Stocks, Shocks & Rocks Launched - Tom Luongo's Unique Way To Profit From Geopolitics

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Tom Luongo
2.34K Followers

Summary

  • Stocks, Shocks & Rocks Launched.
  • Focused on the commodities, the world goes to war over Gold, Silver, Oil, Natural Gas, Iron, Copper, and Uranium.
  • Strategic and tactical positioning to profit from a changing world.

I'm Tom Luongo and I have a mission - to interpret the big changes happening on the world stage into actionable information you can use to prepare your portfolio over the long term.

Market analysis is often myopic; focused on individual markets, sectors or countries, it misses the forest for the trees. Or worse, it looks only at a company's fundamentals or valuation to determine if the stock is a buy.

But markets don't trade on valuation or fundamentals. They trade on capital flow and sentiment. These things cross political borders with ease through the currency, bond, and stock markets.

This is a crisis period of history where old orders are breaking down and new ones are being built.

Shocks - Decrypting the News

Without understanding how capital flows into or out of a country, all the work to determine 'fair value' on a 'discounted cash flow' basis means nothing. Moreover, bringing your political bias to the investing table cuts you off from some of the best investments in the world.

The smallest events can have the biggest impacts. A meeting between two foreign ministers on the sidelines of an economic forum in Poland or a cease-fire in a geopolitical hot spot can result in market-moving behavior in hours or lay the groundwork for a bull market that lasts decades.

And, there are the myriad ways in which the global financial system is not, in the words of Nicholas Nassim Taleb, Anti-Fragile. Decoding changes at this level tying it to the price of those strategic commodities is what I do best.

If you follow my freely distributed work here at Seeking Alpha, you know that I focus on how events shape changes in currencies, commodities, and global liquidity with an emphasis on precious metals.

In an investment environment dominated by central bank jaw-boning, liquidity injections, and global debt saturation, the potential Shocks to the global financial system are too numerous to count.

I keep my investment theses simple as well as my technical analysis. Taking an economist's view, I only care about actions.

Diplomats, central bankers, and politicians talk. But what they do moves markets. And, despite the talk, those actions are always revealed in the charts of the most important markets - the dollar, the euro, gold, U.S. treasuries, and oil.

Stocks - Hit 'em Where They Ain't

The world is complicated. Your analysis must be clear using simple tools to leave you the energy to absorb new information without fear.

We have only so much bandwidth. Our brains can only process so much. It is my job to distil the chaos of the geopolitical and financial world into information that gives you the edge you need to make great investments and trades.

My technical analysis is focused on what we know - Open, High, Low, Close - and how the market reacts to them. It is qualitative, quantitative, and universal across time frames. You won't find proprietary indicators, wave counts, or pivot points. I'll keep it simple, so you can get to a decision to make profitable trades.

And, I will teach it to you.

Some of the greatest companies in the world trade at low valuations for years while throwing off big distributions to shareholders.

Uncovering new geopolitical trends reveals choices people ignore and gives you the courage to buy when everyone else says sell.

Case in point. I'll give you an example of a decent trade I put on. Not my best but an instructive one.

In 2015, oil prices were crashing. I was looking for an oil major to add for my former newsletter service, Resolute Wealth. I figured yields were strong enough to offset any potential drop in share prices. I was wrong, oil dropped further, but the question was important.

Given this most important question:

Which oil major would most benefit from the convergence of China and Russia's interests into, what is now, a strategic alliance?

The answer was easy, Royal Dutch Shell (RDS.A).

Because Shell was pulling up stakes in North America and aligning with Russia to supply future needs in China.

I bought RDS.A in the summer of 2015 for around $48 when everyone was saying sell. I bought another tranche in the summer of 2016 at $54 when they were saying the same thing. In between, the stock fell to $35.80.

The sell-side was wrong to worry about Shell remaking its portfolio. I knew its shift from North America to Asia was the key. Today, the stock is trading at $55.31.

With dividend reinvestment and bad timing due to publishing constraints, this was an annual return of 10%. The trade is still valid, and Shell looks like a winner for the next five years.

I'll give you that one just for reading this far.

With Stocks, Shocks & Rocks, those returns can be even better because I have more control over timing.

Rocks - Finding Great Exploration Plays

Blue chips like Shell are a way to de-risk your portfolio over time. Where real money is made is in the resource sector. Junior miners trading on the bulletin boards have huge potential if you play them right.

In less than three years, I edited my former newsletter. I placed six stocks on what I called my Loose Change List. Five of them were big winners. Here is the breakdown of the returns.

Company Name

Ticker

Entry Date

Price

Peak Price

Peak Price Date

Annualized Return

Gold Standard Ventures

(GSV)

8/27/2014

$0.63

$3.20

8/7/2016

261%

CanAlaska Uranium

(OTCQX:CVVUF)

11/26/2014

$0.15

$1.20

6/26/2016

505%

Pretium Resources

(PVG)

5/22/2015

$5.73

$12.41

7/10/2016

190%

Select Sands Corp. (in CAD)

(SNS.V) (OTCQB:SLSDF)

7/24/2015

$0.39

$2.04

2/5/2017

340%

Scandium Int Mining

SCYYF

4/25/2016

$0.14

$0.34

3/12/2017

276%

FuelCell Energy

(FCEL)

10/23/2014

$12.00

$1.10

N/A

-91%

Returns like these come from understanding markets, my background as a chemist and metallurgist, and asking the right questions of management. Fitting them into the geopolitical landscape sifts out the good ones from the bad.

You only need a 20% hit rate to make money in these stocks. Pair these bets with a core portfolio throwing off 5+% and you're betting with 'house money' while everyone else sweats.

That's my strategy for Stocks, Shocks & Rocks. It's a proven one. It will benefit from a community as passionate about these issues as I am. For the month of May, I am discounting the annual price to $299. After that, the price rises to $349.

See you in the trenches.

And, always keep your stick on the ice.

This article was written by

Tom Luongo profile picture
2.34K Followers
I am a former research chemist by trade and an Austrian Economist by study and a market analyst by choice. For the past four years I have been a Senior Financial Editor with Newsmax Media publishing my thoughts on where markets, central banks, gold and geopolitics meet and explode.  I am now the publisher of Gold, Goats n' Guns, a monthly newsletter offered through Patreon.  I have been an investor and market analyst for more seventeen years and am an astute observer in changes within the culture and the political landscape. Feel free to find me on: My personal blog, Giold Goats 'n Guns: www.tomluongo.meYou Tube: https://www.youtube.com/channel/UC54PyZuVrDrhbWc6UqNjEBALinkedin: http://www.linkedin.com/pub/tom-luongo/5/384/a59/ Twitter: @TFL1728 Patreon: www.patreon.com/goldgoatsngunsPeriscope: @tomluongo (Mondays at 8pm and Fridays @ 9pm EST)
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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