I happen to know one of the richest, most secretive money managers in the world...

His fund is based in the Cayman Islands, but he only pops down to the Caribbean once a quarter. He bases his trading operations in London, because London is the best spot to trade the entire world. Plus, as a foreigner living in London, he pays next to nothing in taxes.

His track record is extraordinary. And thankfully, he takes my calls and shares his big ideas with me. It's one of my biggest secrets...

Actually... I made all that up. That guy probably exists. But I don't know him. The reality is, what I do to spot great investments early on is incredibly mundane. And it's not even hard. You don't need to know a guy at a bank in Zurich.

I'll explain it to you today...

I have spotted a good number of ideas very early on for my subscribers... In this decade alone, readers have made triple-digit profits in timber, gold, collectibles, real estate stocks, virtual banks, and so on.

When I first started writing about these themes, nobody even considered them worthwhile investments. For example, when I started recommending gold a few years ago, I couldn't even convince my mother it was a good idea. Now gold is up a few hundred percent. This is the way it often goes...

I've had all the fancy toys institutional investors use... I've flown around in private jets scouting out opportunities in faraway places. But the truth is, you don't need that. Before you can even get on the plane, you have to have an idea. So where do I come up with my "wild" ideas?

The reality, again, is incredibly mundane. It's a long way from the private plane. It's more like I'm cruising the discount racks at the local Goodwill. You never know when something extraordinary might come in and you get to snap it up.

You know the saying "One man's trash..." Well, I'm generally sifting through someone else's discards. The longer it's been discarded, the better...

To continue the metaphor... A few years ago, I never would have thought bellbottom jeans would return to popularity. You probably could have bought a pair of old bellbottoms for 50 cents at Goodwill. That same pair might go for $100 today at a New York City "vintage clothing boutique."

What I do in the investment world is basically look for bellbottoms that are priced at 50 cents. I try to see them in a different way...

I ask, Is there any value here at all above what you pay for? Can I sell the zippers? Can I sell the denim? Unfortunately, you have to thumb through a lot of duds and think a lot before you finally hit upon a great buy.

I had one of those great buys in rare gold coins...

When I recommended them, they were selling closer to their meltdown value than at any other time in their history. If gold went up, you'd make money, too. And if they traded at a higher percentage above their melt value, you'd make money too. Your downside risk was limited... you had the gold in your hands! But nobody listened. If they did listen, they laughed soon afterward. Now we're sitting on triple-digit profits.

Today, I hunted the discount racks of the stock market for you...

A few sectors of the stock market have performed miserably this decade... They're the discards of investors over the last eight years. These sectors include tech and pharmaceuticals. And lately, they include finance companies and real estate businesses.

Tech and pharmaceuticals have been ignored since the dot-com bust. They're on the discount rack. I think their days for triple-digit returns are coming soon, though we haven't seen the uptrend start yet.

First the Guillotine, Then the Sandpaper Sandpapering the Vultures to Death

As you can see, there's no big secret to spotting great buys early on... You don't need a high-powered insider to tip you off. You simply must buy what's been thoroughly ignored and is now cheap, once it kicks into a convincing uptrend.

Sizing up today's discount rack, the time isn't right... yet. But I do expect hundreds of percent gains when these trends kick in again.

Good investing,

Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.

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