Beat The Rush: Expert Interview with Caitlin O'Malley Of Money Map Press On Finding The Latest Investment Trends

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The reality is that, as an investor, you will always make the most money by being ahead of "the crowd." Think of it like you're buying a ticket to the opening day of a really hot play or movie. If you get there first, you have your choice of the best seat in the house - after which the theater fills up. The latecomers get seats with lousy views, are left to stand, or don't get into the theater at all.

This is a quote from our interview with Caitlin O'Malley of the specialty investment publishing house Money Map Press when asked how they go about finding the latest investment trends and why smart investors should always be on the lookout for those golden tickets.

While the Internet and countless publications may bring terabytes of news, features, and financial analysis daily, it can be hard to know where to find trusted information, let alone finding it in one place.

Money Map Press set out to fill that need by bringing in investment professionals from every aspect of the financial world - from stockbrokers to investment bankers and industry insiders - to bring unparalleled insights and expertise under one roof for all of your investment information needs.

Can you introduce us to Money Map Press? When was your company founded? Where are you based out of?

Money Map Press is a Baltimore, Maryland-based financial-research publisher. It was founded in 2007 by Publisher Mike Ward, and is a unit of Agora Inc., one of the country's largest publishers of financial, health, travel and special-interest books and newsletters.

Like its parent, Money Map Press is based in the historic Mount Vernon district of Baltimore. In fact, we operate out of a renovated three-story brick building that's had nine owners - including 19th-century land investors, coal businessmen, attorneys, and Baltimore City engineers. The building at 16 W. Madison St. ended its residential days in 1953 when a real-estate firm moved in. Agora renovated the building in a manner that retains much of its period-correct appointments. But it added computer networks and a state-of-the-art recording studio - creating a collegial workspace that fosters the creative thinking Money Map Press was built on.

What inspired Money Map Press's creation? What need did the founders perceive that they hoped to fill?

If you look at our flagship e-letter, a free daily publication called Money Morning, you'll see the statement: "We Make Investing Profitable."

For Money Map Press, that's not just a "tagline" or marketing motto - it's a mission statement.

It's what we believe, what we try our very best to do for our subscribers; in fact, everything we do stems from that core value.

When Mike Ward and his team formed Money Map Press in 2007, the group did so with the belief that Main Street investors - the regular folks who make up the retail-investing crowd - could take charge of their own financial futures ... and could do so successfully.

If anything, this independent mindset, which would free them from the games that Wall Street plays, would be an asset and an advantage.

But we knew those folks would need help to succeed. And a detailed search of the market we wanted to serve led to an interesting discovery: although there are many companies that deliver business and financial news that cover the markets or that attempt to provide investment "advice," there really wasn't one venture that did it well. There wasn't one publisher that had bona fide investment experts on staff - former Wall Streeters, investment bankers, wealth managers, and sector insiders with real résumés and verifiable track records - who catered to the retail audience.

We vowed to fill that void.

We are a specialty publisher. Our goal is to help our subscribers make money. To that end, our team of handpicked experts write and provide our readers with the best possible advice, research, recommendations, and strategic insights.

We seek to bring on as many subscribers as we can - and keep them by providing a service they won't find anywhere else.

In the introduction to your publication "The Money Map Report," you talk about getting your money in ahead of the next big trend as being the key to real wealth. First of all, what are some of the different aspects you look at to determine "the next big thing?" Secondly, what have been some solidly performing trends of the past few years? Is there anything looming on the horizon?

The reality is that, as an investor, you will always make the most money by being ahead of "the crowd." Think of it like you're buying a ticket to the opening day of a really hot play or movie. If you get there first, you have your choice of the best seat in the house - after which the theater fills up. The latecomers get seats with lousy views, are left to stand, or don't get into the theater at all.

Investing is like that. If you're first, you'll get the best price. You won't be forced into a badly-timed or poorly-positioned trade. And you won't be left out, watching as others enjoy the "performance" of the stock they bought cheap and are getting rich on.

Here's another way to look at it: if you buy a stock before the hype starts pushing its price higher, all the subsequent buyers provide the liquidity needed to drive your holding higher in price. In other words, the subsequent buyers do all the heavy lifting while you reap the reward.

