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Old August 22nd, 2009 #1
Alex Linder
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Default Making Money

[Working is only one way to make money, and it is not the best. Pay attention to people who actually know what they're doing when it comes to (investing) or anything else. LRC follows Jim Rogers. His politics aren't ours, but he seems to think clearly and has the results.]

The Best Little Investment Opportunity I Know

By Tim Hanson
Aug 21, 2009

Global investing guru Jim Rogers has said that his incredible success in investing is the result of two basic principles:

1. Buying things that are cheap; and
2. Buying things that are about to see a dynamic change in their favor.

Put those principles together and you’ll succeed as an investor by buying assets that are out-of-favor -- just before they come back in favor.

Sounds like market timing
Being able to execute these basic principles successfully and repeatedly requires that you either have more information than the stock market at large or have more intelligently interpreted the information that is available to the stock market at large.

In other words, you probably can’t pull off this little trick when it comes to big tech names such as Cisco Sytems (Nasdaq: CSCO) or Amazon.com (Nasdaq: AMZN). These names are tracked by just about every professional and amateur investor out there, as well as by trade magazines, blogs, nerdy 12-year-olds ... you get the point.

Rogers has demonstrated, however, that you can pull it off in niches where you can gain an informational advantage over the market.

And that doesn’t mean you’re practicing market timing -- it just means you’ve noticed a real-world trend in a niche the broader market hasn’t caught on to yet.

O niche, where art thou?
There’s good news in this regard: Thanks to the recent chaos in the financial sector, there are more chances to take advantage of market inefficiencies than ever before (or at least since the bull market of the 1990s). That’s because -- bear with me here -- stock market analysts are losing their jobs.

Now, the aim here is not to celebrate others' misfortune. Rather, it’s to point out that between last September and the middle of this past May, according to Factset Research, there have been more than 2,200 instances of an analyst dropping coverage of a company.

That means opportunity ... for you
Less coverage means less public information, and less public information means a greater opportunity for you to either get more information than the market or better interpret the information that is available to the market.

This is particularly true if you’re willing to look at investment opportunities that few others have the time or resources to consider.

At Motley Fool Global Gains, we believe that some of today's best opportunities exist a little bit off the beaten track like, for example, rural China -- the best little investing opportunity I know.

See, international investing is becoming more popular as Americans recognize than they can get greater growth and cheaper prices from international holdings in Brazil, India, China, and elsewhere than they can from U.S. stocks. Thus, the major companies in these major emerging markets -- names like Petrobras (NYSE: PBR), Infosys (Nasdaq: INFY), and China Mobile (NYSE: CHL) -- are fairly well-covered by U.S. analysts.

That’s not true, however, if you get to the less-traveled parts of China -- a niche whose stocks look pretty cheap today and should benefit over the next few years from a dynamic change in their favor.

One example
First, you may not know that rural China has been and will remain the fastest-growing part of China.

Second, you may not know that rural China stands to benefit significantly from government infrastructure projects and social safety net spending.

And third, you may not know that rural China has long been considered the most entrepreneurial part of China (see the research of MIT’s Yasheng Huang) and is home to many companies that are poised to take advantage of further economic liberalizations.

The takeaway
Add it all up, and that makes for a very bright future for a niche that few investors are talking about. That gives you the opportunity to follow Jim Rogers' advice and buy cheap assets that are about to see a dynamic change in their favor.

That’s what we seek to do over and over again at Motley Fool Global Gains, our global investing newsletter that’s devoted to studying investment opportunities around the world. A major part of our investment research involves actually traveling around the world, to meet with companies and get the view from the ground.

In fact, we just returned from our annual research trip to China and recently released a report on the five stocks you can buy to play China’s rural boom. Get that report by clicking here to join Global Gains free for 30 days.

Already subscribe to Global Gains? Log in at the top ofthis page.

This article was first published on June 18, 2009. It has been updated.

Tim Hansonis co-advisor of Motley Fool Global Gains. He does not own shares of any company mentioned. Amazon.com is a Motley Fool Stock Advisor recommendation. Petrobras is an Income Investor pick. The Fool’sdisclosure policy recommends you take a mountain bike off the beaten track.

http://www.msnbc.msn.com/id/32506402...s-motley_fool/
 
Old August 22nd, 2009 #2
Steve B
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Join Date: Dec 2003
Location: Cali
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Quote:
Originally Posted by Alex Linder View Post

At Motley Fool Global Gains, we believe that some of today's best opportunities exist a little bit off the beaten track like, for example, rural China -- the best little investing opportunity I know.

See, international investing is becoming more popular as Americans recognize than they can get greater growth and cheaper prices from international holdings in Brazil, India, China, and elsewhere than they can from U.S. stocks. Thus, the major companies in these major emerging markets -- names like Petrobras (NYSE: PBR), Infosys (Nasdaq: INFY), and China Mobile (NYSE: CHL) -- are fairly well-covered by U.S. analysts.

