Happy Holiday and New Year to All Envoy Research Subscribers

Posted on December 27, 2009

Just want to wish all my readers a Happy Holiday and New Year.

2009 started out in a scary fashion. But, as Bernanke revved up the printing presses, the stock market took off.

If you’ve followed the picks on the site, you should have been up close to 100% this year, even if you are as risk-averse as me.

Risk-averse? Yes. Most people confuse investing in supposed speculative stocks of companies that are losing money with risky behavior. I hope I am slowly proving to you why this is a ridiculous notion. With solid research, a diversified portfolio of “speculative” stocks that are mostly losing money, are ignored by Wall Street, and are trading at multi-year lows are the least riskiest investments you can find anywhere. The devil, of course, is in the details. In 2010, I hope to spend some more posts on why investing in perceived garbage companies is really the only way you can really make alot of money in the Market. I’ll also devote more space to the topic of Loss Analysis (as opposed to Profit Analysis, which is the focus of nearly all funds). From my perspective, Loss Analysis is the key analytical tool for those looking to increase wealth via stock market investing.

As for 2010’s Stock Market, I don’t really have a clue. However, since I like to bet on reversals, as opposed to continuations of trends, I’d hazard to guess that unlike 2009, 2010 will start out strong and then the Market will succumb to a major correction.

The culprit? The Free Fed Money Train will slowly come to a halt. As zero risk financing for all sorts of real junk ceases, those with capital will hoard it for dear life, as there now remain few opportunities for investment that meet any sort of rational investment criteria.

The trick to winning in 2010, is the same as in prior years: Sell when you can, not when you have to. If you are constantly building up cash, you’ll have the capital to take advantage of the inevitable correction to bet again on turnarounds. And there always is a correction, usually when you least expect it.

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This site may include market analysis and we may own shares in the stocks mentioned in our reports. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.