Tags: Investor | make | money | stocks

The Type of Investor Who Really Makes Money

By    |   Sunday, 13 May 2012 11:47 AM EDT

One thing I’ve learned about successful investing is that you’ve got to be someone who can stand on your own two feet and doesn’t need the opinions of others for validation of your investments.

Why?

The masses almost always “get it wrong” over time. They pick what seemingly seems to be the "logical" choice but in the end, they’re always late to the ball game and therefore they end up on the wrong side of the trade.

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I remember when oil crashed from almost $150 a barrel down into the $30s, I decided to buy in the low $40s. When I happened to mention it to one of my trader friends, he said it was one of the dumbest investments he thought I could make at the time. And actually, his opinion was common.

Well, as it turned out, I did very well on my oil investment and as it kept climbing, he finally shut up. But the point is, you’ve got to be able to make the “hard choices” which are unpopular.

I’ve often said that successful investing is a lonely road to walk down because you never have a crowd with you that’s cheering you on.

Most of the time, the masses will think you’re a blooming idiot…and that’s more than likely when you’re about to “get it right.”

If you’re getting too many “atta boys” and pats on the back, then you’d better rethink your investment. But if almost everyone thinks you’ve lost your mind, then you may be onto something. Ha-ha!

Well, within the last month, I made an investment recommendation on a natural gas stock. As you can imagine, people thought I was off my rocker and hadn’t been listening to the news.

Some would say, “After all, Sean…don’t you know that natural gas just hit a decade low into the $1 range?”

The sentiment hasn’t been worse for a commodity in a long time. No one wants to own it and almost everyone thinks it’s a bad decision to do so. Well, that’s the exact type of hunting ground for some awesome values.

So I got to work, looking for the gem that no one was seeing at the time. Then I found it!

After scouring through many fundamental reports for many companies I found my jewel. It was a natural gas stock that traded under its book value. It was one of the largest companies in the industry with a low production cost and a fat 4.50 percent dividend yield.

So once I found this fundamental gem, I got busy scouring through its stock chart to find a good time to snatch up this bargain.

As it turned out, we bought it near its 52-week low and within just 3-4 weeks, the stock is already up 15 percent!

I would have never gotten into that stock if I’d listened to the crowd.

The next stock that I’m about to recommend to my Ultimate Wealth Report subscribers is also in a sector that no one likes. I’m sure they’ll think I’ve lost my mind on that one too.

But this one arguably is in a better position fundamentally than my first pick yet it doesn’t appeal to most investors right now. But it does to me. It trades well under its book value and has tons of cash on its books. It’s one of the largest companies in its industry and will weather the storm much better than others in the industry.

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So I’m going to recommend it to my subscribers while it’s “on sale” and no one wants to touch it. Then later on, we’ll sell it “to the masses” one day when it has gained enough to where they think it’s a smart buy then.

The bottom line: Make sure you’re doing with your investments what I’m doing with my Ultimate Wealth Report subscribers. Be willing to buy something that no one else is willing to as long as the underlying fundamentals are there and it looks like a good time to buy on the charts.

If you can stand on your own when everyone else thinks you’re an idiot, you’re a prime candidate to grow your wealth. You see, if making money were easy in investing, everyone would be flush with cash from their investments over time. But this simply isn’t the case. Why? The masses cannot seem to recognize value when it’s presenting itself. They want “confirmation” which only comes after the best value is gone from the stock.

So be willing to travel the lonely road of investing where no one gives you validation. The market will tell you that you’re right by increasing the value of your account over time.

About the Author: Sean Hyman
Sean Hyman is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of Money Matrix Insider. Discover more by Clicking Here Now.



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