מאמר מחכים

Dear Fellow Investor,
Let me ask you a question…
If you want to win a crowded race, does it make sense to position yourself
in the thick of the pack? Or should you look for a spot where the field isn’t so
crowded? Where your competition is scarce, or maybe even asleep?!?
That’s what this Special Opportunities FREE bundle is all about…
This guide, the videos I’ll send you over the next few days, and the live
chat I’ll host on Monday, March 8 are about grabbing every investing
advantage we can get our hands on!
We’ll unflinchingly examine the companies others ignore, or are scared of.
We’ll go where the crowd “sees” only high-risk penny stocks, ugly ducklings,
and hopeless businesses... and we’ll return with micro-cap moonshots, inevitable
moneymakers and magnificent turnaround stories…
We’ll abandon the big, name-brand stock chase. Because that pursuit nets
average gains, at best. Instead we’ll go where others don’t, face less competition,
increase our odds -- and rake in some extraordinary gains.
To get started, I’d like to introduce you to a handful of my personally
proven “Special Ops” investing secrets. I’ve used these strategies over
the past 7 years to beat the return of the market by more than 10% PER
YEAR… and more than 300% overall.
And once you’re a little more familiar with how I invest, I’m going to invite
you to join me on a quest for the kind of profits 99.9% of investors can only
dream about!
You’ll get all the details as we go…
Tom Jacobs
The Motley Fool
“Special Ops” Investing Guide
How to earn extraordinary profits from ugly-duckling,
deep-value opportunities… special situations, like spinoffs,
mergers, turnarounds… and explosive micro-caps!
Meet The Motley Fool’s
special situations and deepvalue
wiz, Tom Jacobs…
Perhaps you’ve seen Tom on CNN,
CNBC, Fox, or Bloomberg. Or maybe
you’ve followed his recent smalland
micro-cap value, and special
situations recommendations and
pocketed returns like 275% in 32
months… over 185% in 16 months…
247% in 8 months… and more than
465% in 10 months…
But did you know Tom Jacobs began
investing at age 12 with two shares
of Ford? He was a business owner
at 15... taught in Africa and South
America after undergrad and grad
degrees at Cornell… then practiced
law after getting his J.D. at the
University of Chicago…
In 2000 he came to The Motley
Fool and found himself drawn to a
unique sort of opportunistic value
investing. He’s spent the last decade
honing his valuation skills. And
sharpening his eye for the sort of
special opportunities other value
investors routinely miss…
Tom has shown a remarkable knack
for making his readers money in
the sort of stocks you simply aren’t
going to hear about in many places,
and certainly nowhere else at The
Motley Fool. In fact, his total portfolio
has returned 4.5 TIMES the
S&P 500 over the last 7 years!
Outpacing the market average by
10 percentage points a year!
2 Motley Fool “Special Ops” Guide
Special Ops Secret #1:
BE LONG-TERM IN A SHORT-TERM WORLD
It is difficult to succeed or to maintain your fruits of success if you do not look
long-term. Do not get me wrong -- be it long- or short-term, profit is always
good. But short-term profit is almost too much fun, too many people like it -- as
a result, the scene is usually crowded and competition is keen.
--Victor Li, son of billionaire Li Ka-shing (Asia’s Warren Buffett)
In a recent issue of Forbes magazine, Whitney Tilson points out the average holding
period these days for an NYSE stock is just 6 months. Thirty years ago, the average
holding period was 5 years. Meaning, the great majority of investors today are chasing
near-term dollars. Creating a glut of short-term competition, and a near-sighted market.
That being the case, doesn’t it make sense to take a longer-term view and zero in on the
opportunities that are simply out of focus for so many investors and money managers?
Let’s think about it another way. Imagine short-term investors seeing a clogged street,
and they decide to take the “long way around.” At the same instant, we have a view
from above (maybe with some new GPS device). We can see it’s a routine traffic snag
that’ll clear out quickly, and take a lot less time than the alternate route. We make an
unconventional choice, and we’re soon rewarded and get where we’re going.
It’s the same with investing. When small cap Key Technology (Nasdaq: KTEC) had a
couple of slow quarters, most investors decided this company’s customers didn’t want
its products anymore. However, if you took a longer-term view, as I did, you would’ve
recognized these slow quarters as a normal business snag between product introductions
and upgrades.
You could say I had a pretty good “big picture” view of this business. I recognized
this company’s investment in new products and upgrades would lead to increased cash.
I scooped up shares when most investors were looking elsewhere, and held on for an
almost 200% gain!
