Published September 06, 2016

This Common Investing Mistake Could Cost You Everything

Buy low, sell high.

We’ve all heard the saying. It’s investing common sense. Yet, few people actually invest this way.  

Most investors do the exact opposite. They buy expensive stocks.

You see, most investors want nothing to do with a stock that’s been falling for the last three years. It’s much easier to buy a “popular” stock that’s trading at record highs. But that’s not how fortunes are made.

To beat the market, you have to go against the crowd.

That’s how Baron Rothschild, Sir John Templeton, and Warren Buffett became some of the richest men on earth. It’s how Casey Research founder Doug Casey made millions.

Like other legendary investors, Doug bought assets other investors hated.

Doug once bought a stake in a small Canadian resource company for $1,875. At the time, most investors wanted nothing to do with resource stocks, especially small, risky companies.

But Doug’s method paid off. Two and half years later, he sold his stake for $1.2 million. That’s a staggering 64,000% return.

That wasn’t the only time Doug made enormous gains using this same strategy. And now you can too.

• You see, many investors are making a dangerous mistake right now…

They’re buying U.S. stocks, which have been climbing since March 2009.

The S&P 500 is near a record high, and is trading for 18 times “forward” earnings. U.S. stocks haven’t been this expensive since 2002.

As we explained yesterday, you set yourself up for poor returns when you buy expensive stocks. More than 100 years of data proves this.

You also expose yourself to big losses. After all, what goes up must come down. That’s why we’ve been telling you to avoid most U.S. stocks. The risk outweighs the reward.  

We see much better opportunities in beaten-up industries and markets. Today, we’re going to tell you about one dirt-cheap market with explosive upside. This is a classic Doug Casey investment… and there’s still time to get in on it.

But first, you need to “meet” Nick Giambruno, editor of Crisis Investing.   

• Like Doug, Nick buys markets other investors run from…

He’s a contrarian, who learned crisis investing firsthand from Doug.  

This year, Nick has had success in several different crisis markets.

A world-class oil company that he bought for cheap in March is up 26%. A beaten-up platinum miner he recommended in April is up 31%. A gold stock he recommended is up over 47% in under six months. To compare, the S&P 500 is up just 7% this year.

• Nick created a system for finding markets with huge upside…

Like Doug, Nick avoids “popular” stocks that the financial media loves. Like we said earlier, these stocks are usually expensive.  He prefers countries or industries plagued by negative investor sentiment.

If a country or industry is getting nothing but bad press, it’s worth a look. It’s even better when a crisis makes the front page of world newspapers. According to Nick, you can get great deals buying hated markets.

He also looks for beaten-up markets. You see, all stocks fall during a crisis. If you time it right, you can buy profitable, well-run businesses for next to nothing.

Most importantly, Nick looks for dividends. According to Nick, dividends are “without question” the best way to spot value. Dividends are cash in your pocket. They’re harder to fake than earnings, which companies can pump up with accounting tricks. 

• According to Nick, Colombia has everything you could ever want in a crisis market…

It’s rich in natural resources. It’s one of Latin America’s fastest-growing and most diversified economies.  

But that’s not how most people see Colombia.

When most people think about Colombia, they think of the infamous drug kingpin Pablo Escobar’s Colombia… a country overrun by drugs and violence.

But that is not the Colombia of today.

Nick—who’s been to Colombia three times in the past year—says the country has undergone an “incredible transformation.” It’s safe and growing.

Still, a lot of people think of Colombia as a war zone. And that’s exactly why it’s worth a look… 

• Nick says Colombia is the “perfect crisis market”…

Nick wrote in the June issue of Crisis Investing:

This perception gap is a huge opportunity. It helps keep Colombia incredibly cheap. I can’t think of a country that offers better value. It’s no coincidence that Colombia is right in the sweet spot on the Value Radar, my tool for pinpointing world markets with the highest upside.

Nick is so certain that the average person’s perception will change that he recently made a large real estate investment in Medellín, Colombia’s second-biggest city.

Nick also says there’s a “huge amount of money” to be made in Colombian stocks.

• The COLCAP Index, Colombia’s version of the S&P 500, has been falling since 2013…

As we explained yesterday, stock markets almost never fall three years in a row.

When they do, a powerful rally usually follows. On average, these beaten-up markets have delivered gains of more than 30% during the fourth year.

Last December, Colombian stocks changed course. The COLCAP is now up 16% on the year. Last month, Colombia had the world’s top-performing stock market.

But this is likely just the beginning. The COLCAP is still trading 26% below its 2013 high. Based on earnings, Colombian stocks are also relatively cheap. The COLCAP trades at 16 times last year’s earnings. That’s 20% cheaper than the S&P 500.

• Nick recommended a world-class Colombian company in June…

It’s a holding company that invests in Colombia’s elite businesses. Think of it as Colombia’s version of Warren Buffett’s Berkshire Hathaway. It gives investors broad exposure to Colombia’s economy.

Best of all, it trades on the New York Stock Exchange. It’s as easy to buy as Apple (AAPL) or IBM (IBM).

In less than three months, this pick has gained 13%. But it’s likely headed much higher.

Remember, Colombian stocks have been in a bear market since 2013. And the stock is still cheap. It trades for only 13 times last year’s earnings. That’s a 35% discount to the S&P 500.

The company also pays a 4.5% dividend. That’s more than double the S&P 500’s 2% dividend.

Unfortunately, we can’t reveal the name of Nick’s Colombian stock. That would be unfair to Nick’s paying subscribers.

But you can learn more about this exciting opportunity by signing up for Crisis Investing. But before you do that, we encourage you to sign up for our newest training series.

• You see, most investors aren’t cut out for this kind of investing…

While the returns can be huge, crisis investing is riskier than buying blue chip stocks.

You should only invest this way if you know what you’re getting yourself into. To help you decide if Crisis Investing is right for you, we’ve put together a FREE four-part training series. This workshop explains how Doug and Nick find “beaten-up” stocks with huge upside.

By signing up today, you’ll also learn about the biggest crisis opportunity we’ve ever seen. As we often say, a major financial disaster is about to hit the U.S. When it does, millions of Americans could lose their entire life savings.

Most people don’t know how to prepare for this coming crisis. In this training series, we will show you how to protect your wealth. Plus, how to turn this crisis into a huge money-making opportunity. 

Click here to learn more about this training session.

Chart of the Day

Nick’s Colombian investment is soaring.

Today’s chart shows the performance of Nick’s Colombian investment over the past twelve months. As you can see, the stock has taken off. It’s up 34% on the year, and trading at its highest level since July 2015.

You may think that means it’s too late to buy this stock. After all, the essence of crisis investing is to buy cheap assets.

While that’s true, we also don’t like to buy cheap stocks that are in a sharp downtrend. You see, buying a stock in decline is like trying to catch a falling knife. You could catch it without getting hurt but you're more likely to lose a finger in the process.

To lower our risk, we try to buy cheap stocks after they’ve carved out a bottom and start moving higher. As you can see, Nick’s stock is in a nice uptrend. That tells us this rally could just be getting started.

Again, you can learn more about this stock by signing up for Crisis Investing. Click here to reserve your spot for our special FREE training series.