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Friday, December 13, 2019

The easiest way to make money in the market

Anyone can tell me what's the easiest way to make money in the market? I'm pretty sure not many can comfortably tell what is the best way to make money. After all, you will say, it is awfully difficult to make money in the market. Who has the magic for an easy way to make money? I know one and it is 100% surely an easy way to do so: Buying lows and selling highs!!😎😛


Don't you agree this is the easiest way to make money if you can buy something low and then sell it high? Of course, in theory it is but hardly anyone is willing to buy lows these days in the market. That's the most odd thing in the stock market. Normally everyone is interested to buy something cheap for anything else in their daily life. That's why people love to shop at Walmart, Marshall, Dollar Trees etc, which can effectively compete with Amazon. But rarely you will find someone who can tell you that they love to buy stocks cheaply. It seems it is a fashion in the market to chase highs and hardly anyone is looks for bargains, especially those great gems but left dead for months or even years without much buying interest for them. As I have often used as an example, my beloved MSFT had been left for dead for at least 10 years before people suddenly found that it was so easy to make money from it when it was deadly cheap. But I got numerous notes from friends telling me they were sorry that they didn't listen to me to buy when it was in $30s to $50s even when I was pounding the table many times here arguing how great its value was! But now when it is clearly very expensive at $150, it seems everyone is interested to buy it and thinking they can make great money from it regardless. I doubt buying MSFT at this level can truly make good money relatively speaking although I have no doubt MSFT is still and will continue to be a great stock to own. The reason for my suspicion is simple, it is against the easiest money making modus: buying lows and selling highs!


Now the more relevant question is what is really cheap to buy at the moment when the market as a whole is red hot with widespread FOMOs. As you can imagine, I'm not a fan of chasing at all and I love to buy lows. Let me share with you one sector that appears to have a lot of value in it when nearly everyone is hating it, a truly left dead one for now. It is the energy sector. You can hardly find anything that is more hated than energy stocks, not only for this year but for the last 3-4 years. Indeed who wants to touch it when oil and gas have been in a relentless downtrend for years and it is hard to see any light at the end of tunnel, right? But if you believe stock prices should in general follow the earnings, then I can tell you per the current estimates I have seen, the Energy sector is projected to have a an earning growth more than 30% for 2020, nearly double that for the second sector, Industrials. Believe or not, the red hot sectors for now, Information Technology and Healthcare are only projected to grow at around 10% for the next year. So Energy sounds to be really an area for my money to be for next year!


I know I'm a bit to generic as it is not an easy task to find a diamond among pebbles, especially in a dead sector like energy. Well for the fairness for my Family, I cannot talk specifics here but I did share several ideas already with my Family. Some of them have already gone up quite a bit and I have even closed a 50% profit for my calls for one of them. I'm pretty sure there are more profit potential in Energy and I'm planning to share more ideas with my Family. By the way, in the past few months,  I have been labelled as a permabear as if I only wanted to short everything. I can only laugh when I see this kind of laughable note. Just ask my Family members how much I have bought vs shorted. I'm just highly cautious at the moment and extremely selective but I'm never afraid to buy when there are bargains. The energy sector is one of them to buy for long term as well as for trading for me! 


If you are interested to learn more, send email to: dwmt19@gmail.com.

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