Why "Invest In What You Know" Doesn't Work...
It's one of the best known mantras in investing, but many are using it incorrectly.
But use it the right way and, you can find high quality stocks with 50%-100% upside potential...
I'll show you how.
Fellow Investor,
Every day, Jim Cramer's Mad Money audience of millions like you asks him for undervalued stocks with huge upside potential.
Sometimes it's because you want to find the next Apple-type "rocket ship" of a stock. Or you are simply a value investor looking to lock in the best deal.
Now, Jim can't please everyone. He only has so much time and energy that he can put into his Mad Money picks.
But I've worked with Jim for over a decade. He taught me how to navigate the financial markets, and I learned the ropes at his side.
Today, I can help you find those value picks - the low-priced stocks primed to skyrocket.
Before I show you how, let me ask you this question...
What is the most important rule of trading and investing?
You might say: "Invest in what you know."
This principle was laid out by the famed portfolio manager of Fidelity Investments, Peter Lynch.
On its surface, this seems like sound advice. Putting your money in an investment you don't understand is a surefire path to disaster - and losses.
But you might be missing the point in his statement.
Let's say you hear of a company you are familiar with - a former household name - that is trading at what some call a "great value".
Excited and confident, you buy up some shares, waiting for the inevitable bounceback.
But it never comes - and your shares sit in your portfolio, worthless, until you accept defeat and take the loss when the stock bottoms out.
Investing in what you know has to go hand-in-hand with making smart investments.
It's all about acquiring the right knowledge and putting it into action.
In a moment, I'm going to show you how to ferret out the bargains that could actually generate profits for you without spending hours sifting through research to find them.
First, though, I want to show you what I mean...
Some investors are buying these 3 stocks, but they're missing the point...
There are certainly profits to be made from stocks trading under $10 a share.
It's too easy, however, to look at a stock that you recognize currently trading that low and assume that it will bounce back to new heights again.
JC Penney (JCP) once traded at close to $80 a share when it was one of the nation's leading retailers.
Currently, it sits at under $9 a share, and it has even been booted from the S&P 500.
It might just seem like this is a bump in the road for JCP. After all, such a household name must have deep reserves and a savvy management team at the helm, ready to turn things around, right?
You might believe that. But what the average investor doesn't realize is JCP is a dangerous place to put your money right now.
Last year, they were silent about their holiday sales (a surefire sign that things didn't go very well). They have a patched-together management team after a failed rebranding left them posting even more losses. Vendor relationships are deteriorating.
These are not the wait-and-see building blocks of a company on the rebound. These are the signs of a struggling company that has no clear reason to hope - and should be avoided at all costs.
| Here's what people are saying about Stocks Under $10:
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| | And yet, people are still foolishly buying purely out of the faith in the JC Penney name, expecting great things from this once-profitable stock.
Radio Shack (RSH) is down 68% this year alone. Once a leader in consumer electronics, the company is now basically a penny stock, trading at under $1 per share.
Again, the brand name is recognizable. Even as the stock has continued to plummet, investors remember the days of Radio Shack's market dominance in retail technology.
Seeing that this "big" retailer is trading for less than a dollar, some are sprinting to snatch it up for the inevitable surge in price.
But 1,100 stores are closing. The stock is actually down 90% since 2010. And they posted a loss of over $400 million in 2013.
Radio Shack is dying. To put your money in RSH is to risk losing it completely. But that won't stop investors from thinking it will come back from the ashes.
All evidence suggests that RSH is going to stay down, and you should stay away.
At one time, Blackberry (BBRY) was an industry titan. Before people were using the term, "smartphones", they were all from Blackberry.
But it is on a freefall with no end in sight. Just in the past 5 years, the share price has collapsed from $83.62 all the way down to under $10 today.
Blackberry is showing some signs of life, and investors are scrambling to pick it up in hopes of another great rally. But before you run to buy shares of BBRY, realize this: you're doing so at your own risk - and there isn't much evidence of a rebound.
Despite all the hype, the underlying business is nearly identical to what it's been the last 5 years: sliding revenues, no returns on capital, and no profits.
Meanwhile, CEO John Chen is continuing to throw money down the drain in a futile attempt to take on market leaders Google and Apple.
So how do you avoid being duped by the hype? How do you weed out these "dying" stocks and find the ones with the best value?
And how can you still "invest in what you know" at the same time?
I'll show you how, but first, let me introduce myself and...
My name is David Peltier, and I manage the Stocks Under $10 portfolio at The Street.
My goal is simple: to alert you to stocks that are incredibly undervalued (and unnoticed) with the potential to experience massive growth.
I do this through ongoing trade alerts and weekly summaries designed to keep you on top of the best undervalued stocks on the market.
These aren't just recommendations - these are actionable stock picks found through long hours of research.
My analysis is backed by more than 20 years of experience in finding these incredible returns, along with over a decade of training from Jim Cramer.
While the rest of Wall Street is chasing fads and blindly placing their hope in companies fallen on hard times, I am doing the grunt work. I'm talking to industry insiders, management teams, and fellow analysts.
I'm digging up the facts that are not being reported elsewhere: competitive positioning and stock catalysts. I'm finding the crucial information that matters to investors.
And with Stocks Under $10, I put it in your hands.
| David Peltier is your guide to the world of undervalued and uncovered stocks.
David earned his BS in Finance from the Stern School of Business at New York University. In addition to his regular video appearances for TheStreet, he has been a guest on NPR, Nightly Business Report, CNNfn, WNYW-TV and presented at The Money Show. David also hosts a live monthly chat on Twitter (@davidspeltier).
Since his very first days at TheStreet 12 years ago, David has been groomed by Jim Cramer to lead members of TheStreet to the kinds of profits they just can't get without an extraordinary investment of time and effort.
As the editor of Stocks Under $10, David couples simple but powerful strategies with an inexhaustible energy to give you the kind of wealth you deserve.
Give him the opportunity to show you what he can do, starting today.
| | With Stocks Under $10, you won't just receive a stock name and a ticker symbol that I think will do well.
I give you everything you need to understand why I'm making a particular recommendation - so that you can successfully "invest in what you know".
And I won't make a trade recommendation unless I am convinced that it has 50%-100% upside potential... at least.
But don't take my word for it.
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Good Investing,
David Peltier
Portfolio Manager, Stocks Under $10
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