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Has This Stock Gone Too High? No Way... It Can ALWAYS Go Higher

By Dr. Steve Sjuggerud
Wednesday, December 8, 2010

"The lesson is, it can always go higher..."
 
I was struggling. I was on deadline for my monthly True Wealth newsletter. And I had what I thought was a fantastic idea for my readers...
 
But I had one problem: The darn stock had already soared 900% in the last two years.
 
 
With returns like that already, how could it possibly go higher?
 
I was reluctant. But it really was a great opportunity. My readers needed to know about it.
 
The only thing that was holding me back was the historical price performance. If I simply ignored its historical performance and evaluated it on its merits today, it was a buy.
 
So I went ahead and recommended it. Here's what happened...
 
 
The story of this stock – Silver Wheaton – is simple and great. Here's what I wrote to my True Wealth readers:
 
Silver Wheaton (NYSE: SLW) has one of the best business models I have ever seen...
 
It could make over $800 million in profits in 2013... and yet it has less than two-dozen employees and basically no operations.
 
Its "business" is driving to the bank and cashing royalty checks. When your business is depositing big checks payable to you, it's near impossible to lose money.
 
When I first wrote the story less than two months ago, Silver Wheaton's market cap was $9.5 billion. Today, it's around $14 billion.
 
True Wealth readers are up nearly 50% on a stock I almost didn't recommend.
 
The lesson is simple. My colleague Brett Eversole pointed it out to me yesterday. Brett is new in my office. He's just 22 years old. Here's the lesson he learned from Silver Wheaton:
 
"It can ALWAYS go higher."
 
In the past, I've avoided great stocks just because it looked like they'd already had great runs. Then I watched as they proceeded to soar, over and over again.
 
I thought of those past mistakes when I recommended Silver Wheaton. I learned the lesson.
 
If something is a great value... a truly great opportunity... don't worry so much about where it's been.
 
The lesson is, it can ALWAYS go higher. Silver Wheaton is proof of that.
 
Good investing,
 
Steve




Further Reading:

"Once I was up by 100% on Silver Wheaton, I sold half... From there I let it ride..." This success story could be you. Don't miss Steve's key investing lessons and learn how you can ride his recommendations to 100%-plus gains here: The Greatest Investment Lesson You'll Ever Learn.
 
"We will have to sell someday," Steve says. "And we will. When? We don't know... Right now, we're taking what we're given. We're playing a game of chicken with the Fed. It could go on for years." Find out how to make "ridiculous" amounts of money on this situation here: Stay Long Stocks.

Market Notes


ANOTHER "BAD TO LESS BAD" OPPORTUNITY

As we noted in early November, our "tech bottom" trade is turning out to be a big winner. Today, we provide another idea along those same lines. It comes from our colleague Frank Curzio. And it involves another cheap stock carving out a bottom after getting clobbered earlier this year...
 
Frank is one of the best stock analysts we know, with one of the best track records in the industry (click here for more on signing up for his excellent service). That's why we're watching one of his favorite trends right now: cleaning China's air.
 
China gets around 75% of its power from burning coal... which has helped wreck air quality in its major cities. These conditions must be improved to secure the country's long-term health. And one "no brainer" play on this idea is the "coal cleaning" sector – companies that reduce the pollution generated by China's electrical power industry.
 
Frank likes microcap player Fuel Tech (FTEK) here. It's a leader in the "coal cleaning" business. It's also a leader in our search to execute our "bad to less bad" strategy of ringing up 100% profits in a short time. As you can see, FTEK suffered a selloff early this year, has "carved out" a bottom, and is moving higher in response to its strong fundamental picture. FTEK is going higher...

FTEK has

In The Daily Crux



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