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CHAPTER 13 Stock Research Checklist—Asse... > Does the Company Have Any Hidden Ass...

Does the Company Have Any Hidden Assets That Have Been Overlooked by Wall Street?

For example, look at natural resource companies that specialize in resources such as gold. During 2009 and 2010, gold prices soared. The reason for the price hike was Federal Reserve quantitative easing, which increased demand from China and India and caused a lack in supply. Because of the gold price increase, gold mining stocks soared.

Sometimes, Wall Street does not recognize the value of those reserves and it misprices the securities. For those situations, you need to use the opportunity to buy the securities at discount prices. When commodity prices are in a downturn, people think that prices are going to stay the same. So, tired of waiting, they sell their stocks at the lowest prices. When the commodity prices start to recover, whoever bought the shares at the lowest prices is going to earn a high return on their investment.


  

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