[Day 2/7]: The Mindset for Huge Gains (One Reader’s $500K Profit)

Dear Reader, Today’s note isn’t a hot stock tip. And it’s not a secret to identifying big winners in the resource market. It’s about psychology. Before you close this email in disgust, I hope you’ll understand how important it is to have the right mindset when investing in resource stocks. And that’s why, today, I want to teach you about the proper mindset for making huge gains. This mindset is one of the reasons my readers are so successful, like G.T., recently wrote to tell us: “Investing in Marin’s ideas is the best investing decision I have ever made. Marin is head and shoulders above the rest – in a class of his own. To boot, he puts his money where his mouth is. I invested $15,000 in his recommendation of Blackbird Energy. I was up 193% in 3 months. I invested $13,500 in Northern Dynasty. In less than three months, the value of my investment was over $52,000… up 280%.” Or F.F., who made a HALF A MILLION DOLLAR PROFIT on my ideas: “Marin always finds investments I have never heard of, but I’ve learned to pay attention. In mid-February 2015, he suggested buying Brazil Resources. I bought 200,000 shares at C$0.45. It was a C$90,000 investment. In July of that year, I sold my shares at C$2.95. So, I made exactly half a million dollars after getting back my original $90,000. I made over 500% in less than a year.” I call it the “Home Run Mindset,” after the famous slugger Babe Ruth. But this psychology goes far beyond the baseball diamond. It’s the same principle practiced by Silicon Valley billionaires like Peter Thiel (an early investor Facebook) and hedge fund gurus like George Soros. Back to Babe Ruth… Babe Ruth is considered one of the greatest baseball players of all time. He hit 714 home runs, a league record at the time. Over his career, he collected 2,873 base hits. He was a seven-time World Series champion. He made baseball’s “All Century” team. However, Babe Ruth was also known as the “King of Strikeouts.” Ruth led the league in strikeouts five times. He was the all-time leader in strikeouts when he retired. In other words, Ruth succeeded a lot… but he also failed a lot. Because of his aggressive style, Ruth would often either hit a home run or strike out. His home runs would win games instantly. The opposing team could spend hours gradually building up a lead… only to watch a Ruth home run destroy it in seconds. In other words, when Ruth achieved success at the plate, the success was often very meaningful. Ruth was okay with a few failures because he knew his successes would more than make up for them. This approach helped Ruth become one of the greatest baseball players in history. To achieve success as a resource investor, you need to adopt the Babe Ruth mindset. It comes down to three principles: - Understand you’re going to strike out - Make your losses small and insignificant - Make your wins large and meaningful Said another way, maximize your winners and minimize your losers. Forget about your winning percentage as an investor. It’s much, much more important to make a lot of money when you’re right… and lose a little money when you’re wrong. When you start thinking like Babe Ruth, you can be right just half the time… and still make huge profits in the resource market. To get an idea of how powerful this strategy can be, consider a hypothetical investment scenario… On January 1st, you buy ten different stocks. You hold them all for one year. The return of these ten stocks after the one-year holding period is listed below: - 20% - -80% - -76% - 32% - -55% - 235% - 80% - -99% - -40% - 383% You bought ten different stocks. Five went up. Five went down. That’s just a 50% success rate. But because you hit a few big winners (#6 and #10), you made an outstanding average return of 40%... And you made this excellent return while being right just 50% of the time. This is the power of making your winners large and meaningful while keeping your losers small and insignificant. Of course, we wouldn’t ride a position to zero, like investment #8. We’d cut our losses much faster. We just wanted to show the difference big winners can make to your overall portfolio, even if some positions go down 99%! Don’t get me wrong. I like to be right as much as anyone. I try to cut my downside as much as possible on my investments. But the simple fact is that resource investments carry risk. I know I’m not going to be right 100% of the time. Resource investments frequently produce triple- and quadruple-digit returns. Participating in these massive winners is a major component of our success. Focusing on the winning percentage is not. Best, Marin Copyright © 2024 Katusa Research, All rights reserved. If you wish to stop receiving our emails or change your subscription options, please [Manage Your Subscription]( Katusa Research, Suite 530 - 800 West Pender St, Vancouver, BC V6C2V6, Canada