One thing you’ll notice about these secrets, they all share a common theme. And here
it is: Be where others aren’t. It’s as simple as that. And it’s the key to earning these sorts
of gains. Take a look…
Special Ops Secret #2:
SIZE IS THE ENEMY OF RETURNS
If I was running $1 million today, or $10 million for that matter, I’d be fully
invested. Anyone who says that size does not hurt investment performance is
selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed
the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a
huge structural advantage not to have a lot of money. I think I could make you
50% a year on $1 million. No, I know I could. I guarantee that.
--Warren Buffett, June 25, 1999 (BusinessWeek)
Did Buffett say it’s a huge advantage to NOT have a lot of money? You bet he did. It’s the
important edge we have over all the giant institutions and money managers.
In the early days, Buffett used this natural advantage and scooped up smaller, less-liquid
stocks. Again, he looked where others weren’t looking. And he made a lot of money for his
Motley Fool “Special Ops” Guide 3
early partners investing this way. In fact, in Omaha today (where Buffett is from) there are
over 30 families worth over $100 million EACH!
Pretty compelling evidence that starting small with stocks large investors can’t buy, is an
important early step to building a lasting fortune. I took just such a step not too long ago…
Big investors couldn’t buy shares of small mutual fund and asset manager U.S. Global
Investors (Nasdaq: GROW). But with thousands -- instead of millions -- to invest I was
able to take a significant stake in a company with a $120 million market cap.
U.S manager U.S. Global Investors (Nasdaq: GROW): Jan 06 – May 08
This stake zoomed up 247% -- over a triple in just 8 months! Imagine how this
could jump-start your portfolio and put you on the path to real wealth.
It’s a scenario that built fortunes for Buffett’s early investors: Pediatrician Carol Angle
began with $40,000 and today is worth over $300 million… David Gottesman piled up
$368 million… Ernest Williams and his family grew their investment into $250 million…
Early investor Malcolm Chace piled up $850 million all by himself… and the list goes on.
The important part in all this for you is you really can make an unbelievable amount of
money investing this way. And you’d be surprised how you can do it without abandoning
conservative investment values. For proof, consider the next secret we’ll talk about…
Special Ops Secret #3:
KNOW VALUE, NOT PRICE
Price is what you pay, value is what you get.
--Warren Buffett, CEO, Berkshire Hathaway
Sure, I crunch numbers and value companies. Nearly all value investors use a handful of
well-known calculations and analytical tools like enterprise value, owner earnings, assets,
and more.
However, there’s an even deeper layer of analysis that often means the difference between
making a fortune and simply plodding along. And it involves applying discerning judgment
toward things like management, competition, and competitive advantage -- because these are
what really count. Not simply the company’s share price.
This means sometimes a penny stock -- a stock selling for less than $5, say -- can be
an excellent value investment. Tearing apart the financials and listening to management
might tell us that this low-priced stock is actually less of a risk and offers more potential
than something much bigger.
And here’s another question: Can you spend accounting profits? Of course not.
2006 2007
$10
$20
$30
bought
sold
4 Motley Fool “Special Ops” Guide
All that matters is the cash the company cranks out. When I bought Key Technology
(the company I mentioned in Secret #1), it wasn’t turning out any significant or consistent
earnings-per-share for those among us who only crunch numbers. But it sure was printing
dollars of free cash flow for owners.
By looking at the cash flow statement, not the EPS, and carefully evaluating management
and competition -- I found a huge value and profited almost 200%.
But more important are the gains yet to come. That’s why after you’ve soaked up some
these lessons I’m sharing here, and in the video presentations I’ll send, I urge you to make
a note of the live chat I’m hosting on Monday, March 8th. It’s your opportunity to ask
questions and pick my brain about the best “Special Ops” now and in the coming months.
Special Ops Secret #4:
BUY UGLY STOCKS
We buy ugly houses.
--highway billboard
Why do you see those signs? Because those house buyers know if they pay a rock-bottom
price and renovate smartly, profit awaits. And they know if they only buy “pretty” houses,
they’ll pay a premium and profits will be much harder to come by.
In similar fashion, “Specials Ops” investing is sometimes about buying “ugly” stocks.
The kind most investors avoid because they take real work to figure out…
Most investors would prefer to simply shuffle along when faced with scenarios that
appear too complex, with too many moving parts that could wear out or blow up. But what
if we could see below the complexity, to a far simpler situation?
Now lean in, because I have a confession to make: I love these challenges! I’m talking
about rolling up my sleeves and figuring out if management has a plan, for example, and
if that plan makes sense... I’m talking about making real money buying what others won’t,
and buying it cheaply -- and holding on until the market catches up!
