[Investing 101] – How to Pick a Winning Stock 100% of the Time

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First of all, I’ve gotten quite a bit of feedback since I started writing the blog again. Due to the feedback received I will be writing about Virtual Reality Stocks, Under Armour and Michael Kors, and expediting the Investing for Beginners series. This article was going to be apart of one MASSIVE Investing for Beginners article, but I’ve decided to make it a series. I will be adding to these as I go, and then at the end of the series, I will be compiling all the articles into one big, edited, article.

I know I’ve gotten behind on the 30 articles in 30 days, but I’m really trying to get back on track with these articles, and with school work, so it’s been a bit of a grind.

I know that this article is totally out of place in the series and should be like the 3rd or 4th article in the series, but honestly, I’m not really feeling like explaining the primitive basics of how the stock market works right now (midnight), so enjoy this article.


As I’ve said before, I’m more of a, “Use your heart not your head” type of investor. That philosophy takes on different styles of investing every time, but for this article I will be sticking to one specific style.

The stock market isn’t something that you have to study for years and have a natural talent for, it’s just like a game – play it long enough and you’ll learn everything about it, and become extremely skilled at it.

All you do is look for stuff you use in your everyday life. Then you ask yourself a couple questions, and then you decide whether or not you want to buy the stock by asking yourself a few more questions. It might seem really dumbed down and simple, but that’s because it is.

This is one of the easiest ways to find a stock that you know you will not lose money in (as long as you don’t invest in Financials like banks, or Healthcare stocks, you should be fine). Why? Because these companies are NECESSARY for the world to go on. Chances are, if you use something, and your friends use something, then the majority of everybody uses it.

This is how  found stocks like Netflix, Tesla (although it wasn’t necessary or mandatory at the time when I found the stock in 2012), Amazon, Adobe, Microsoft, Apple, Google, FaceBook, Visa, Nike, Under Armour, Activision, Electronic Arts, and a lot, lot more.

If you’re reading this and going, wait, all this kid did was spit out FAANG (Jim Cramer’s acronym for the super successful tech stocks that are holding the Nasdaq up), and a few other stocks that are super obvious, well you’re right. Except, I found every stock in FAANG 3 years before Cramer (Netflix being the last of the stocks that I identified in 2012). How? Well I just asked myself these questions:

  • What do I use everyday?
  • Do other people use it everyday?
  • Can the world function without it?
  • Will people feel a void if it doesn’t exist?
  • Do all my friends and family use it or want it?
  • Will it impact them if it disappears?
    • If yes to all the questions above, proceed to find the items creator and check if they have a stock.
    • If they have a stock, ask yourself these questions:
      • Have the recently announced earnings?
      • Have they shot up a lot recently(50% or more in the last quarter is how I define it, you’ll come up with your own definition as you learn)?
      • Are they expected to do poorly in earnings?
    • If the answer to any of the above is yes then I don’t recommend buying the stock. The only times I’ve broken these rules and still made money is with Netflix every January when they report earnings and have over inflated comps which analysts never expect and the stock shoots up (check out my post from Jan. 2014 when the stock went up 86% the week I recommended buying it), and with every other stock in FAANG, as well as a few other trades. However, seeing that this is [Investing 101], I’m going to assume that you don’t have enough experience to make that kind of call yet.

Now that you’ve asked yourself all these questions, I recommend blindly going to your brokerage of choice and putting in an order to take a ~5% or less stake in the company.

When I was 11 (I think this may have been before I turned 11), in 2011, I made a list of 3 companies the world couldn’t go on without. The list was:

  • Adobe
  • Microsoft
  • Google

Are you surprised to see Microsoft and Adobe on that list? Well now I’d probably replace Microsoft with FaceBook, and keep the rest of the list the same. Either ways MSFT has done spectacularly in the last 5 years, as has ADBE, and GOOG/GOOGL. Amazon (AMZN) was a strong contended for the Microsoft slot until Jet.com came out. Now you have Ali-Baba spin offs, and Jet.com to cover just about all of your online shopping needs. While no one under 35 uses FaceBook anymore for purely social media purposes, it’s used by just about every business, hosts a plethora of games, and is leading the way in virtual reality development (and in about 50 [sic] other fields as well).

