Build A Fortune In The Stock Market

There is only one way to truly build wealth in the stock markets — spot trends well before the thundering sheep herd of investors does, invest in them many months and sometimes even years before the average Joe and Jane, and concentrate your stock picks. If you do, 40% and 100% annual returns are possible. All this without great risk you say? Absolutely. Well, at least with no more risk than the terribly diversified portfolios (and terrible!) that you receive at most commercial investment firms. How can I say that concentration is less risky than diversification? Well if you perform research that tells you that certain asset classes have a 90% chance of appreciating greatly and you greatly overweight this asset class in your portfolio, I’d take the 10% downside risk any day to perhaps outperform a diversified strategy by 20% or even 60% a year. In essence the “get rich quick” title above is slightly tongue-in-cheek as there are truly no guaranteed get rich quick schemes in stock investing; however, there are certainly periods of time triggered by certain government and central bank actions that present an opportunity to build great wealth in a short period of time. This is just one such time right now.

• Prediction made in January 2006: “On January 7, 2006, I offered this piece of free advice on my blog (go to http://www.theundergroundinvestor.com and perform a search for «U.S. Treasury Bonds» to read the full article), “Many people think of any type of dollar denominated bonds, whether they are U.S. corporate bonds or U.S. Treasury bonds as a safe place to park your money for reliable sources of income stream. In fact, the U.S. Treasury Department on their own website, even tout U.S. Treasury Securities as a ‘great way to invest and save for the future.’”

“Many people believe this rubbish because they are advised of this by a horde of financial consultants that have zero understanding of how the political-corporate-banking triumvirate operates, and how this financial triumvirate has produced a most unattractive likely scenario for dollar-denominated bonds going forward from 2007. Many people think of U.S. Treasury bonds as safe because of the federal guarantee. The ten reasons below [stated in my blog article] render that federal guarantee irrelevant.”

• Outcome: Six months later in June, after bond prices experienced a surprise, unexpected plunge in prices according to The Economist (of course the plunge wasn’t surprising to me!), the world’s most followed bond commentator, the U.S. bond king Bill Gross, finally agreed with our assessment of U.S. bonds as a poor investment. In September, 2007, foreign investors not only ceased purchasing U.S. bonds and debt like it was the plague but they sold the largest amount of U.S. debt in 7 years! This was the first example of many predictions I made that came true many months in advance of anyone else.

• Prediction made in mid-2006 in my Online SmartKnowledgeU™ Education Course: “Highly leveraged hedge funds are extremely dangerous funds to be invested in as of mid-2006 due to this situation [easy and risky credit]. If you are in a highly leveraged hedge fund, we at SmartKnowledgeU™ recommend immediately divesting of it before you potentially lose everything you have invested in that fund. In as simple terms as we can explain it, many hedge funds bought up trillions of yen to make easy returns for their investors.” If that warning wasn’t explicit enough, I predicted back then: “the Bank of Japan in mid-2006 is now aggressively contracting the global yen supply and raising interest rates — two actions that will cause any highly-leveraged hedge fund that has played dollar-yen-dollar swaps to collapse. That is an indisputable and inevitable fact.”

• Outcome: Starting about six months later, in early-2007 and still ongoing, those that did not heed our warnings are still in the process of losing billions of dollars from hedge funds, with a very low likelihood of recouping those losses.

• Prediction made in mid-2006 in my Online Education Course: “The dollar has to weaken not a little, but considerably, for the massive U.S. trade deficit to close considerably. And a stronger U.S. dollar of course makes this less likely to happen (a stronger dollar means that U.S. goods become more expensive for foreign countries, so U.S. exports would be likely to decline). However, because American individuals are burdened with debt as well, Bernanke’s hands are tied as to the number of times he can continue to raise interest rates without causing an economic recession. In the early 2000’s many American’s overextended their credit, taking advantage of historically low interest rates to buy huge houses with low mortgage payments that were really over their budget.”

• Outcome: The sub-prime mortgage fiasco that we warned about became a reality. Since a year ago, the U.S. dollar lost 15% against the NZ dollar, 5% against the Sing, and 16% against the Thai baht not to mention huge losses against major currencies like the Euro and Pound Sterling.

• Prediction made September 16, 2006 on my online blog: “Everywhere in the media, you have pundits saying that the commodities Bull Run is over — including even chief global economists of major investment firms like Steven Roach of Morgan Stanley. THEY’RE ALL WRONG…I’ve dug deep enough down into the rabbit hole to know that gold will rise much much higher in the future…Yes, oil has slipped to below $60 a barrel but again, this doesn’t mean that oil is done either.”

• Outcome: I made this prediction at a time when the price of gold was falling rapidly and all the gold bears stated that the commodity bubble was going to burst. As oil headed to $50 a barrel, a lot of experts started calling for $30-$40 oil. A lot of advice was given, even from chief investment officers at major global firms to sell out of almost all commodity based stocks at that time. Since then gold has moved to over $750 an ounce and oil rebounded strongly to over $80 a barrel. Understanding these trends have allowed me to earn more than 200% returns on gold stocks as well as 50% returns on oil stocks over just the past couple of months.

• Predictions I made September 6, 2007 (Speech at the Pan Pacific Hotel, Bangkok, Thailand) that will help you make a fortune in the future

• U.S. Federal Reserve will continue to sacrifice the dollar to prop up stock markets.

• Increased volatility as $370 billion in sub prime mortgages re-set to higher rates, starting with $50 billion in September and $30 billion every month thereafter for the next 18 months to 2 years. Triple-digit losses in the Dow during single day trading sessions will become commonplace.

• A deepening correction in global stock markets, likely to occur despite best efforts of central banks across the world, will cause the Federal Reserve and the ECB to launch efforts to drive the price of gold down before gold and gold stocks advance much much higher. At some point, the U.S. Treasury, Feds, and the Exchange Stabilisation Fund will succeed in manufacturing a strong rebound in traditional stock markets. This is the point you should be very very afraid.

• 2007, and possibly into very early 2008, will present the last opportunity to buy gold at less than $700 an ounce, but not without some volatility in between.

If you understand these above points and the reasons why the above will come true and has already started to come true in the five weeks since I made them, then you will understand what 99% of the thundering sheep herd of investors don’t understand. The time to rebalance your portfolio according to this strategy is yesterday! If you haven’t drastically altered the composition of your portfolio, it is not too late. Start now and you will build great wealth in the next five years. For more information, join our Group “Crisis Investing” on Facebook (http://www.facebook.com).