Where Is the Biggest Profit Potential? In Risky Stocks

Risk management is one of the first things investors learn... but most people might not actually know what it means. Alex Koyfman explains why his goal is to maximize, not minimize, risk to reap the biggest profits. You are receiving this email because you subscribed to Wealth Daily. [Click here]( to manage your e-mail preferences. [Wealth Daily logo] Where Is the Biggest Profit Potential? In Risky Stocks [Alex Koyfman Photo] By [Alex Koyfman]( Written Jun. 21, 2018 Dear Reader, Risk management is one of the first things investors learn — whether it's from a book, a class, a business degree, or from experience. But does it actually mean what most people think it means? Risk management, to your average investor, means one thing: minimizing it. In reality, however, this concept is much more complicated. In order to effectively manage risk, an investor must first decide the level of risk he is willing to personally undertake. People with differing financial situations, differing goals, and differing mindsets will invariably peg their risk tolerance at differing levels. Some might be able to stomach a highly speculative investment plan, whereas others are only comfortable with slow and steady but safe returns trickling in for years to come. This raises a question, however: Why bother with risk in the first place? Your Single Advantage Over Warren Buffett Could Make You a Million By Winter’s End He’s the biggest, richest investor in history, with enough money to run a small country. But there’s one thing he can’t do that you can... And he’s admitted it publicly. [He absolutely cannot buy a very specific class of stock](, due solely to the very thing that makes him a legend: his wealth. And it’s this exact class of stock that makes millionaires faster than any other, bar none. Warren Buffett can’t take advantage of it. Not for himself or for his clients. But you can. In fact, you can be invested in just minutes, without leaving your chair. [Click here and find out how.]( An Ugly Word for a Beautiful Thing Therein lies the biggest psychological pitfall that has faced investors since the very advent of currencies. Risk in investing isn't the sort of risk you take when you decide to drink half a bottle of Stoli and go for a spirited drive in your convertible. Risk is another word for volatility, meaning the potential for change in the value of an investment. The more volatile a stock, the more likely it is that tomorrow's price will be different than today's price. That's it in a nutshell. But the implications here are great. Volatility, when properly played, can lead to major gains in short periods of time. So when an investor chooses to raise risk levels, he is choosing to put more of his capital into investments whose price is likely to change (hopefully for the higher) on as short a timeline as possible. For most people, the highly volatile investments are like kryptonite to Superman... they don't want to go anywhere near them. Returns of 6% or 8%, on an annual basis, are just fine — just as long as those returns are more or less set in stone. That's the average mindset, but, as you might imagine, it's not a path to rapid wealth. In fact, it's usually not a path to wealth at all — just slow, gradual growth to ensure that hard-earned money is protected from inflation long enough to be tapped for retirement. Please Be Warned: This Is NOT for Everyone If that's the kind of investor you are, I respect your attitude, but you should probably just stop reading right now. Because my focus today is a rare kind of risk structure, where instead of eliminating volatility, we maximize it. You read that right: maximize, not minimize. The rule is simple: If properly applied, volatility leads to the biggest price changes over the shortest period of time; therefore, maximizing this volatility maximizes profit potential. It sounds crazy, but the reality is the biggest, richest investors around usually make their money by doing just this. Major VC legends like PayPal pioneer Peter Thiel, Uber backer Bill Gurley, Instagram owner Steve Anderson, and even Elon Musk himself all made their fortunes investing in the riskiest companies in existence: pre-profit, early-stage startups. They bought shares early, when the companies were still private, and then nurtured these companies until the big payday: the IPO. At that point, the shares went on sale to the public, and these guys cashed out, pulling in hundreds or even thousands of times more than their initial investments to walk away with billions. The Walmart Profit Loophole Walmart shares are pretty expensive right now... $84 a share. But if you knew about this little-known “backdoor,” you could be banking $4,969 every month directly from the company’s corporate accounts... And all without having to purchase a single share of Walmart’s stock. The best part is you can get started for as little as $50. [Click here to find out more.]( Everyone Gets Their Start Somewhere Now, of course, these private investments are not within everyone's reach. Typically, in order to own early-stage shares of a private venture, you need to know somebody within the company, be tied in with a powerful investment fund, or be one of the founders yourself. If you don't fall into any of these categories, however, there is a way around that. You see, there is a little-known class of public stocks — stocks you can buy today, right now, if you wanted — that fit all the criteria of early-stage startups. They're small, they're pre-profitable, and, most importantly, they have products in the works that have the potential to disrupt or even destroy the establishment. A good example is [a company I previewed earlier this year]( that has come up with a material-detection system capable of telling the difference between a watch or a pocketful of change and a knife, a gun, or even a bomb with no metal parts. These sensors can analyze entire crowds so rapidly that people can walk through the detection zones without even knowing they're being scanned. This company, which only got approved to sell its groundbreaking artificial intelligence-powered devices in the U.S. late last year, is a virtual unknown outside the investment community. Today, schools, government agencies, airports, and even Las Vegas casinos are champing at the bit for this technology, [and it's still just the beginning](. Best of all, this company is already trading. You can buy its stock right now, sit on it for a few years, and probably cash out 10 or more times your investment. These Opportunities Were Right Under Your Nose the Whole Time But that's just one example. There are many, many more, and all of them are flying under the radar of the mainstream investment community — for now at least. Finding these companies isn't easy, and I end up spending most of my time, hundreds of hours per month, researching and traveling to learn more. I even attend covert investor meetings in New York, Los Angeles, and Toronto, where companies like this make their pitches to some of the wealthiest, most risk-tolerant investors in the world. Once again, if your goal is to take your savings and grow it slowly and securely in hopes of ensuring a comfortable retirement, Godspeed to you, but this isn't going to be your cup of tea. I'm looking for risk-insensitive investors ready to take a modest sum and multiply it many times over during a hold period usually shorter than a year. For those who qualify, this could be life changing, as there are four-figure gains being closed in this space on an almost weekly basis. If you think you fit the bill for this sort of investment, [click here](. Fortune favors the bold, [alex koyfman Signature] Alex Koyfman [[follow basic]@AlexKoyfman on Twitter]( Coming to us from an already impressive career as an independent trader and private investor, Alex's specialty is in the often misunderstood but highly profitable development-stage microcap sector. Focusing on young, aggressive, innovative biotech and technology firms from the U.S. and Canada, Alex has built a track record most Wall Street hedge funders would envy. Alex contributes his thoughts and insights regularly to [Wealth Daily](. To learn more about Alex, [click here](. Enjoy reading this article? 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