There's an old French proverb that says: Achetez aux canons, vendez aux clarions. That's "buy on the cannons, sell on the trumpets."
As a dyed-in-the-wool Contrarian investor, I'm a firm believer in the precept. In fact, back in the late 1990s, when New York money manager Anthony M. Gallea and I penned our book Contrarian Investing: Buy and Sell When Others Won't and Make Money Doing It, one of the opening lines was "Gloom makes us glad."
Bad news, you see, can create some of the biggest profit plays that you're going to find. Most retail investors just about stampede their way out of "bad-news" stocks. Those stocks get hammered down to ridiculously cheap levels.
For shrewd investors, this kind of situation creates a double-barreled winner because:
- Well-chosen "bad-news" stocks can often recover their way to their former highs, meaning you have a built-in profit that you don't enjoy with most other stocks.
- And, believe it or not, you also often face lower risks – since "bad-news" stocks have reached severely "oversold" levels. That means that the risk of additional downside moves has been minimized. This kind of terrific "high-reward/low-risk" stock can be the best kind of Contrarian play to find. And the best kind of "bad-news" stock to find is one where "external events" (those not related to the company's own operations or businesses) are the culprit behind the sell-off.
Now you see why I spend a lot of my time perusing the headlines and getting the "story behind the story" with some of the world's scariest news headlines.
You see, I know that, hidden in the "background noise," are some huge potential profits.
That's why I often look at the biggest negative news stories out there – and then look behind the headlines to see all the appealing investments the bad news is creating.
And right now, one of the splashiest "bad-news stories" you'll find is Russia…
And all that stuff about Ukraine, the Crimea, and Vladimir Putin has investors just about trampling one another to get out of Russian stocks.
And that's a big mistake.
In fact, Russian stocks – especially Russian tech stocks – offer some of the biggest profit opportunities we see today.
And there's one in particular that offers a massive potential upside.
And, best of all, it's a tech stock.
And since it is a tech stock, I called in our resident tech expert, Radical Technology Profits Editor Michael Robinson. I often consult with him in my Private Briefing column.
And so you can reap the maximum benefit from our discussion, I'm offering a partial transcript of the interview that I conducted with Michael late last week:
A Conversation with Michael Robinson
Patalon: As you know, Michael, I'm a longtime Contrarian. And there's an old French proverb that tells us to "buy on the cannons, sell on the trumpets."
So when I see what's happening in Russia right now, I can't help but wonder if it isn't perhaps worth a look.
Late last week, for instance, a White House spokesman was quoted as saying: "I wouldn't, if I were you, invest in Russian equities right now." When I see someone in a position of authority telling everyone that something isn't an investment… well, that gets me really interested. So let's take a look at Russia as an investment play. And Michael: Let's get into your wheelhouse… technology.
So let me start by asking you a basic question: What's happening in Russia, and why is that scaring investors?
Michael: The media, of course, is focused on what's happening in Ukraine and the Crimea, which Russia just annexed. It's one of the most significant changes to Europe's political map since the fall of the old Soviet Union.
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish… and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.