The Valuable 'Cocktail-Party Indicator'

I've learned a lot over my 20-year career on Wall Street... But perhaps nothing is as valuable as talking about investing with average folks. I call it the "cocktail-party indicator." Whether it's your trainer at the gym, a neighbor of a family member who has never shown any interest in the markets, or the proverbial […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] The Valuable 'Cocktail-Party Indicator' By Whitney Tilson --------------------------------------------------------------- [Man hailed as 'Prophet' warns of August 29]( A historic unveiling in Houston, Texas on August 29 could decide which stocks will crash next... and which could rise 1,000%. [Learn more here](. --------------------------------------------------------------- I've learned a lot over my 20-year career on Wall Street... But perhaps nothing is as valuable as talking about investing with average folks. I call it the "cocktail-party indicator." Whether it's your trainer at the gym, a neighbor of a family member who has never shown any interest in the markets, or the proverbial shoeshine guy... When you hear these folks talking about how much money they've made in cryptocurrencies, 3D printing companies, or the latest hot IPO... run, don't walk, the other way. I've found, again and again, that when the least knowledgeable investors I know are piling into whatever is hot, it's usually very near the top of a bubble. Today, I'll give you another example of how you can use the sentiment of average investors to your benefit – instead of riding the bandwagon to disaster... While the rest of the investment crowd is busy looking for the next way to get rich quick, I strongly suggest taking a different route. --------------------------------------------------------------- Recommended Link: ['God Code' Now Programmable]( For the past 50 years, developers and programmers used the binary code to create every piece of software you use today. But now, highly specialized programmers are using a different code to make everything from vaccines to plant products to data-storage devices and more. McKinsey, a leading consultancy, claims this code will usher in a $4 trillion industry. And Wall Street is starting to take notice. The man CNBC nicknamed "The Prophet" says he's found the one little-known company that has the potential to rule this industry and become America's Next Big Monopoly. [Get the full details here](. --------------------------------------------------------------- I buy investments that are so hated, you would be embarrassed to say you own them at a cocktail party... The best example that comes to mind is the only time in my life I bought an oil stock... You guessed it – BP (BP) in 2010, just after the Deepwater Horizon oil spill. Shares had gotten absolutely clobbered, falling from around $60 in April to a low of $27 in June. It was an environmental calamity, and a number of people lost their lives in the tragedy, which led CNBC's Jim Cramer to call the stock "unownable." That week, the New York Times wrote... It seems unthinkable, even now, that the disastrous oil spill in the Gulf of Mexico could bring down the mighty BP. But investment bankers get paid to think the unthinkable – and that is just what they are doing. The idea that BP might one day file for bankruptcy, particularly as part of a merger that would enable it to cordon off its liabilities from the spill, is starting to percolate on Wall Street. This kind of fear in the market – bordering on hysteria – was music to my ears... I had analyzed the fundamentals and was convinced that BP wouldn't have to file for bankruptcy... and that the stock was an incredible opportunity. So on June 9, 2010, I appeared on CNBC's Fast Money. Of course, BP deserved the anger and blame. But when it came to the company's future, the crowd was just flat-out wrong. Here's what I told viewers that day... What everybody's missing here is this is truly one of the most profitable businesses on the planet. They have managed to screw everything up. There's really no excuse, as best I can tell, in terms of allowing this disaster to happen. The PR has been horrific ever since. And BP is going to pay billions and billions, maybe even tens of billions of dollars for this debacle. But what everybody is missing is this company consistently earns well north of $20 billion a year in profits, and keep in mind all the damages are paid for with pre-tax money, so now we're talking close to $30 billion a year. And it's trading at five and a half times earnings, paying a 9% dividend yield... We fully expect the headlines to be horrible for a good, long time. But the stock is just too cheap. That day, BP shares closed around $29... By early August, the stock was trading around $41. Folks who took my advice were up 40% in just two months. When I looked at BP, I saw a company that no self-respecting investor would admit to owning... And yet, it was a huge, profitable business – the kind that can weather a storm. Not only that, but it was trading far below what it was worth. Those are odds I like in an investment. And as my years on Wall Street have taught me, it's the kind of setup you should always be searching for in the markets. Remember – when you find an investment so hated that you'd be embarrassed to talk about it at a cocktail party, you might just be onto something good. And right now, the thing people don't want to talk about at a cocktail party is the U.S. stock market in general... Let me show you what I mean. Last month, my colleague Sam Latter shared the following graphic with Empire Financial Daily readers... That's a recent reading from the American Association of Individual Investors ("AAII"), which polls individual investors every week on whether they're bullish, neutral, or bearish on stocks over the next six months. As Sam explained, this is an extremely contrarian indicator. On average, when 60% of investors are bearish, stocks are up 20% after six months, 33% after a year, and 46% after two years. While it's impossible to know for certain whether the market has already bottomed, I believe that this year's panic has created some of the best investment opportunities I've seen in my 20-plus years as a professional investor on Wall Street. I'm talking about the chance to make 5 to 10 times your money on a select group of stocks. That's why I recently sat down on camera with Louis Navellier, an industry legend, to explain why I think we're about to see a repeat of the COVID crash of March 2020. We also discuss which popular stocks to avoid right now, the exact date this turning point will arrive, and even the name and ticker symbol of one of both of our favorite stocks today. [For an extremely limited time, you can view this presentation by clicking here](. Best regards, Whitney Tilson July 21, 2022 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](