I was 13 years old when India was in crisis. It took too much money in dollars, desperate to get it back.
India needed dollars. So the government came up with a plan to get it from people like my father who made money with petrodollars.
The Middle East was booming, with thousands of Indians following in my father’s footsteps and finding work in Dubai and similar places. They benefited from the rapidly growing economy there.
The currency of Dubai is easily converted into dollars, և India desperately wanted to tempt my father նման like him to lend those dollars to the government.
To do this, India offered my father a deal that was made once in a lifetime. Borrow your dollar from India and get 18% interest-free tax for 30 years. To ease the deal, the government set it so that you can get your money back in dollars in a few years if you wish, or continue to earn 18% tax-free for 30 years.
Eighteen percent is a surprisingly high yield. You will be lucky enough to get it from stocks or risky assets. It is impossible to get it, in fact, to put your money in a government-guaranteed bank account.
It was a once-in-a-lifetime shot of risk-taking, stock-like earnings.
And even though I was only 13 years old at the time, I learned something that is absolutely possible about investing in everything my father did when he received this offer …
My father correctly guessed that although India was in crisis, there was almost zero chance that the government would tighten it. In other words, this crisis was his opportunity.
My father went all the way inside. He put all the UAE reserve dirhams in this offer. It was a complete home run for him. And even though my father died in 2000, my mother was collecting interest until a few years before this deal.
And here is what I took from my father’s bet. When the odds are in your favor, you have to make a bet. You have to be proactive և go for it.
The shining star of the market
Earlier this year, I told readers that gold mining companies were making a big splash. This is because the shares of these companies had just gone through an incredible sell-off panic that lasted six months.
I showed that it was really a panic because the gold mining companies were making money during this time. In other words, there was nothing to cause this panic in the companies. It was purely a feeling at work, driven solely by the irrational selling of investors.
At these prices you do not need gold prices to go up to make money. All you need to do is stop selling. And then the natural demand of smart money investors, who sniff out these panic situations to make huge amounts of money quickly, will drive up prices. That’s the script I wrote.
And that is exactly what happened. Gold reserves rose 56% in the four months after that article, while the S&P 500 rose just 10% in the same period.
The rally is not over
If you’ve bought gold miners and experienced these phenomenal achievements … congratulations! Clap your back or maybe heal yourself. You did well.
Now, if you’ve bought: and made money, I want you to know that I think there is more to win. That may sound crazy. However, I can tell you from 25 years of investing that when stocks take such a big step, it is a sign that more profits are coming.
This is due to the fact that this profit for gold mining companies is based on the huge demand from all kinds of investors who are just waking up here. These shares still belong to Big Money. the same group that spent two years throwing them away, causing them to crash.
Moreover, in 2016, gold and silver prices increased by 30% և 50%, respectively. This means that gold / silver mining companies will show an increase in sales revenues in 2016 և 2017 from an increase in gold / silver prices.
Eventually, the collapse of the shares of gold mining companies forced the management to make massive cuts – cost cuts. They are still being implemented today. As a result, the profit margin increases. Even higher returns are expected in the future … ունեցող Investors with large sums of money are going to come back inside.
That’s why I do not hesitate to say that it is not too late for you to miss out on these first easy achievements. Although gold mining stocks have grown by more than 50% in four months, there are many returns still left in this trade.
You can be sure that crooked market creators: careless hedge funds will cause instability to force you to sell your gold mining stocks, so expect more volatility as this trade enriches you.