Do This When You're Afraid

So the market took a giant dump on all our hopes and dreams, dropping more than 2600 points from all time highs in the space of just three trading sessions. 

God knows there were catalysts helping it along: A weak jobs report, missed earnings in big tech, a global tech meltdown, political uncertainty, rabid overbuying for over a year, no rate cuts, the threat of two major wars looming in two volatile regions of the world… 

Lots of analysts are going to be beating their skulls in trying to find a single culprit which caused the cascading sell-off. But the fact is, it was all of these factors coming together, until one day… You get this: 

When you’ve boiled it all down, the one element that directly causes four-figure down days on the Dow, and similar catastrophies on the other major indices, is panic selling. 

And that, unfortunately, is almost always either triggered or magnified by retail investor herd mentality.

So blame the algorithms as you may, they’re almost always programmed to behave reactively. 

We’ve All Made This Same Mistake

If you were able to log into your brokerage account yesterday and sell stocks that were down, congratulations, you are part of the problem. 

But don’t take it personally, because anybody who has ever managed their own investments has been subject to herd mentality. 

I myself can blame the loss of hundreds of thousands over the course of my career to just that, so I’m not judging as much as I’m merely pointing out a truth. 

All of that said, there is redemption for us, and it can be summed up in a saying I’ve noticed making its rounds through the internet these days. 

“When you’re feeling afraid… Take a risk.”

It’s seems counterintuitive, but this is the very essence of the same old piece of investment advice that I bandy about at least once a month in these little articles: 

“The time to buy is when there’s blood in the streets.”

Credited to legendary banker and financiar, Nathan Rothschild, of the Rothschild banking dynasty, it may be the only piece of advice an investor needs to be successful — so long as the rule is never broken. 

The logic is simple. You buy when other people are selling, thus turning their pain into your advantage. 

One Step Instructions For Winning Every Time: Go Against The Herd In Times Of Fear

When fear subsides, as it always does, and rational valuations return, then you will profit. 

It’s that basic, and yet, as evidenced by the sell offs of last week and this week, and by sell-offs throughout history, it can be extremely hard to put into practice when your own blood is what’s flowing through the streets. 

Now, for those of you looking to turn this moment of fear into an advantage, I return to a small lithium company I’ve been writing about for months now. 

It’s a lithium extraction technology company, which means it’s not a miner or an explorer, and is immune to all of the risk and pitfalls which plague firms in that sector. 

What they’re doing is creating a technology, the best of its kind anywhere, that can extract syllable lithium from oilfield brine. 

The tech has been proven over and over again to produce some of the cheapest lithium in the world, using solutions too weak for any aspiring competitors to work with. 

The company just recently achieved a major scaling milestone, and is just one more milestone away from commercial scale production — which is expected sometime in the first half of next year. 

A Billion Dollar Valuation In 2025?

Now, this company is still quite young, and the tech is still being developed, but while the rest of the market was on fire, its shares remained remarkably steady. In fact, it gained 2% on monday while the dow dropped over 1000 points. 

The likely explanation behind this is simple… After months of anxiety and sideways trading, the weak hands are all gone, and only the most informed, most steel-nerved investors are left holding their shares. 

That’s why there was no panic selling, and the next day, the stock traded within its normal daily range as well. 

At least one of the major shareholders just happens to be a major oil and gas interest, which wants to use this technology to diversify its own operations into lithium production. 

Now, remove all fear and anxiety from your calculus and consider these irrefutable facts alone:

• The lithium market is projected to quadruple in the next decade. 
• Lithium production is projected to start trailing demand starting this year. 
• Most future battery technologies, including solid state, will depend on lithium just as lithium-ion batteries do today. 
• This company’s lithium is among the cheapest anywhere and without requiring exploration or mining to implement, can initiate production far (weeks vs years) faster than any traditional hard rock operation. 

Add all that up, ignore the fear-mongering press, and decide where you want to be in a year or two. 

If you want to learn more about where this company will be, click here.

Fortune favors the bold,

Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.