Best of Investing

6 rules I follow when making any investment

This morning as I glanced at the headlines, I had to sit back and wonder-- when did the world get so crazy?

Interest rates across the West are at zero or negative.

Bankrupt governments are selling 100-year bonds with tiny interest rates, while others have convinced investors to pay for the privilege of loaning them money.

What really gets me is that people aren’t laughing. Serious investors are buying up the $10+[...] Click here to continue reading

VIDEO: How to identify the most compelling investments on the planet

[Editor’s note: We have made this content available as an audio and video podcast, but I encourage you to watch the video with the slides.]




https://www.youtube.com/watch?v=wsYe8_FFkoA

In the video I mention a preview issue of our 4th Pillar Investment Service.
Click here to download it.


For most of the past week, we’ve been spending a lot of time talking about trading overvalued paper currency for high quality, undervalued businesses.

Right now,[...] Click here to continue reading

The US stock market is highly overvalued. Here’s why…

The US Stock Market is overvalued
This is really starting to get out of control.

No doubt you’re familiar with the S&P 500, the stock index that measures the performance of the largest US companies.

And as we’ve discussed before, one of the most important benchmarks in measuring whether stocks are overvalued or undervalued is the Price/Earnings, or P/E ratio.

Looking back through more than a century of financial data, the long-term average P/E ratio for the S&P[...] Click here to continue reading

It took me a year to close this deal (but it was worth it)

After a mind-numbing, year-long process, one of the longest business deals I’ve ever been involved with in my entire life finally closed a few days ago.

I couldn’t be more excited.

Through Sovereign Man’s parent company, we purchased a wonderful, Australia-based business that’s been around for over 20 years and is a pretty iconic brand in the country.

Plus, it’s had a long history of profitability and zero debt, so it’s a[...] Click here to continue reading

How to make 13% on your favorite song

Did you know that until June 28, 2016, the song “Happy Birthday” was actually copyrighted material?

Yes, I’m serious. And I’m talking about THAT Happy Birthday, as in the song we all sing at birthday parties.

The original melody was written by two sisters, Patty and Mildred Hill, back in 1893. But instead of “Happy Birthday” they called it “Good Morning to All.”

The Happy Birthday lyrics started appearing in the early[...] Click here to continue reading

My partner found $57 million in a random corner of Asia

Two months ago at the annual Benjamin Graham Conference in New York City, billionaire hedge fund manager Leon Cooperman told the audience that their industry was on the ropes.

“[O]ur industry is in turmoil. It’s very ironic because you’ve got Clinton and Sanders crapping all over us and they don’t realize Wall Street is in the midst of a very serious downturn. . .”

He’s right. Investors are bailing on hedge funds in[...] Click here to continue reading

How I went broke from my own arrogance

In 1999, as an arrogant 20-year old kid who thought he knew everything, I went flat broke.

Actually, I was worse than broke. On top of losing all of my money, I was also in debt more than $22,000… so I had a negative net worth.

That was an astronomical sum for me at the time, and I thought I’d never recover.

I wrote about this a few months ago, explaining how[...] Click here to continue reading

How much gold should you have in your portfolio?

While I was in Mexico for our Global Offshore and Investment Summit in Cancun in 2015, I was approached by Forbes Mexico for an interview on some of the key trends in the global economy as well as internationalization strategies for investors.

You can read the full article here in Spanish, and below I’m reprinting one of the questions on precious metals.

This is understandably a topic that seems to be on many people’s[...] Click here to continue reading

Reconsider holding these Dividend Aristocrat Stocks

On May 23, 1719, one of the greatest financial bubbles in the history of the world kicked off when the Compagnie Perpetuelle des Indes was granted a monopoly by the French monarchy over all the trading rights of all French colonies worldwide.

The company’s stock price quickly soared, from 300 livres per share to more than 1,000 just a few months later.

It was quite a jump. But the enthusiasm continued for more[...] Click here to continue reading

How to legally steal $35,000 from Vladimir Putin

Jim Rogers told me to come here.

We were having dinner a few weeks ago in Singapore, and Jim had just returned that morning from Russia full of optimism for the improving economy.

I had been meaning to come back here anyhow to scout out private equity deals.

But after hearing Jim’s take on Russia having just met with a lot of the country’s business elite, it really lit a fire.

[...] Click here to continue reading

This is definitely an asset that you want to own

I’ve got auditors sitting in my office here in Santiago right now.

No, not those auditors. Not the kind from the IRS that strike fear in the hearts of taxpayers.

The auditors in our office are from one of the big international accounting firms, and we invited them to review our agriculture company’s 2016 financials.

This is something that nearly all large, responsible businesses do in order to provide their shareholders with[...] Click here to continue reading

Warren Buffett: “It’s a huge advantage NOT to have a lot of money…”

Warren Buffet has famously said many times that the vast majority of investors shouldn’t bother picking stocks.

Instead, he’s advised everyone from Lebron James to his own children to simply buy an S&P index fund and hold it ‘for the next 50 years.’

