By Dr. Scott Brown, Education Director
Thursday, March 26, 2009: Issue #964
Welcome to the 11th Annual Investment U Conference from sunny St. Petersburg, Florida.
In his 1989 Letter to Shareholders, Warren Buffett said, “We only want to link up with people whom we like, admire, and trust.”
That’s why we are here… to introduce members to our experts and recommended specialists… people we trust to give us the best ideas for making money now.
As the Roving Reporter for this year’s conference, my goal is to give you an insider’s view of this year’s teachings. Investor education and networking is the focus of Investment U… we are not here just to get a list of our editors’ top picks. Even though many are here for exactly that.
We are here to get knowledge on new strategies for wealth management so we can profitably make our own decisions for what’s right for us.
Welcome to the Conference
Julia Guth, Founder and Publisher of Investment U opened the event saying that although some businesses and investors are all about “surviving the bad times” right now, she stated emphatically that she hates that word “surviving.” And reminded us that is not why we are here. There is no satisfaction in “just surviving.”
As a business manager and an investor, Julia remarked what is truly motivating is the pursuit of our dreams, and for most of us, dreams take money.
So she is inspired by our analysts’ approach, which is to show us how to “prosper” in the bad times, not just “survive.” She set the theme for this week’s event, and for these reports – How to Manage Your Money for Good Times and Bad, So You Can Prosper in Both.
Overcoming “The Great Recession”
Alexander Green, the Chairman and Investment Director of Investment U, followed Julia with a resounding endorsement for investing in the stock market today.
He pointed out that the media and the scaremongers would have you believe that the economy is coming crashing down. But it’s not.
No doubt, the market has seen some rough trading sessions. However, when media talk turns to the United States entering a Depression, he chuckles.
Why? Well… it’s very unlikely that the great depression will happen again – at least not now. And he gave us a few reasons why.
In the 1930s, the government raised interest rates and tightened the money supply. They increased tariffs, which angered our trading partners and isolated us. Finally, they raised taxes. That squeezed businesses, hard.
The final “nail in the coffin” was when our federal government let the banks fail. It was just too much for the system to take.
Today is a different story. Banks are being bailed out, and interest rates have been slashed over the past 6 months.
In fact, most investors should be looking at our current market with optimism, even though that’s not what you’ll hear – the mainstream media is still focused on whether we’re entering another Great Depression.
And perversely enough, the market often behaves differently than the economy, often climbing during downturns and falling during upturns. These are rare opportunities for investors right now.
“We’ve had many bear markets, but remember that crashes, panics and slumps are your friend.” Alex explains, “Returns of up to 900% were attained by stepping up and buying during crashes.”
It’s this reason why he’s especially interested in equities right now…
Alex’s next few words certainly moved more than a few of us to the edges of our seats. He talked about “vice” stocks he’s recommended in the Oxford Club Communiqué – like Diageo (NYSE: DEO), the world’s largest spirits producer. He went on to name six other stocks that have skyrocketed in very similar conditions. These companies could see incredible gains in our current recession.
If you’re here, you may have already placed a trade. If you’re not, you can get an audio transcript of his talk here.
Finding Big Profits Through Innovation
Louis Basenese talked about the “one sector that will save our economy.” He showed that small caps have led stocks out of every recession, returning an average of 74% over a 3-year period.
What surprised me is that small caps also outperformed every asset class coming out of a recession, no matter what time frame you looked at within that 3-year period, whether it was 1 month or 6 months. And they are leading the market again, right now.
But Lou drilled it down even further, showing that there is a “class within a class” of small cap stocks that move the fastest…called “White Caps.”
You see many small companies are built on a new or unique innovation. Unfortunately, many will fail because they were based off a flawed or irrelevant technology. Look for the most innovative companies, with a unique first position in their market, that are already dominating their industry and making money.
If you’ve ever read the best-selling management book “Blue Ocean Strategy,” it will give you a good road map to how these companies position themselves in the marketplace.
Lou mentioned 3 companies that he considers the most successful innovators today, including TeleCommunication Systems (Nasdaq: TSYS), the leading provider of technology for facilitating text messaging – and if you have a teenager you already know that texting is a communication revolution. He also recommended a desalinization water play and a nanotechnology play.
For details on all of Lou’s recommendations here at the conference, go here.
Overcoming Your Biggest Risk
Perennial favorite, Investment U Conference speaker Rick Rule, Chairman of Global Resources, opened up with a sobering reminder on why we need to look back…
“I gave a hell of a lunch speech last year and I wish I would have listened to it. I knew that credit markets were broken, knew credit was important to restore stocks, and I didn’t get anywhere near as far out of the market as I should have.”
He went on to emphasize that,
“In that whole panoply of risks the biggest risk in the investment business is ourselves. Me… I knew the resource markets were expensive, I knew the credit markets were at risk, and the government was unable to help. But I didn’t think…”
I think we’ve all “been there” and had an experience like that. It’s why we sit down once a year in a gorgeous setting like this – looking back, while looking ahead.
For many of us, “looking ahead” meant to the Amateur Charity Golf Tournament to benefit the Roberto Clemente-Santa Ana Health Clinic, a charity that Investment U has supported over the years. And I must say that in all of my years as a golfer – or whatever you call a grown man digging trenches with gold clubs – I haven’t seen anything as funny as Lou Basenese.
Walking out of the pro shop, he was dressed from head to toe in flamingo pink.
Everyone around me was laughing, I was laughing… Lou was laughing.
That is, until we started taking pictures. Then he didn’t laugh as much. (I’ll share pictures later) We’ve got a lot to go over tomorrow, so until then…
It all starts with education,
Dr. Scott Brown
P.S. Stay tuned for tomorrow’s highlights, including Louis Basenese’ “Three Strategies that Work in Every Market.” To see the entire conference itinerary, go here.
For a limited time, we’ll be offering audio recordings at a conference price of $79. You’ll be able to get all of the today’s recommendations, and the rest of our conference, in MP3 format – the fastest way possible. If you’d like to receive an audio version of the entire Investment U conference and get the complete list of stocks Alex Green and Lou Basenese talked about today, go here.
Until then, stay tuned for Thursday’s, Day 2, conference notes tomorrow.
- The Investment U Roving Reporter: Day 3 – Live at the Conference
- The Investment U Roving Reporter: Day 2 – Live at the Conference: “Profitable Trading Strategies To Use Right Now”
- Investment U: What No Books, No Schools, No Brokers Will Teach You
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