Free webinar on cryptocurrencies; Investing in Retail Turnarounds; Update on At Home; One Family Built Forever 21, and Fueled Its Collapse
1) As I've written many times before, I think cryptocurrencies like bitcoin are nothing more than a techno-libertarian pump-and-dump scheme, mostly foisted on gullible individual investors.
So it was with great interest that I sat down for the first time last Friday with Eric Wade in Los Angeles, the editor of Stansberry Research's Crypto Capital newsletter:
After a bit of nervous chitchat, as we acknowledged our vastly different views on this sector, we had a thoughtful, hour-long conversation about it. I don't think we changed each other's minds, but it was an intellectually stimulating and enlightening conversation.
Eric agreed that cryptocurrencies are extremely volatile and risky, which is why he recommends that anyone investing in the sector size their total crypto exposure equal to a typical stock position. So, if you usually take a 3% position in, say, Apple (AAPL), then your combined crypto exposure should be only 3%. That's excellent, sensible advice for risky speculations.
He also acknowledged the tremendous fraud in the sector, which is why he carefully researches every crypto he recommends to his readers. He looks for ones that are designed for a particular, useful purpose, such that they have a real chance to survive, endure, and grow. That's what I would do if I were investing in the sector.
At the end of the day, my advice remains the same: I think you're likely to lead a less stressful, more profitable life if you avoid this sector altogether.
That said, I know that some of my readers are going to want to speculate with a (hopefully tiny) percentage of their portfolios, in which case I know of no bigger expert on the subject than Eric. He's a proven moneymaker: His current open portfolio is showing an average gain of roughly 80%, and he has six 100%-plus positions.
If you want to learn more, I highly recommend that you watch the free webinar Eric is hosting next week on Wednesday, November 20. During it, he'll share his latest thinking on the sector, reveal his latest crypto idea, and interview 12-term U.S. Congressman Ron Paul. You can register for it right here. Again, it's totally free.
2) During one of our webinars last year, my former partner Glenn Tongue and I answered one of our student's questions about what we look for when Investing in Retail Turnarounds (10 minutes). In it, we discuss Barnes & Noble, Bed Bath & Beyond (BBBY), and Best Buy (BBY).
3) Speaking of retail turnarounds, in my e-mail on July 24, I highlighted home décor superstore operator At Home (HOME) as my "Stock Idea of the Day." I wrote:
At Home reminds me a bit of Snapchat at its lows... Both stocks crashed to around $5 in a short period of time (HOME was over $40 a year ago), and had compelling bull cases posted on my favorite stock-idea website, ValueInvestorsClub.com...
Many big-box retailers in this sector are getting hammered – look at Bed Bath & Beyond (BBBY), which has gotten cut in half in the last three months alone. But I've often had great success identifying babies thrown out with the bathwater...
Since then, the stock is up 42% from $6.15 to about $8.75...
We recommended a consumer brand/retailer in our August issue of the Empire Investment Report. The stock is up roughly 30% since then, but it still has plenty of room to run. If you'd like to read about it – and all of our other materials only for our subscribers – click here to sign up. (Plus, you'll receive my upcoming recommendation in the next issue, due out next Wednesday, November 20.) If you're not satisfied for any reason, you can get a full refund within 30 days.
4) One more thought on retailers... I enjoyed this insightful look at how and why Forever 21 went bankrupt. The insular Korean family that owned it made just about every mistake in the book... One Family Built Forever 21, and Fueled Its Collapse. Excerpt:
The Changs were indeed a unique success story, and Forever 21 was far from a run-of-the-mill family operation. At its peak, the retailer brought in more than $4 billion in annual sales and employed more than 43,000 people worldwide in hundreds of stores.
Now it is leaving 40 countries and closing up to 199, or more than 30%, of its stores in the United States as part of its bankruptcy, and former employees and industry experts are pointing to the Changs' insular management style as a significant reason for the collapse. They cite disastrous real estate deals and the chain's bungled merchandising strategy in recent years.
Best regards,
Whitney