Investiv Daily Sunday Edition

[Sunday Edition: A “Buy It And Forget It” Diversified Portfolio With 300% to 500% Upside Potential] By Shane Rawlings on January 22, 2017 Today we are going to take a sneak peak at six globally diversified high growth companies with 10-bagger potential. Companies I believe every serious investor should own. But first, I want to talk about a big mistake I see most investors making, which is to “over diversify.” When you own too many stocks, your chance of outperforming the market diminishes because you become the market. I’ve shared with our readers before what I believe is the right number of stocks to own so that you have enough diversification to mitigate non-systemic or individual company risk, yet not own too many stocks and hamper your ability to outperform the market. I believe the ideal number of stocks you should own ranges from 8 to 20, depending on how much volatility you can stomach. And in truth, this is how all the best investors manage their own money, despite the tired and worn Wall Street rhetoric of “being adequately diversified.” Owning just eight stocks mitigates 81% of non-systemic risk. However, such a portfolio is likely to have greater volatility than a portfolio of twenty stocks. And twenty carefully selected undervalued companies is still not too many to own and still outperform the market. The “sweet spot” is probably owning 12 to 15 undervalued companies in well diversified industries, which brings me to the point of today’s article. Over the last year, Sven Carlin—a PhD in finance and hedge fund manager—has written the daily content for Investiv Daily with myself and Thomas Moore contributing an occasional piece for the Sunday Edition. I challenge you to find free daily content that is as well thought out and as valuable as what Sven delivers to your inbox every day. You won’t find it. In an effort to stay ahead of the competition, I read all of my competitors free content—and there are a handful who put out some good stuff—but it still doesn’t compare to what Sven writes. But it’s not Sven’s free content that I’m most impressed with. About six months ago, I hired Sven to pick deeply undervalued stocks for a new paid newsletter we are getting ready to launch. The newsletter will be called Global Growth Stocks and will focus on fast growing, undervalued companies with exposure to the fastest growing emerging markets. Markets I believe will provide investors with the opportunity to increase their wealth at a much faster clip than investing in the US and European markets. It’s true that over the last 50 years the U.S. stock market has been one of the best performing stock markets globally. Between 1980 and 2000, the S&P 500 climbed from 100 points to 1500 points (not including dividends). The biggest contributing factor to such incredible growth was a long, stable period of relatively high economic growth averaging around 4%. Unfortunately, the US will never experience that same kind of growth without a major “economic reset” – which will come and will be very painful. However, I believe carefully selected and undervalued emerging market growth stocks will provide investors with a better opportunity to increase their wealth than the US market has over the last 30 years. India currently has a population of 1.29 billion which is expected to increase to 1.64 billion by 2065. The average GDP per capita is $1,820, which is 29 times lower than the average US GDP per capita of $51,486. And the Indian economy has averaged 7.7% GDP growth over the last 10 years. The low starting point of the Indian economy and aggressive growth rate is creating the perfect opportunity for enormous growth. The Indian economy still has to grow 3.7 times just to reach the development level of China, which currently has a GDP per capita of $6,416. China still needs to increase 8 times to reach the GDP of the U.S. So there is tremendous opportunity to create wealth in both China and India as well as other emerging markets. Fears about China and India should be ignored when looking at the longer term perspective. Not to mention, the challenges the developed nations of the U.S. and Europe face are much more daunting than those faced by emerging markets. Beginning in mid-February, we will beta launch Global Growth Stocks to a limited number of subscribers. There are currently six issues Sven has written, with all six companies still in our acceptable “open buy” range. Being privy to each issue, I can tell you based on his research and investment thesis, each of these six companies has at least 300% to 500% upside over the next few years. And each pick is in a completely unrelated industry, providing the smooth equity curve every well constructed portfolio should have. Here’s a sneak peak of the first six companies Sven has included in the Global Growth Stocks portfolio. Company 1. A Canadian-based mineral mining company that mines primarily copper (40%), zinc (40%), and gold and silver (20%). If there are two industrial metals/minerals that face huge supply/demand imbalances in the near future (2017 and beyond), it’s copper and zinc.  