Today’s Take: Special situations in the markets can give you the thrill of getting something for nothing.
When I see Sailor Jack and Bingo, I tear up.
It takes me back to when I was 8 years old, growing up in Brooklyn, New York.
Grandpa Louie was a big Mets fan. A few times each summer, he would take me and my younger brother by train to Shea Stadium.
You weren’t allowed to bring outside food into the stadium. But as Grandpa always said: “No reason to spend triple the price on snacks from the vendors.”
He’d rather spend the money on the New York Mets Yearbook for us. So before we got to the stadium, he’d always buy us Cracker Jack at the candy store and we’d hide them in our pockets. And when I had children of my own, I did the same thing.
A box of Cracker Jack brings back memories of my Grandpa Louie.
The best part of eating Cracker Jack was the prize inside the box. Back in the day, it used to be a real prize, like a plastic cowboy. Today, the prize is usually a sticker.
Now, when you reach into that box and pull out that prize, there’s this thrill of getting something for nothing.
And you can get a similar thrill in the markets, too. I’ve found a way to make potential quicker and higher gains from stocks that’s a lot like getting the prize in a box of Cracker Jack…
The Thrill of This Market “Prize”
Remember, the best hack I can share with you when it comes to investing is this: Buy businesses in industries with strong tailwinds.
It’s the key to making outstanding gains in the stock market. That’s why I always look for companies in industries that have growing demographic and secular trends.
But imagine if — in addition to getting a business benefiting from strong tailwinds — you could also get an additional catalyst that should drive prices higher?
It’s an added bonus. It’s a lot like getting something for nothing, the same as the Cracker Jack prize.
I call these opportunities special situations…
Special Situations = Bigger, Quicker Gains
Special situations are nothing more than stocks that have catalysts — or reasons they should move higher.
Some of those reasons might be because they’re spinoffs or small caps. Or, they could be seeing insider buying or activist investor involvement. It all depends.
But the bottom line is that buying stocks with these special-situation catalysts usually leads to bigger, quicker profits than those without catalysts.
That’s why, every day, I’m at my desk looking for them. I never know what opportunities are going to pop up. But I’m always trying to find an area where we know more than the next guy, and Wall Street is ignoring it.
Being on Wall Street for close to four decades, I not only know where to look … but I also have contacts that I’ve known for years that share ideas with me.
And I want to make sure you can take advantage of the “Cracker Jack thrill” of these special situations — especially those in one industry in particular. It’s seeing huge tailwinds pushing it higher over the next several years.
But getting the timing right on these opportunities is important. On Wednesday, I’ll show you why. So, be sure to keep an eye on your inbox
And on Thursday, I’ll also be sharing more details on this industry with you. Stay tuned for this special deep dive by marking your calendars right here.
Founder, Alpha Investor