Anyways, the reasoning behind Adobe was that everyone used PDFs. Gamers everywhere used Flash, and Youtube is based on Adobe Flash. Imagine if Adobe went under, the few months (at least weeks), you’d be without Youtube would be devastating for people everywhere.

The reasoning behind Google was (and still is) that it is used by everyone, for just about everything on the internet. Teachers say, “Google it,” not, “Bing it,” or, “Yahoo it,” (Yahoo, right that still exists), entire businesses are built off of Youtube, manipulating Google Search Engine Results, Google Blogs, AdSense, Scholar, Wallet, Play, Android, literally everything that is anything, Google was involved somewhere along the way.

Now if you’re in a betting mood, you can take a chance on companies that have fallen on hard times. I recommended a company called Aeropostale on Quora a few weeks ago. ARO had fallen from $30 to $0.20 cents. I figured that I saw enough Aeropostale shirts floating around school that it was still relevant, and that it couldn’t possibly just go under like that (and even if it did, oh no, you just lost $0.20 a share). I went to school and asked 10 girls when the last time they wore Aeropostale was.

I was surprised by the number of people who’d worn it within the last week (7), so I figured YOLO, lets go for it. On April 4, the stock rallied to above 50%.

I’d give some more anecdotal evidence about why these simple questions are so good at getting the job done, but you won’t believe it until you see it for yourself. Go ahead, track a stock for a couple weeks (or months), that you picked using this method and report back with the results.

I don’t recommend using this for banks, healthcare stocks, or social media stocks because they are so fragile and move due to far too many other reasons. Social Media stocks are incredibly hard to make money off of because most social networks don’t have proper advertising and revenue structures in place.

I try to respond to every email I get, but there are an awful lot of them, and only one of me, so give me a few days and I’ll get around to you. I hope this article was helpful in some way, and if it was, please rate it and leave a comment.

I’d write some more, but it’s almost 2 am here, and even if I did go to bed at 9pm last night, I’m feeling tired, so good night, and hope this helped!

 

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Title III: Equity Crowdfunding – How to be an Online Venture Capitalist


Before I start, I wanted to say thanks again for 1,000 unique visitors! That’s pretty incredible, and I might actually be able to make it through the next 27 articles if this keeps up!

I’m super far behind on the daily articles I need to be doing to get 30 in 30 days, but I’m confident I’ll crank out like 10 of them in one day eventually.

I was going to write a part 2 to the “How to Start and Run Your Own Business” series (you can find the last article here), but those things take an inordinate amount of time. Here’s an article I’ve been thinking about writing for a while.


 

What is Title III: Equity Crowdfunding?

  • It’s a small section included in the JOBS Act of 2012,
  • It legalizes venture capitalism online. You give a company your money, they give you equity in their company. Welcome to Investing in the 21st century.

Why is it Important?

  • It regulates the industry, making sure you don’t get robbed blind (yes this has happened several times in the past from what I understand).
  • People not living in San Fran or NYC now have a chance of finding the next Google or Instagram or FaceBook.
  • An ENTIRELY NEW MARKET has just opened up. That means a select few people are going to become a whole lot richer. I just can’t wait for banks to start insuring these online VCs because, “it’s got 0 downside and is easy money, and call the insurance CDIs (I’m taking a jab at corps. like JP Morgan and Lehman who offered insurance on Toxic Mortgages and got screwed in 2007).
  • Companies now don’t need to be based in Silicon Valley and can raise capital extremely easily.

If you’ve ever wanted to become a VC this is the golden opportunity you’ve been waiting for right?

Not quite. Title II and Title IV are both severely less regulated and are more enticing to companies that want to raise capital quickly. Title IV crowdfunding lets you IPO after you reach your target capital goal. Title II has no restriction on how much money you can raise. However, the risk for fraud is much higher.

It is up to the industry to decide which way it will go in terms of what it does with crowdfunding and online Venture Capitalism, but it seems to me that Title III is the most risk free for investors, so that is what I’d guess investors want, but Title II seems more company friendly, so that’s what business owners would want.

If you’re interested in becoming an online VC, check out these websites:

On May 16, 2016, you will no longer need any sort of accreditation at all to join these sites and invest in up and coming businesses.

I hope you liked this post! Be on the lookout for an article tomorrow!

