It sounds tough, but it is an often quoted investment axiom that is credited to Baron Rothschild.
Maybe he could have put it a little more cautiously, but history says he’s right. When there is a crisis in the markets, there are also great opportunities.
The member of the wealthy Rothschild family made a fortune in the early 1800s when he bought investments during the famous Battle of Waterloo that ended Napoleon’s reign.
The same strategy of buying when everyone else is selling has helped many millionaires and even billionaires over the years.
Here’s what it means to you …
During the last 20 years, two major buying opportunities were created by crises.
The first was the technology bubble in the early 2000s, which provided fantastic opportunities to buy some of the biggest winners of the last 20 years at deep discounts. Even the strongest and most stable technology companies were crushed when the bubble burst, and many of them continued to win thousands of percent.
Then there was the financial crisis of 2008-2009 where the S&P 500 lost more than half of its value. Investors panicked and praised many companies as if they were going bankrupt, only to see them come back stronger than before.
A good example is Jazz Pharmaceuticals (NASDAQ: JAZZ). This biotech stock dropped to a low of $ 0.55 in April 2009, and it looked awful when the company cut jobs to stay afloat. Eleven years later, Jazz has several approved drugs on the market along with a robust pipeline of new candidates. From the lowest at the end of April 2009 to the highest in July 2015, the share gained 35,000%.
This leads me to today. The world is dealing with another crisis – the Coronavirus pandemic.
Like all other crises over the last 20 years, this is another fantastic opportunity. And that’s why I launched my Crisis and Opportunity Portfolio last week.
Last Wednesday, I released three new recommendations for small stocks to start the portfolio. The plan is to add at least five more shares in the coming weeks and spread our purchases on the volatile market. After doing a deep research dive, I decided to add the fourth portfolio to the Crisis and Opportunity Portfolio today.
The first three shares have done quite well just a week since the portfolio was launched. All crush the market within the short time frame, with gains of 39%, 17% and 11%.
History shows that there is not only an opportunity to buy during a crisis, but that the best performers are the small capsules. I see the same thing happening this time, and all three original stocks in the Crisis and Opportunity Portfolio are small companies.
The fourth stock I added after closing time yesterday is also a smaller company. With a market valuation of $ 1.4 billion, the biotechnology commercial scene has more than five times the potential in the next few years.
It is rare to find a biotech store with a small cap that already has an FDA-approved drug on the market and is about to become profitable in the near future. The company not only has a drug sold today, it also has a strong pipeline of future candidates. And five new clinical trials are expected to start in 2020.
To add to the bullish case for small-tech biotechnology, it recently announced work on a COVID-19 treatment.
Although the market has been strong in recent weeks, there is still a lot of volatility for the shares. As a long-term investor, you want a strategy to continue buying and using volatility to your advantage. This is our plan with the Crisis and Opportunity Portfolio in the coming weeks.
All members of my Early Stage Investor newsletter will receive the new shares that will be added to the portfolio. Many of you who follow me know that I was there for you almost every day when stocks fell in March. And today I am here for you too. This time I’m here to help you prepare for the next big stock market rally instead of talking about you.
I hope you join us on our journey to financial freedom.
Matthew McCall left Wall Street to actually help investors – by getting them into the world’s biggest, most revolutionary trends FOR anyone else. The power of being “first” gave Matt readers the chance to bank + 2,438% in Stamps.com (STMP), + 1,523% in Ulta Beauty (ULTA) and + 1,044% in Tesla (TSLA), just to name a few . Click here to see what Matt has up his sleeve now. Matt does not directly own the above-mentioned securities.