You are receiving this email because you signed up to receive our free e-letter the Wealth Whisperer Our Three-Step Strategy to Bet on Unloved Stocks 02/12/2024 How often have you said, âI donât invest in thatâ¦â â¦only to watch everyone else make a mint? Anyone who avoids Chinese stocks like the plague missed out on a 10% rally in less than two weeks, with names like Alibaba jumping over 17%. Youâre guaranteed to NEVER make money in the stocks you avoid. However, maybe itâs time to adjust your thought process. Look, thereâs no question that Chinaâs repressive government hates free markets. [Jim Woods painted a dark portrait of Americaâs future in his latest report.]( So, thereâs good reason to say âNo thanksâ to holding any Chinese stock long-term. But what if you didnât look at these as investments but bets you might make? Anyone whoâs played Texas Hold âEm knows you push your chips in if youâre holding pocket rockets (two Aces). However, it wouldnât be wise to pull a second mortgage on your home and dump it all on that one hand. Because even if youâre the statistical favorite, you can still lose. We want to offer a three-step strategy approach for those interested in playing the Chinese market. By treating these as bets, you open up a new set of profitable plays that you can structure to match your style and goals. SPONSORED CONTENT [Millionaires Will Be Minted OVERNIGHT]( Legendary tech futurist who predicted the rise of Amazon, Netflix, and Apple YEARS in advance now says: âThe biggest, most profitable technological advances in the future will ALL stem from this single breakthrough. Millionaires will be minted overnight.â [Heâs revealing EVERYTHING here.]( [Click Here to Read More...]( Step #1 - Find a Comparable U.S. Company Investing is all about balancing risk and reward. When risk increases, we demand a higher reward. Believe it or not, there are many profitable Chinese companies: Alibaba, Baidu, Yum China, etc. However, we know Chinaâs government can and does change the rules of the game at any time. We saw it crack down on perceived âdata sharing,â destroying companies like Didi overnight. And when companies like Alibaba get too big, the government clamps down through arbitrary regulations. This risk doesnât exist for U.S. companies. To compensate for this risk, investors discount the shares of the Chinese company. This is known as country-specific risk. To see how this works, letâs consider two companies: Baidu and Google. Both companies largely operate the same way. They are the prominent internet search engines in their respective countries, making most of their money through advertising. Yes, there are other differences we could account for with a deeper analysis. However, these two are close enough for our purposes. We can use these two companies to figure out the discount placed on Chinese companies relative to similar U.S. companies. Now we have what we need to calculate the spread or the discount being placed on Chinese companies. Sponsored Content [7 Once in a Decade Buying Opportunities]( Eric Fry has been right about a lot of stock picks. 41 recommendations that increased over 1,000%. Another 20 that went up more than 500%. He's good. So if he releases a surprise list of 7 companies he expects to win big in 2024, you can't afford to miss it. The research is available in a new report that is available...FREE. [You can download it today.]( [Click Here to Read More...]( Step #2 - Calculate the Spread What metrics would you use to calculate the value of a stock? The most popular is the price-to-earnings ratio. So, we need to calculate those values for the stocks and then the spread between the stocks. Lastly, we need to look back, say, six months, a year and two years to see how the current discount compares to the historical figures. Itâs always a good idea to use other valuation measures for this analysis. So, weâve pulled the price-to-free-cash flow ratios for Baidu and Google as well. Note: Chinese companies donât report free cash flow on a quarterly basis Now that we have data, hereâs how you analyze them. [3 Steps for Surviving the "Perfect Storm" Market Crash]( Recent moves by the Fed could wipe out billions of dollars in the marketâ¦worse than the .com bubble, housing meltdown, or covid-crash combined. Navigating this requires more than gut instinct; it calls for the sophisticated edge that artificial intelligence trading software provides. [Learn to Protect Your Money Ahead of Any disastrous Event for FREE >]( [Click Here to Read More...]( Step #3 - Look for Extremes The goal of this analysis is to find places where valuations are stretched and place bets they will snap back to the average. What might that look like? Immediately, we can see that Baiduâs stock now trades at 47% of the value of Googleâs based on earnings. Yet, six months ago, it was only being discounted by 13%. And a year ago, it actually traded at a premium. Was this an aberration? Maybe. But Baidu traded at a premium two years ago as well. However, we see the same expansion and contraction in free cash flow. Using this information, we could assume that Baidu now trades at an extreme discount relative to Google. So, weâd make a bet the discount on Baiduâs stock should move back to the historical average. Does This Guarantee a Win? Of course not. No one can make that claim because no one can control the outcome. We CAN make smarter decisions. The process we outlined isnât limited to Chinese stocks. You now have a method to compare any type of equity or asset. However, thereâs one last piece of the puzzle to pull this all together. This entire strategy is pointless if you donât understand whatâs happening and how everything fits together. Right now, the relationship between the United States and China presents some once-in-a-lifetime chances. There's a plethora of strategic moves to consider, from Chinaâs currency manipulation and the ongoing trade wars to the anticipation surrounding the upcoming election. Thatâs why Jim Woods has dedicated himself to keeping you informed about the situation. His latest report delves into the dynamics from A to Z, ensuring you donât overlook any of these critical moments. Donât miss this opportunity. [Click HERE to read this report.]( P.S. We are excited to invite you to a free, live webinar with George Gilder on Thursday, Feb. 15 at 10 a.m. Eastern Standard Time. In this Startup Investing Masterclass, George is teaming up with Jon Medved, the founder of OurCrowd, to discuss investing in private placements. George and John Schroeter from Gilderâs Private Reserve will be interviewing the CEO of Georgeâs latest AI startup pick⦠so youâll be receiving a great startup pick just by attending! [Click here now to attend this amazing event.Â]( To Your Wealth,
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