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Want Recession-Proof Stocks? Stop Watching the Damned DOW

Written By Alex Koyfman

Posted July 19, 2022

Dear Reader,

If you're anything like me, you start getting pangs of microdepression the moment the clock hits 4:00 p.m. (EST) every Friday afternoon.

The North American markets close for the weekend, and suddenly, you're faced with two whole days of zero movement. Your main barometers of the financial state of the Western world — the Dow Jones Industrial Average and the Nasdaq — go to sleep, leaving you with nothing to watch hour to hour, minute to minute.

The movement of your wealth also seems to do the same thing, and you get antsy. You start watching the news, trying to make heads or tails of how current events will affect your fortunes come Monday, but the main source of your endorphins — those good old green digits — remains in a coma.

I've been an investor for close to a quarter-century now, and I have to say that this is one of the worst habits, not just for your own sanity, but for your wealth as well.

While keeping a constant eye on the scoreboard may seem like active involvement in the evolution of your wealth, it's actually the No. 1 driver of bad decisions.

Stocks go down for a day or two, you panic, and you start considering selling to avoid further, irredeemable losses. "What if the stock never gets back to where I bought it?"

Stop Listening to Your Brain

"What if there's something going on behind the scenes that I don't know about?"

"What if these losses are just the beginning stages of reorganization?"

What if this? What if that?

The constant mental battle is one you cannot win. Believe me, I've been there.

And then there are the moments when things are looking up, and what's your brain's response to that? Once again, you start thinking about selling, because what if this is the top? What if that last 4% or 5% bump is the last bit of good fortune before things turn to crap and collapse around you?

Oddly enough, the same exact panic that moved you to sell into a dip is now pushing you to sell into a gain. Don't get greedy, your brain tells you. You're up 20%, maybe 30% or even 50%. You've done well. Time to dump it and move on, because who knows what those numbers will say about your fortune in the next trading session.

There may be another war. Another terrorist attack. Another set of depressing data in the offing.

Needless to say, neither reaction is conducive to building wealth. Real wealth. The sort of wealth that you'd have if you'd dropped a pretty penny into Tesla (NASDAQ: TSLA) at the start of the last decade or into Amazon (NASDAQ: AMZN) at the start of the 21st century.

Would You Have Held or Sold?

If you'd been a shareholder of either and had been watching and reacting to daily movements of the Dow or the Nasdaq, you'd have sold a hundred times over by now. You certainly never would have stuck around for the 1,000% or even 10,000% gains that those stocks landed their most stoic (or most absent-minded) shareholders.

So if you want to turn your nest egg into the yacht-buying, generational-wealth-creating fortune that you dream about, here's one step you absolutely need to take: Stop watching the damned stock market every single day.

Stop trying to find patterns in those numbers, because guess what… You'll always find patterns that support your paranoia. You'll see double tops and triple tops. You'll see heads and shoulders. You'll see points of resistance reached and breached, both on the upward trajectory as well as on the downward.

Everything that your brain tells you to fear you will see in those minute movements, and in the end, your brain will betray you every single time.

In all my years of investing, all my work in the field, and in all my meetings, conversations, and travels, I have never met a successful investor who has consistently made good calls based on daily or even weekly movements.

Ever Met a Successful Chart Reader? Me Neither

Sure, they may exist, but the chances of not blowing it all, even after being right a majority of the time, make gambling at a casino a surefire bet by comparison.

Most wealthy chart readers I know are wealth managers, and guess what… Those guys make money off you, the client, not off the gains their supposed predictive abilities get them. They make their fortunes off fees, and you pay those fees, win or lose.

It's one of the longest-running scams of the modern world.

By contrast, Warren Buffett, the most successful investor in history, has always claimed that his ideal hold time is "forever." He does his research, makes a sober decision, buys, and lets it sit. He doesn't tease and coddle and helicopter over his stocks. He makes a decision based on fundamental and long-term realities and then waits for the market to catch up to those realities.

It's that simple, and it's that difficult.

I'm writing all this today for my own benefit, as much as for yours. "Don't stare at the numbers" is a mantra that everyone calling himself an investor needs to repeat a hundred times a day.

Instead, do what the proven winners do. Research, identify trends, invest, and wait for the markets to catch up.

It's Stupidly Simple… Yet the Hardest Challenge in Long-Term Investing

If you want an example of this theory in action, let's take one reality that the modern world has already accepted: Electric vehicles (EVs) will take over the personal and commercial transportation space within the next 20 years.

There is virtually no way this will not happen. There are laws already in place in Europe and Asia that have all but guaranteed that this industrial shift will take hold.

Even OPEC nations, which have built all of their wealth and power on oil, have accepted this future and have invested accordingly.

The Saudis are major stakeholders in a Tesla-beating EV brand today, in Lucid Group (NASDAQ: LCID).

So that much is clear. What's the next step? Simple. Find an underbought company that will provide a crucial component to the realization of that future.

We all know that lithium-ion batteries drive the EV market, quite literally. We also know that they're inefficient, both in construction as well as in function. They're slow-charging, unreliable, short-lived, and fail to meet the rapid-charging desires of millions of prospective EV buyers.

So we know that a change is coming. Something besides lithium has to emerge if this seemingly unstoppable future is to be realized.

Want to Get Rich? Buy and Forget

I've spent months working on this very problem, and I've zeroed in on a single company that fits all of the criteria of a buy-and-hold investment.

This company is building and marketing a next-gen battery that boasts an energy density 50% greater than lithium, up to three times the service life, and up to 70x the charge speed — allowing for full charges in less than one minute.

Perhaps most important of all, they can can be produced cheaply and efficiently, with almost no environmental impact and no troublesome supply chain links — two problems that have plagued lithium from the start.

These batteries are no longer just theoretical. Smaller, consumer electronic-powering units are already being produced, and soon enough they will move into the EV space.

The result will be a transformative improvement to the industry. Major hurdles will disintegrate as the traditional shortcomings of EVs fade away.

This isn't the kind of stock that you watch every day. This is the kind of stock that you buy, forget about, and revisit in two, five, even 10 years.

This is the kind of stock that puts your kids and grandkids through college, secures your retirement, buys you that yacht, or simply buys you the security that all of us crave.

I recently published a video presentation on this company for the benefit of my readers. It's an eye-opening experience that I recommend you watch even if you're not in the market.

Check it out right here.

Fortune favors the bold,

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Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.

P.S. I recently joined Angel Research Podcast host Jason Stutman to discuss what I’ve learned from years of trading microcaps, what I look for in a stock, and the No. 1 graphene company that I believe will transform the battery industry. You can watch the episode for free, right here.