What do liking hamburgers and buying stocks have in common?
Legendary investor Warren Buffett gives us a good example.
You see, Buffett loves hamburgers. In fact, he says he wants to eat them for the rest of his life.
But burger prices, just like everything else, can fluctuate. In his own words: “When hamburgers go down in price, we sing the ‘Hallelujah’ chorus in the Buffett household. When hamburgers go up in price, we weep.”
When prices go down, you can buy more of what you like. When prices go up, you have to tighten your purse strings.
This concept sounds simple enough when applied to food.
But it’s not the case when it comes to the stock market. In fact, it’s usually just the opposite.
When a stock price drops, people don’t get excited and buy more. They panic and sell out.
Stocks that people love at $50 per share are despised when they trade for $30.
We, however, look at stocks differently.
We look to buy dollar bills when they’re trading for 50 cents … and we get even happier when we find them at 30 cents.
And thanks to Charles Mizrahi, we get to sing the “Hallelujah” chorus in even the toughest of markets.
Better Buying Opportunities
With 37 years of experience as a former floor trader, money manager and hedge fund manager, Charles knows better than anyone that drops in stock price are nothing more than opportunities to buy.
Just think of these drops as the market’s version of a great sale. The lower a stock price goes, the better the sale is.
Now, that’s not to say that Charles would advise you to buy any stock whose price is dropping. He uses his tried-and-true Alpha-3 Approach to select only the best of the best.
Before every recommendation he makes, Charles considers three things:
- Alpha Market. He looks for businesses that will profit from riding tail winds of mega trends in major industries.
- Alpha Manager. He looks for businesses with rock star CEOs at the helm — managers with excellent performance history.
- Alpha Money. He looks for businesses that are being seriously undervalued by Wall Street and selling for bargains.
These filters allow Charles to be confident in those companies with falling stock prices.
Because if they pass through all three, you can be sure that any volatility they’re going through is temporary.
You’re just buying fantastic companies on sale … and waiting for their stock prices to match up with the underlying worth of their businesses. It doesn’t get much simpler than that.
Since the market bottom in March, the S&P 500 Index has soared more than 55%. Several of the stocks in our portfolio have done considerably better.
That’s right … in the midst of the market chaos, Charles was giving his readers opportunities to profit.
And one such reader has come forward to show you exactly how much you stand to gain by subscribing to Alpha Investor. You do not want to miss out on what she has to say!
Assistant Managing Editor, Alpha Investor