If You’ve Got It, Flaunt It
- WEALTHY: Average Joe Investor vs. the Institutional Investor (Andrew Gordon)
- HEALTHY: A drug-free approach to blood sugar control (Jon Herring)
- WISE: Mark Twain on the matter of size
ALSO IN THIS ISSUE:
- 3 things you need to know about making sales to a business (Bob Bly)
- "Shocking" news (Michael Masterson)
- Add "desultory" to your vocabulary
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"It’s not the size of the dog in the fight, it’s the size of the fight in the dog."
Mark Twain
If You’ve Got It, Flaunt It
By Andrew Gordon
In this corner, stands Average Joe Investor. He travels light, accompanied only by his spouse and maybe a couple of kids. As far as market muscle goes, he invests a few thousand bucks here and there. He knows the difference between a jab and an uppercut, but is not highly trained or skilled in either "sweet science" - boxing or investing. He has high hopes of taking home the "purse" in 2007, but deep down suspects he may be overmatched.
Standing in the opposite corner is Average Institutional Investor. He customarily brings millions to the table. He’s been training for 2007 for years. He has software up the wazoo, along with an entourage of researchers and market analysts. He can tell you what the market did two years ago, two months ago, two days ago, and two seconds ago.
You, my friend, are the 90-pound weakling in this scenario. As an investor, you go up against the heavyweight institutional guys every day. How can you possibly stand a chance against them? They have the skills, training, resources, and money.
You’re lucky if you leave the ring with your shorts on, right?
You’d think so. Yet we know that institutional investors don’t always do so well. We’ve seen hedge funds fail spectacularly. And we’ve heard of individuals who somehow do very well, despite the apparent long odds. What could be in their toolboxes that allows them to match up with the big boys? I’m willing to bet it’s not anything you don’t have. But if you’re unaware of the advantages, you’re denying yourself a fighting chance in the marketplace.
If you want to make more money this year than ever before, you need to start using these three tools.
1. Long-term outlook
I read a study showing that people have trouble investing beyond a three-year outlook. So if you know there’s going to be, let’s say, a water shortage in two or three years, you’d be inclined to invest in the water industry now. But you wouldn’t be so inclined if the shortage will occur in four years. It’s only one study, and more research needs to be done on the subject, but it does have the ring of truth.
For hedge funds, three years is an eternity. These "happy-go-lucky" funds aren’t as opportunistic as you think. Most get three months, at best, to show a profit. If they’ve lined up a sure thing that isn’t expected to pop for six months, forget it. They’re on the outside looking in.
Not you, though. You can and should invest for the long term. Even confirmed traders and speculators should balance out their portfolios with long-term investments.
The only qualification you need to invest for the long term is a willingness to wait.
For example, I know a gas company that committed to some unwise hedges several years ago. But these hedges come off the books in 2008. And when they do, the company’s earnings are sure to spike. I recommended investing in this company back in 2005, when it was dirt cheap because investors weren’t willing to wait until 2008 to see their investment pay off, even if the payoff was big. Those who took my advice got an amazing bargain that hedge funds couldn’t touch, no matter how much they wanted to.
2. Thinking small
With your thousands, you can invest in companies that would be too small for institutional holders with their millions (or billions). These largely undiscovered companies aren’t on the radar screens of major investors, and they usually have few, if any, analysts covering them. So their prices haven’t been bid up by the big boys. Thus, you can be one of the early investors who get in while the price is low … and then enjoy the ride up the charts.
These companies may have a less notable track record than their larger peers. Many have been around for at least two years, yet remain too small for many institutional investors. Evaluate them as you would any other company, and invest if everything looks good.
Once they get big enough, analysts will start tracking them and the institutional guys will eventually jump on board. When that happens, their share prices will start to surge.
3. Deep research
Thanks to the Internet, you can learn plenty about a company in a matter of hours. Basically, the same information that is available to professional analysts is a click or two within your reach.
Okay, many institutional investors actually visit companies that catch their eye. They get invited as part of a group or they come alone. Warren Buffett and his colleagues get to know the leaders of a company up close and personal. And when I’m researching a company, I talk to its CEO and/or other high-level execs.
