We are closing in on the end of the year—and it has been an interesting one, to say the least.

Here at Hidden Profits Report, we have shared lots of ideas and strategies, and we will share more in 2024.

I kicked around several ideas about how to end the year with a bang and decided that giving you a handful of what I consider high-probability long shots is the best holiday gift I can offer.

Let’s get to it…

Remember that when I talk about long-shot stock picks, I think in terms of years, not weeks or months. I am looking for gains of several times the current stock price, not just a few percentage points.

When considering these picks, the trick is to think about investing a little for the possibility of earning a lot. With a 50% win rate, you will make a staggering amount of money over the next several years, even with small amounts invested in each stock.

I consider this a hero-or-zero approach to investing: those that work make us a lot of money. Those that do not have the chance to cost us whatever small amount we initially invested.

First up is Warner Brothers Discovery (WBD). The merger that created this company has had less-than-stellar results since the deal’s 2021 completion, but the stock has been picking up some steam in recent weeks.

Warner Brothers Discovery includes a fantastic collection of streaming and entertainment assets, including the HBO, Discovery, CNN, and TLC cable networks, as well as the streaming platforms HBO Max and Discovery Plus. That means with one stock purchase, you own shares of Superman, Game of Thrones, and Bugs Bunny, as well as major production studios like Warner Brothers, HBO, Discovery Studios, DC Films, and Cartoon Network Studios. You also get my wife’s favorite networks: Animal Planet, The Food Network and HGTV.

As it sits today, the company is worth more than two times its current stock price. A few years down the road, a value of two-to-three times today’s price does not strike me as an unreasonable possibility.

Which electric vehicle (EV) manufacturer will be the best investment?

I do not know, and I do not care. But what I do know is that almost all of them—as well as the manufacturers of hybrid vehicles—will buy part from Borg-Warner (BWA). (Companies that stay with good old-fashioned internal combustion engines will buy from Borg Warner, too.)

In fact, with 92 factories in 23 countries worldwide, Borg Warner is in a solid position to do business with every auto manufacturer on the planet.

My calculation of the value of the business is currently almost two times its stock price. Add in some growth from the drive for cleaner cars and continued expansion of the market for EVs, and the stock could easily trade at three to four times the current price in a few years.

We all know the lithium story—it is needed for the best batteries for everything from cell phones to EVs.

Lithium Argentina (LAAC) owns two lithium mines in Argentina, both in partnership with Ganfeng, China’s largest lithium company. The Argentinian government also has a piece of one of the mines.

The balance sheet is solid, and the company has more cash than debt.

The first mine, Chauchari-Olarloz, has just gone into production. If all goes well, it will be the lowest-cost lithium mine in the world. The cash flow from this mine will pay the startup costs of the second mine, which is located right next door.

If this company hits its potential and both mines produce at capacity, you should see a long-term return of ten times your money or more.

The political landscape in Argentina just underwent a seismic shift with the election of a libertarian, Javier Milei, who is massively in favor of free markets and who should be good for Lithium Argentina. But, if the politics go the wrong way or something goes disastrously wrong with the mines, investors will come up with a loss of at least half and maybe all their investment.

Long-shot stock picks should come with a warning label.

We are playing a game mathematicians call the asymmetric payoff wager.

A small stake can reap huge gains, but the chance of a loss is real. And some of these stocks will be losers.

Only invest money in this strategy that you can afford to lose without significant consequences.

Then, be patient. Think big, and resist the temptation to take small profits.

Happy Holidays!

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Source: Investors Alley