The 5 Pre-Requisites to Starting a Business


First of all, thank you so much for all the support. The site got more views in the last 24 hours than it did all last year haha.

Before I get into today’s article, I just wanted to say that I’m getting back into basketball at school, and my schedule is getting really tight again, so I’m going to be writing all the super important articles during the weekend, and the easier ones during the week.


 

I get asked the “How do I start my own Business” question about 2 or 3 times a day on Quora. I didn’t actually plan to start a business, or have it work out the way it did, but now that I’ve run one business successfully, I’ve taken up one more and am trying to get it off the ground.

Accidental or not, it’s simple for me to look back and tell you how I personally came around to starting my business, but that wouldn’t help. Here I’ve gone through all the answers I’ve given on Quora about this, and picked out the 5 most important things to have BEFORE you start your business.

  1. Find your interest
    1. Most Entrepreneurs I’ve talked too (it was zero in December, now it’s probably around 40 people) decided that they wanted to start a business. They went to Silicon Valley, and just waited for people to pitch them their ideas and these entrepreneurs would make it happen. The problem with this is, you want to start a business, and you just might not have what it takes. Make sure you know yourself well in and out first and find what interests you and then start. Make sure you’re an expert in the field.
  2. Learn the Economic Fundamentals of a Business (Read Balance Sheets, Accounts, Legal Contracts, etc.)
    1. Great you’ve found your interest. Same thing as before, in December I could’t read the first word in a legal document – it was just too intimidating, now I can probably recite half the tax laws in the world and the entire SEC Trading Guidelines by heart. These legal documents are meant to stump you and trick you, but the internet exists, use it. Learning to read your Sheets and learning to Salary people an such is hard, but once again, Google is a thing. Also, reach out to people who have started businesses before you. People don’t just want to be mean and not help out, in my experiences I’ve found the opposite to be true.
  3. Find a Niche in you’re Interested Field that Needs to be Filled
    1. You’re finding something that you would want in your Interested Field, but it doesn’t exist. If it existed it would make a lot of people’s lives easier. OR it is something that already exists, but there is enough room in the market so you can join and make money.
  4. Find Like Minded People who Have a PASSION for your Interested Field
    1. As long as they have a passion for it, work hard, and care, you can teach them anything. If they’re already qualified, well that’s even better. This is where social media, and your real life friends come into play. You will have to sped some time on this if you don’t get lucky (I got lucky)
  5. Find Out How Much Money VCs Are Willing to Give you
    1. This is incredibly important. If there isn’t anyone around to give you capital to start your business you’re dead before you take off. You need to find out the value the market places on your product or service, and then take these aggragated numbers to a VC and show them. Now no VC in his right mind will ever give you money for just an idea, but they will tell you how much they’re willing to pay. Take your data and results of market interest, and you may even score some $$$.

I hope this article was helpful in some way. I just finished it and it is 11:59 pm right now, *whew* cut it just in time!

The 30 for 30: The Primepick Renaissance

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Skip to the bottom if you want to know who I am exactly and what credentials I have. This part is explaining the direction of the Primepick, and what I’m going to be doing with the blog. You should read it too.

Alright so for those of you that don’t know, I started the PrimePick when I was 13 years old. Every single stock I’ve ever written about on here (yes ever) has gone on to be profitable – at least for that recommended time frame.

I have been very active on Quora.com recently (it’s a great website, seriously check it out), and was repeatedly asked to write about my stock picks and stock advice, as well as business, consulting, and marketing advice. It started getting to the point where on every single one of my finance posts one or two people would ask me to write somewhere.

I didn’t realize that I would ever be this in demand (because after well over 2 years, this site hasn’t broken a 1000 views), but now I think it’s time that I started writing about my investments again.

EROS went up to $13, when I recommended it at $6 in January (that was my last post, and I onl wrote it because I was trying SUPER hard to get back into this and failed miserably). On Quora, I recommended ARO (Aeropostale), days before it exploded 50% to go as high as $0.39, from when I called it at $0.2. People were calling me “unqualified” and telling me that I didn’t know what I was talking about because I was only 15.

They never came back to that post (because who really wants to talk to an unqualified 15 year old right?), but that was it. I got like 15 people who saw that messaging me that I absolutely had to write, so that’s what I decided to do.

