ve made a living on Wall Street. I quit in December, 2015. But I’m still a very active investor, with even more time to search for great companies.
I’m building websites to share what I’ve learned, investing since 1976. This will be a swell website, because you’re going find very exciting companies, at very compelling (low) valuations, and when timing can be on our side, not against us. Most stocks I discuss will be risky, some will fail completely. So be careful!
While any of the companies I discuss at this site may fail. If just one in five of these companies rises 8 or 10 fold every year or so, we’ll do very very well. You’ll have to monitor these stocks carefully, and be very disciplined about selling. Such stocks rise and fall quickly, without explanation.
I’ve learned: To invest only after the market has been crushed, or after a stock I like has been crushed. I avoid all stocks and all sectors that have risen significantly. It’s not that just because a stock or sector was high it will return to its previous highs. I am saying it is far easier to make money buying stocks after the market has suffered major declines. One more thing, it is prudent to take most of your money out of the casino entirely. Keep most of your money safe, and gamble with just a small portion of your savings. Again, buy only after major declines in your targeted stocks and sectors. Then, be patient and take profits, when you have them. Remember, with all investments, just because your stock bond or fund rises, it does not mean your investment is safe from a major decline in the future. And, we cannot predict future prices because prices in the future are determined by events which have not occurred yet, and are therefore unpredictable.
The companies I discuss at this website will all be risky, but some will much riskier than others. I’ll try to indicate which companies have lower risk (yet still in a high-risk category) than others. Please keep in mind, as logical and thorough as my presentation is, I may be dead wrong. I repeat, we do not predict future prices because prices in the future are determined by events which have not occurred yet, and are therefore unpredictable. This is why all investing must be considered speculative.
I’m on your side, I have no hidden agenda! I don’t want or need you to buy any stock I review at this site. Only you can make that decision, calmly with no pressure.
I hope you consider these companies, only as part of your speculative portfolio because all of them are very risky.
My best to you,