There's a risk-minimization benefit to being ahead of the crowd, too. Stocks rise because more buyers come in to bid up their prices. The later you are in that cycle, the fewer "new" buyers that remain behind you. And if you're the last one in, look out.

This is why our experts use their insights, years of experience, and systems they've developed both to spot individual opportunities and to identify powerful trends that they are predicting or are just starting to form.

The "next big thing" is a bit of a misnomer; it implies a "fad" which can flame out quickly. The trends we look for are backed by new developments in technology, shifts in the economy, powerful changes in public policy, or massive shifts in the flow of money.

And when you can find a "confluence" (intersection) of several of these developments, it's even better.

Take biotechnology. Advances in science (new ways of creating medicines), shifts in public policy (new FDA programs to fast-track "breakthrough" drug therapies), imminent market changes (expiring patents on a slew of "blockbuster" drugs, known as the "patent cliff"), and capital flows (big hoards of cash held by Big Pharma players, who were willing to use it to buy new drugs) led to some very big winners for us.

One company, Pharmacyclics Inc. (Nasdaq: PCYC), had developed a highly effective new drug for treating several different blood-related cancers. One of our "trading services" recommended it to our subscribers in a special report in early 2012, saying we believed the drug alone was promising enough to ignite a big gain in the stock. And the potential for a takeover was a possible "kicker," we predicted.

It played out just as we predicted. The drug, Ibrutinib, received several "breakthrough therapy" designations from the FDA. That alone, in concert with the big run-up in biotechs, ignited a massive gain for our subscribers. In early 2015, Pharmacyclics agreed to be bought by AbbVie Inc. (NYSE: ABBV), a company with a "patent cliff" issue. Subscribers who followed that "call" made more than 800% on the stock.

With an aging population, additional innovations in the way drugs are developed, and new types of partnerships in the marketplace, we expect biotech to continue to be a big opportunity.

Generally speaking, we favor the stocks of companies that provide necessary products and services as opposed to "nice-to-have" offerings. So-called "need-to-have" providers, if chosen well, figure to provide the steadiest long-term profits, and to fare the best during the inevitable rough spots the stock market periodically doles out.

Technology fills that bill, and so does biotech. There is no end to opportunities in both those areas.

A subscription to Money Map Report comes with urgent profile alerts that tell an investor when to exit a position. What are some warning signs that a stock is about to fail? How can these urgent alerts help prevent damage rather than trying to compensate for it?

According to Money Map Press Chief Investment Strategist Keith Fitz-Gerald, the best way to avoid such "failures" is to very carefully screen the companies before you invest in their shares. Take care to research their core businesses, their finances, and the markets they serve to be sure strong growth prospects remain.

That said, there are some signs that a company is headed for trouble, Keith says. Watch for CEOs who are making major changes in their company's business focus - something the veteran investor likes to refer to as "going off the reservation." Sometimes shifts in strategy are necessary, or even healthy. But too often, a company's desire to move away from the markets or strategies that made it a winner turn out to be ill-advised. So if a firm is proposing big changes, research and understand what's unfolding. If it doesn't make sense, appears risky, and will affect earnings, best to sell the stock and move on.

Look, too, for companies that are losing touch with their core market.

Keith last year took stalwart McDonald's Corp. (NYSE: MCD) off his "Buy" list for the first time in more than a decade because he correctly perceived that the burger giant had lost touch with the strategies that made it great.

The Money Map Report comes with reports on different market sectors, like commodities, energy, and more. First of all, are certain sectors better for faster yields, while some others perform more slowly and steadily? Does each sector have its own rules as far as performance, and what are some ways that you deduce how each is doing?

According to Keith, it's certainly true that different sectors, markets and investments will give you different returns at different points.

"There are certain points in the business cycle that favor certain sectors over others," Keith said. "You really need to know where you are at any given point in that business cycle. Understanding that can increase your returns significantly. For example, right now, we are in the latter third of the fourth-biggest bull market in the last 85 years. And that favors tech companies, medical companies, and even certain energy companies. We look for companies that offer attractive values and the opportunity for sustained growth."