He’s probably right; most people probably should just buy an S&P index fund. But not because it’s a superior investment.

It’s because most people simply aren’t educated about business,[...] Click here to continue reading

How to find companies selling for less than their bank balances

[Editor’s note: This letter was penned by Tim Staermose, Sovereign Man’s Chief Investment Strategist and editor of the 4th Pillar Investment Alert.]

If you know me personally, you know I have a lot of hair.

So when I go get a haircut, I always feel bad that the price is the same for me as for people who are almost bald… so I tip accordingly.

Recently when I went for a long-overdue[...] Click here to continue reading

How to profit from market anomalies and irrationality

Tulips aren’t native to Holland.

The first Tulips were brought over from Istanbul (then known as Constantinople) by a horticulturalist named Carolus Clusius in 1593.

But the scent, shape, and rarity of the flower soon caught on and quickly became a status symbol among wealthy Dutch residents.

As with any popular commodity, the price started to rise, giving way to all-out ‘Tulip Mania’ in Holland during the 1620s and 1630s, during which[...] Click here to continue reading

This is a great way to make a lot of money overseas

I just had a great lunch with a couple of entrepreneurs that our Sovereign Man: Private Investor group funded a few months ago with a $1.5 million investment.

These guys are incredibly bright entrepreneurs, and they co-founded a wonderful business.

Essentially they’re becoming an Alibaba or Amazon.com, supplying business product needs from office furniture to welding equipment to printer cartridges to local Brazilian companies.

The business has been growing rapidly even though[...] Click here to continue reading

The most successful investment strategy in the world

The most successful investment strategy in the world
Education is a BIG part of a having a Plan B… especially when it comes to money.

In light of the obvious risks that we discuss on a regular basis, safeguarding (and growing) our savings is absolutely critical.

Finance can be a little bit scary and seem quite complicated at first.

No one comes out of the womb a financial expert. And they certainly don’t teach this stuff in a government-controlled public[...] Click here to continue reading

This artist still makes $300,000 per year from something he created in 1971

It was early spring in 1971 when an obscure American folk singer wrote a song that would change his life forever.

Sitting at a café in Saratoga Springs, New York, Don McLean scribbled the lyrics to a long ballad about an experience he had as a 13-year-old boy.

It began with a radio bulletin that said that Buddy Holly had died in a plane crash. The boy was crushed. But the man used[...] Click here to continue reading

Still the best-kept secret in the world… but not for long

Growing up in the US I heard the same stories as everyone else about Colombia.

Corruption. Drugs. Kidnapping and ransom. Narcoterrorists. Pablo Escobar.

From the ivory towers in our suburban enclave, it seemed ludicrous why any sane individual would risk life and limb to visit such a dangerous place.

Hollywood drove the point home every chance they had.

When Harrison Ford’s character from the 1994 film Clear and Present Danger went[...] Click here to continue reading

US stocks are now the most overpriced since the 2000 crash.

WSJ: "Dow Industrials Top 10000" & "If This Is a Bubble, It Sure is Hard to Pop"
On March 30, 1999, the Wall Street Journal’s front page headline blasted the good news across the world:

“Dow Industrials Top 10,000”

The day before, the all-important US stock index, the Dow Jones Industrial Average, closed above 10,000 for the first time in history.

It was a major milestone, and investors cheered.

A few investors, however, were concerned.

They felt that US stocks were too expensive, and the entire market[...] Click here to continue reading

How I earned 16% in a single week

I don’t understand Snapchat.

I hate sounding like a grumpy old curmudgeon (I’m only 38!), but it’s true.

If you have kids, you may have seen Snapchat… or if you’re one of our many younger readers, you probably use it yourself.

I understand the basic premise-- people share photos with each other, and then add funny ‘filters’ that make them look like a dog with floppy ears.

Last summer at the[...] Click here to continue reading

Incredible opportunities in a hidden corner of the world

[Editor’s note: This email was written by Peter K, a former McKinsey consultant and securities analyst who now leads the private investment division at Sovereign Man.]

Simon Black sent me to the former Soviet republic of Georgia to spend some time on the ground conducting due diligence on some potential private investments.

Georgia is a fantastic country that Simon has been to several times, and the opportunities here are simply amazing.

It’s[...] Click here to continue reading

Here’s a unique way to make money from the British pound’s historic plunge

Here’s a great example of how, no matter what’s happening in the world, there’s always an abundance of compelling, lucrative opportunities.

Lately the British pound has plunged to historic lows.

The pound recently touched a 31-year low against the US dollar, and an all-time low against the euro.

And earlier this month the pound shed nearly 3% of its value in the course of a single day.

That’s simply not supposed[...] Click here to continue reading

Freedom and financial independence start with just one thing

The year was 1999. I was 20 years old. And like most 20 year olds, I knew EVERYTHING.

Or at least I thought I did.

I was a young West Point cadet at the time, and I’d just received a bank loan of more than $22,000.