One of the guys on that post reminded me that I had called Netflix in Jan. 2014 before it ran up 86% THAT WEEK! After reading that I realized this could be my resume for my first job, or something that I show to future investors interested in giving me their money.

I will be writing 30 posts in 30 days (or less) about running a business, investing, consulting, marketing, basically anything finance related that you can think of, I’ll write about it.

It’s going to be hard, but I’ll do it. After that, I’m going to write 2-4 posts  a week, and keep you guys updated every time I am going to buy a stock.


 

My name is Sudarshan Sridharan and I’m 15 years old. Last year I made 24% on the stock market, and I have never made a trade for a loss in my life. This year I started a business in January, then after that started running itself (because of good management from people who weren’t me), I started a website design and app creation company. I am extremely business minded and I plan on LLC’ing both companies under an umbrella company sometime in June of this year before I turn 16.

I have been into stocks since I was 7 and a half years old, and I have been investing with real money since I was 11. I turned my Google Finance Play Money Portfolio into my first pitch deck when I asked my dad for real money to invest with.

I don’t use math to justify my trades. Stocks like ARO (read above if you don’t know what I’m talking about) just don’t cut it at a fundamental level, but using my methods and intuition (yeah, my gut feeling), I can find and invest in stocks people don’t expect to ever turn a profit on again. I also invest in high flying tech stocks (although all my normal ones like AAPL, GOOG, NFLX, TSLA, ADBE, FB, all seem washed up. AMZN is probably the only one that I can depend on to make me like ten bucks a share in a day), and extremely risky stocks that could either go sky high, or crash.

My least favorite trades are the ones I always find myself stuck in for months (like the ones I’m in right now with NKE and V), but companies like those, with little to no downside and high upside are the ones I tend to go into after I’ve made a lot of money and want to cool down.

Anyways, I understand that you may have trouble accepting advice from a 15 year old who doesn’t use math to justify any trades, but I do have a very strong and established track record, a strong demand (which I hope translates into views on here), as well as a strong set of principles that I invest off of and follow religiously. I’ll write about them on here one day.

If you ever need something answered on here, just message me using the Contact Us page and I’ll write about it.

Thanks for reading, here’s to a new beginning and a lot of money.

Follow Me on Quora: https://www.quora.com/profile/Sudarshan-Sridharan-4

A Budget Beast – Eros International


       Today’s ~2% market declines (primarily caused by China among many other factors) didn’t treat Eros International (Ticker: EROS) badly. When I say didn’t treat it badly, I mean it only fell 2.5%. More than likely, the stock is set for another decline tomorrow; news just broke an hour or two ago that they were sued again. Here’s the article.

       On the other hand, EROS has never been more profitable. Recent estimates have put their subscription base for their Netflix like service (EROSNow) at between 35 million to 65 million paying subscribers. While the decline in their accounts receivable may seem bad, keep in mind that their revenue is growing – a lot. This could show a shift in consumer confidence – people are immediately paying for EROSNow, and theatre owners are paying up front for Eros movies.

       Eros was able to make waves in India recently when they forced theaters to choose between showing their movie and another popular actor’s movie. Eros seems to have won out with the theaters in India. While there is still some downside in Eros (more significant market declines, the effect the lawsuit will have, any other bad news…), I cannot imagine seeing another company that has declined ~75% in a few months, yet is becoming more and more profitable by the quarter. Eros has shown significant growth internationally, and has multiple winners lined up.

Bottom Line: EROS is a buy; it seems to have support, preventing it from sinking below $6.84, as witnessed in the chart below. The chart also shows that according to the Bollinger Band Width, Eros is at a critical juncture in its stock. If it breaks the bandwidth upward it’s set for a run, if not, it could go into free fall.

Screen Shot 2016-01-04 at 8.32.23 PM.png

Thoughts on Bank of America


The below is an email I sent to the institutional investor that I am currently interning under. It is my thoughts on why Bank of America should increase greatly within the next few months. Value stocks like Bank of America (especially ones that are dead in the water like BAC) normally stay barely under the radar until they breakout big. Activision Blizzard (which I spotted it at $17.44) is an example of a stock that barely grew at all, but when it broke out, it broke out big. Now I’m not promising some sort of gold mine with Bank of America, but the conditions just may be in that ideal place where BAC could go back to a price reminiscent of its $55 a share glory days.

