The Motley Fool

Get Your Money Ready To Buy!

It is often better to be lucky than good.

Recently, I warned of a coming market crash. That was just a few weeks ago on 22nd January and since then the FTSE has fallen 5%.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

If I were a different type of guy I might claim I was a genius and that I made a great market call.

However, if you read my article then you would know I wrote:

“Now, I’m not a soothsayer and I’m definitely not a doom monger. I’m still investing my money in the market and I personally expect to see another year of positive returns in 2014.”

Who’s the genius now?

I’m the first to admit I had no idea we would see the market drop the way it has during the past two weeks. My timing was purely luck – as evidenced by the fact that I didn’t act on my warning and didn’t save my portfolio from a harrowing fortnight.

However, I’m a long-term investor not a market timer – I don’t bounce in and out of shares based on short-term bearishness or bullishness.

In fact, I’d argue that most people that try to time the market are relying mostly on luck.

While I enjoy being lucky, I don’t like to rely on it when investing because luck is completely out of my control – and eventually luck runs out.

I’d rather invest like Roman philosopher Seneca.

“Luck is what happens when preparation meets opportunity.” – Seneca

It is important to know what to watch for… and be ready to act

While Seneca may have been playing a little fast and loose with synonyms (I can’t think of an opportunity that didn’t involve a bit of luck) I take the man’s point.

As such, I’m constantly cultivating my investment watch list. I look for companies that I think have the characteristics of greatness – those that have strong, durable competitive advantages.

Then when the market offers me an opportunity, I pounce.

And we could be seeing one of those opportunities right now.

He’s just spent $1 million on his company’s shares

Diageo (LSE: DGE) (NYSE: DEO.US) – the proud owner of some of the world’s best spirits brands – has seen its shares slide more than 11% since 22nd January. The fall has been partly due to the general market slide, but also because the group’s interim numbers revealed weaker-than-expected sales growth in China and Nigeria.

Slowing growth may be a concern, but short-term news such as this needs to be considered in the right context.

Diageo is one of the bluest of the blue chips. The company consistently boasts enviable operating margins – averaging nearly 30% during the past ten years.

The company’s global distribution network and marketing prowess allow it to sell what are essentially commodity items – the vodka Jay-Z or P Diddy drinks is distilled from the same grains as every other vodka out there – at premium prices and makes the entry of competitors very difficult.

Those are some very attractive characteristics, which are unlikely to be erased by a few slow months of growth in select markets.

A company with those characteristics is made even more attractive when we see its chief executive – Ivan Menezes in this case – spending $1 million of his own money to buy shares of Diageo following the slide.

It is never too late to start preparing

Now, I must be honest with you – I still think Diageo’s shares look a little expensive. While free cash flow of £1.4 billion last year is an impressive number, the shares are trading at over 30 times that amount.

That’s still a top-shelf valuation for what is admittedly a top-shelf company, but I prefer to do my drinking during happy hour and I prefer to buy my shares at a discount!

So while I think Diageo has a great business, I’m placing the shares on my watch list for now – preparing for the opportunity that a further market slide could provide.

If you haven’t yet built a watch list of your own, I highly recommend you start one today. When we’re in the midst of a turbulent market it just makes sense to have your ideas – and your money – ready so you can act quickly when the bargains arise.

After all, a market slide can turn into a rebound rather quickly!

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

> Nate does not own shares in Diageo.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.