Dear Reader,
Last night I had dinner with a personal friend of mine who also subscribes to all of our services at Behind the Markets and invests in a lot of the things we recommend.
(A lot of my friends subscribe to our services, which is just such a fun part of running Behind the Markets.)
He said, “Hey, you recommended selling Palantir and then the stock jumped 50%. You recommended selling around $40 a share and it’s now around $60. What gives?”
We did recommend it around $7.
We did have a huge winner with it.
===URGENT BUY ALERT===
We’re going to release our top 3 defense stocks “buy alert” Monday morning…
Last month alone we sold 3 defense stocks for a 408% gain on Palantir, a 146% gain on half of Rocket Lab … and 82% on IonQ …
That’s on top of the 133%, 120%, 115%, 106% and 60% gains we’ve seen with other defense stocks this year.
The only “catch” is that access to this alert expires in 48 hours…these opportunities move fast.
Please check this out while you still can.
===
But yeah, this is a market that can make you look a little stupid.
It’s a silly market.
And I’ll tell you what I said to him –
We recommended Palantir a couple years ago when it was a $2 billion business.
Now, it’s a $2.8 billion business.
And the market cap is $160 billion.
So, while the business grew 30%…
The market cap grew 1,000%.
So you know, it’s not rational.
When you’re investing in a market like this you have to understand, every company has a range of value.
When a stock is way below that range of value we like to recommend buying it.
When the stock price is inside the range of value, we’re very happy.
When it gets to the top or above that range of value, we recommend selling it.
Because once that happens, it becomes a guessing game.
Which is not investing. It’s speculating.
Speculating is fun – don’t get me wrong.
But it’s not the way I play the game.
Using a blackjack analogy, I don’t like to hit on 18.
At the end of the day, what we’re doing here is looking for companies that are trading beneath their range of value.
That’s what we’re looking for.
They could be trading beneath their range of value because Wall Street isn’t looking at them – it could be for millions of reasons.
Maybe their business is growing faster than anybody expects…
Or they’re about to win a drug approval.
But once they get into their range of value, they bounce around in this value range and I start to say to myself, if they stay here, that’s okay.
But if they really break above their range of value, gosh, now we’re just guessing where it goes.
We have another company that fits in that category.
Rocket Lab, which I am really starting to think about…
Okay, when is it time to hit the eject button on this?
We recommended this thing at $3.80. It’s $20 a share. Could it go to $30?
Sure!
A flock of birds can fly in any direction they want.
Is that the high probability bet?
So that’s something I’m considering right now.
But we’re not the only people who think Palantir’s overvalued.
Peter Thiel sold a billion dollars’ worth.
Palantir’s own CEO Alex Karp sold almost $2 billion worth in the last three months.
The way we play the game is, we’re going to buy things when they’re selling for less than they’re worth…
We’re going to sell things when they’re priced way above what they’re worth.
That’s just the way we play the game here.
And sometimes, in a market like this, when people are just going crazy, you look a little stupid.
That’s okay. I’d rather be safe than sorry.
I’m not trying to impress the world.
I’m trying to impress my accountant and the people who manage our track record and the customers who look at our track record every day.
And I’ll tell you something else – everyone has a plan till they get punched in the mouth, like Mike Tyson said.
You have to worry about markets like this one because when they move – when you see a company like Palantir “priced for perfection,” it has to be perfect.
When they disappoint, those things go down so fast and so hard.
It’s like you get caught by an undertow or a tornado.
So yes, we are in a market that is going to make us look silly sometimes.
It’s a silly market!
We’re never going to time things perfectly.
And, on top of all that, I am human.
You don’t graduate above being human.
But again, the way we run things here, we aren’t going to hit on 18.
That’s just not the way we play the game.
Those of you who know my history, know some of my favorite investments are takeovers.
Getting these right very early in my career catapulted me to become one of the youngest people in history to found my own investment bank on Wall Street – bankrolled by clients who loved the work I was doing in takeovers.
And now, I’ve been running Takeover Targets just shy of five years, with a near-100% win rate.
I use the same strategy Warren Buffett uses to grab quick, consistent gains. You can check out our strategy and my 21-point system for these right here.
I hope you have a wonderful weekend. God bless you.
I’ll see you on Monday.
“The Buck Stops Here,”
P.S. There’s still time to get into “Our #1 Takeover Target for November.” We love this opportunity so much we went live with our first webinar in five years to talk about it.
We had so much fun doing this. Here’s the recording if you’re interested.
And here’s the report on it, if you prefer reading over listening in.
But don’t wait – this takeover opportunity is so ripe it could happen any day.
