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Don't Chase Opportunities, Let the Opportunities Come to You

Written by Luke Burgess
Posted August 17, 2018 at 1:07PM

My 25-year-old neighbor is all bummed out.

He hasn't been successful in relationships with women for a while. And now he thinks he'll be alone forever.

Sounds silly, right? But I'm willing to bet that you know a few 20-somethings like this, too.

In my opinion the reason he's not having success is because he's trying too hard. My advice to him is this: Instead of chasing the women, let the women come to you.

He probably won't take my advice. But you should. Because it's this exact same philosophy that has made me a successful investor.

Don't Chase Investment Opportunities, Let the Opportunities Come to You

Baron Rothschild, the 18th century British nobleman and member of the great Rothschild banking family, is famously credited for giving us the contrarian's mantra:

The time to buy is when there's blood in the streets, even if it's your own.

Rothschild would know. The man made a fortune buying into the panic that followed the Battle of Waterloo against Napoleon.

Later fortunes would also be made using this philosophy.

In the stock market crash of the early 1970s, Warren Buffett bought an $11 million stake in the Washington Post Company. That investment would go on be worth $1.1 billion, nearly a 10,000% gain for Buffett.

On October 19, 1987, known as “Black Monday,” the Dow plummeted 22.6%. It was the largest one-day plunge in history — bigger than even the stock market crash of 1929.

But by July 1990, the Dow had recovered and was again making record highs. Had you bought the Dow on Black Monday, you'd be sitting on a 1,250% gain today.

These two examples don’t even begin scratch the surface of contrarian success stories. Time and time again, investing against the grain has been very profitable. And in every case, the successful investors didn’t have to chase the opportunity. Instead, they allowed the market to provide one.

Right now, there’s a major opportunity in gold that the market is handing us as a gift.

A Golden Opportunity

Gold is very often seen as a naturally contrarian investment itself. That’s because gold generally trades inverse to major equity and debt markets. When fear and panic grip the stock market, investors typically flee to gold.

But what happens when despair enters the gold market? What happens when everyone hates gold?

Well, just look at the gold market today and you’ll see.

The price of gold is now sitting at a 1.5-year low. And the majority of investors have now turned against the yellow metal. Short positions against gold are at record highs.

In gold town, there’s blood in the streets. A recent MarketWatch article even suggests gold may cease to be an investment.

To the true contrarian, this is a screaming signal to buy.

With contempt against gold at what is probably an all-time high, there has never been a better time to be an investor. As I mentioned to you a few weeks ago, the key to smart investing is to invest with your head, not with your emotions.

Long-term investors should be particularly looking at low-cost producers that could survive in a $1,000 gold environment. Speculators aiming for shorter-term gains with higher risk should look to development-stage gold companies with near-term low-cost production.

Whatever your strategy, right now is a great time to buy gold. The market is handing us a gift. Take it.

Until next time,

Luke Burgess Signature

Luke Burgess

follow basic@Lukemburgess

As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bubble and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.


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