I’m in an investment club and need to swing for the fences… if you could only buy one super high risk / high return stock (12-24 month time frame) what would it be? Thanks!
Look into emerging markets.
Tons of stock with high returns. I know one stock which made 1200% over the ten years. It was an agriculture company in India.
1-2 years is still a crapshoot.
20 years from now? If I had to…Google.
Look into stocks with high price declines (>50%). Should be an easy screen to give you ideas. Bonus points for cyclical industries, like oil or metals. In Financials LC, ONDK, Puerto Rican banks, GNBC, and FNBC come to mind.
Just bought Google for my portfolio for this reason, seems like a fantastic investment profile for the very long term.
The way to do this is to take a long shot. So choose something that is really beaten up and close to death. If it avoids going under, you could make 5x or more on your investment. Maybe some mining play that is struggling but has a reasonable chance of turning things around.
Is the whole point of an investment club though not to learn to avoid these kind of speculation punts? Long-term you want to be the tortoise, not the hare.
Feel like he missed the boat on a lot of the minig plays. Earlier in the year when the sky was falling was the time to make massive returns on them
valeant
BRK
Oh, and obviously SUNE.
If you are allowed to trade derivatives, buy / sell options instead of buying the stock since you are swinging for the fences.
Also, since you are in India, does your return calculations adjust for currency movements? (ie. do you get additional returns if CAD appreciates against INR)?
Assuming you allowed long only and you get a bump on FX, you could gamble on an oil or oilfield service company in Oslo or TSX and hope and pray for $80 oil in the next 12-24 months, which should also give you a lift on the stock and FX as well since commodities will be highly correlated with CAD or NOK.
I’m not too too familiar with companies listed in OSLO… but in Canada for E&P, I think you could go with a MEG, Athabasca Oil, Penn West, Bellatrix, Pine Cliff Energy, Chinook Energy and etc… Now… these aren’t quality oil companies, but they have high risk and high reward.
If you are looking at services, I think Western Drilling, Canadian Energy Services, STRAD or Essential… again… high risk, high reward.
Also… the other upside might be that there would be a takeover on some of these companies (hopefully at a premium) because lot of these companies have debt issues and there is definitely more M&A to come in the oil patch in Canada.
Not sure if they still have it, but a couple years ago half of Athabasca’s asset base was an option on some property. Even more leverage to the upside if Oil turns around.
Birkshire, 1962.
Home Depot
LOL
(5-10 years):
Southwest Airlines - Unless someone invents jetpacks or teleportation, I think airlines will continue to increase profitability. There’re only a few standing competitors left after all the mergers. They’ve gotten good at charging people for everything. High barriers to entry. Possible expansion to overseas markets.
Activision Blizzard - A bit overpriced right now, but if this Brexit thing happens I’d buy ATVI for the long-term.
2-4 years
Some blue-chip high yield oil stock (CVX, RDS/A). A bit of a gamble because oil could go back to 30s or worse. But take into account their 5%+ div yield, at worst one can recover the initial capital.
Short-term
Novocure- trade only after a strong market-wide sell-off.
^ It cites the hundreds of new entry over the last 40 years.
40 years. The industry has changed a lot since those post-deregulation days.
This is because now, like high barriers to exit, entry barriers are also high. Key markets/airports are gate-controlled and slot-controlled. Passengers are tied up to frequent flyer programs either through flying or credit cards. Probably the biggest deterrent to entry is the history of cut-throat price competition in the industry and low profitability.
The mega mergers are over. The pilot groups are getting stronger once again. Not really refuting your points, just showing that it is probably not a slam dunk. Very political. Politicians dont like airlines making money for some reason. Not anymore at least. http://onemileatatime.boardingarea.com/2016/04/02/newark-airport-slot-restricted/ Disclosure: Long SAVE, mid-thirties.
I’d short VXX during this Brexit thing. With that instrument grinding away on itself for two years, high probability of biggie-sized gains, limited to 100% though.