A membership to the Money Map Report comes with Keith Fitz-Gerald's The Money Map Method: How to Create Lifelong Wealth in a Forever Changed World. To begin, can you briefly describe "The Money Map Method" and what it covers? Can you also talk about what you mean by "a forever changed world?" Do you perceive these changes to be positive, negative, or neutral?

Keith is definitely a glass-half-full kind of guy. He agrees that because of technologies that speed things up, the growing global nature of the financial markets, the willingness of governments and central banks to intercede, and other factors, the world investment markets are experiencing more change than ever.

With change, however, comes opportunity, he believes.

So he puts aside concerns about whether those changes are "good" or "bad," and instead looks for the opportunities.

He urges investors to embrace that same mindset.

For instance, you may not like the fact that China continues to emerge as a new economic power. But that country's emergence is part of the fabric of the "forever-changed world." And its emergence creates opportunities.

One example: the growth in China's economy is helping turn Asia into an important trading bloc. That will create new high-growth opportunities - markets like Vietnam, for instance.

Savvy companies recognize this and are adapting. Intel Corp. (Nasdaq: INTC), for instance, has shifted production of its PC chips to Vietnam. This year, a full 80% of the world's PC chips will be made in that country.

So if big companies are recognizing the realities of the "forever-changed world" - and are not only adapting, but are moving to capitalize on the opportunities these changes are sparking - individual investors should, too.

More change means more opportunity, especially since money always flows where it's treated best.

Another example has to do with demographics. Here in the United States, people are living longer and are remaining healthy at older ages. That's creating opportunities for investors in terms of healthcare, retirement, medical technology and recreation.

"Whether we're talking about new geographic markets, growth catalysts in existing markets, or new product-and-service markets altogether, the fact is that the changes we see do create massive profit opportunities," Keith says. "To me, that's exciting. It gives us the chance to examine an array of change-driven opportunities and to pick those that offer the biggest returns and the lowest levels of risk."

That last line speaks to the philosophy underpinning the Money Map Method.

"The goal is to position money in a way that an investor captures much of the upside the stock market provides, while minimizing the downside," Keith said. "We do that, in part, by how we recommend investors construct their portfolios. And we also do it by identifying big opportunities - before those ideas go mainstream."

One example was Becton, Dickinson and Co. (NYSE: BDX), a company that specializes in crucial but "single-use" medical supplies. Keith realized that the growth in worldwide medical threats would make it inadvisable to reuse many medical instruments. Single-use and disposable medical instruments would see a big spike in demand should any kind of an outbreak occur.

Sure enough, when the Ebola outbreak occurred in 2014, it ignited a rally in Becton, Dickinson's share price. Because he identified the company's upside long before the masses and recommended it to his readers, Keith's subscribers already had a hefty profit. But since the Ebola scare, BDX shares have risen another 26%.

You also talk about the 50-40-10 balanced portfolio allocation. What is the 50-40-10 allocation? What are some reasons it's important to have a balanced portfolio?

The "conventional wisdom" Wall Street sells to investors is that it's best to have a super-diversified portfolio - kind of a financial extension of the old adage "don't put all your eggs in one basket."

We believe that's a mistake.

And we're not alone.

Back in his day, writer Mark Twain once remarked: "Put all your eggs in one basket - and then watch that basket."

And if you look at the strategy that investing icon Warren Buffett has adhered to through the years, he's much more Twain than Wall Street.

Wall Street believes in broad diversification. We believe more in "concentration;" that is, using a strategy where you allocate 50% of your investments in "base builder" investments, 40% in "global growth and income," and 10% in high-octane "rocket rider" stocks.

With this strategy, which Keith Fitz-Gerald created, you build your "base" and work your way up from there.

Base-builder investments are defensive positions that will hold their value in most market conditions. Global growth and income plays consist of world-recognized brands with strong balance sheets and high-cash flows that pay above-average dividends.

Finally, the rocket-rider plays consist of small-cap stocks, special-situation plays, IPOs, and takeover stocks.

It's an apportionment strategy Keith says he's spent years developing, and one that's backed by just as much research.