Good Afternoon Mr. X,

       I was looking at various stocks that might be a good investment, but this time instead of looking for P/S, or EPS, I looked solely at the Peter Lynch chart before looking further into the company. I was thinking about your investing strategy and how you like to buy stocks at a discount and sell for profit. I believe that Bank of America is a stock that an investor such as yourself would invest in.

Obviously it would have been best to invest in BAC immediately after its incredible fall, but Bank of America is ready for [another] breakout run. The Peter Lynch chart is clashing PERFECTLY with the Bank of America trend line, and excluding 2008, every time it has met with the trend line, the stock has gained significantly. I have attached the chart below:

Screen Shot 2015-12-22 at 9.11.26 PM.png

Note the stock price increasing right after clashing with the PL line

Now let’s look at the numbers. Bank of America was VERY depressed this year. Posting -60% EPS from last year, and a -6.6% Q/Q sales would normally make an investor shy away from any stock. However, Bank of America is expected to post a positive EPS of 1.57 next year (up from 1.35), and an EPS increase of +9.29%. Bank of America is also -7.02% below its 52 week  high, and as you can see in the chart above, the stock is always well below its 52 week high when it has a breakout run.

Screen Shot 2015-12-22 at 9.13.23 PM

Ultimately I believe that BAC will have a really incredible run – especially since there’s finally been an increase in the interest rate (albeit an incredibly small one), and it is just a matter of finding the lowest price you can buy it at.

Is the American Market Really in a Good Place?


Yesterday I had the opportunity to talk with a few analysts from Davenport & Company. To two different people, I posed the question: What are your views on the market? Do you think it’s in a good place? The first answered that he thought that select sectors were doing well while the rest of the market lagged behind, but the market was overall in a better place. The latter of the two also said that he thought the market was doing well.

It is difficult to believe that the market is doing as well as people have been trying to make it out to be. Has it improved from 2007,2008,2009? Yes, but it sure isn’t doing as well as pre-2008. I understand that the markets (Dow, Nasdaq, S&P500) are all far higher than they have every been since their inception. However, our current market is almost purely artificially inflated.

When I say artificially inflated I don’t mean that the government is pumping in money to the markets or manipulating it (other than Quantitative Easing). I mean a very few select stocks (think well performing companies with massive market caps like Apple, Google, Amazon, and Facebook, and extremely high performing companies with lower market caps such as Netflix which has increased 185% in the last year ) have kept the S&P in the green.

The S&P500 is the index that institutional investors look at. It has 500 of the best performing companies from all of the imaginable array of businesses. The fact that less than ~10% of the S&P is what is keeping the rest of it afloat is mind blowing. It puts into perspective how wounded this country still is and deep and jarring a wound 2008 and the bank crash left our markets.

The U.S. economy however, has not only recovered, but is also becoming stronger every month, as more and more people find jobs. The unemployment rate in May of this year was 5.5%, which is close to the ideal unemployment number of ~4% as defined by Adam Smith. If more people are employed – that means they have money. If people have money that means that they are going to spend it. If people spend money, then they are putting it back into the economy, helping the slow but steady regrowth of the U.S. economy.

Bottom Line:

I can’t say when, and I can’t say how, but expect a market crash sooner or later (historically recessions happen ~once ever 15 years, so it’s not too far away.) Unless the S&P500 has failed in being the bar for growth measurement, the markets are doing poorly. However, no matter how odd this may sound after giving such a bleak outlook on the market, the U.S. economy seems to be fully recovered and actually growing much faster than expected.

Visa is a BUY!


Visa (Ticker: V) is an incredibly strong stocks. Visa has been a permanent bull, growing slowly but steadily all the way from 2008 to the present. In an age where more and more customers are going through online vendors, trying their hand at securing cheaper deals at cheaper prices – from the comfort and safety of their own homes, department stores like Target and Walmart may slowly be getting eked out of the niche market that they helped build. Visa however enjoys increased growth in customer spending online. Last years customers spent over 9 BILLION dollars during the Black Friday weekend (according to this). Visa is the most popular credit card (coming in number 1 with 36% of credit card holders owning a Visa credit card) in the United States. This Black Friday Visa can expect about $90 million dollars in revenue.