Here’s just such a scenario… Uranium prices languished for years while antinuclear and
environmental sentiment kept demand low. In the U.S., no one wanted nuclear power, and
Chernobyl’s memory nixed nuclear expansion in Europe.
Declining worldwide exploration and production left all the marbles with the largest
producer, Canada’s Cameco (NYSE: CCJ), and even when China announced a massive
increase in nuclear plant construction, nobody bought. Uranium was the ugly duckling.
I bought Cameco with uranium prices in the high teens per pound. Then after uranium
zoomed into the $100s per pound, I sold for a 267% gain in less than three years. Just
another in a long string of gains I’ve made investing in “Special Ops...”
Special Ops Secret #5:
WATCH THE FLOOR, NOT THE CEILING
If you were going to buy a business, would you want to pay a low price or a high price?
Now ask the same question if it were the only business you could buy in your whole life:
Do you want to bet the farm on a long shot at the track or do you want to take a chance at
profits with protection against losing everything?
Buying stock is buying a company. Think accordingly. When I look at a company, I want
Motley Fool “Special Ops” Guide 5
to know how low it can go. If it can’t drop much lower, then I can wait for profits without
worry.
When I bought Steak n Shake, a once-famous brand that management had drained of any
worth for over a decade, I calculated that the real estate was worth twice the price -- even
in a recession -- because the company was still selling average locations at those prices.
You didn’t have to be a genius… you just had to focus on the floor. It was only real
estate, not a new biotech drug targeting a specific molecular target, for crying out loud!
With that downside protection, risk came cheap. Today, those shares are up over three
times, and there’s still a great future to come --and the turnaround risk is gone.
Ditto with uranium producer Cameco I just told you about. Uranium prices could rise
and fall, but it had a steady business producing electricity and mining gold to cushion the
latter. I could wait without fear of losing everything.
There is always risk, for sure, but if you buy with a margin of safety -- focus on the floor
-- your profits cost you less and are therefore worth much more. And it’s just as important
to remember that every bubble eventually bursts…
Special Ops Secret #6:
TREES DON’T GROW TO THE SKY
“You pay a high price for a cheery consensus.”
--Warren Buffett
Bull markets and the sort of suspended disbelief that fuels them never last forever. So
whenever someone proclaims a “new era” of some kind or another, don’t walk away --
RUN! Because the average investor buys into the stock market during times of maximum
excitement. Often just in time for it to expire, leading that same investor to sell at maximum
pessimism. That’s emotional investing, and it leads to poverty. Don’t be average.
When the bulls are running -- whether in 1929 or 1999 or 2007 -- you will pay a high
price for whatever growth occurs.
When I bought shares of small oil and gas producer ATP Oil & Gas, I watched it catapult
over the next year. When it started appearing as a top stock for 2010 -- everyone else
wanted it -- I was happy to sell, gaining almost 500%!
ATP Oil & Gas: Jan 09 -- Present
By taking profits more and more, rather than simply buying and holding these stocks,
you’ll find you have more cash to redeploy. Cash you can use to pounce in moments of
crisis and opportunity. I’m talking about ‘special opportunities’ in the coming weeks and
months. And I’m looking forward to discussing these with you in the live chat on Monday,
March 8…
$10
$5
$15
$20
$25
$30
10/08 1/09 4/09 7/09 10/09 1/10
bought
sold
6 Motley Fool “Special Ops” Guide
And telling you about my new service, Motley Fool Specials Ops, which launches the
very next day, Tuesday, March 9th. In fact, that’s why I’m sharing these strategies with
you. This report and the videos I’m going to send you are a primer for something much,
much bigger, as you’ll discover in a moment.
But first, another “Special Ops” secret…
Special Ops Secret #7:
HOWEVER, TREES DON’T GROW UPSIDE DOWN, EITHER
“Buy when there’s blood in the streets.”
--Variously attributed to Bernard Baruch, John D. Rockefeller, and Baron Rothschild
Whenever the bears are not only growling, but bellowing, when all hope is lost, when
panic has led to blood in the streets -- be a buyer. This is when you can buy dollars for
pennies. In fact, when others act with extreme emotion -- fear, panic, desolation -- you can
buy a $100 bill for a dime!
Why? Because just as stock markets go wild and crazy on the upside, defying all rationality
and putting values on stocks that require blue skies for the rest of eternity, they
overshoot on the downside, where fear and panic lead everyone to think, This is the Big
One! Get out! They end up buying high and selling low.
I advised my readers from fall 2008 to spring 2009 to buy, buy, buy. I didn’t know it was
the bottom --nobody did! But I knew that prices were so cheap they were priced for trees
to grow upside down.
That’s when it made sense to buy Sears Holdings. Sure, Sears today is not a strong retailer,
but during the panic, everyone thought it would die a horrible death, pricing the stock
as if it would hardly ever sell another washer/dryer or Lands’ End shirt. The schadenfreude
crowd crowed that its chairman, successful hedge fund manager Eddie Lampert, had lost
his touch.
But it didn’t matter. The panic had driven Sears’ price so low that a buyer could buy the stock
and own real estate worth many times more -- just as with Steak n Shake. Even if biology were
repealed, this tree was not going to grow upside down. I almost tripled my money in six months.
And, good news, you don’t have to wait patiently for a decade or more for this. You will
live through a decent panic often -- not just every five or 10 years -- and you can find panics
in individual stocks every day. Just dive into the dumpster of the day’s biggest losers. They
often contain some gold.
Special Ops Secret #8:
SWITCH, DON’T SELL
Fear of selling to buy something better is like paying full price when there’s a
clearance sale on the same item next door.
I grew up with a catchy TV commercial in which a loyal brand adherent proclaimed, with a
black eye, “I’d rather fight than switch!” We say, we’d rather switch than fight.
Never think of what you paid for a stock. Think of only one thing: Is this investment,
today, as good as or worse than an alternative? If worse, switch. Get used to always
comparing the investments in your portfolio. Be ruthless. It’s not trading.
So here’s what you do. When prices fall and the clearance signs spring up all around you,
Motley Fool “Special Ops” Guide 7
what you own may not be as great as what’s come on the market. Switch, don’t fight!
Investors fear sales for many reasons, some better than others. It’s sensible to fear tax
consequences and transaction costs, but this isn’t day trading. The Motley Fool Special Ops
strategy of small-cap value and special situations has higher expected long-term returns
-- many percentage points per year over time -- to make up many times over for the effects
of higher turnover.
Now, among the wrong reasons not to sell are the fear of being wrong or not wanting to
sell at a loss. These are just two things that prove it’s important to tame psychology and
emotions. But think it over.
Today’s deal may not look so good tomorrow. Switch.
From later 2008 through spring 2009, I advised investors repeatedly and loudly to do
this -- to buy, buy, buy and switch, switch, switch. As stocks dropped, this gave us the
opportunity to buy, but we had to sell some of our stocks to do so. We shaved some large
positions and completely sold others. This allowed us the cash to buy greater values, such
as ATP Oil & Gas, which rose over SIX TIMES from our March 2009 buy.
Keep in mind, you really can make an unbelievable amount of money investing this way. And
as I mentioned, you can do it without abandoning conservative investment values. But there’s an
important difference between what I do and what more traditional large-cap-type value investors
tend to do. And there’s an important difference between Motley Fool Special Ops and the other
services The Fool currently offers, as you’ll begin to see.
Special Ops Secret #9:
PUT YOUR EGGS IN ONE BASKET, AND WATCH THAT BASKET
The principle of diversification is a good one, because you don’t want to invest everything
in one place. You never have all the information about a company or the future, so
diversifying lets you counter information risk.
But the truth is that there are limits. No investor can really know more than a dozen or
so companies well. So do you want to own 50 companies you don’t know at all (investing
by committee or ignorance), or do you want to own a smaller number (not in the same
industries) you know really, really intimately? A focused portfolio is actually less risky if
you know each company well.
Yes, you will have ups and downs, but volatility is not risk. In fact, it’s your friend, because
market emotion gives you the chance to own better companies at better prices.
In fact, I court that volatility by going a step further, concentrating my cash in my best ideas.
You might find sometimes as much as 50% of the portfolio in the best handful of ideas. But the
flip side is that if you can handle the swings, when one highly concentrated, focused egg wins,
it makes the portfolio a big winner, too. When a 1% position doubles, it’s a yawn. When a 10%
position does, it’s major.
When my investments in Steak n Shake, Sears, uranium company Cameco, food quality software
company Key Technology (Nasdaq: KTEC), ATP Oil & Gas, and small asset manager U.S.
Global Investors doubled, tripled, and more -- portfolio returns grew because each was a big bet.
I’m looking forward to discussing these and others with you a little more in the live
chat on Monday, March 8. And of course, my new service, Motley Fool Specials Ops
which launches the very next day, Tuesday, March 9th.