"The 50-40-10 portfolio is focused on a group of core economic realities - equities, interest-rate instruments, income production, commodities, and systemic credit," Keith said. "This focus makes the overall portfolio less susceptible to economic downturns because the risk is much more evenly distributed. Furthermore, because the Money Map Method requires that we constantly re-balance our risk, we can easily shift with varying market phases - growth, contraction, inflation, and even sentiment-driven events - all without placing significant portions of our capital at risk."

Money Map Press offers a variety of trading services, from the Biotech Insider Alert to Short Side Fortunes. Are any of these services particularly popular? What have been some industries and sectors that have been performing reliably these past few years? Any unexpected, overnight success stories?

Over the last five years, the iShares NASDAQ Biotechnology Index ETF (NASDAQ: IBB), a proxy for biotech stocks in general, has soared 305%. And that huge surge in biotech stocks in recent years has ignited investor interest in the sector.

But here's a secret: as great as those returns have been, many individual stocks have done much, much better.

To find those stocks, though, you need a guide. And Biotech Insider Alert Editor Ernie Tremblay is tops in his field. Tremblay has more than 20 years' experience studying and writing about the latest developments in health, medicine and related technologies. Ernie understands the circuitous (and long) FDA-approval process, the "hard science" behind these drugs (and the market demand for them) better than almost anyone else on earth. He has mastered the complex dynamics that determine whether a new drug will be a breakthrough winner or just another clinical-trial casualty.

Over the decades, Ernie has gained "insider" access to some of the world's top medical professionals, including Nobel-caliber doctors like Yale's Karel Liem, Columbia's George Gaylord Simpson, and Harvard's William S. Beck.

Ernie's followers have reaped the payoff, including one bioscience stock that brought readers triple-digit gains four times in eight months.

For people who are just thinking of getting into the stock market, what are some key words or phrases they can research to get an idea of up-and-coming businesses and products? Are there any places that are particularly useful for finding that information, whether that be social media or a dedicated financial website?

One of our gurus often tells the story of the father of a close friend who years ago asked, "How can I double my money in a year - without taking any risk?" Our expert warned the man - we'll call him Al - that this was an impossible goal and implored the soon-to-retire gent to abandon such a dangerous gambit.

Unfortunately, Al didn't listen. Worse still, he knew nothing of investments, and then put his trust in a broker - a young one, in fact, at a second-tier firm - whom he'd never met before.

Worst of all, this took place during the very last stages of the "dot-com" bubble, when risk-free wealth seemed possible.

The young broker put Al's retirement money into a couple of hyper-risky Internet funds, and they blew up when the bubble burst. Al lost half his money overnight, had to pay penalties for withdrawing his cash early, and, tragically, died a few years after.

The lesson here - one we at Money Map Press are big proponents of - is that every investor should take charge of his or her own financial destiny.

Some of the key concepts they need to understand are things like personal "risk tolerance" and investment "time horizons." Beginners should have a working understanding of stocks, bonds, mutual funds, and exchange-traded funds (ETFs). And they should establish and start using a brokerage account with a reputable firm.

And we're certainly here to help with free publications like our flagship Money Morning, tech expert Michael A. Robinson's Strategic Tech Investor, Keith Fitz-Gerald's Total Wealth, and the energy-and-commodity-based Oil & Energy Investor that's helmed by the world-renowned oil guru Dr. Kent Moors.

For someone who wants some additional hand-holding, we offer (for annual subscription fees as low as $49) such full-service monthly newsletters as Keith's broad-interest Money Map Report, Michael's tech-oriented Nova-X Report, and Kent's Energy Advantage.

And by all means, do even more to educate yourself.

Become an avid reader of investment publications. Two that are especially worthwhile are The Wall Street Journal, which is published daily, and Barron's, a weekly that's delivered on Saturday. In its Money section, USA Today also offers regular features on consumer finance and investing topics.

As you grow in knowledge and sophistication, it's also worth looking at the coverage offered by Bloomberg Business. It's more news-oriented, but Bloomberg offers the most detailed and most sophisticated look at general business news stories you'll find.

For more updates from Money Map Press, connect with them on LinkedIn.