That’s not true, however, if you get to the less-traveled parts of China -- a niche whose stocks look pretty cheap today and should benefit over the next few years from a dynamic change in their favor.

One example
First, you may not know that rural China has been and will remain the fastest-growing part of China.

Second, you may not know that rural China stands to benefit significantly from government infrastructure projects and social safety net spending.

And third, you may not know that rural China has long been considered the most entrepreneurial part of China (see the research of MIT’s Yasheng Huang) and is home to many companies that are poised to take advantage of further economic liberalizations.
More bs from guys at LRC. Along the same lines as the doc who says diet and exercise have no relation to health.

What Rodgers is saying is Americans should take their investment dollars and not invest it in America(that might create jobs doncha know) and instead invest it in China. Does anybody see a problem with this besides me? Growing China's economy with American zogbucks. That's the ticket. Not only is it shortsighted (depriving Americans of capitol), it's risky. Remember about 15 years ago? The Asian "tiger"...Japan. The jappos were going to blow past the United States, buy up all of our companies and real estate, and win with money a war it had lost with guns a half-century earlier.

Unfortunately, or fortunately, depending on which side the fortune cookie is buttered, it didn't happen. Japan is now mired in its second decade of stagnation with things only looking worse for the foreseeable future. The same uncertainty holds for China. The chinks have major problems in spite of the positively glowing jewsmedia reports we constantly hear.

One being the environment. Things are bad and they are getting worse. China has no effective legal structure to bring polluters to task. The public doesn't give a shit and government and corporate leaders don't care either as long as there is "growth" at any cost.

The second big problemo the gookers have is debt, specifically ours. The US, already deep in debt, cannot absorb any more without eventually reneging. This could under the right circumstances lead to a global trade war and a serious break in China-U.S. relations.

Obviously Chinese export-led growth will soon be a thing of the past. Do you want to be a investor in China if this happens?

This stuff is why I don't read much of Rockwells site cuz it's about 50% bullshit.
 
Old August 22nd, 2009 #3
Alex Linder
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Quote:
More bs from guys at LRC. Along the same lines as the doc who says diet and exercise have no relation to health.
He said they have relation to how you feel in everyday life, to fitness, but not to causing disease - that aspect is overrated to nonexistent.

Quote:
What Rodgers is saying is Americans should take their investment dollars and not invest it in America(that might create jobs doncha know) and instead invest it in China. Does anybody see a problem with this besides me? Growing China's economy with American zogbucks. That's the ticket. Not only is it shortsighted (depriving Americans of capitol), it's risky. Remember about 15 years ago? The Asian "tiger"...Japan. The jappos were going to blow past the United States, buy up all of our companies and real estate, and win with money a war it had lost with guns a half-century earlier.
He's a globalist. I'm sure he'd invest in America if he thought he could get the returns.

Quote:
The second big problemo the gookers have is debt, specifically ours. The US, already deep in debt, cannot absorb any more without eventually reneging. This could under the right circumstances lead to a global trade war and a serious break in China-U.S. relations.

Obviously Chinese export-led growth will soon be a thing of the past. Do you want to be a investor in China if this happens?

This stuff is why I don't read much of Rockwells site cuz it's about 50% bullshit.
Your general truths I agree with, but it's interesting to watch what specific companies or commodities the most successful invest in.

I don't find LRC 50% bs, I find they leave out the most important stuff, either to sell it or because they're pulling punches (ie, on race).

Last edited by Alex Linder; August 22nd, 2009 at 07:27 PM.
 
Old August 22nd, 2009 #4
Kievsky
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We need to own convenience stores, and use Islamic banking methods to buy up more and more. Basically, one guy gets a convenience store and hires another one to be a slave for X number of years until he has paid off the convenient store to the original owner. The new owner would get a minimum wage and an apartment over the store and basically that's all he does, and makes profits for the seller.

The seller takes his capital and buys another store and starts the process all over. That's how the Gandhis and the Paks do it. Our people need a good work ethic to make it work, though. It's easy enough work, when you don't have an a-hole boss over you. Have broadband Internet and write articles and post on VNN while selling lottery tickets and cigs to the local folks.

As for stock advice, I did OK. I came out a few thousand ahead by buying DXO and OLO and UGA when oil was 33 a barrel and gas was 2 bucks a gallon, and then sold when oil went up to 60 and gas went up to 3 bucks a gallon. I have a very speculative penny stock, mPhase, which is coming out with a new kind of battery. I own 25,000 shares (at .02 cents a share) of thise company:

http://www.mphasetech.com/about.html
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