| There is only one way to truly build wealth in the stock | | | | - Outcome: Starting about six months later, in |
| markets - spot trends well before the thundering | | | | early-2007 and still ongoing, those that did not heed our |
| sheep herd of investors does, invest in them many | | | | warnings are still in the process of losing billions of |
| months and sometimes even years before the | | | | dollars from hedge funds, with a very low likelihood of |
| average Joe and Jane, and concentrate your stock | | | | recouping those losses. |
| picks. If you do, 40% and 100% annual returns are | | | | - Prediction made in mid-2006 in my Online Education |
| possible. All this without great risk you say? Absolutely. | | | | Course: "The dollar has to weaken not a little, but |
| Well, at least with no more risk than the terribly | | | | considerably, for the massive U.S. trade deficit to close |
| diversified portfolios (and terrible!) that you receive at | | | | considerably. And a stronger U.S. dollar of course |
| most commercial investment firms. How can I say that | | | | makes this less likely to happen (a stronger dollar |
| concentration is less risky than diversification? Well if | | | | means that U.S. goods become more expensive for |
| you perform research that tells you that certain asset | | | | foreign countries, so U.S. exports would be likely to |
| classes have a 90% chance of appreciating greatly | | | | decline). However, because American individuals are |
| and you greatly overweight this asset class in your | | | | burdened with debt as well, Bernanke's hands are tied |
| portfolio, I'd take the 10% downside risk any day to | | | | as to the number of times he can continue to raise |
| perhaps outperform a diversified strategy by 20% or | | | | interest rates without causing an economic recession. |
| even 60% a year. In essence the "get rich quick" title | | | | In the early 2000's many American's overextended |
| above is slightly tongue-in-cheek as there are truly no | | | | their credit, taking advantage of historically low interest |
| guaranteed get rich quick schemes in stock investing; | | | | rates to buy huge houses with low mortgage |
| however, there are certainly periods of time triggered | | | | payments that were really over their budget." |
| by certain government and central bank actions that | | | | - Outcome: The sub-prime mortgage fiasco that we |
| present an opportunity to build great wealth in a short | | | | warned about became a reality. Since a year ago, the |
| period of time. This is just one such time right now. | | | | U.S. dollar lost 15% against the NZ dollar, 5% against |
| - Prediction made in January 2006: "On January 7, | | | | the Sing, and 16% against the Thai baht not to mention |
| 2006, I offered this piece of free advice on my blog | | | | huge losses against major currencies like the Euro and |
| (go to and perform a search for "U.S. Treasury Bonds" | | | | Pound Sterling. |
| to read the full article), "Many people think of any type | | | | - Prediction made September 16, 2006 on my online |
| of dollar denominated bonds, whether they are U.S. | | | | blog: "Everywhere in the media, you have pundits |
| corporate bonds or U.S. Treasury bonds as a safe | | | | saying that the commodities Bull Run is over - including |
| place to park your money for reliable sources of | | | | even chief global economists of major investment |
| income stream. In fact, the U.S. Treasury Department | | | | firms like Steven Roach of Morgan Stanley. THEY'RE |
| on their own website, even tout U.S. Treasury | | | | ALL WRONG...I've dug deep enough down into the |
| Securities as a 'great way to invest and save for the | | | | rabbit hole to know that gold will rise much much higher |
| future.'" | | | | in the future...Yes, oil has slipped to below $60 a barrel |
| "Many people believe this rubbish because they are | | | | but again, this doesn't mean that oil is done either." |
| advised of this by a horde of financial consultants that | | | | - Outcome: I made this prediction at a time when the |
| have zero understanding of how the | | | | price of gold was falling rapidly and all the gold bears |
| political-corporate-banking triumvirate operates, and | | | | stated that the commodity bubble was going to burst. |
| how this financial triumvirate has produced a most | | | | As oil headed to $50 a barrel, a lot of experts started |
| unattractive likely scenario for dollar-denominated | | | | calling for $30-$40 oil. A lot of advice was given, even |
| bonds going forward from 2007. Many people think of | | | | from chief investment officers at major global firms to |
| U.S. Treasury bonds as safe because of the federal | | | | sell out of almost all commodity based stocks at that |
| guarantee. The ten reasons below [stated in my blog | | | | time. Since then gold has moved to over $750 an |
| article] render that federal guarantee irrelevant." | | | | ounce and oil rebounded strongly to over $80 a barrel. |
| - Outcome: Six months later in June, after bond prices | | | | Understanding these trends have allowed me to earn |
| experienced a surprise, unexpected plunge in prices | | | | more than 200% returns on gold stocks as well as |
| according to The Economist (of course the plunge | | | | 50% returns on oil stocks over just the past couple of |
| wasn't surprising to me!), the world's most followed | | | | months. |
| bond commentator, the U.S. bond king Bill Gross, finally | | | | - Predictions I made September 6, 2007 (Speech at |
| agreed with our assessment of U.S. bonds as a poor | | | | the Pan Pacific Hotel, Bangkok, Thailand) that will help |
| investment. In September, 2007, foreign investors not | | | | you make a fortune in the future |
| only ceased purchasing U.S. bonds and debt like it was | | | | - U.S. Federal Reserve will continue to sacrifice the |
| the plague but they sold the largest amount of U.S. | | | | dollar to prop up stock markets. |
| debt in 7 years! This was the first example of many | | | | - Increased volatility as $370 billion in sub prime |
| predictions I made that came true many months in | | | | mortgages re-set to higher rates, starting with $50 |
| advance of anyone else. | | | | billion in September and $30 billion every month |
| - Prediction made in mid-2006 in my Online | | | | thereafter for the next 18 months to 2 years. |
| SmartKnowledgeU (TM) Education Course: "Highly | | | | Triple-digit losses in the Dow during single day trading |
| leveraged hedge funds are extremely dangerous | | | | sessions will become commonplace. |
| funds to be invested in as of mid-2006 due to this | | | | - A deepening correction in global stock markets, likely |
| situation [easy and risky credit]. If you are in a highly | | | | to occur despite best efforts of central banks across |
| leveraged hedge fund, we at SmartKnowledgeU (TM) | | | | the world, will cause the Federal Reserve and the |
| recommend immediately divesting of it before you | | | | ECB to launch efforts to drive the price of gold down |
| potentially lose everything you have invested in that | | | | before gold and gold stocks advance much much |
| fund. In as simple terms as we can explain it, many | | | | higher. At some point, the U.S. Treasury, Feds, and the |
| hedge funds bought up trillions of yen to make easy | | | | Exchange Stabilisation Fund will succeed in |
| returns for their investors." If that warning wasn't | | | | manufacturing a strong rebound in traditional stock |
| explicit enough, I predicted back then: "the Bank of | | | | markets. This is the point you should be very very |
| Japan in mid-2006 is now aggressively contracting the | | | | afraid. |
| global yen supply and raising interest rates - two | | | | - 2007, and possibly into very early 2008, will present |
| actions that will cause any highly-leveraged hedge fund | | | | the last opportunity to buy gold at less than $700 an |
| that has played dollar-yen-dollar swaps to collapse. | | | | ounce, but not without some volatility in between. |
| That is an indisputable and inevitable fact." | | | | |