Nearly 70% of all investors lost money last year.
That’s according to Openfolio, an app used by regular investors track their investment results.
That’s a staggeringly high number.
You know what though, I believe it.
I’m actually a bit surprised it’s not higher.
The problem is most investors make two mistakes which consistently cost them money time and again.
Below I’ll reveal those two mistakes and how they’re coming together to create a once-in-a-decade buying opportunity.
Mega-Trade Mistake #1
The first mistake is simply focusing on the wrong things.
The explosion of stock commentary over the years has been quite costly for most investors.
The problem isn’t that it’s wrong, it’s the most read isn’t helpful at all.
If you pull up a quote on Google Finance of a popular stock like Netflix (NFLX) or Apple (AAPL), you’ll see dozens of articles posted about these companies every week.
Some will say it’s a “buy.”
Others will say it’s a “sell.”
Many will say this could or that could happen which is nothing at all.
Here’s the problem with all of them.
The stocks people are most interested in (and therefore get the most commentary) have all had their big runs.
Most are basically a 50/50 bet at this point.
They’re going to be more greatly affected by the overall market’s movement than anything else.
I don’t care if Apple is going to move three million more iPhones this year or Netflix is going to add 1.2 million or 1.3 million more subscribers this quarter.
That’s why I don’t buy them, don’t hold them, and don’t waste any time looking at them.
Most investors don’t and that’s their first mistake.
Mega-Trade Mistake #2
The second mistake is extrapolating every current trend indefinitely into the future.
If a company is growing, investors will see it growing at the same rate indefinitely into the future.
The opposite is also true.
They can’t see change anywhere before it happens ever.
This too is reinforced by the media.
I took about three minutes to find a good example of what I mean.
In this case I searched the archives of Fortune magazine on oil over the last few years.
Oil has had a big run up and an eventual implosion.
It’s ripe for endless commentary and over-analysis.
For example, price of oil climbed from a low below $40 in 2008 to more than $100 at the start of 2011.
A two-year run of 150%+ is going to attract a lot of opinions.
Fortune supplied theirs in 2011.
With oil at $107 a barrel in May 2011, Fortune told us “Why oil prices will spike again soon.”
Oil was up big and it was expecting it to run higher.
A year later oil prices were flat.
Fortune extrapolated the go-nowhere trend out as well.
It warned high oil prices were here to say when it said “Saudi Arabia can't save us from high oil prices.”
As you know well, that couldn’t have been more wrong.
Saudi Arabia’s announcement that it would continue its oil production as shale oil production climbed, sent oil prices plummeting in 2014.
In a year’s time oil would drop from more than $100 a barrel to less than $30.
Now, when oil prices were down, Fortune was there to extrapolate the trend once again.
About a year into the oil collapse, Fortune detailed “4 reasons oil will stay this cheap for years.”
That wasn’t far away from the bottom.
I don’t mean to pick on Fortune.
This is something everyone does.
It’s totally natural.
The key point I want to show you the majority of everything you hear will be wrong.
Especially at the extreme high and low points for different assets.
Two Mistakes, One Big Opportunity
These two mistakes are combining to create what could be a major trading opportunity.
First, it’s an asset class few investors pay attention to.
Second, as I write, one asset class is hitting its lowest price levels in over a decade.
Things have gotten so bad, one analyst recently said there’s “no doubt” prices are going down next year and there won’t be a turnaround until 2019.
For contrarian investors looking to avoid the big stocks everyone is following and jump on the big opportunities wherever they may be, more profitable words have rarely been spoken.
In the next Profit Alert I’ll reveal more details on this trade and a few simple ways to play it.