Yahoo Finance 10 Investments for High Rollers
It you're looking to gamble and place your bets on a high-roller investment, who better to talk to than a financial advisor based in Vegas, baby?
"As an investor, looking at situations where the risk-reward possibilities are dramatically in your favor can result in some potentially lucrative results," says Yale Bock, founder and president of YH&C Investments in Las Vegas and a manager of two portfolios on Covestor, an online investment management platform.
Note the words "can result." Bock and other investment mavens caution that there's never a sure thing when it comes to big returns. But if you have the stomach for rolling the dice, you might just reap returns that are nice -- really nice. Here are 10 investments primed to either rock your portfolio or sink it like a stone in 2015:
1. Liberty Broadband (LBRDA). This spinoff of Liberty Media has a 25 percent stake in Charter Communications, and that's where it gets interesting. "Charter has an agreement with Comcast to buy and swap cable assets, as long as Comcast's buy of Time Warner Cable gets regulatory approval," Bock says. "If it goes through, Charter will eventually become the second-largest cable company in the U.S., and their subscriber numbers will nearly triple." If it doesn't go through, Bock thinks Charter may look for another acquisition opportunity, but it will also face the risk of erosion in its core cable business.
2. Energy-related junk bonds. The bonds of many exploration and production companies are selling at huge discounts, says David Twibell, president and founder of Custom Portfolio Group in Englewood, Colorado. "Buying these bonds now at discount prices not only locks in their high yields, but provides an opportunity for capital appreciation when oil prices recover. Don't expect energy bonds to recover overnight. You'll likely need to hold onto these for a year or more. But for capital gains that could top 10 percent, along with a similar yield for the duration of the bond, that's not a bad bet."
3. Bet the dollar against the yen. Foreign exchange is always trickier than it looks. But the Japanese currency is in crisis, says John O'Donnell, chief knowledge officer of the Online Trading Academy, based in Irvine, California. "I think the yen is going to decline, so I want to be short on the yen and long on the dollar," he notes. "Japan's in deep, deep financial trouble. They've been in and out of serious deflation pockets for 24 years. Their total debt as a percentage of [gross domestic product] is a disaster. We're now at about 115 yen to the dollar, and I see no reason why we won't go to 200. The Japanese economy is a bug in search of a windshield."
4. Bet the dollar against the euro. The hot news is that the European Central Bank will begin quantitative easing. And that presents a hotter opportunity, says Jeff Sica, founder, president and chief investment officer of Circle Squared Alternative Investments in Morristown, New Jersey. "With the U.S. already finished with its own easing program, I expect the dollar to gradually strengthen, especially versus the now-weakened euro," he says. As for the time frame, "I see this short of the euro working now and throughout 2015," Sica says.
5. Gold, silver and platinum. These precious metals are already conducting a stealth rally in 2015, says Paul Irvine, the Kleinheinz endowed chair in international finance and investments at Texas Christian University's Neeley School of Business. "As 'permabear' [and Swiss fund investor] Marc Faber puts it, he'd like to short central banks in 2015 but can't do that directly. The best way to short central banks is to own gold, silver or platinum. You should already be positioned," Irvine says.
6. Alibaba (BABA). The $25 billion initial public offering of China's biggest online commerce company made history in 2014 as the largest on record. But there's more history to be made, says Ron Weiner, founder, president and CEO of the RDM Financial Group in Westport, Connecticut. and Boca Raton, Florida. "Alibaba is the next Amazon on The Street, without having inventory," Weiner says. While it's a mid-term investment, he still thinks Alibaba could see "returns in excess of 30 percent over the next 12 to 24 months, and there could easily be more."
7. Seventy Seven Energy (SSE). When you're making a gamble, it's hard to resist betting on sevens. Heavy insider buying of stock in this oil field supply and services firm is the key here, according to Jim Osman, CEO of The Edge Consulting Group in London and New York. "Insiders continue to accumulate SSE at lower levels," Osman says. "But the market is valuing SSE more in relation to the steep fall in the crude oil prices and expectation of even lower prices in the near future." His advice is to ignore the naysayers and trust the insiders, who've paid as little as $6.18 a share in December for a stock he predicts could hit $16.37.
8. Classic cars. Who says high-rolling can't be fast-rolling, too? "Classic cars are a passion investment likely to produce enormous returns," says Paige Stover Hague, a principal in Crowninshield Consulting in Boston. Data from the Historic Automobile Group International shows that "rare historic" cars appreciated by nearly 16 percent in 2014. "This large appreciation rate is thought to be due simply to supply and demand. The amount of classic car investors is on the rise, and the amount of collectible cars is staying pretty much the same," she says.
9. Biglari Holdings (BH). Do you like Steak 'n Shake or Cracker Barrel? You may want to take a bite out of this San Antonio company, which owns all of the former and 20 percent of the latter. "The interesting part of this position is you're aligning with CEO Sardar Biglari, who has built a very good short-term record with undervalued companies," Bock says. "But many investors don't like his compensation structure and his absolute control of capital allocation." Characterized as combative and controversial -- his move to standardize Steak 'n Shake menus prompted lawsuits from some franchisees, for example -- Biglari is also a Warren Buffett acolyte. So perhaps some of that Omaha Oracle pixie dust will supercharge his holdings, which also include Maxim magazine.
10. Contemporary art. You don't have to be an art lover to fall for the potentially enormous returns. Hague points out that the market came off a record-breaking stretch in 2012 to 2013, when sales rose 33 percent. Over the last 10 years, the market has seen a 1,078 percent increase, according to Hague, who cites Artprice's Annual Global Index report for 2013-2014. But you have to be very wealthy to afford the work of established artists such as Jeff Koons. That could mean speculating on lesser-known names. "Just as with any form of investment, good decision-making requires a great deal of research and consultation with key people who have their finger on the pulse of the market," Hague advises.
More From US News & World Report
