| It was true. I didn't understand it. But I understood math and knew that if you run out of money, you can't keep the lights on. As the dot-com boom continued to inflate and the companies' financials deteriorated, I avoided nearly all of these stocks, while analysts, internet message boards, and CNBC all breathlessly cheered these garbage companies higher until the music stopped and there weren't enough chairs. Millions of investors lost their shirts. During the crash in early 2020 after the pandemic shut down the global economy, investors headed for the exits quickly, only to watch from the sidelines as stocks quickly rebounded. Investors who still bore the scars from the 2008 global financial crisis swore off the markets forever, claiming they were akin to a casino. Meanwhile, the S&P is up 183% since the bottom of the 2020 bear market. Twenty years ago, my career took a dramatic turn. I was hired by Avalon Research Group, the most contrarian research firm on Wall Street. We were only allowed to initiate coverage on stocks if it went against the consensus. The firm poked lots of holes in the hype surrounding many popular stocks - so much so that the founders had to hire security after receiving death threats. How's that for extreme sentiment? At Avalon, we were right way more often than we were wrong. I still go against the grain when sentiment is at an extreme. I love nothing more than buying a stock that most or all of the analysts rate a "Hold" or "Sell" or buying stock of a quality company that has been hammered after an earnings miss, despite positive results. You can't simply be contrarian for the sake of being contrarian. But when markets make big moves because of extreme sentiment, it's usually profitable to take the opposite trade. Good investing, Marc P.S. Want to learn about a specific strategy that's geared around "zigging while others zag"? Tomorrow, I'll be hosting a free online event that I'm calling the "Overnight Reversal Watch Party." During the event, I'll unveil my latest research on why the biggest losers in the market almost always rebound the next day... and how this pattern could lead to potential wins as high as 354% in 24 hours or less. The party starts at 1 p.m. ET tomorrow - claim your spot here now! |
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