🚨Trade Alert #7: Increasing Two Positions and Opening One New Position

Buying shares in 3 international stocks that are gravely undervalued.

The market is at all-time highs, attractive stocks with high growth potential have already reached their fair values or exceeded and the macro uncertainty is looming.

What should investors do?—This is the question we have discussed a few times last week in our Discord group.

Here is my straightforward answer: You gotta keep allocating.

This answer doesn’t come just from my tendency to be a net buyer of stocks, but there are decades of data indicating that you should keep allocating:

Since 1990, the S&P 500 has made more than 730 all-time highs. Allocating money at these tops returned, on average, 11.6% after a year. This is higher than the historic average return of 10%.

This despite the fact that you would have fully suffered from the dot-com crash and the Great Recession. Data is conclusive.

The rationale is also clear from a behavioral economics point of view. Market highs are actually the points where people get the most FOMO. This attracts more and more money to the market the bringing news highs after highs.

If this weren’t the case, the market would correct a bit every now and then, and we would never get big corrections. But the correction comes when this process drives the market to unsustainable highs.

The behavioral economics is clear, and it’s supported by decades of data. You gotta keep allocating because the correction doesn’t come when it’s due, and you never know when it’ll come.

Yet, this doesn’t mean you should buy blind. You should allocate in a way that minimizes the downside while maximizing the potential upside.

• Diversify more both sectorally and geographically.

• Overweight stocks that are undervalued based on their current cash flow.

Today I’ll execute four trades that fit the above criteria.

I’ll be buying shares at the market at three companies. All three of them are international stocks.

• All three of them have a +10% long-term annual revenue growth projection.

• The most expensive one is trading at 18 times forward earnings.

• All have at least 2x potential from here.

I already have positions in two of them. I’ll be increasing their allocation within the portfolio.

One stock is a new buy that is surrounded by extreme pessimism, which is completely detached from its business fundamentals.

Here are the exact trades I am making:

The first one has the highest potential among all and arguably the most undervalued one, given its potential.

I think it can easily make 3x from these levels in the next 5 years.