business newsHow to Invest Like a Billionaire
By
William Meade
Aug 27, 2012 1:05 pm
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MINYANVILLE ORIGINAL
There is a reason investing is called a zero-sum game.
Consider this:
In the last decade, 99% of all equity-based mutual funds made little or no money. Retail, do-it-yourself traders made no money. Meanwhile a small group of billionaire investors took billions out of the markets.
These investors did not use leverage. They did not short stocks -- necessarily. They simply bought huge stakes in undervalued stocks, and then imposed their will on the company to create instant shareholder value.
It’s a strategy that I follow too. But I don’t have to be a billionaire. And I don’t have to build a huge stake in a stock, nor impose my will on the company. I just copy the billionaires that do.
Piggy-Backing Billionaires
Let’s be honest. You have to have an edge to consistently outperform the general stock market year in and year out. Simply picking stocks with the same formula that every Wall Street analyst has been trained to follow is a recipe for mediocrity. That’s why mutual funds and investment advisors continually give little to no value to their investors.
So how does the average investor win in this game? Well, it’s simple. Follow the folks that have the most power and most influence on Wall Street.
These investors are generally called “activists.”
Activist investors buy 5% or more of a company’s stocks, or controlling interest. Then, they do whatever it takes to create shareholder value. They might use their power and influence to force a company to sell poor performing units or to buy back their own stock, or they might just simply put the company up for sale to the highest bidder.
These are generally not complex actions, but ones that only the biggest and wealthiest hedge fund managers can execute. For those that follow them, they get to go along for the ride -- for free.
How Do You Find Out What They’re Buying?
My investment research firm follows only the best billionaire hedge fund managers and studies the stocks they are buying.
I have built a database of these managers over the past decade, intensely studied every manager’s tendencies, picked through their returns with a fine-toothed comb, and have developed a strategy that produces outstanding long term returns, right alongside the folks that have amassed billion-dollar fortunes executing it. And I only buy or recommend these stocks when they are selling at a 25% to 30% discount to what the billionaire hedge fund managers paid for them.
So let me walk you through an example of how this strategy works.
There is a reason investing is called a zero-sum game.
Consider this:
In the last decade, 99% of all equity-based mutual funds made little or no money. Retail, do-it-yourself traders made no money. Meanwhile a small group of billionaire investors took billions out of the markets.
These investors did not use leverage. They did not short stocks -- necessarily. They simply bought huge stakes in undervalued stocks, and then imposed their will on the company to create instant shareholder value.
It’s a strategy that I follow too. But I don’t have to be a billionaire. And I don’t have to build a huge stake in a stock, nor impose my will on the company. I just copy the billionaires that do.
Piggy-Backing Billionaires
Let’s be honest. You have to have an edge to consistently outperform the general stock market year in and year out. Simply picking stocks with the same formula that every Wall Street analyst has been trained to follow is a recipe for mediocrity. That’s why mutual funds and investment advisors continually give little to no value to their investors.
So how does the average investor win in this game? Well, it’s simple. Follow the folks that have the most power and most influence on Wall Street.
These investors are generally called “activists.”
Activist investors buy 5% or more of a company’s stocks, or controlling interest. Then, they do whatever it takes to create shareholder value. They might use their power and influence to force a company to sell poor performing units or to buy back their own stock, or they might just simply put the company up for sale to the highest bidder.
These are generally not complex actions, but ones that only the biggest and wealthiest hedge fund managers can execute. For those that follow them, they get to go along for the ride -- for free.
How Do You Find Out What They’re Buying?
My investment research firm follows only the best billionaire hedge fund managers and studies the stocks they are buying.
I have built a database of these managers over the past decade, intensely studied every manager’s tendencies, picked through their returns with a fine-toothed comb, and have developed a strategy that produces outstanding long term returns, right alongside the folks that have amassed billion-dollar fortunes executing it. And I only buy or recommend these stocks when they are selling at a 25% to 30% discount to what the billionaire hedge fund managers paid for them.
So let me walk you through an example of how this strategy works.
No positions in stocks mentioned.
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