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The Secret Behind My Best RecommendationsBy
Wednesday, November 20, 2013
"I feel terrible when I follow your advice," Darrin told me yesterday...
I'd just gotten off the stage in Singapore after giving a speech at the S&A Alliance conference, when I was approached by a friendly-looking subscriber – Darrin.
But Darrin didn't start off friendly... Darrin came right up to me and told me how terrible he feels every time he buys something I recommend…
It turns out, he meant that as a compliment... I had made him a lot of money. He told me...
Over years of following my advice, Darrin came to a conclusion... "Hold your nose and buy" works. The worse Darrin feels when he's making a trade based on my advice, the more he knows he NEEDS to buy it. He has learned that the worse he feels when he's pulling the trigger, the more money he makes.
I have to let you (and Darrin) in on a little secret...
I feel the same way Darrin does when I'm buying.
I have simply learned that Darrin's feeling – the "hold your nose and buy" feeling – is actually what you want to feel.
It's GOOD to feel nervous that things look really bad and you're the only person in the trade.
Said simply... when nobody is left to sell, the downside risk is gone, and the upside potential is the greatest.
So what's an investment today where you're the only person in the trade... where there's nobody left to sell?
How about Chinese banks...?
When I recommended Chinese banks recently, I got a three-word e-mail from Tama Churchouse, an analyst in Hong Kong who I respect (from www.AHAreport.com).
Tama's e-mail simply said "Cojones muy grande."
I asked him to elaborate on that e-mail while on stage this week in Singapore. Tama said:
I told you about Chinese banks a month ago. I wasn't buying because I loved them. I was buying because there was nobody left to sell. I wrote:
Have you seen what's happened with Chinese banks lately? They just hit a new 10-month high this week. The easiest way to buy Chinese banks is through the Global X China Financials Fund (CHIX).
If you want the next "I feel terrible when I follow your advice" trade, buy Chinese banks...
Good investing,
Steve
Further Reading:
For the last few months, Steve has been urging readers to buy cheap, hated Chinese stocks. Find more of his favorite opportunities right here:
Triple-Digit Upside in this Safe, Simple Trade
"If you're simply bold enough to buy when people think China will never amount to anything... you can make a lot of money in Chinese stocks." This Trade Has Triple-Digit Upside Potential... And NOBODY Is Buying
"It's hard to set up trades with risk-to-reward characteristics as good as we have here." Market NotesAMERICA'S FINANCIAL BACKBONE IS BOOMING The U.S. financial stock fund XLF is booming... and that's good for America.
Regular DailyWealth readers know we monitor XLF to gauge the action in the banking sector. With large weightings in JPMorgan, Bank of America, Goldman Sachs, and Citigroup, XLF represents the backbone of the U.S. financial system. It rises and falls according to America's ability to earn money, save money, service debts, start businesses, and generally just "get along."
Like most assets, XLF suffered a major decline in 2011. But today, banks are getting an added boost from the Fed, which is keeping interest rates super-low. That means banks get to borrow cheap... and lend money out at higher rates. And as Steve noted a few weeks ago, we're likely to see "many more years of very low interest rates."
As you can see in today's chart, XLF has soared from its 2011 low under $12 per share to over $21 per share today. And last week, the fund broke out to its highest level in more than five years. The bull market in American finance continues.
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