Turning Fear into a 231.72% Gain

Small-cap stocks

During our working day we often have Bloomberg TV on in the background. We typically like working with ambient noise around us. Silence is uncomfortable. The added bonus of having Bloomberg on is you get a reasonably good idea of what’s happening in world markets.

Bloomberg is one of those mainstream broadcasters that we don’t mind. They don’t usually tend to push their views onto viewers, and they stay pretty apolitical. That’s good. Compared to other finance TV stations, Bloomberg is our favourite.

And while we’re not constantly paying attention to everything that’s on there, we’d like to think a bunch of information still sinks in, even if subconsciously.

Bloomberg regularly has breaking news throughout the day. And almost every day some of that ‘news’ is about President Donald J. Trump.

One moment he’s on a golf course threatening North Korea. Then next he’s on a golf course threatening North Korea again. Then he’s on a golf course tweeting about US companies. And then he’s back in Washington bumbling around a teleprompter, making a half-hearted effort at condemning racist hate groups.

There was one point in the last eight months we almost thought he might be good for the US. It was just a moment, just one. But it’s gone now.

Don’t mistake our dislike of Trump for favour of Clinton. She would have been equally bad, if not worse. We don’t particularly like any politician the US has thrown up in the last…in the last…well, come to think of it, we’ve never liked any of them.

If you fail the politician test, you’re fired

The same goes for Australia. We don’t play favourites; we dislike them all.

And as embarrassing as Trump is, we’ve got our own buffoons to worry about.

Let’s say we wanted to get a job as a financial advisor — we were, once. To achieve a position as a financial advisor we had to pass a number of tests. We had to understand financial concepts. We had to know how to engage with clients, how to risk profile them, how to build a financial strategy with them.

To do this we had to study. We studied economics, finance and law at university. After university we had to pass more tests to prove our knowledge of the industry. We had to prove to the regulators and authorities that we were of sound character, and knew what we were doing. Failure to understand basic concepts would result in us not being allowed to advise clients. As it should.

But if you’re a politician, there is no test. There’s no requirement to know basic concepts of your industry — such as the constitution.

If politicians did have to know about the constitution, they wouldn’t be arguing in the high court about dual citizenship. They simply wouldn’t be in office. Any student of the constitution could have told you about section 44 and its restrictions on who can be a Federal parliament candidate.

In our book, for a politician to not know and understand the Australian Constitution is like an Instagram ‘Celebrity’ providing medical advice. Or like a shoe salesman giving out personal financial advice.

Clearly, if Barnaby Joyce or Matt Canavan had to pass a test on the constitution, they would fail. To us, that makes them unfit for purpose. Sack them. Out you go.

Fear, fear and a little more fear

‘Shambles’ is the only word we can use to describe the political landscapes in Australia and the US both. That also goes for the UK and, well, everywhere we can think of. We don’t have time to go into the problems in Venezuela, the Philippines, China, Japan…you get the point.

Even today President Trump decided to go on the ‘Twitter attack’ again. This time taking aim at Amazon [NASDAQ:AMZN],

Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt — many jobs being lost!

Place your views on Amazon as an investment aside for a moment. The fact is, Amazon employs over 351,000 people. Compare that to two other major US companies, Google and Microsoft…


Source: Amazon, Microsoft, Google
[Click to enlarge]

What perhaps also escaped Trump’s mind is that these companies are almost singlehandedly dragging the US markets to record highs. Rather than condemning them, he should be thanking them.

Instead, he perpetuates fear. The US is being dragged to the brink of racial conflict. Riots and violence. Extremists calling for a new civil war.

Meanwhile, Australia is wracked by a human rights battle, due to a lack of leadership on same-sex marriage.

Fear, confusion, turmoil, uncertainty. It’s how politicians justify their existence. They push out more fear and uncertainty than anyone — and the media helps by repeating it to you all.

Proof there’s something to get excited about

But the real fact is there’s a lot to be optimistic about. There’s a world where incredible breakthrough, as well as wonderful acts of kindness and generosity, happen every day.

The markets are full of companies that can turn around your investing life. These companies help push economies forward. They improve and sometimes even save lives. But you never hear about it.

It’s our job to open your eyes to what you don’t see in the mainstream. To get you thinking about new, perhaps confronting ideas. Ideas that lead to opportunity.

And in a world full of fear and uncertainty, it’s easy to get caught up in that mindset. Well, don’t.

Take for instance yesterday’s market performance.

When the ASX All Ordinaries finishes 0.5% higher, you could be mistaken for thinking it was a bad day.

Except 23 stocks finished with greater than 10% gains for the day. For purposes of balance, I’ll point out that 10 stocks finished the day with losses greater than 10%. Only 10. And if you think the ASX has been a tough place to find winners, take a look at this. In the last three months these five stocks have gone bananas:

  • Bubs Australia up 371% ($125 million market cap)
  • Buddy Platform up 336% ($73 million market cap)
  • Fastbrick Robotics up 165% ($176 million market cap)
  • Artemis Resources up 202% ($83.81 million market cap)
  • Updater Inc. up 87% ($355 million market cap)

If you’d have put just $1,000 into each of those stocks in June, you would now be sitting on $16,586 — a 231.72% gain.

We included in their market cap to make a point. All these huge opportunities are small-cap stocks. Two of these stocks we know inside out. We know them because we’ve researched and recommended them to our subscribers in Australian Small-Cap Investigator. We can’t tell you which ones. That wouldn’t be fair on the readers who have paid for our recommendations.

The point is, in our view the ASX is an absolute gold mine ground for stocks with the potential to deliver massive gains. We say this because we know this to be true.

We know that the most exciting section of the ASX to find these winners in is small-cap stocks. Those are stocks worth less than $500 million, but more than around $50 million. These are the stocks that give us hope that people around the world, including Aussie companies, are doing great things.

These stocks prove that there’s plenty to get excited about. And when your focus is on the opportunities, not the fear, then whatever the world throws at you, there’s always something better to look forward to.

Regards,

Sam Volkering,
Editor, Australian Small-Cap Investigator

Sam Volkering

Sam Volkering is Editor for Money Morning and its small-cap, cryptocurrency and technology expert. Find out what he has to say here with all his latest articles.

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