Stop Being Poor (It’s Not As Hard As You Think)

I grew up poorer than dirt, and I hated every minute of it.

Now, I’ll always be a redneck at heart. I love to jump in the truck and spend a day at the range with my wife and son blowing holes in targets, and I spend a lot of time watching baseball with a nice bourbon at my side.

But now that I’ve figured out the secret of Heatseekers, I’m a rich redneck. And that’s the way I like it.

By now, I hope you’ve watched the crazy video I posted last night. (If you haven’t, it’s right here.)

35,000 people just tuned in to watch this. And I showed them how baseball – of all things – can help anyone identify hidden gems in the market, quit being poor, and grab your chance to start being rich.

It worked for me. And it can work for you, too.

I’ve spent a long time reading, studying, and learning on my own – not in college or at business school, but from books and real-life experience. I figured out early on that Wall Street research departments were writing marketing fluffery and not serious stock picks, and I was on my own when it came to figuring out how all this really works.

Let me tell you a little more about the detective work that led me to a very unconventional fortune…

In Order to Get Rich, I Figured Out You Have to Watch Rich People

It took years for me to solve the “get rich” equation, which, as you’ve already figured out, isn’t “get rich quick,” but more like “get rich slowly.”

I made pretty much all the mistakes you can make along the way. I tried trading in short time frames. I tried the hyper growth stock approach. I drew lines on charts and plotted X and Os on graph paper. I read all the books I could get my hands on and read reports until my eyes bled. I had been poor, and I didn’t ever want to experience that again.

It took some time before I decided to come at this equation a different way and study the people who had actually gotten rich off their investments and not just charging outrageous fees to unsuspecting investors. It became really obvious that the bulk of the people on the Forbes 400 list of wealthiest folks owned businesses, real estate or some type of income-producing assets.

There were just a handful of traders on the list, and it was pretty clear that they all had some sort of specialized knowledge that would be difficult for me to replicate.

When I narrowed my search down to folks who had gotten filthy rich on their skill as outside investors, it all started to become crystal clear. The most successful investors, the ones who made enough money to be in a position to tell the whole world to go take a jump at a rolling donut, did three things.

  1. They viewed stocks as owning a business;
  2.  They held them for a long time;
  3. Finally, they were hypersensitive about the price they paid to own that business. They wanted to buy good businesses at a great price and hold them long enough for time, and the magic of compound returns to make them rich.

Once I knew this, I simply started calling them all. Not all of them answered my questions or even took my call, but a lot of them did. My years as a door to door salesman have made me pretty fearless when it comes to just calling people cold and asking them to teach me what they did to make money.

I talked to professors, private equity investors and hedge fund managers. I took copious notes and studied them constantly. I read the books and papers that these ridiculously rich people told me were important, and I began to crack the puzzle.

It also became obvious that for all this to work for me I had to find a way to take the emotion out of the equation. We are hard-wired to want to avoid loss and seek short-term pleasure. Taking small profits feels really good. It is also the quickest way to the poorhouse. In addition, it’s terrifying to be buying when everyone else around you are selling, but it is also the very best way to get filthy stinking rich. I needed to get rid of the hype and remove the doom and gloom from the process.

That’s when I made the sabermetrics connection.

My Love of Baseball Helped Me Put The Final Pieces Together

Math tells the truth in baseball and in life. Taking all the information from trading, studying and talking to the world’s best investors gave me the information I needed to put together my sabermetrics approach that allows me to ignore the noise and confusion of the markets, rationally discover great businesses, and determine the right price to pay for them.

One of the smartest people I know once told me, “If it can be tested, it must be tested.” When I crunched the numbers I found that the long-term returns from a logical math-based approach to investing works as well as it does in baseball. I’ll just mention that the Oakland A’s with the lowest payroll in baseball made the playoffs this year and the Houston Astros who were built from the ground up using math won their division again. In fact, over the last 20 years, the results of the Heatseekers strategy would put us in the same conversation with some of the best financial minds and ridiculously rich investors.

Think about the last 20 years. We have seen the collapse of the internet bubble, 9-11, the credit bubble, the credit crisis, four Presidents and four Federal Reserve Chairs.  Enron and World Com blew up, and Long-Term Capital came close to blowing up global financial markets. The internet really came into its own, and every day we are hit with a constant barrage of tips, stores, and hype that can leave us dazed and confused if we take it seriously. Through it, all the core Heatseekers strategy has ground out superior returns.

If you had bought an index fund as all the talking heads suggest you should, then today you have almost 2.5 times your original investment. Investors following a “Sabermetrics” strategy could have made up to 40 times their money. Sticking with the math and ignoring the stories can pay off handsomely.

In other words, this strategy is designed to make people rich.

If you’re one of those 35,000 people who tuned in last night – welcome to Heatseekers and thanks for being part of the adventure. I promise you I am going to do everything I can to make it interesting, fun and wildly profitable.

And if you haven’t watched yet, what on earth are you waiting for? The video’s still up. Watch it here.

To the Max,

Tim Melvin

4 Responses to “Stop Being Poor (It’s Not As Hard As You Think)”

  1. I’m doing fairly well. Iv bought a chunk of all of your recommendations and two tiny bank stocks. I have a lot of money in COHN and it’s down a bit. Since I believe in the company I think I should by some of it cheaper. However it has reached my limit of what I will allocate to one stock. What should I do?

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