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One thing that characterizes the best traders and investors, is an obsession with “asymmetry.”
Most people don’t like asymmetry. In fact, they are obsessed with the opposite – symmetry – in pretty much every other part of their lives.
Simply put, when the two halves of a whole item have equal form and size, they are said to be symmetrical.
Think of a butterfly where the opposite wings match exactly. That’s symmetry.
The reason folks love symmetry is because it is hard-wired into our brains as a pleasing form.
Symmetry is pleasing in art and architecture. Filmmaker Wes Anderson is famous for his use of symmetry in movies such as The Grand Budapest Hotel and Asteroid City.
But when it comes to the financial markets, experts – the world’s best traders – avoid symmetry.
To put it bluntly, symmetry is for amateurs.
Why you want to avoid symmetry in investing
Many retail investors make symmetrical bets in the market again and again. What does that look like?
Most investors routinely risk 100% of their money in the pursuit of 100% returns.
Even worse, they risk 100% of their money in the pursuit of 50% returns.
If you haven’t done it yourself, I’m sure you’ve seen or heard about it plenty of time. Folks get a stock “tip” from some source or other … invest too much and ride the stock to a double – or to zero if things don’t work out.
So, they either get 100% upside.
Or, 100% downside.
Symmetry.
Now, risking a dollar to make a dollar sounds fine. But intelligent speculators know there is a much, much better way to think about risk and reward … a much better way to tilt the odds in their favor.
And few are better at this than global macro investing expert Eric Fry, editor of The Speculator. I’ll let him pick up the explanation…
The world’s best traders and investors almost never touch positions with symmetrical risk/reward profiles.
When I put my money to work, I look for opportunities where I can risk $1 for the real chance of making $5 … $10 … even $20.
Risk a little …
… in the pursuit of making a lot.
That’s the power of asymmetric bets
In Any Asset … in Any Country … in Any Direction
Newer Digest readers may not know what makes the global macro approach so different from other approaches to buying and selling stocks.
As you’re probably aware, Wall Street’s ad machine has sold investors on the idea they should start with “micro” analysis – the idea that every trade should start by comparing P/E ratios, income statements and other small details about a stock.
Eric does the opposite. He explains how his approach is different.
I start with the “macro” analysis.
I look for big-picture trends that drive huge, multiyear moves in entire sectors of the market.
The type of trends that can spin off dozens of triple- and even quadruple-digit gains in a span of a few years.
Global macro traders dig up moneymaking opportunities by watching and going deep on interest rates, business cycles, disruptive technologies, stock valuations, geopolitical events, commodity price trends … and even further afield.
That means global macro opens us up to an abundance of wealth-building opportunities.
The next phase of the AI Boom
As someone focused on the big picture trends, you can bet Eric was on the Artificial Intelligence bandwagon early.
For many people, including Eric, that meant cashing in on the “Magnificent 7” stocks, companies that have enabled the AI boom to lift off.
But the sudden emergence of the AI boom caught many people – and many investors – by surprise. Sadly, a lot of folks missed out on those big gains.
The good news is that Eric is now tracking the next phase of the AI Revolution and a different set of companies that will lead the way. The AI Seven is about to become the AI Eight… Nine… and beyond…
Eric calls these companies the “AI appliers.”
Unlike the AI enablers, these companies are not at the forefront of producing the material needed to create AI. Instead, they are employing AI technology within their own products and services.
AI appliers are everywhere… and growing by the day.
Not all of them, however, will deliver gains like we’ve continued to see from Nvidia.
Eric has spent the past few months deep in research… and he has identified a company that he believes will become the next $1 trillion AI stock.
That was the main topic of a strategy session Eric held last week.
He also discussed a market approach anyone can use to get 40 years of Nvidia gains out of this stock in a matter of months.
The stock Eric has found is about to revolutionize a $13.1 trillion industry… with a potential to serve over 3.8 billion people.
If you missed the event, there is still time to see the full presentation.
Eric also shared:
- His strategy to profit from this boom…
- How billionaires like Elon Musk, Bill Gates, and Jeff Bezos are all investing big in this new AI application…
- And one FREE stock recommendation.
Regular Digest readers know that we call Eric “Mr. 1,000%” because of his track record of finding stocks that go up 10X.
To make gains like that, you have to find the opportunities for big gains … and asymmetric bets.
If you’re interested in finding out how you can risk a little to make a lot, I recommend you view Eric’s presentation – the Next $1 Trillion Stock – before it’s gone forever.
Enjoy your weekend,
Luis Hernandez
Editor in Chief, InvestorPlace
