Fight Or Flight Investing

If you’ve ever followed anything I’ve written or interviews I’ve done, you’ve probably heard me say that the stock market is a scam.

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And that’s because, quite frankly, it largely is.

So many public companies manipulate their numbers, so many mutual funds, and stockbrokers have a bunch of hidden fees. All these investment news sources preach that the stock market is going to collapse, or that you should buy this or that stock that’s going to get you 6,000% gains.

Don’t fall for any of it. It’s all a scam.

But that doesn’t mean you can’t make money in the stock market.

In my years of investing, I’ve probably tried every strategy there is out there. There are only about three that I really care about. This is one of them.

In fact, if I were to die tomorrow, this is the strategy I would tell my children to use to invest the money from my life insurance policy.

And the best part is you’ll never hear any investors talk about this strategy because it goes against everything they believe about investing.

So here it is. This is one of the most important strategies, if not THE most important, that I could give you. This is what you should always look for when investing.

1) Find the irrational fear

In 2008, the oils markets were crashing and so everyone thought that Texas and California were about to declare bankruptcy. Everyone was talking about it on TV and in the news.

They had no idea what they were talking about.

It’s not even legal for a state to declare bankruptcy; the founding fathers wrote it into the Constitution.

The only way a state can even get out of paying back a debt is if first, they fired every single public servant and every public school teacher, etc.

I would go on CNBC and have these arguments with people. I’d go on and say that it wasn’t going to happen. That it wasn’t ALLOWED to happen.

But still these guys on CNBC—professional pundits and investors!—could not wrap their minds around this.

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Currency Trader 4 years ago Member's comment

I think this is a simple yet, brilliant strategy.

Keith Schneider 4 years ago Contributor's comment

this sounds like a blueprint for disaster.... How does one execute this unless they have a staff of research people or have gone to Columbia to learn value investing and have the ability to sit through major losses.How do you determine when you are wrong?

Did you ever hear that the single best variable is price performance and relative strength to identify the biggest trends and the liquidity cycle.... I would suggest investing ideas to the public that work and one can execute with some risk control