"Bitcoin has been in a bear market, and everybody loves the asset," analyst Richard Bernstein told CNBC a few weeks ago.
Meanwhile, as he put it, "Oil has been in a bull market, and... you never hear anything about it. People don't care."
Rich nailed it...
The takeaway is, to make big money through investing, you have to be willing to buy an asset when nobody cares about it, and sell it when everybody loves it. It's (almost) that simple.
When you apply this formula today, you'll see that oil – and commodities in general – have a lot of room to run.
Let me explain...
In November 2020 – during the height of COVID-19, when the economy was at a standstill – I traveled to Abilene, Texas to size up the situation in the oil markets. I discovered that oil was as hated as it gets... which is exactly what I want to see in an investment.
At the time, the U.S. economy had slowed to a halt. The price of oil had fallen below the cost of production. So the oil industry had effectively shut down... At its worst point in 2020, the number of active oil rigs in the entire state of Texas dropped to just 100.
When I got home, I strongly recommended buying two relatively safe oil plays in True Wealth. One of them is up 43% as of Friday's close, and the other is up 21%.
Oil was hated. And absolutely nobody was paying attention. So, our timing was excellent... My readers bought a cheap, hated asset in the start of an uptrend.
The crazy thing is, even after those huge gains, these stocks are still cheap. They haven't become loved. So this trend can continue.
The price of oil has more than doubled – from its November lows around $35 a barrel to around $72 a barrel as I write. Oil was unprofitable to produce in November. Today, it's incredibly profitable.
Even crazier, "people don't care" about oil – still – as Rich Bernstein said. Yet, bitcoin fell from a peak around $63,000 down to $32,000, and "everybody loves it."
The same is true of many stocks today... like tech-fad giant Tesla (TSLA). The stock fell from a peak near $900 early this year to around $600. It has essentially traded sideways since March. Yet once again, "everybody loves it."
To get in early as an investor, you have to be bold and buy what nobody else is willing to buy. You have to "hold your nose and buy," so to speak.
The best opportunities are when you can buy a hated investment soon after the uptrend has just begun. And then you have to ride that uptrend for as long as you can.
That's it. That's the formula.
So even though oil – and commodities in general – have gone up a lot, you haven't missed it yet.
The fun will be over when everyone's excited... when everyone's bullish. That's when you'll want to sell. But we're not there yet.
Good investing,
Steve
Further Reading
"When everyone is making the same directional bet in the markets, that trend is likely to reverse," Steve writes. And with everyone expecting inflation to cause the dollar to crash, we could see the exact opposite soon... Get the full story here: The Most Contrarian Bet You Can Make Today.
When too many investors rush in to one side of a trade, the opposite is likely to happen. And with folks piling into this "safe haven" asset today, following the crowd could mean missing out on further upside from here... Learn more here: Don't Rush Into This Popular Bet Today.
A new bull market in commodities is under way. And we have a "smart" way to take advantage for even bigger gains today...
HIGHS AND LOWS
NEW HIGHS OF NOTE LAST WEEK
Alphabet (GOOGL)... tech "World Dominator"
Microsoft (MSFT)... tech giant
Adobe (ADBE)... cloud services
DocuSign (DOCU)... Software as a Service
Cloudflare (NET)... network security
Fortinet (FTNT)... cybersecurity
Palo Alto Networks (PANW)... cybersecurity
Sea Limited (SE)... Singaporean tech giant
Intuit (INTU)... tax-prep software
Bristol-Myers Squibb (BMY)... pharmaceuticals
Novo Nordisk (NVO)... pharmaceuticals
ResMed (RMD)... medical devices
American Homes 4 Rent (AMH)... rental properties
Duke Realty (DRE)... realty "landlord"
American Tower (AMT)... 5G infrastructure
Cintas (CTAS)... uniform supplier
Costco Wholesale (COST)... membership-only stores
Dollar General (DG)... discount retail
Coca-Cola (KO)... beverage giant
McDonald's (MCD)... burgers and fries
Mondelez International (MDLZ)... candy and snacks
Starbucks (SBUX)... coffee "World Dominator"
NEW LOWS OF NOTE LAST WEEK
Not many... It's a bull market, you know!
