Everyone knows the old rule: buy low, sell high. But when are prices truly at their lowest?
Usually, it is when fear is so overwhelming that most people want nothing to do with the market. That is the idea behind the Rothschild line about buying when “blood is running in the streets.” It gets to the heart of speculation: profiting from extremes in crowd psychology.
During the Great Depression, legendary investor Sir John Templeton put that principle into practice. He bought at a moment of extreme despair and eventually tripled his money—an early move that helped lay the foundation for his billion-dollar fortune. It is the same instinct Warren Buffett captured years later when he said, “Be fearful when others are greedy. Be greedy when others are fearful.”
Or, as Templeton himself famously put it:
“The time of maximum pessimism is the best time to buy.”
That is the theory. In 2020, amid one of the greatest episodes of mass panic in modern market history, the oil market handed us a textbook example.
You may recall that near the height of the great Covid hysteria, oil prices went negative in April 2020.
More precisely, it was the May 2020 West Texas Intermediate crude oil futures contract that fell below zero, settling at negative $37.63 per barrel. Demand had collapsed during the lockdowns, storage was scarce, and traders holding expiring futures contracts were desperate to avoid taking physical delivery.
On top of that, it was near the peak of another hysteria: the green scam. Many serious people were committed to the delusional fantasy that the world would rapidly phase out hydrocarbons.
Together, these dual hysterias created a veritable aberration in mass psychology. The result was a panic in oil stocks, where prices fell to absurdly low levels.
An astute speculator would have recognized the extraordinary opportunity created by this distortion in the market. With the benefit of hindsight, we can see that it produced a once-in-a-generation chance to buy the highest-quality oil stocks at prices most investors can only dream of.
Take ExxonMobil (XOM), for example.
XOM is a Dividend Aristocrat—a company that has increased its dividend for at least 25 consecutive years. These companies are usually also “best of breed” industry dominators with powerful brands.
A business has to possess a strong and sustainable advantage over its competitors to increase its dividend for 25 consecutive years. It also has to manage the inevitable ups and downs of the business cycle.
That is no small feat.
These companies are also better able to pass on price increases, which makes them excellent inflation hedges.
For these reasons, Dividend Aristocrats like XOM are rarely cheap. After all, everyone knows they are the best.
However, a once-in-a-generation opportunity opened up for XOM in 2020. For about a month that year, XOM was so cheap that it traded at a double-digit dividend yield.
See the chart below.
Let’s say you were able to buy $100,000 of XOM at a double-digit yield.
Suppose you bought it in October 2020, at $34.74 per share. At the time, the company’s quarterly dividend was $0.87, or $3.48 annualized, representing a 10% yield.
That would have given you roughly 2,878 shares, producing about $10,015 in annual dividend income.
Fast forward to today.
XOM’s dividend kept growing. Today, it is $1.03 per quarter, or $4.12 annualized—about 18.4% higher than it was in 2020.
That means your 2,878 XOM shares are now producing roughly $11,857 in annual dividend income. That is about an 11.9% yield on your original $100,000 investment.
And the shares are now worth around $150 each. Your initial capital has grown from $100,000 to roughly $431,700.
There are not many things that would tempt me to sell my gold.
But buying a Dividend Aristocrat at a double-digit yield is one of them.
The lesson is simple: the best opportunities usually appear when most investors are too scared, distracted, or misinformed to act.
The hard part is knowing which crises are real threats—and which ones are creating rare chances to protect and grow your wealth.
That is especially important now, as debt, money printing, political instability, and cultural upheaval are creating distortions across the economy and markets.
I’ve put together a free dispatch showing what I believe is coming next—and the three strategies investors should consider right now.
