Dear SPI-Club Member
Alerting Members to The Value of investing in LOW-PRICED Investments
Welcome to the latest edition of SPI-Club News! In this newsletter, we will explore the exciting potential of compounding when it comes to investing in under-priced investments that have become dislocated to market values.
In our everyday lives, we often search for bargains, when buying cars or homes. Surprisingly, a similar mindset is frequently over looked when it comes to building investment portfolios. Today, we want to shed light on this overlooked strategy and share one of many compelling examples we are monitoring, particularly after the recent savage Bear Market.
During this market downturn, many share prices have become oversold, and are very significantly undervalued, therefore providing opportunities that we may never see again in our lifetime!
Let’s take a closer look at the power of compounding in the context of investing in undervalued equities.
Compounding is simply the process of steadily adding to your portfolio to compound gains over time. Although compounding can be applied to investments of any value, our focus today is on the value created during the Bear Market of the past two years, which is throwing up opportunities to buy at low values unlikely to be seen again in our lifetime.
I have created a list that is exclusively available to SPI-Club Members illustrating the potential of the most dislocated opportunities and firmly believe Savvy Fearless Investors have the potential to make significant fortunes in this environment.
There are 9 opportunities with an upside potential to their recent all time high ranging from 1,050% to 14,443%
These opportunities do not come around often. E.g., On 12th May, I sent a Trade Alert to SPI-Club Members when I personally added to my exposure in TuSimple Holdings at $0.80 per share. The stock reached its all-time highest price on 30/06/2021, approximately 24 months ago, around the time the Bear Market began its sell-off, leading to increased volatility. Volatility can be your friend if you have a personal strategy, stay committed, and equal weight your portfolio either quarterly, half yearly but at least annually by adding new money or taking from your top performers and adding to the bottom performers.
When it comes to building an investment portfolio, inexperienced investors often gravitate towards stocks with recent upward momentum. They assume that higher-priced stocks offer greater potential for growth. However, this approach overlooks the hidden opportunities presented by undervalued stocks, which can hold immense potential for compounding growth.
Another common mistake made by inexperienced investors is they sell when a share falls instead of taking a longer-term view and buying more shares reaping the benefits of discounted prices. You should not buy a share that you are not prepared to add to if the market value reduces significantly.
The power of compounding should never be underestimated, especially when it comes to low-priced investments. By adopting a mindset that seeks out hidden opportunities with undervalued equities, investors can tap into the compounding effect and generate significant wealth. This is typically achieved over the long term, but sometimes, if a share or sector performs exceptionally well, luck of timing can come into play, and the timeframe can be much shorter.
For instance, in the above example, TuSimple has gained over 200% in value since the Trade Alert on 12th May, please note in the example above the up side potential when returning to its all-time highest price 24 months ago has reduced by 5,645% because the share price went up 273.75% in just under 6 weeks!
You should not “bet the Farm” on the strategy of buying undervalued stocks, but a % of your portfolio, with a sensible spread, just may produce some staggering winners.
We hope this edition of our newsletter has provided you with valuable insights into the potential of compounding with low-priced investments.
Warmest regards
Stuart Langan
SPI-Club Founder