Buying All Time Highs

Last week, I read a news article showing that had you invested in Chinese stocks for the last 20 years you would have earned a grand total of 1% on your investment.

I've read books about China's supposedly excellent fundamentals, mostly by renowned investor Jim Rogers, and I have experienced some of the country's economic advancements first hand while I lived there for 2 years teaching English, but none of this translated at all to investor's profits.

In fact, there is one thing (and only one thing) that can translate into making money in the markets:  price.

As a trend following trader, the price action always overrides any opinion or belief I may have.   Specifically, I like to buy assets that are making new all time highs.    Here is a chart of Chinese stocks focusing on this price action sweet spot:

By concentrating on buying new highs, you would have participated in the majority of a huge bull market that unfolded in 2007, while ignoring all of the sideways trendless price action that has occurred since.



But it's not just stocks that are worth buying at new all time highs.   If any asset class is making a new all time high, I want in.   For example, take this Crude Oil chart:

Crude Oil starting making new all time highs in 2004.     Although it may have seemed "too high" at that price, as it had tripled already, yet it went on to triple again, forming hundreds of new all time highs along the way.

Currently, the only asset class that I am aware of that is making new all time highs is US stocks. Although never a guarantee, buying strong US stocks making new all time highs powerfully places the odds in your favour.