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I'm a huge fan of what I call "boots on the ground" investing, which is why I take off on an extended motorcycle trip at around this time every year. There's no substitute for first-hand knowledge to my way of thinking.
That's true both in terms of the lessons learned and the specific recommendations I make.
Riding BMWs through Europe's fertile farming regions, for example, led me to Monsanto Co. (NYSE: MON) and led readers to one of the first 100% winners I recommended after becoming Money Morning's Chief Investment Strategist.
A crazy day piloting antique sidecars in Shanghai, China, helped me identify Sinovac Biotech Ltd. (Nasdaq: SVA) as a promising investment opportunity and the resulting 351% winner that went with it.
Ducatis in northern Kyoto, Japan, led me to recommend two plays on the Japanese yen, the Invesco CurrencyShares Japanese Yen (NYSEArca: FXY) and the ProShares Ultrashort Yen (NYSEArca: YCS), that beat legendary investor George Soros to the punch by six months. Both helped readers who were following along to more than double the returns Soros reportedly achieved, according to The Wall Street Journal.
My trip this year around the American West was no exception in that department.
I'm going to be sharing a recommendation with you in the weeks ahead that could double if what I learned about a quintessential American automaker during an early morning, coffee-fueled pre-ride conversation proves out. So, you'll want to check back for that shortly when I've completed my research.
In the meantime, though, I want to share three key investing lessons from this year's ride…
Believe it or not, there is a lot of crossover between the kind of thinking it takes to successfully navigate a motorcycle across thousands of miles of remote territory and to generate the huge profits that are possible from making the right investments.
In fact, the inputs are almost identical.
Lesson No. 1: Never Doubt Local Knowledge
From the Road: I made it a point this year to follow the old emigrant wagon trails. My goal was twofold: a) I've always wanted to see how our country's earliest roots were established; and b) I wanted to get a taste of what my ancestors experienced more than a century ago when they crossed America in covered wagons, along with other emigrants, in search of a better life.
That meant a big shift in my plans and an entirely new level of detail. Most of my touring to date has been by road, and now I was talking about remote wagon trails and dirt pathways on a big adventure on my motorcycle, hundreds of miles away from anything or anybody.
The logistics were challenging, to say the least. Some things, though, were downright unexpected… like being warned about "Bigfoot" in northern Idaho by a well-meaning and very sincere hotel clerk who'd heard where I was headed that day.
The look on my face must have said it all because she then added, "That thing eats our goats and we hear 'em yowling at night."
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Still, I have to admit, I couldn't help but look over my shoulder when I hit the Poverty Flats and Old Emigrant Hill Road area a few hours later… in the deep woods… miles from anything or anybody.
From the Markets: Many investors assume that analysts know all there is to know about the companies they follow. So, they take them at their word when it comes to how and why the markets move.
The problem is that it's the "unexpected" that causes change.
We all know, for example, that the current bull market will come to an unceremonious end one day without warning. History shows financial stimulus ends with a bang rather than a whimper.
In other words, bad news isn't exactly a surprise any longer. But presidential tweets, political vitriol, Russian hacking, Chinese retaliation… those are all things that can severely impact your financial portfolio, if you're unprepared, because they're the financial version of a "Bigfoot" sighting.
Alphabet Inc. (Nasdaq: GOOGL) trades at $1,250 a share right as I write this, and Amazon.com Inc. (Nasdaq: AMZN) is a lofty $1,815.40, which means chances to buy them "on the cheap" are fleeting. However, that also means that anything that unexpectedly knocks them down a few notches will create a massive buying opportunity.
Even a financial "Bigfoot."
Lesson No. 2: Flexibility and Risk Management Go Hand in Hand
About the Author
Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean, and he's also the founding editor of Straight Line Profits, a service devoted to revealing the "dark side" of Wall Street... In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.