♟ Don't Fall Into This Trap

Even the so-called experts make this mistake.‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

"The next time you get that feeling that you just have to buy a stock, listen to that guy on your shoulder..." Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance It's never "different this time" in the markets. It just takes time to come to that conclusion. And during that time, you can make or lose a lot of money. Valuations on companies always revert to the mean - their average levels, as determined by history. Why is this? Well, a business is valued based on its growth, its sales and its earnings. History says businesses are usually valued at between 2X and 10X sales, depending on the sector. In this cycle, we've seen companies trading at 25X, 50X, 75X and even 100X their reported yearly sales. Would you pay someone 100X yearly sales for their business? The Greatest "Dip Buy" Opportunity in Decades One of the "World's Most Admired" Companies Generates More 12-Month Income Than Disney, Square or Tesla - Yet Trades for Less Than $2 Per Share. If You Buy One Stock on the Market Dip - This Sub-$2 Stock Has to Be It (It'd Still Be Undervalued at $20!) Probably not. But that's exactly what so-called experts were doing. How do I know this? Look no further than the Tiger Cubs. The Tiger Cubs were hedge funds created by protégés of famed hedge fund manager Julian Robertson. His original Tiger Fund took $8 million in seed capital in the early '80s and turned it into over $20 billion by the end of the '90s. From January 1, 2022, through April, Tiger Global Management lost over 44% of its value, incinerating over $16 billion of investor capital! The markets are down much less than that. The biggest losers among the fund's holdings are down 70%, 80% and close to 90% from their highs, and they all have one thing in common... Over the last few years, the companies in question were selling for 30X, 40X, 50X and even 100X sales. Now they are all trading for less than 5X sales - and in some cases less than 1X sales. That's reversion to the mean. YOUR ACTION PLAN The next time you get that feeling that you just have to buy a stock, listen to that guy on your shoulder telling you to check the mean for the industry. That will help you determine whether you should trade or invest in that company. That's what we do in The War Room. We trade AND we invest, giving you the best of all worlds! Our track record proves it - we've won on over 75% of our trades since inception. Isn't it time you joined us? Do you own gold? Somebody recently decided to buy a lot of it... And I think I know why. Click here for details on a brand-new way to invest in gold. FUN FACT FRIDAY "Long-duration" stocks (such as growth companies, which take longer to turn a profit) are vulnerable to rising rates. As the Fed has tightened up, relative performance has dropped for growth, tech and other long-duration companies. As Karim noted above, you need to be on the hunt for stocks that are undervalued - and continue to ignore those that are overvalued. INSIGHTS YOU MAY HAVE MISSED The Next Sector to Boom Recession-Resistant Sector Pick A Critical Tool for Improving Your Trading Results Revealed: The One and Only Safe Haven Investment Left Follow Us on Instagram! FACEBOOK TWITTER   Monument Traders Alliance   You are receiving this email because you subscribed to Trade of the Day. To unsubscribe from Trade of the Day, click here. Questions? Check out our FAQs. Trying to reach us? Contact us here. Please do not reply to this email as it goes to an unmonitored inbox. To cancel by mail or for any other subscription issues, write us at: Trade of the Day | 16 West Madison Street | Baltimore, MD 21201 North America: 1.800.507.1399 | International: +1.443.353.4977 Website | Privacy Policy Keep the emails you value from falling into your spam folder. Whitelist Trade of the Day. © 2022 Monument Traders Alliance, LLC | All Rights Reserved Nothing published by Monument Traders Alliance should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in their own securities recommendations to readers. All of our employees and agents must wait 24 hours after online publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Monument Traders Alliance should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.