Have you ever wondered how billionaires continue to get RICHER, while the rest of the world is struggling?

I study billionaires for a living. To be more specific, I study how these investors generate such huge and consistent profits in the stock markets — year-in and year-out.

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When you look back at the investments that have made the most money over the past few decades, theyve always been assets that had reached an extreme—an extreme low or an extreme high. Buying gold at $250 per ounce in 2001… buying tech stocks in the early 90s or Apple Computer at $8 per share in 2003… shorting real estate in 2007 or the stock market in 2008… the list goes on.

Each of those speculations led to massive returns only because the price of the respective asset was either dramatically undervalued and poised to take off or, in the case of the short sales, a bubble ready to pop. [Related: Why Our Financial System Is Vulnerable ]

Paradoxically, such opportunities arent that hard to find—the truth is, they sprout up all the time. What is  hard to find is the type of investor who has the guts to take advantage of those opportunities.

Fact is, most people run from assets that are at an all-time low… and happily buy into stocks that are reaching their peak. As legendary resource investor Rick Rule likes to say, Youre either a contrarian or youre a victim. [Related: The Federal Reserve Is Monetizing A Staggering Amount Of U.S. Government Debt ]

When you think about it, the strategy for getting rich—a strategy regularly applied by the Doug Caseys and Rick Rules of the world—is deceptively simple:

• Find an asset at an extreme (low or high) and determine if its headed in the other direction anytime soon;
• Take a significant position and hold the fort while market forces play out.

Thats all. The difficult part is to muster the courage to hold on when all your senses are screaming that its a huge mistake, that your investment will never pan out, that todays fool (you) is tomorrows loser.

If, on the other hand, you dont mind going where others fear to tread, opportunities practically jump into your outstretched hands.

Heres the best one I know of right now: gold stocks .

Actually, to say theyre a good opportunity is a laughable understatement: Gold stocks are at an extreme low we havent seen in over 30 years in this industry .

An effective way to measure the true value of gold stocks is to compare them to the gold price. Other things being equal, a gold producer selling for $20 per share at a $1,500 gold price is a heck of a lot cheaper than when golds at $1,000. (When the price of a product is higher, the stock is more valuable, and vice versa.)

The XAU (Philadelphia Gold and Silver Index) consists of 30 gold and silver stocks and began trading in December 1983. Here are the first 23 years of the Indexs ratio to gold.

Any time the ratio reached 0.20 or below, gold stocks were undervalued in relation to gold, and investors who bought at those inflection points made a profit. Conversely, once the ratio reached 0.34 or above, stocks were overvalued and due for a pullback.