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Curtis Freeze Made 210% Last Year Doing This: You Can TooBy
Thursday, February 3, 2011
Curtis Freeze's hedge fund soared 210% last year... making it the world's second-best performing hedge fund in 2010.
How did he do it?
He bought small-company stocks in "Country X."
Here's what he told Bloomberg last week:
I'm still very bullish on [Country X]... so few people are looking around [Country X] for ideas.
As long as people are skeptical, that means there's opportunity. If the consensus is that [Country X] is going in one direction – up only – I'd be much more worried.
Right now, people are skeptical. And nobody is there looking. But Curtis has "two dedicated analysts on the road constantly" in Country X.
Almost a year ago, I quoted Curtis Freeze in my True Wealth newsletter. Here's the quote:
[Country X] is the only country in the world that has 200 listed companies trading below just the cash on the books... 200 companies you could virtually buy for free. These are valuations we've never seen in the history of [Country X] and maybe not the history of investing.
I summed it up in that newsletter by saying, "There is no greater value in the world... and possibly in history, than small stocks in Country X."
Curtis put his money where his mouth is, buying smaller companies in Country X – and his fund rose 210%. The great part today is...
Small-cap stocks in Country X are as cheap today as they were when I wrote about them a year ago. Check it out:
Based on the Nasdaq Index, U.S. stocks now trade at over three times book value and over two times sales. In other words, small-cap stocks in Country X would have to rise FOURFOLD to equal U.S. valuations. Country X is CHEAP. In True Wealth, we look for three things in an investment: cheap, hated (or ignored), and an uptrend.
Small stocks in Country X basically set records for the first two categories. For cheap, we're at valuations "never seen in the history of investing." And for ignored, the market is not far off of 25-year lows. The uptrend is there, too... Shares of my favorite way to play this idea bottomed in October 2008 and March 2009 and are now at three-year highs. And they're still cheap!
To end the suspense, Country X is Japan...
For me, buying small Japanese companies today is like buying gold in 2002. In 2002, investors were completely apathetic about gold. I couldn't get subscribers interested in the least. They wanted the next hot dot-com... and I wasn't going to give it to 'em. Don't make that mistake with small Japanese stocks today. If you missed gold then, don't miss this now.
My preferred way of playing this is through shares of the WisdomTree SmallCap Japan Dividend Fund (DFJ). It's easy to buy... It trades like a stock in the U.S. And it holds hundreds of small Japanese companies.
This fund, as its name suggests, is full of small dividend-paying stocks. Dividend-paying companies are cash-generating companies... which is just what we want. DFJ has literally hundreds of percent upside over the next five years, and the downside risk is pretty small.
Curtis Freeze earned investors 210% last year in small Japanese stocks. And the value is still there today.
Look... investing simply comes down to risk and reward... to stacking the odds in your favor.
In this trade, our upside is hundreds of percent... And if we use a 25% trailing stop, we're only risking 25% in the worst case.
Hundreds of percent upside, while risking only 25% on the downside? Odds like that don't come along often. You ought to take them...
Good investing,
Steve
Further Reading:
In October, Steve called Japan "the world's cheapest major stock market," and for good reason. Find out the recommendation Steve called a "low-risk speculation with significant upside potential." It's up 16% in three months. Read more here: And the World's Cheapest Stock Market Is...
Market NotesIT'S STILL BOOM TIMES FOR IOWA Our chart today shows they're still partying in Iowa... and that you should get ready to pay more for food...
As Michael Pollan details in his excellent book Omnivore's Dilemma, most Americans eat a heck of a lot more corn than they realize. The cows, chickens, and pigs you eat are fattened with corn. Corn syrup makes your soda taste good. It's also in all kinds of cereals, condiments, and packaged foods. The stuff is the foundation of the U.S. food system. And thanks to the Great and Stupid ethanol boondoggle, we now burn 40% our annual production as motor fuel.
All this is why corn is a permanent member of our daily "watch list." For much of the past 20 years, a bushel of corn has traded in the $2-$3 area. But due to recent weather trouble, historically low stockpiles, and the emergence of Asia as a big buyer of corn, prices are skyrocketing. The vital commodity is up 77% since the summer... and just struck a new 52-week high.
Just like robust oil prices mean good times in Texas, robust corn prices mean good times in Iowa, the nation's largest corn producing state... and boom times in fertilizer companies like Mosaic.
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