caseyresearch.com / By Louis James, editor, International Speculator / November 06, 2016
Editor’s note: If you’ve been reading the Dispatch, you know Casey Research founder Doug Casey believes we’re at the start of a gold “mania.” In the coming years, he expects certain gold stocks to rise 500%, 1,000%, 2,000%, or more.
Yesterday, our gold stock guru Louis James explained how he finds gold stocks with huge upside potential. Today, Louis gives key advice on maximizing your gains in gold stocks…
Here’s how to make volatility your friend: Buy low and sell high.
That’s easier said than done.
To make it work, you have to be a contrarian investor. That means backing up the truck for stuff no one else wants.
It may be a cliché, but it’s true: The best time to buy is when there’s blood in the streets. And the time to sell is when everyone else piles in to the market you knew would go up.
Of course, this only applies to investments that have value. Buying after the pet rock market crashed in the 1970s was not a great move. But buying copper when it fell below the cost of production in 2001 was. The world still needed copper then, needs it now, and will need it in the future.
In an ideal world—or at least one in which we are immortal—disciplined contrarians could amass limitless fortunes. All they’d have to do is buy necessary goods after total market meltdowns and sell when the masses pile in.
Unfortunately, these cycles can last ten or twenty years. That’s well beyond the patience of most investors.
Enter our friend: market volatility.
Economists like to imagine that markets are rational. Experience tells us otherwise. Markets are often more volatile than pure theory predicts. Resource markets, and precious metals markets in particular, are among the most volatile.
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