Warren Buffett’s favorite indicator is telling us that stocks are more overvalued right now than they have ever been before in American history.  That doesn’t mean that a stock market crash is imminent.  In fact, this indicator has been in the “danger zone” for quite...

Life would be different if you had a rich, generous aunt, wouldn’t it?

If you would indulge me … imagine for a moment that you do.

We have seen a stock market over the past nine years that is simply great.

Imagine that you consulted with your rich, generous aunt at the start of the period.

Doing so would have allowed you to post better-than-market returns.

I explain why below … and tell you how long this market continues in bull mode.

Using Debt to Sweeten Profits

Brokerage customers — like you and me — can incur margin debt.

When you buy stocks through a broker, you can do so using a cash account or a margin account.

A cash account is what it sounds like. You buy stocks using the cash in your account.

If you buy using a margin account, your broker funds a portion of the investment. The portion you pay is known as the margin. The portion the broker pays is margin debt.

You can amplify your cash returns using margin debt.

Let’s think about it with an example. If you buy $1,000 of stock and it grows 13% per year for nine years, you will have $3,000 by the end of the ninth year … $3,004 to be exact.

Remember your rich aunt? She’s so sweet. Let’s call her Aunt Judy.

The markets have been all over the place, and investing in this environment—or in any environment—can seem intimidating. It doesn’t have to be. Investor and precious metals expert Bob Moriarty, founder of 321 Gold, is such a risk taker and a rebel that he once flew his aircraft under the Eiffel Tower. The rebel side comes out in his contrarian approach to investing that has brought him a lot of success. David H. Smith, senior analyst for The Morgan Report, discusses the value of Bob Moriarty’s practical, straightforward information on how to invest.

“Investors have come to believe that they need to find a guru, a financial advisor, or to read articles about certain theories of investing if they are to become rich from their investments. Those notions are all wrong. There are no gurus. Financial advisors advise because they have to earn a living. If they were experts on investing, they wouldn’t need to be selling their services. The different theories about investing mostly remain interesting theories.

If you have good sense, keep an open mind and learn the basics, you don’t need all the fluff. In short, there are no experts. Nobody knows anything.

I was chatting with a friend of mine about investing, trying to make the point that we make things way too complicated. It’s easier to profit if we skip a lot of the nonsense associated with investing and go directly to the core. Investing for profit isn’t as difficult as the so-called gurus would have us believe, but like a contractor building a house, we have to start with a proper foundation.

I’ve run a successful financial website for fifteen years at 321gold.com. It started out as a way to pass on information about concepts and companies I was familiar with to friends and family, and it grew. And grew. From the beginning I was determined to cut out as much as possible of the voodoo and hocus pocus from the pieces we published, so we could attract serious investors.

As I was saying to my friend, some of the most basic bits of background in investing are missing from most investment books. The authors tend to write about their personal agendas without ever providing some of the most essential building blocks that every investor needs to know.

I’ve made money and I’ve lost money. I have made some brilliant and timely calls, and I’ve made enough boneheaded calls, and in public, that it’s obvious I’m not a crook or a shill.

If you are going to be a successful carpenter, someone needs to teach you how to buy and hold a hammer in the correct way so your nails go in straight. If you are going to be a successful investor you need to know some of the basics about investments that are rarely found in books. We learn them through trial and error, and that makes for both bad carpentry and poor investing.”

So begins veteran investor Bob Moriarty, the founder of 321 Gold, in his book,Nobody Knows Anything.

Investing is a battlefield. If you plan to emerge a winner, then it’s time to fully accept this fact and arm yourself with the proper weapons—internal and external—before placing your hard-earned cash on the line. Investing success rests upon understanding and following a select set of critical behaviors that can protect and enrich you through bull and bear runs alike.

Here are four examples of advice that Bob Moriarty has given over the years: