How a Secretary Built a Fortune

In the May 10th edition of The New York Times, there was an incredible story about a woman named Sylvia Bloom.

Ms. Bloom, who passed away in 2016 at the age of 96, worked her entire life as a secretary.  She also managed to accumulate a $9,000,000 fortune.

What I find so fascinating about this story is that no one who knew her had had any idea that she was worth that kind of money.

The article demonstrates a perfect example of how to build wealth by letting your money compound over many years, as I describe in my book, The Stock Market is for Everyone.

Ms. Bloom did three critical things – things that you must do in order to build wealth.

  1. She paid attention.  When her boss bought shares of companies, she didn’t just place their orders.  She had the presence of mind to piggyback them, and each and every time buy a smaller amount of the same stock(s) for herself.
  2. She lived well below her means.  This is huge.  Most people suffer from lifestyle-creep – meaning that the more we make, the more we spend.  Look, I am in no way saying that we shouldn’t enjoy life.  But we do need to be smart with our spending.  Ms. Bloom packed a bag lunch for work each day, and took public transportation.  These are two excellent examples of ways to keep spending down that any of us can model.
  3. She got rich slowly.  She let time do its thing, allowing her investments to compound over decades.

Warren Buffett was quoted on this week’s episode of The Motley Fool’s Rule Breaker Investing podcast as saying that most of us are interested in getting rich quick as opposed to getting rich slowly.  Ms. Bloom, and the other investors mentioned in this Times article, prove beyond the shadow of a doubt that when your goal is to get rich slowly, you will!

Please share your thoughts on what I’ve written here, and please share this page with others.  If you haven’t picked up a copy of my short investment guide, please do so.  My mission in writing this blog is to see all of us enjoy wealth through stock market investing.

Enjoy your weekend!

Proof That AI is the Future

ttd

Last October, I published a small e-book, titled The Stock Market is for Everyone, because I am a believer in the wealth that investing can provide for everyday, average Americans.

Sales of the book have been slow.  But when I started out, I knew that this was a process, and that it would be a marathon, not a sprint.

One of my goals was to create a Wealthy Joe Fund from proceeds generated by the book, identify ideas to invest in, and share the progress with the general public.

Without a great deal of capital from book sales, I took exactly $50.50 of royalties that the e-book generated and used Robinhood to purchase one share of a company called The Trade Desk (NASDAQ:TTD).

Now I’m sure that most, if not all of you, have never heard of this company called The Trade Desk.  It is not a household name.

What The Trade Desk does is provide a technology platform for companies that want to buy advertising.  It helps advertising agencies manage and display social, mobile and video advertising campaigns.

The company uses a great deal of machine learning to create the most effective advertising campaigns possible, by targeting the ads to the individual’s personal taste.  If you’ve read any of my posts, you know that I am a huge proponent of the future of investing in companies that are going to be leaders in the artificial intelligence (AI) space.

I purchased one share of The Trade Desk because I believe that this company is going to be one of the leaders in artificial intelligence over the next 10 to 15 years.

On Thursday, after the close, The Trade Desk reported earnings.  As you can see from this screenshot, their earnings were so impressive that the stock was up over 43 percent in one session!

If a company’s stock goes up 43 percent in a year, that is a great return.  Going up 43 percent in one day is spectacular!

I believe that this is but a prelude to what’s to come for companies that are on the cutting edge of AI.

My friends, you need to pay attention to what’s happening.  Don’t just take my word for it.  Look at the performance of a company like TTD and draw your own conclusions!

In my next post, I will share a story that epitomizes the importance of paying attention to generating wealth.

Until next time!

51 Million Reasons Why You Should Invest

Yesterday, May 5, 2018, Berkshire Hathaway had their annual Shareholders’ Meeting.

Now, if you’re not familiar with Berkshire’s annual meeting, you need to know that it is huge.  Yesterday’s meeting was held at CenturyLink Center, which has a capacity of over 17,000 people.  They sold out of tickets!

Put this in perspective.  This is a company’s annual shareholders’ meeting, not a Justin Bieber concert!

If you are an investment geek like me, you spent your Saturday morning listening to Warren Buffett and Charlie Munger answer numerous questions about Berkshire Hathaway’s business, the potential trade war, and the future of business in America.

If you’ve never read or listened to any of Buffett’s wisdom, I highly recommend you do so.  His investment philosophy is profound in its simplicity and very easy for the layman to understand and implement: Find great companies, buy them at an attractive price, and never sell them.  That’s it.  That’s his philosophy.

Yesterday, part of Buffett’s presentation included going back to 1942 and looking at all of the disastrous headlines that dominated the news at that time, and over the past 50 years.

In doing so, he wanted to demonstrate that no matter what current events were taking place at the time, investing in America in the long run was going to be profitable.

He used as an example $10,000 invested in the equivalent of the S&P 500 in 1942.  He asked the audience to silently guess what that investment would be worth today.

The answer: $51 million!

We are talking about a one-time investment of $10,000, reinvesting your dividends and not investing a penny more.  It would be worth $51 million today.

In 2018, investing in an S&P 500 or other index fund is 10 times easier than it was in 1942.  What are you waiting for???

You or I may not have 76 years to wait, but your kids sure as hell do.  And I believe that if the last 76 years can produce $51 million, the next 76 could well produce $100 million.

Imagine setting up future generations with a $100 million fortune because you had the foresight to look at the next 76 years, believe that they would be more profitable than the past 76, and invest based upon that belief.  Think of your great-great-grandchildren honoring you because your foresight in investing wisdom has now afforded them a life that may not have been possible otherwise.

Learn more about Berkshire’s annual meeting at https://finance.yahoo.com/news/warren-buffett-charlie-munger-lead-berkshire-hathaways-annual-shareholders-meeting-124006252.html

Until next time!

 

Millionaire Making Trends

I am without a doubt an investment information geek. I can’t get enough of great information that exposes me to future trends that can create tremendous wealth.

I wish to God I had this information 20 years ago, but I didn’t, so…woulda, coulda, shoulda.

Today I caught the last 7 minutes of the San Antonio/Golden State game, which is the only 7 minutes I’ve seen since the NBA playoffs have begun.  Let me make one thing clear: I love the NBA playoffs! This is how obsessed I get with reading articles, watching videos, and listening to podcasts about investment.

When you read as much investment related material as I do, you come across a lot of bad and some good.

Occasionally, you come across information that’s exceptional.  Tonight, I want to share a video I came across recently that falls into that category to me.

The name of the company is ARK Investment Management.  ARK was founded by a woman named Cathrine Wood.

The work done by Ms. Wood and her analyst is exceptional.

She is so ahead of the curve that a few years ago, when Amazon was valued at $240 billion, she declared in an interview with Steve Forbes that Amazon’s opportunity was not factored into its stock price, and that it would ultimately be a trillion dollar company.

Today, Amazon is valued at over $700 billion.

ARK’s prediction was not a lucky guess – it was a combination of great research and the ability to see what others don’t see.

In the below video, Ms. Wood discusses big ideas that she predicts will result in growth.  Now, most of you may find it boring, and that’s OK. I feel it’s my duty, though, to share this information with you.  You do with it what you choose.  Until next time, Joes!

 

Put Your Money To Work!

If you have money in the stock market, you love days like today!

Last night, after the close, Netflix (NASDAQ: NFLX) reported earnings.  It turns out they added 7.4 million new subscribers during the first quarter.  The stock was trading up 7% immediately following that report.

If you were one of the smart people that bought and held Netflix over the last 15 or so years, more power to you!  Unfortunately I’m not one of them.

Today’s action got me to thinking about something: No matter how hard you work, your money can and will always outwork you.

Humans can’t work 24 hours a day. They simply can’t.  However…your money can.

The best thing about investing in stocks is that your money is constantly working hard for you.

Netflix was up 9% today.  Ask yourself a question: Could you increase your income by 9% this week, month or year?  Hell, Netflix made its investors 9% richer in one day!

You will never outwork your money!  So you should stop trying – and just put your money to work.

If you need help getting started – please check out The Stock Market is for Everyone, my short introduction to investing for complete beginners!

Until next time, Joes!

Pay Crypto Attention!

Over the last 20 years of my life, I have been an avid follower of equities, i.e. stocks.  I have seen a number of different examples of how buying and holding great companies can transform your wealth over a number of decades.

As I’ve said in the past, I believe that now is the greatest time in history for the average individual investor.

The access to investment vehicles has never been as diverse as it is today.  Platforms like Robinhood make it super easy for anyone to invest.  There are at least 5 to 7 major investment themes that are at the beginning stages and have the potential to become absolutely enormous.

These themes include artificial intelligence (deep learning), robotics, autonomous driving, cloud computing, genomics, biotechnology, fintech, and cryptoassets.

I would like to take this time to focus a little on cryptoassets, more commonly known as cryptocurrency.

Whenever a new technology is introduced, without fail, it goes through what Gartner has coined “the hype cycle”.

Image result for hype cycle

Now, I will admit that in the beginning, I did not closely follow any cryptocurrencies.  I was, however, very aware of the enormous price appreciation that occurred from 2012 on.

When bitcoin was around $1200, I started to periodically track the price.  What I found was that every big drop in price was followed by a surge, in which the price would exceed that in which it had traded prior to its fall.

