It's October 27, 2008, and Silver Wheaton (SLW) just hit $3 per share. I buy 10,000 shares, more than I've ever devoted to any one stock. I sell half when it hits $33 per share and pocket $150,000 after a 1,000% gain. I pay off the mortgage, and my wife quits work—and I still have 5,000 shares…
Not a bad daydream, eh? I don't know how many investors actually had the intestinal fortitude to plunk down a big lump of cash on a stock at that time—but Silver Wheaton did indeed offer that 1,000% return, and more.
When you look back at the investments that have made the most money over the past few decades, they've always been assets that had reached an extreme—an extreme low or an extreme high.
Buying gold at $250 per ounce in 2001… buying tech stocks in the early '90s or Apple Computer at $8 per share in 2003… shorting real estate in 2007 or the stock market in 2008… the list goes on.
Each of those speculations led to massive returns only because the price of the respective asset was either dramatically undervalued and poised to take off or, in the case of the short sales, a bubble ready to pop.
Paradoxically, such opportunities aren't that hard to find—the truth is, they sprout up all the time. What is hard to find is...
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