While you don’t normally have the same level of access as some pros, you’re a telephone call or e-mail message away from communicating with any company’s investment office. You can read the annual reports, quarterly reports, and SEC filings. You can listen to earnings teleconferences and go to shareholder meetings.
I love uncovering the dirty little secrets of a company, but that’s just me. Doing all this research may not be your cup of tea - but it’s important for you to know that you can do it. And doing at least some digging is as easy as pie.
In fact, if you invest in just a handful of companies rather than the dozens that analysts often have to follow, you have the opportunity to get to know those companies better than the analysts. It takes only a little time, effort, and skill to get the lowdown. The advantage is yours … if you want to take it.
It’s also not impossible to beat the big boys on their own turf - to rush your money in and out of trades, speculate on small price movements, and leverage your money with option trading … as long as you’re experienced and very good at what you do.
Don’t just assume that institutional investors hold all the cards and you hold none. Not only is it not true, it could prevent you from appreciating strategies where the investment opportunities play to your strengths and thus increase your chances of doing just as well, if not better, than the professionals with the quick jab and monster uppercut.
[Ed. Note: Andrew Gordon, ETR’s financial expert, is the editor of our new investment service, INCOME. Each month, he uncovers specific stocks that promise safety (first and foremost), along with much-higher-than-average profit potential.
The above article originally appeared in ETR’s Investor’s Daily Edge.]
“I stumbled my way into a limitless source of cash - that was virtually un-tapped!”
Real estate investors are often surprised to find that mortgage brokers, hard-money lenders and the typical “creative financing” techniques used are actually the hard way to go about financing their residential and commercial deals.
The fact is, there’s a much easier way.
- It doesn’t require good credit or employment history
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- You can actually get some of your profits when you buy instead of having to wait until the sale.
I’m sharing the secrets of this inexhaustible cash-source with a limited number of ETR readers during a private teleseminar. There is no charge to attend, but you must sign up now to be included, as space is limited.
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Editor, Main Street Millionaire
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The Difference Between Business-to-Business and Consumer Marketing, Part 1
By Bob Bly
Is there a difference between selling to business and professional buyers vs. the general public? Absolutely. And to make sure your sales and marketing efforts have the most powerful effect, you should know what those differences are.
There are six key factors that set the business-to-business buyer apart. Here are the first three. (I’ll have three more for you tomorrow.)
1. The business buyer wants to buy.
Most consumer advertising offers people products they might enjoy but don’t really need. How many subscription promotions, for example, sell publications that the reader truly could not live without? If we subscribe, we do so for pleasure - not because the information offered is essential to our day-to-day activity.
But in business-to-business marketing, the situation is different. Indeed, all business enterprises must routinely buy products and services that help them stay profitable, competitive, and successful.
2. The business buyer is sophisticated.
Business-to-business marketing talks to a sophisticated audience. Your typical reader has a high interest in - and understanding of - your product (or at least of the problem it solves).
In fact, the reader usually knows more about the product and its use than the person writing the ad. It would be folly, for example, to believe that a few days spent reading about mainframe computers will educate the copywriter to the level of his target prospect - a systems analyst with six or seven years of experience.
The sophistication of the reader requires the business-to-business copywriter to do a tremendous amount of research and digging into the market, the product, and its application. The business audience does not respond well to slogans or oversimplification.
3. The business buyer will read a lot of copy.
The business buyer is an information seeker, constantly on the lookout for advice that can help him do his job better, increase profits, or advance his career.
Don’t be afraid to use long copy in mailers, ads, and brochures aimed at this market. Prospects will read your message -IF it is interesting, important, and relevant to their needs. And don’t hesitate to use informational pieces as response hooks for ads and mailers. The offer of a free booklet, report, or technical guide can still pull well - despite the glut of reading matter clogging your prospect’s in-basket.
[Ed. Note: Bob Bly is a popular Early to Rise columnist, self-made multi-millionaire, and the author of more than 60 books. He is also the editor of ETR’s Direct Marketing Masters Edition - a program to help you start your own successful direct-mail business.]
The Positive Effect of Vinegar on Blood Sugar
By Jon Herring
Numerous studies have shown that vinegar can help lower your blood sugar, even after a high-carb meal.
