Bill Haast was a renowned scientist and snake handler. He led an extraordinary life – one dedicated to studying and working with poisonous snakes.
And he was famous for being fearless.
Bill handled the world’s deadliest snakes… and was bitten 172 times. He not only survived all those bites (which was recognized by the “Guinness Book of World Records”)… he lived to the age of 100.
This was no accident. Haast inoculated himself with small amounts of venom over prolonged periods of time. And he built up a resistance to the toxins.
If he had followed the old adage “once bitten, twice shy” – which applied, quite literally, in his case – Bill would have quit after the first bite, never pursued his passion, and never helped science make great strides in developing antivenom.
Handling snakes is definitely not a passion of mine. But making money in stocks sure is.
We all know that stocks can inflict painful “bites” from time to time. Like most of last year. And earlier this year. And definitely in the just-completed (and painful) month of August.
But, like Haast, investors like you and I can choose how we react to those bites.
Like Haast, we can keep taking “calculated risks” – meaning we’ll get bit and lose a bit of money here and there. But we’ll also benefit, creating enough wealth to inoculate ourselves against the threats to come).
Or we can play it safe, and avoid those occasional moments of pain – knowing that we won’t really get anywhere and won’t achieve future security.
I’m sharing this story at this particular moment for an important reason.
As investors, the biggest risk we face right now isn’t inflation. Or the Federal Reserve. Or even the recession everyone fear that never came.
The biggest risk is missing out on a potentially explosive fourth quarter. Of being so afraid of “bites” that we bail out of stocks and get left behind.
It’s why we don’t want to succumb to the “once bitten, twice shy” mindset.
You know what I mean: If something doesn’t work out the first time, don’t do it again. Or be hyper-cautious if you do.
But walking away from stocks – or freezing in place, waiting for the right moment to get back in – isn’t the answer.
The Bull Is Already Snorting
Most investors got hammered in 2022. Many sold their stocks, which intuitively makes sense.
Protect what’s left and live to fight another day.
It’s that “fighting another day” part that trips up so many investors – since they never fully get back into the ring.
We see that right now with a lot of investors continuing to sit on cash. Record amounts, in fact. To the tune of $5.7 trillion.
But regret seeps in when folks realize how much stocks have rallied, and how much they’ve missed out on.
Then indecision sets in – as they get caught wondering if they should wait for another pullback, or if they are going to miss out on even more gains.
After all, the broad S&P 500 Index has racked up more than two years’ worth of gains just since the bottom last October… meaning it’s an “official” bull market. Even with the August swoon.
Dig down into specific sectors and the numbers are downright stunning…
- PHLX Semiconductor Sector: 67.9%
- S&P 500 Information Technology Sector: 43.4%
- S&P 500 Telecommunication Services Sector: 36.8%
Those are some serious gains, even if it felt like a slog to get there. You can see why regret afflicts those who have stayed on the sidelines.
And “regret” brings with it a negative form of “compounding” – as in the “compounding of errors.” This regret invariably turns to FOMO, or “fear of missing out,” meaning those folks chase stocks by “buying high” and overpaying. And FOMO then supercharges the entire market, making it really hot for stocks.
Which is great for those who invested before the regret-motivated FOMO crowd jumped on the stock-market bandwagon.
Stay With the Best
The messiness we saw in August didn’t surprise me at all. In fact, I said to expect a volatile month on typically low trading volume as we continued to work through inflation, the uncertainty about central bank interest-rate increases, and lingering fears of a recession – which my data continues to show is highly unlikely at this point.
And we got it
But the 4.5% pullback pales in comparison to the gains over the last 10 months. And investors who continue to be “twice shy” risk missing more gains and prolonging their financial recovery.
If you’re nervous about buying or holding stocks right now, focus on the absolute best in the market – the ones with less risk and a bigger shot at profits.
I built my whole Quantum Edge system to find those exact stocks with the characteristics that indicate higher prices ahead. Our data shows that we succeed about 70% of the time.
On any given day, fewer than 1% of stocks make it through my system to even be considered a possible recommendation for my Quantum Edge readers.
These are shares of companies that have superior fundamentals… the best in the business. You can’t make money consistently in weak companies.
They also have strong technicals. They are stocks that are already on the move, which is better than trying to predict a bottom or a turnaround.
And here’s the kicker: Big Money is buying these stocks. I’m talking the really big money – like millions of shares worth many millions of dollars.
I cut my teeth in this business facilitating these Big Money trades. I was the middleman that matched up the buyers and sellers, and I learned firsthand how to detect unusually large institutional buying, down to the specific stock.
That’s the trifecta of high-probability investing right there: super strong fundamentals and technicals combined with Big Money inflows. Find stocks with those factors, and you have a good chance of making good money.
These are the kinds of stocks we’re going after right now. Many have gotten cheaper in the summer slowdown, and buying at lower prices lowers our risk and raises our profit potential. I expect multiple opportunities in the coming weeks as volume picks back up and stocks strengthen for their typical fourth-quarter rally.
You can click here if you would like to join us and receive my stock recommendations as soon as I release them.
Putting the odds squarely in your favor should help overcome the fears of getting bitten again. That way, you can get back to making money in stocks that are already on the move.
Jason Bodner’s Power Trends