Buy Bears, Sell Bulls
Friday, 10/03/2014 09:28
Extraordinary gains aren't easy. Obvious until you try it...
AT OUR San Antonio summit, Rick Rule gave a talk that, as always, was well reasoned, packed with facts, and powerfully cogent,
writes Louis James, chief metals & mining investment strategist at Doug Casey's Casey Research.
His message was simply that bear markets are for buying and bull markets are for selling – and in the future, resource investors with staying power would look back on the current market as "the good old days" when they were able to buy great stocks cheap.
It was a great talk. No one I spoke to had any objection nor argument against. What I did hear from some people, however, were comments along the lines of:
"Yes, but Rick Rule's been saying that for years."
Given the level of understanding and sophistication regarding natural resource investing among Casey Summit attendees, this downbeat expression might be a sign of a bottom.
Fair enough. But while I did get some questions about talking tax losses or reducing exposure to metals and mining stocks until the tide turns, what most people wanted to know was what the best bargains on sale now are. My answers are covered in our metals newsletters and updated in between issues.
Back to Rick's talk. When I heard the pushback about Rick having said the same thing for years, my first thought was that he hasn't; during the first two years of the slump that began in 2011, Rick was saying the market could go lower. He did recommend selected investments earlier, but it wasn't until the beginning of this year that Rick and the others we featured in our Downturn Millionaires and Upturn Millionaires videos really started saying that this is the year to go long – way long.
Others have been more assertive about buying on the way down, myself included, which I have admitted in print before.
But here's the thing: Rick and Doug and others – myself again included – have indeed made money buying when the market melts down and despair is in the air, as it is at present. That is an undisputed fact.
This got me to wondering why anyone would dismiss Rick's remarks. I very much doubt that anyone there thought Rick was making things up, lacking in perception, or faulty in his logic.
Nor is it plausible that he could have been trying to trick anyone – to what end? Sure, brokers make money on all trades, winners and losers, but brokers who lose their clients' money lose their clients. It simply makes no sense to deliberately mislead investors about the market or give bad advice on purpose. That's a recipe for going out of business, and Rick has been in the business for decades, making a lot of money for a lot of people along the way.
No, I don't think anyone was really doubting Rick's sincerity or his conclusions. The hesitant ones were just so beaten up by the markets they were afraid.
This brings us back to an observation I've made many times myself and tried my best to stress to investors before they become resource speculators: you have to be a contrarian in our sector, buying low and selling high, and that takes a lot of courage based on solid convictions.
I suspect that some people may sabotage themselves on both scores when the market is down, not wanting to seem like zealots, blind to negative results. The thought makes me uncomfortable myself.
And yet, it's true that resource investors must be contrarians, or they will get wiped out, and it's absolutely true that successful contrarianism requires a very great deal of courage.
That's when it hit me: it's no accident that Doug and Rick make millions while others make peanuts. Anyone of reasonable intelligence could do what Rick and Doug do, but they don't choose to. Fear can be fought, conviction can be nurtured, contrarianism can be cultivated. The ingredients and recipe for success are right in our hands...but so few people grasp them!
Extraordinary success can't be easy, or it would cease to be extraordinary. Obvious. Almost tautological. But still important; it means that while few people do make the necessary choices, almost anyone can make them.
That includes you, my dear reader – if you have the conviction. So what's the difference between a fanatic and a visionary?
Honest answer: Nothing. A visionary is a fanatic who happens to be right.
I'm convinced Rick is right, of course, agreeing as he does with the Casey consensus on our market sector. I've been putting my money where my mouth (or keyboard, as the case may be) is.
Only time will tell if we are right – but if you wait until it's obvious that we're right, you'll miss the opportunity for maximum profit.
Tough call.
But the choice is yours, and only you can make it. And now you have the opportunity to be seated front and center to hear Rick's entire talk, along with over 30 other world-renowned experts, in our
Casey Research 2014 Summit Audio Collection.
With your Casey Research 2014 Summit Audio Collection, you'll hear three days of in-depth presentations covering the most important issues facing our economy today and learn how to survive and prosper over the coming year. Altogether, over 26 hours-plus of lessons from the world's greatest investors, delivered to your door as a CD set or straight to your computer in MP3 format. And if you order today, you'll get $100 off the Summit collection price.
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