This mid-tier miner generates the majority of its revenue from the sale of both copper and zinc, which will soon translate to much higher revenues and earnings for this company which has no debt, trades at book value, and pays a 4.55% dividend. Sven’s conservative target for this company is a 300% gain. Company 2. An Indian producer and exporter of organic food products sold in over 60 countries, giving you exposure to emerging markets through the safety of food-based commodities. It currently trades 30% below its book value, providing a solid margin of safety. Sven’s conservative target is a share price of $20 with EPS of $2, and a PE ratio of 10. He believes this could happen in as little as 6 to 18 months, implying a 255% gain from today’s price. Company 3. This company is one of the best risk reward plays in the current market with minimal long term debt and a huge war chest of cash, indicating a possible future dividend.  This apparel company is perfectly positioned to capture the huge middle class growth in both China and India. They opened 133 new stores in Q2 2016, bringing the total stores to 1548, with 74% residing outside the US. So slowing domestic retail sales will have little effect on this company’s bottom line. Sven believes the worst case scenario for this company is it only doubles in price – but could triple or quadruple. Company 4. Buffett’s old adage of being greedy when others are fearful perfectly describes the opportunity in this company. The fertilizer industry is in a negative environment similar to the one gold, iron ore, and oil were in in January 2016. And those sectors all rebounded 150% to 400%. Unlike oil, demand for fertilizers is bound to increase due to constant population growth, less arable land, and increasing calorie consumption in emerging markets. This company has averaged a quarterly dividend distributions of $0.40 in the past 5 years and is simply too cheap to ignore trading at a price between $5 and $6. Company 5. Given the rapid 7.7% annual GDP growth in India and a rising middle class, exposing your portfolio to the Indian banking sector is a wonderful opportunity to position your portfolio to the Indian growth story. In the last 6 years, this private sector bank has grown its branches from 1,707 to 4,468. And its non-performing assets of 3.21% is very low when compared to the whole private bank sector at 4.6%, and 6.1% for public sector banks. With continued 11% year-over-year revenue and 14% earnings growth, this company is ridiculously cheap with a forward PE ratio of 12.9 compared to the Indian average of 20. Company 6. This stable, safe company has a high margin of safety due to high book value and cheap valuation. It trades at .64 cents on the dollar based on book value and has a 10-year cyclically adjusted P/E ratio of 3.83. Not to mention, an extra added margin of safety and upside return potential due to the Brazilian Real being so undervalued. This company would have to increase 679% to trade at the price the Chinese just paid for a major competitor to this company. Constructing a well diversified portfolio based on Sven’s Global Growth Stocks picks would give you exposure to mining, food production, apparel, fertilizers, banking, and energy. And this diversified stable of solid companies is much more resilient in the face of an economic slowdown because these companies produce “basic needs” products or services that we just can’t live without, such as food, banking, and apparel. Or they produce the most important input commodities such as copper, zinc, and energy, which help us produce everything else. I’ve vacillated on how much we should charge for Global Growth Stocks. If Sven were offering this kind of advice to accredited investors, who were investing a minimum of $250,000 with him through a fund, he would charge a 1.5% management fee and 15% to 20% of the upside return. Assuming a 25% annual return (I believe Sven’s picks will do even better), each investor would happily pay him $13,125 to $16,250 per year which would continually increase as Sven grew the value of their portfolio. We could easily charge $2,000 per year for Global Growth Stocks and it would still be an absolute bargain. But we want to provide top hedge fund-like returns to non-accredited investors who may not have $250,000 to invest. So we’ve decided to make it more affordable and not charge $2,000 per year. However, we still want to attract a subscriber who isn’t fickle, and has a longer term outlook on global growth, so we won’t be charging $99 per year either. If you haven’t added your name to the fast growing list of investors who have expressed a deep interest in Sven’s work, [click here] to be automatically added. We are hoping for a mid-February beta launch and will be offering a significant discount to Charter Subscribers to Sven’s Global Growth Stocks with the annual subscription rate increasing thereafter. Sincerely, Shane Rawlings Founder, Investiv [No Comments »] | Filed under: [View all posts in Emerging Markets], [View all posts in Investiv Daily], [View all posts in Sunday Edition] | Tags: No Tags --------------------------------------------------------------- If you are having trouble reading this email, you may [view the online version] This email was sent to {EMAIL} by Investiv, LLC 3400 North Ashton Blvd. | Suite 170 | Lehi | UT | 84043 [Forward to a friend] | [Unsubscribe] Disclaimers Investing is Inherently Risky There are risks inherent in all investments, which may make such investments unsuitable for certain persons. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. You may lose all of your money trading and investing. Do NOT enter any trade without fully understanding the worst-case scenarios of that trade. And do NOT trade with money you cannot afford to lose. 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