In 1997, I was a trader at Spear, Leeds and Kellogg, and we traded Amazon when it went public.  We watched it go from $19 per share to over $300 in a matter of months.  Over the next two years, it would go to $456 per share.

By the beginning of 2000, the Internet frenzy reached its peak.  Everyone and their grandmother were purchasing dot coms.  This was a signal that the bubble was about to burst, which it did.

Although the bubble had popped – and the price of many stocks like Amazon fell 70 percent – the promise of the Internet was still very much alive, as evidenced by the performance of Amazon and other Internet-related companies today.

I see similar parallels in the evolution of bitcoin and other cryptocurrencies.

I knew from experience that when the price of bitcoin hit $19,000, a severe crash was about to take place.  How did I know, you ask?  Not because I’m a genius, or because I’m brilliant.  I knew because a loved one, who had never in her life called me about any investment, called to ask me about whether or not she should purchase bitcoin.

That may not be very scientific, but that’s the way hype cycles operate!

Since bitcoin’s plunge of over 50 percent, I have not heard a peep from anyone in my circle about it or any other cryptocurrencies.  What that tells me is that the frenzy has passed, and now might be the time to take a serious look at the cryptocurrency opportunity.

Most retail investors want to buy when prices are rising.  That’s just the psychology of investors.  But the best time to buy is after the frenzy is over and the price seems to have found a bottom.

I cannot say with any certainty that the price of bitcoin has bottomed.  Neither can anybody else.  However… one thing that I can say, with 100 percent certainty, is that cryptocurrencies are here to stay.  They present an incredible opportunity.  If you are not taking a look at them now, you need to start.

Investing in cryptocurrencies was something I really never seriously considered until recently.  I was watching a program on CNBC called “Fast Money”.  One of the traders, Brian Kelly, recommended a particular cryptocurrency called Cardano.

Kelly recommended Cardano because it has a really well respected development team and it is considered to be a serious threat to Ethereum.

After doing more research, I decided to take the plunge and buy a few thousand Cardano coins.  All told, I plunked down $335 to buy 2261 Cardano coins.

My thought process is that if Cardano reaches even 10 percent of bitcoin’s current value – which would be around $800 per coin – I will make about $1.8 million in profits.

So to wrap up: 95 percent of my investment portfolio will always be in stocks.  But with potential returns like these, it is worth it, in my opinion, to take even a hundred dollars and invest it in various cryptocurrencies.

Please share your thoughts in the comments.  Until next time!

*IMPORTANT NOTE: This post describes my personal experience of investing in Cardano and is in no way a recommendation.  

Do Nothing! Do Nothing! Do Nothing!

Like clockwork, every time the stock market falls by 2 percent or more, CNBC has a special segment devoted to analyzing the day’s “plunge”, “plummet”, or comparable euphemism.

As someone who has followed the market for 20 years, I’ve watched this type of programming as a form of entertainment and curiosity more than anything else.

In some ways, the network, in deeming the day’s market activity worthy of a “special presentation”, can evoke more fear and panic in viewers!

One of the things that bothers me about shows like this is that the market is doing what it has done since the beginning of time and these programmes may present the illusion that today’s activity, or “selloff”, is something that is unusual and out of the ordinary.

Let me start by addressing that point.

Here is a fact: over the last 50 years, the stock market has gone up 2 out of every 3 years.  This means that you can expect a down year 1/3 of the time.  We have not had a correction, or severe selloff, in over 8 years.  This is highly unusual!  If you are new to the market, however, you may not know that.

Now, am I 100 percent certain that a crash won’t happen?  No.  Neither is anyone else.  But what I believe to be taking place is simply the natural order in which markets correct.

The second thing i want to address is the continued bad advice TV personalities give when they tell individual investors to sell, or “trim”, their winners.

I think that mentality is a very shortsighted, “trader” mindset – not the mindset of an investor.

If you sell your winners, you can guarantee that you will never participate in owning the next great long-term investment!

You would never have owned Walmart, Home Depot, Microsoft, Intel, Cisco, Disney, Berkshire Hathaway, and Amazon, just to name a few.

The reason why is that once you’d doubled, tripled, or even quadrupled your money, it may have been time for you to “trim” and “take profits”, according to television pundits.

Initially, you may have felt great because, well, you quadrupled your money!  Now, quadrupling your money is always a good thing – don’t get me wrong.  However…when you look at the returns you left on the table over the next 2 or 3 decades, that profit from quadrupling your money will look like mere peanuts when you realize that your $5,000 investment that you sold at $20,000 is now valued at $5,000,000.

In closing, let me just say this.  I do not have a crystal ball, nor does anyone else.  But I do have history on my side.  And history tells me that the real money in investing comes from holding for many, many years.

So…if you do anything today, Joes and Janes, look for companies to buy.

Otherwise, do nothing!!!