GLOBAL HIDDEN GEMS PORTFOLIO

Uncovering RARE – TO – FIND ridiculously mispriced stocks around the world

Learn one of the best return strategies that have been used by many legendary value investors including Warren Buffett, Walter Schloss, Benjamin Graham.

A Super-simple strategy to beat the market consistently

Dear investors,

Warren Buffett once said:

“If I was running $1 million today, or $10 million for that matter, I’d be fully invested… It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”

When Warren Buffett managed his partnerships, he made most of his returns on cigar-butt situations. He described it “like picking up a discarded cigar butt that had one puff remaining in it. Though the stub might be ugly and soggy, the puff would be free.”

Indeed, most companies, which are trading at very cheap prices, are often unprofitable and in bad financial shapes. However, at Global Hidden Gems, we only find companies which are trading very cheaply (often trading at LESS THAN CASH THEY HAVE IN THE BANK). Thus, there are more margin of safeties and more upside potentials in those hidden gems. Heads I win, tail I don’t lose much!

Remember: Buying stock is buying a piece of the business, so if we can identify the business at an extremely cheap price, we will win in a long run.

At Global Hidden Gems, we have been spending a huge amount of efforts to uncover those very rare, deeply valued, ridiculously cheap stocks around the world.

One Simple strategy had generated 3.5x value than investing in the S&P 500.

We have run the back-test for the similar portfolio in the U.S., from 01st Jan 2013 to 09th Dec 2018. The portfolio, which rebalances every 4 weeks, includes only companies:

  1. Trading at or below their net cash
  2. Still profitable

During that period, when S&P 500 generated a 15% annualized return, the “net-cash and profitable” portfolio generated more than 34% annualized return.

After nearly 6 years, $100,000 invested in S&P 500 would be $122,080, while the $100,000 invested in the “net-cash and profitable” portfolio would be as much as $433,330.

Back-test data and performance from Portfolio123.com

 

How I missed a 10x return in only 01 year

Back in August 2013, my investment contact in Hong Kong and I have a discussion about one Japanese situation, called Digital Media Professional, which is trading in Tokyo Stock Exchange under stock symbol: 3652. At that time, it traded at around 530 yen ($4.7) per share, with the total market capitalization was around $10 million. Although it was unprofitable, it was so just so cheap. It has zero debt and the cash on hands was $20 million.

So imagine you pour in $10 million to buy the whole company, it means you have $20 million in liquid cash that you can spend right away, an immediate profit of $10 million (100% return). I don’t even mention the whole business behind it. Crazy world isn’t it?

Digital Media Professional’s main business was in software and hardware IP, for semiconductor manufacturers of semiconductor embedded products including mobile communication equipment, games, and other household appliances. The company built their own LSI (large-scale integration) design. It had the dominating digital camera market with more than 60% market share, which was not growing. At the time, it had the intention to go into strategic partnership with other big mobile companies including Apple. At that time, I estimated the whole business could be worth $50-60 million alone. Add on $20 million cash, Digital Media Professional was worth $70 million. However, I was neglected to purchase it back then.

Fast forward one year later, in August 2014, can you guess how much the company was trading???? At more than 5900 yen per share, more than a 1000% increase. What if I decided to act aggressively on Digital Media Professional, I would be making 10x in my investment in within just ONE year.

Source: Google Finance

In October 2017, Digital Media Professionals experienced another huge run, from around 2,700 yen to 16,000 yen in Jan 2018, and came back to around 5,000 yen at the time of writing on 11th December 2018. However, if I bought in the company at 530 yen and hold it until now, I would make an annual return of more than 56.5% in five years.

Updated note: With the net cash of $13 million and a market cap of $130 million, Digital Media Professionals is quite expensive already, no longer fit in our Global Hidden Gems portfolio.

 

This stock which fit Global Hidden Gems Portfolio’s criteria just recently got acquired

Another Japanese company which previously fit the criteria of Global Hidden Gems portfolio, Kitagawa Industries (stock ticker: 6896), just got the buyout offer. Kitagawa Industries involves in electromagnetic wave environment and precision engineering manufacturing. It has nearly ¥14.5 billion in net cash ($130 million) while before the buyout offer, it was trading at ¥1,400 ($12.36) yen per share, making the total market cap of only $108 million, much less than its net cash on hands. Investors might appreciate the fact that Kitagawa has been profitable since 2014, and been growing its bottom line really fast. In addition, it has been paying consistent dividends for many years. It was just super-undervalued. At beginning November 2018, Kitagawa Industries got the buyout offer of ¥3,943 ($34.80) per share, nearly tripled the market price before the buyout offer.

Source: Bloomberg

 

Those ridiculously mispriced undervalued stocks are extremely hard to find

You might be thinking how it can happen? Business is sold on the stock market is less than the cash it has in the bank? Although these kind of stocks are extremely rare and hard to find, they somehow exist. Mr. Market is very emotional and irrational himself. If he is happy, he can bid everything up to be overpriced. Someday if he is sad, he can sell everything so damn cheap. We, being investors, have to patiently wait and uncover all those irrational situations to benefit ourselves.

To bring these benefits to investors, we start Global Hidden Gems portfolio, to inform investors all of those ridiculously undervalued stocks globally. It will be in the form of monthly letters, discussing those rare-to-find safe global stocks with high capital appreciation potential. If there are any urgent updates of significant price moves to trigger buy or sell or should make any portfolio adjustments, we will send to investors alert email.

To prevent quick ramp-up in prices of those undervalued stocks right after we find it in the Global Hidden Gems portfolio, the service will be open to ONLY A LIMITED NUMBER of investors. After that, it will be closed to the public.

Six Reasons to Join Global Hidden Germs portfolio

  • Global Hidden Gems portfolio is the ONLY unique place that you can find stocks trading at less than the cash they have in their bank accounts.
  • We will spend countless hours to find those very rare-to-find opportunities, which have minimal downside risks and great upside potentials, and present to you. You do not have to spend your time to go through trillion database data to find them. Just spend those valuable quality time for your family and your friends.
  • You have access to much more varieties of opportunities than average investors who just look at one market because with Global Hidden Gems, we can go around the world to proactively uncover global opportunities.
  • You are also introduced to high-quality stocks, with limited downside risks and huge upside potentials.
  • Timely alert. Every month each issue. In addition, if there is any sudden change in the market, we will alert you via your emails.
  • Only a LIMITED number of investors can join only. Global Hidden Gems Portfolio cannot be available to everyone. The total subscribers are limited because if many people know about those rare-to-find opportunities, those stocks will go up in a short time and no longer be undervalued.