In one recent example, researchers assembled a small group of subjects. One-third of them had been diagnosed with diabetes, one-third were pre-diabetic, and one-third had normal blood sugar. The subjects all drank either two tablespoons of vinegar or a placebo prior to eating a high-carb breakfast. A week later, the same subjects had the same breakfast, but with the opposite drink. The researchers measured their blood sugar and compared the results.
What they found was that all the subjects had lower levels of blood sugar when they drank the vinegar. The blood glucose levels of those who were pre-diabetic were reduced by almost 50 percent in the first hour after the meal (as compared to when they drank the placebo). Those with diabetes saw their blood sugar levels drop by 25 percent - results as good as or better than what can be expected from Metaformin, a popular diabetes drug that can induce unpleasant side effects.)
Not too interested in slurping down a couple of tablespoons of sour vinegar? Not a problem. Even dressing a side salad with vinegar and olive oil will do the trick. Researchers have found that just about any food with vinegar can produce a similar effect. In a Swedish study, for instance, pickles slowed the absorption of sugar into the bloodstream, while cucumbers did not.
Notes From Michael Masterson’s Blog: A New Tool for Citizen Vigilantes
Ordinary citizens will be able to buy hand-held stun guns pretty soon. Taser International recently unveiled a new model that will cost only $300 and will shock its victim into immobility for 30 seconds.
To make the new torture devices seem friendly, they have an ergonomic design (for an easy grip) and come in cheerful pastel colors. 120,000 Americans currently own one of Taser’s larger models, and the company expects to sell an additional 200,000 baby tasers this month.
Critics are afraid the new devices will be used irresponsibly. "It’s a terrible idea," said Larry Cox, executive director of Amnesty International. "I can’t think of any reason you would want these out in public."
I mentioned this news to JB, who said his wife would be sure to buy one as soon as he told her about them. "She carries mace when she walks the dogs," he said. "This will make her really happy."
Taser International recommends that users keep them "on their nightstands," but it doesn’t take much imagination to see them being carried in pockets and handbags. Can you imagine what will happen if these things become commonplace? Think about all the arguments that will be "settled" this way:
Shopper One: "Hey, don’t cut in line!"
Shopper Two: "Sorry, I’m running late."
Shopper One: "I warn you. Get to the back of the line!"
Shopper Two: "What you going to do about it if I don’t?"
Shopper One: "This is what I’ll do, you sonofabitch!" Zap.
Checkout Clerk: "Someone … call an ambulance!"
- Michael Masterson
[Ed. Note: To read more of Michael’s unedited, uncensored (and sometimes unexpected) ruminations, check out his blog here.
Start Making Money Today
Interested in getting a nice little side-business going on the Internet? Or maybe even from your living-room table?
But you don’t have too much money, you don’t have too much time, and you’re not exactly Bill Gates when it comes to technology. Sound familiar?
A lot of people are in the same boat. The good news is that ETR has heard you. And now we’ve done something about it…
We’ve asked our colleague Marc Charles to be on the lookout for profit opportunities that can be run from a kitchen table, your desktop or out on the road.
Criteria? They’ve got to be inexpensive, easy to start, and still have great income potential, but without a lot of red tape.
They say when you’re first getting your feet wet with a side-business, the most important dollar to make is the first one. Well, Marc is an expert at taking beginning entrepreneurs and showing you how to make that first buck. He knows, because he’s done it dozens of times for himself, his family and his friends.
If you’ve been dreaming about starting your own business … now you can get started for about the price of 2 lattes.
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Word to the Wise: Desultory
"Desultory" (DES-ul-tor-ee) - from the Latin for "leap" - means jumping from one thing/subject to another in a disconnected or aimless way.
Example (as used by Henry James Jr. in the November 1880 issue of The Atlantic Monthly): "The shadows on the perfect lawn were straight and angular; they were the shadows of an old man sitting in a deep wicker-chair near the low table on which the tea had been served, and of two younger men strolling to and fro, in desultory talk, in front of him."
[Ed. Note: Become a more persuasive writer and speaker … build your self-confidence and intellect … increase your attractiveness to others … just by spending 10 VERY enjoyable minutes a day with ETR’s new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007