I also think Dave and Buster’s (Ticker: Play) is an excellent stock with a lot of upside. I’ll have a little something on PLAY out soon.

Activision Blizzard – An Incredible Stock from an Incredible Company


[IMPORTANT: I forgot to hit the Publish button, so this article was just sitting in my Drafts for two weeks, sorry. Everything in the article is still valid, and ATVI is a FANTASTIC stock. Happy Thanksgiving.]

Over the Summer I invested in Stocks like Google, Activision Blizzard, Netflix, Electronic Arts, and a few more Stocks. All of them were TREMENDOUS successes (especially google gaining $120 within three days of me buying it, and Activision growing $5 in two days from when I bought it). Unfortunately I sold Activision super early and only came out with ~$5 a profit per share (from $24 -$29). The next big mistake I made was buying EA (Electronic Arts). It took me two months to come out with a meager $2 a share profit (albeit on 2500 shares, so not too shabby).

A few days afterwards I was reading up on Blizzard’s forums, and one of their Community Manager’s had said something similar to, “We will be receiving help from another company to make Hearthstone’s Mobile UI better.” Hearthstone is Blizzard’s massively successful 20 million dollars a month (according to this article) multi-platform online card game. Hearthstone single handedly makes up for the revenue Blizzard is losing from World of Warcraft’s (another massively successful Blizzard game with over 6.5 million monthly subscribing members) waning player base.

So, three days before ATVI announced they were buying King, some loose mouthed CM leaked it to anyone who was keen enough to pick up on it. I bought 2000 shares, and lo and behold, Activision announces that it’s buying King. I sold after a nice profit and bought Google.

Anyways, why is Activision such a good stock right now? Well Blizzard makes ~1.2 billion dollars a year, and Activision makes ~3 billion a year. Every year Activision pushes out Call of Duty games, and every year their revenue only goes higher and higher. It’s also the Winter, and ATVI makes up a large portion of the video games that commonly go on sale and are in high demand.

Not only is ATVI heading into its strongest season (as per historical trends), the fact that it bought King shows that it’s attempting to break into the micro transaction pay as you play market that King specializes in. All in all ATVI is a strong buy with a very high price ceiling.

 

China’s Down More than 25% in the Last Month, Is it a Good Time to Actually Bet ON China? Exploring the YINN

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Much like the Yin and Yang that represent good and evil in Chinese mythology, their financial counterparts represent how China as a whole is doing. For those of you who do not know, the YINN (Direxion Daily China Bear 3x Shares ETF) bets on China. For every one percent China goes up, you make three times that much money. The YANG (Direxion Daily China Bull 3x Shares ETF) does the opposite, it bets against the Chinese market, and every time it goes down 1 percent, the stock goes up three times. Over the past 30 days, China has fallen more than 25%. This chart of the SSE Composite Index (an index of all stocks traded in the Shanghai Stock Exchange) from Yahoo Finance clearly shows the decline in Chinese Markets from its peak on June 5.

Screen Shot 2015-07-10 at 11.25.21 AM

The red line is the S&P500s performance over the same time period of 3 months.

So what does this mean for YINN and YANG? Well, YANG has fallen from over $2500 in 2011 to a little less than $80 right now. It’s a big mover in the way that it has potential to make $15 in a day, and fall $20 the next, but its entire stock price revolves around the Chinese Market doing poorly, and that’s a terrible bet to make; especially since China has been one of the fastest growing markets in the world for the past decade. Right now YINN is in an incredible position: its fallen from over $65 in April, to $30 this month. It’s a steal.

Why?

Let’s take a look back in history when the Oracle of Omaha – Warren Buffet – bought thousands of shares of CocaCola (Ticker: KO) after its stock was decimated by health concerns and factory malfunctions. His philosophy was simple:

The best thing that happens to us is when a great company gets into temporary trouble…We want to buy them when they’re on the operating table.

Like that, we want to buy excellent stocks at extremely low prices and sell at an incredibly high rate. In essence, buy low sell high. China will recover, it has to. China isn’t undergoing a recession, it’s undergoing a market correction. As soon as China picks itself up, YINN will pick up too. It’s a stock betting bull on one of the best markets in the world, and it’s a steal.