Avoid Slaughter

To most investors, “volatility” is a bad word. [Katusa Research] To most investors, “volatility” is a bad word. It’s like a habanero pepper in your oatmeal. You don’t want to see it in your sensible, conservative investment mix. The talking heads on financial television bemoan volatility. Mainstream headlines make it sound like a terrible thing. - “Copper is crashing” - “Panic is not a strategy” - “Signs of stress in credit markets have been building” - “The yield curve has plunged” And this brings up one of the greatest lessons you can ever learn about the financial markets…. One of the true keys to market mastery. Great investors and speculators treasure volatility. I’ll show you how we made over 8x our money in rough markets like today... As a professional investor, I love volatility. I owe much of my success to this “dirty word’ of the financial world. In fact, I believe it’s a landmark moment in an investor’s career when he/she realizes that, much like a powerful river, volatility can be harnessed, directed, and used as a tool. When that realization happens, a world of huge opportunities opens. Many of these opportunities will come from the extremely volatile commodities market. If you know how to harness this market’s volatility and put it to work, you can make extraordinary returns on stocks. You can make returns in 10 months that most people wait 10 years to make. Why? Because more so than any other asset, commodity prices move up and down in huge boom and bust cycles. They exhibit what’s called “extreme cyclicality.” One year, the price of a commodity like oil, silver, or copper can skyrocket by 75%. The next year, it can fall 50%. In other words, it can be very volatile. Most financial advisors will urge you to avoid volatile markets like the ones I’ve described. I agree. Armchair investors have no business trying to navigate these rapids. These folks are best served by regularly buying shares in low-cost index funds, settling for average returns, and getting on with their lives. But what if you’re willing to do extra work to earn extra returns? What if you’re interested in being better than average… Like 10 or 50 or 100 times better than average? Well, then you might consider learning how to harness the market’s volatility and using its extraordinary power to generate wealth for you. I could fill a book on how to harness volatility and profit from it… But I believe ultimately, you need two key mental assets to make volatility a wellspring of capital gains for the rest of your life. Key #1: Learn to appreciate a good crisis Boom. Bust. Repeat. That’s the nature of a volatile market. And while booms can be great, you must learn to appreciate the busts as well. You need to learn to appreciate a good crisis. That’s when you sow the seeds of big bull market gains. During crashes, terrified investors sell assets with no regard for their underlying values or ability to produce cash flow. This creates an environment where the price of assets becomes “unhinged” from the value of assets. This, of course, means you can buy bargains during a crash. If you can keep a level head while others are losing theirs, you can buy at fire-sale prices. Key #2: Ability to sell and ring the cash register This might be the most difficult mental asset of all to acquire and put into practice. This is because it’s easy to fall in love with a position that has produced big paper profits for you. Once you learn how to buy extreme bargains during times of crisis, you’re bound to have some massive 100%+ winners in your portfolio. It’s easy to fall in love with a stock that doubles or triples in value. Seeing it in your portfolio will make you feel good. The winning stock can become like a family pet. And who wants to sell the family pet? Trust me… you do. Extremely cyclical assets like commodities and natural resource stocks should be approached with a “rent, don’t own” mentality. You must be willing to sell these assets after they appreciate in value. Market Meltdown: Case Study in Making Money Consider the incredible story of the Northern Dynasty… A company I recommended in my premium service, Katusa Resource Opportunities in July 2016. Northern Dynasty is a great case study on how to profit from volatility. It owns one of the world’s largest undeveloped copper and gold deposits. In 2011, the company was a market darling. Copper and gold prices were very strong. Shares soared to over CAD$20 and major mining companies were bidding to get a piece of its project. Just five years later, copper and gold prices had suffered big declines. Northern Dynasty lost support from major mining companies and its share price fell below CAD$0.40 per share (a 98% decline in five years!!). Below is a chart that shows the share price from 2007 to 2017. After I performed a site visit and hundreds of hours of research, I believed things would get a lot better for Northern Dynasty. During a tough bear market, in July 2016, I recommended the company as a buy under CAD$0.45 per share. Within nine months, the deeply depressed shares soared to CAD$4.40 (a gain of 880%). It’s an incredible story of using volatility to our advantage. I have a very different strategy than most people, and that's good, but I believe the framework for the rest of the world is quite simple. They're in deflation. They need US dollars. They're in trouble. Capital Flows are Going to Continue Into the US… During this period of recession – or even meltdown – there are opportunities to get positioned. But you have to buy smart, using tranches. Because I've received so many media requests and so many emails asking, "How do we get into your framework, how do we get to see what you're doing," Tomorrow I’m going live with an emergency recession broadcast… I’ve only done this one previous time in Katusa Research history – back in March 2020. I will detail 5 ways to position yourself to Recession Proof Your Portfolio. And we’ll touch on the major indicators that are flashing warning signals in the markets. Mark your calendars for my urgent broadcast tomorrow - Tuesday, July 12th at 9am PST. It’s free to watch for Katusa’s Investment Insights readers, like you. Don't miss it. Regards, Marin Katusa Copyright © 2022 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