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The Ultimate Buy Setup Right Now in This AssetBy
Thursday, October 19, 2017
Everyone's talking bitcoin. It's extremely "loved" by investors right now...
Even though I'm cautious on cryptocurrencies, it's a fascinating idea, worth learning about. And that's why we've shared essays on it over the past several days.
The thing is, when I look at investment opportunities, I pay more attention to what's "hated."
That's where I've found my biggest winners often come from...
Two months ago, in my True Wealth newsletter, we bought an asset that had just reached a record hated level.
We bought near the bottom, as you can see – and now the uptrend has begun. Take a look...
 What is this investment? It's a real asset – a commodity – that will never truly go out of style. I'm talking about cocoa.
Cocoa beans are what makes chocolate special... The beans are dried, fermented, then broken into bits called "nibs." The nibs are then further processed into chocolate.
But nibs, apparently, are facing some setbacks for the moment...
Cocoa prices have fallen nearly in half since 2015. Speculators, worried about the possibility of a saturated market, have gotten out of the trade and driven prices down.
The pessimism surrounding cocoa reached an extreme over the summer. We can see this by looking at the Commitment of Traders (COT) report, a useful measure of what speculators are betting on today. Take a look...
 Late in the summer, speculators placed more bets against the price of cocoa than at any time in history. They wanted nothing to do with it. The thing is, demand for cocoa isn't going away. (It's chocolate!)
I told my True Wealth subscribers two months ago:
As you can see from today's charts, you haven't missed the opportunity yet in cocoa...
If you want to make money, typically your best bet won't be on what's getting the love. You want to find a hated asset. Cocoa reached a record hated level over the summer. And now it's in an uptrend.
That's the kind of setup you want to take advantage of to be a successful investor...
Good investing,
Steve
Further Reading:
Like cocoa, the U.S. dollar has reached a hated extreme. And Steve believes we have a unique way to take advantage of it today – with even more potential upside. Learn more here: Capitalizing on the Surprising Upside in the U.S. Dollar.
Brett Eversole recently highlighted an investment that traders are in love with right now. "We love to see sentiment extremes like this... They're great opportunities for profit," Brett writes. Read more here.
Market NotesTHIS COMPANY KNOWS YOU CAN'T RESIST ITS FOOD Today's chart shows a market leader that built its success on addictive products...
Longtime DailyWealth readers know we've highlighted the power of investing in companies that sell habit-forming products, like soda, coffee, and alcohol. People buy these products, consume them, then go out and buy more. And we can see the same thing playing out in fast food...
McDonald's (MCD) has added some healthy options... But people truly crave its burgers, chicken nuggets, fries, and milkshakes. Most consumers know they're full of salt, fat, and sugar. But they don't care. Steady, loyal business has earned the restaurant chain a solid balance sheet... And it passes those rewards on to its shareholders. The company has now raised its dividend 41 years in a row.
As you can see in the chart below, McDonald's shares are up 49% over the past year... And they're hitting new all-time highs. It may not be a popular strategy, but buying companies that sell addictive products can consistently boost your returns...
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