Going Against Buffett and Winning — Twice

A huge contrarian play … how Eric Fry has created a legacy of 1,000+ gaining stocks … the latest contrarian play he believes will handsomely reward courageous investors

 

Four billion dollars is a lot of money to lose … especially in just one trading session … even if you’re Warren Buffett.

But that’s exactly what happened back on February 22, 2019, when Kraft Heinz (in which Buffett’s Berkshire Hathaway was heavily invested) tanked 27%.

As you can see below, the drop was a brutal punctuation to an ongoing decline in the stock that had been plaguing investors for months.

 


***So, what happened to precipitate this freefall?

 

Basically, everything went wrong.

The company didn’t sell as much product as it hoped … it admitted that continued weakness is expected going forward … it had to adjust down the value of some of its most famous brands … and to top it all off, the SEC was sniffing around, looking into Heinz’s accounting practices.

A bad day, to say the least.

Well, perhaps not for everyone …

It was a great day for anyone who had been seeing red flags with Heinz for months …

Who had written extensively about the troubles facing many conventional grocery retailers …

Who had recommended his subscribers take a bearish position betting against Heinz and Buffett.

For Eric Fry and his Speculator subscribers, it was actually a very good day.


***It was all the way back on June 30, 2017, that Eric wrote about the troubles facing many conventional grocery retailers

 

His analysis resulted in what would end up appearing to be a prophetic recommendation — a put option trade, betting against Heinz and Buffett.

From Eric, back in 2017:

“The ‘Amazonation’ of retail took another giant step forward two weeks ago when the online retail giant gobbled up Whole Foods …

Grocery chains, for example, may not be the biggest victims of Amazon’s newest strategic maneuver. Rather, companies like KelloggGeneral MillsCampbell Soup, and Kraft Heinz may have the most to fear.

The purveyors of branded grocery goods were already under assault before Amazon’s takeover of Whole Foods. But now these companies must defend themselves on multiple fronts at the same time.”

Eric went on to discuss the attack on branded grocers — including private-label substitution, organic product substitution, and online vending.

He then zeroed in on Heinz in particular.

Back to Eric:

Warren Buffett’s Berkshire Hathaway owns 25% of Kraft Heinz, which makes that stock the single largest holding in Berkshire’s investment portfolio. So that’s a very big bet from a very successful investor.

As a general rule, betting against Warren Buffett isn’t simply a bad idea … it’s a terrible idea.

But there are a few (rare) exceptions to that rule, and this may be one of them, at least for the moment.

Eric then went into great detail, highlighting Kraft’s woes. It’s not important to dive into them in today’s Digest, so let’s jump to Eric’s conclusion at that time:

Bottom Line: Kraft Heinz is one very pricey stock.

Worse, it is the pricey stock of a company that is suffering a serious drop in revenue, while also facing a powerful multipronged assault on its franchise. This is a textbook case of a richly valued stock that is losing momentum.

Based on his analysis, Eric recommended his bearish trade on Heinz, and subscribers walked away making 101% on their trade in just four months.


***What is Eric looking at when he finds these winning trades that run against popular opinion?

 

First, for any new Digest readers, let me introduce Eric.

He may not be a household name, but many finance industry insiders consider him to be one of the greatest stock pickers of all time.

In an industry where a stock picker is fortunate to have just one 1,000% gain to his or her credit, Eric has dug up an astounding 41 such 1,000%+ gainers.

It’s like the investment equivalent of Major League baseball’s “perfect game,” where no batter reaches base during an entire game.

Very few pitchers have ever thrown a perfect game. But Eric has pitched 41 of them.

But back to our question above …

How?


***That’s what Eric will be discussing today at 4PM ET at a special event called The Survive & Thrive Summit

 

Specifically, Eric will be delving into the specifics of his investment process.

As we noted in the Digest last week, this approach is not taught in business school, covered in your standard “Investing 101” book, or discussed on investment shows like “Mad Money.”

It’s different. It can run against popular opinion.

But that’s often the price of admission when it comes to finding 1,000%+ winners.

After all, it’s near impossible to find quadruple-digit gaining investments when you’re investing like everyone else.


***On the topic of investing “different,” Eric’s Heinz bet wasn’t the only time he’s been willing to go against Buffett — and made his subscribers triple-digit returns in doing so

 

Investors who are more familiar with Buffett will know that the legendary investor has naysaid gold as an investment for years — that is, until recently, when he finally invested in the gold miner, Barrick Gold.

From Eric’s update last week:

For what seems like forever, Buffett has scorned the yellow metal as “forever unproductive.” It is an asset, he has said, that “remains lifeless … [and] never produces anything.”

As Charlie Munger, Buffett’s longtime partner at Berkshire Hathaway, remarked a few years ago, “Civilized people don’t buy gold. [They] invest in productive businesses.”

After going through additional past examples of Buffett publicly poo-pooing gold, Eric noted his counter-perspective:

The Berkshire Hathaway brain trust is certainly correct to brand gold as an uncivilized asset. That’s exactly what it is.

Gold is not an investment for civilized times. It is an investment in disorder, instability, and/or uncertainty.

Ironically, therefore, as economic conditions become less civilized, gold’s returns become more civilized … or at least respectable enough to mention at cocktail parties.

During the last few weeks, for example, I closed out five precious metals trades that had soared between 101% and 408%.

Despite taking those profits, I am continuing to recommend select trades in the sector that have the potential to produce additional triple-digit gains.


***Eric’s contrarian bets against popular investing ideas have also extended to the solar industry

 

Back in July 2019, Eric was bullish on select solar plays, though most investors were wary of the sector. After all, solar had been making investors look like fools for many years.

But Eric’s against-the-grain analysis enabled him to lead subscribers to 200%+ gains with an options play on the Invesco Solar ETF (TAN) … in less than four months.

Then there were the two trades on solar leader, Daqo New Energy Corp. (DQ) that produced 102.5% and 144.7% gains.

After that came SunPower Corp. (SPWR), which Speculator subscribers used to bank 161% profits. Enphase Energy (ENPH) made them 201% gains — in less than four months.

Overall, Eric has issued nine separate trade recommendations on solar stocks during the last three years that have gained at least 100%.

All because he was willing to take a contrarian position to the mainstream investment narrative.


***During Eric’s Survive & Thrive Summit at 4PM ET today, he’ll be announcing his latest “bet” against the mainstream investing establishment

 

From Eric:

I have already pinpointed what I believe will be the next huge megatrend winner.

As “contrarian” as my solar call three years ago was, this one is even bigger.

And I’ll be announcing this huge new bet against the mainstream investing establishment at The Survive & Thrive Summit. Over the past few days, we’ve shown you exactly how high our gains have gone.

This time, I believe, they could go even higher.

Today’s event is free to join and there’s zero obligation of any kind. Just click here to reserve your seat and find out what massive trade Eric believes is forming today.

At a minimum, you’ll learn how a master macro investor — with one of the most impressive long-term track records in the business — analyzes the markets. Hope to see you there.

Have a good evening,

Jeff Remsburg


Article printed from InvestorPlace Media, https://investorplace.com/2020/09/going-against-buffett-and-winning-twice/.

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