This is something that every cadet in his/her junior year is able to do; banks line up to give us lump sum loans secured by our[...] Click here to continue reading

Sun Tzu on Value Investing

August 3, 2015
Vilnius, Lithuania

In 506 BC, the ancient Chinese general Sun Tzu was in command of a vast army of the Wu Kingdom, preparing for battle against the neighboring Chu.

Sun Tzu and his colleagues immediately sensed that the Chu army lacked the will to fight; so the general acted quickly and ordered the main attack to seize the initiative.

His surprise assault spurred a chaotic route of the Chu[...] Click here to continue reading

How to turn $10,000 into $22 million

[Editor’s note: Tim Price, London-based wealth manager and frequent Sovereign Man contributor, is filling in while Simon is en route to Europe.]

As human beings it's in our nature to seek out a great deal.

Whether we bag a steep discount on a new car, or stumble across that hidden gem of extraordinarily cheap airfare, we love the feeling that we're getting a lot for our money.

If you’ve ever found a[...] Click here to continue reading

Four lucrative asset classes beyond the mainstream

Investor
It was close to twenty years ago that I sat in my first personal finance class, learning how to invest money I didn’t have for a “retirement” that seemed inconceivably far away.

It was my first year at the academy. And the government thought it appropriate to ensure that its future Army officers had sufficient acumen to manage their finances.

Their sage advice back then was to buy stocks, hold for 40-50 years,[...] Click here to continue reading

Foreign Earned Income Exclusion: How to earn up to $102,100, tax free

Imagine someone told you this...
I'm going to make you a deal.

For the rest of your life, I'm going to be your silent partner. You're going to pay me 20% of everything you ever make. Forever.

In return, I'm not going to do anything. I won't add value to your life or your business. In fact, I'm actually going to be destructive.

For the rest of your life, I'm going to[...] Click here to continue reading

How I made an extra 15% by buying this stock on a foreign exchange

September 2, 2015
Vienna, Austria

Recently I wrote to you explaining why I’d just purchased shares of Royal Dutch Shell.

Shell is a giant in the oil industry that’s been in businesses for more than a century. And while I almost never buy stocks, they were practically giving this one away.

When I bought Shell, the shares were trading for less than the company’s net tangible asset value.

In other words,[...] Click here to continue reading

Four alternatives to holding your savings in a bank

“Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day.”
Those were the words of famed bond fund manager Bill Gross.

(Gross was actually the first portfolio manager inducted into the Fixed Income Analyst Society’s “Hall of Fame”. And yes, there really is a hall of fame for that.)

Gross wrote that more than $10 trillion in government bonds[...] Click here to continue reading

Foreign Earned Income Exclusion: How to earn up to $102,100, tax free

Imagine someone told you this...
I'm going to make you a deal.

For the rest of your life, I'm going to be your silent partner. You're going to pay me 20% of everything you ever make. Forever.

In return, I'm not going to do anything. I won't add value to your life or your business. In fact, I'm actually going to be destructive.

For the rest of your life, I'm going to[...] Click here to continue reading

This gorgeous penthouse in the nicest part of town sold for $200,000

My friend Zac’s sprawling penthouse apartment is over 3,500 square feet.

It boasts five bedrooms, a library, game room, office, two large terraces, and exceptional views of the entire city.

Plus it’s located in the nicest part of town, just a short walk from all the best restaurants and nightlife.

The price he paid? Just over $200,000.

You couldn’t even build a place like that for so cheap… so Zac essentially[...] Click here to continue reading

It’s now almost impossible to save for retirement

My grandfather was something of a Renaissance Man.

He was a farmer, schoolteacher, fisherman, collector, real estate investor… and one of those guys who always seemed to know how to do everything.

He could take apart an engine, build a house with his bare hands, tame wild horses, treat life-threatening wounds, play the guitar… and he was extremely well respected in his community.

Plus, like many from his generation who grew up[...] Click here to continue reading

One simple reason why gold can still jump 50%

Heike Hoffman is a 54-year old fruit merchant in a small town in western Germany.

She has no formal training in finance. She’s not running a multi-billion dollar portfolio.

And yet, as the Wall Street Journal reported on Monday, “[w]hen Ms. Hoffman heard the ECB was knocking rates below zero in June 2014, she considered it ‘madness’ and promptly cut her spending, set aside more money, and bought gold.”

She’s right. It[...] Click here to continue reading

This surprise asset outperformed stocks and bonds for 27 years

Out here in Eastern Washington’s Yakima Valley are beautiful, seemingly endless fields of abundance and wealth.

But not ‘wealth’ in the conventional sense. I’m not talking about paper money that’s conjured out of thin air by central bankers.

I’m talking about real wealth. Real assets.

Growing up in a lower middle class household where my parents had to work three jobs each just to pay the rent, I never understood what any[...] Click here to continue reading

50 years of data prove Value Investing to be the most profitable investment strategy

Inflation and Deflation
[Editor’s note: This letter was penned by Tim Price, London-based wealth manager and author of Price Value International.]


In his book What works on Wall Street, James O’Shaughnessy analysed a variety of strategies that delivered market-beating returns in the US stock market.

Value investing proved to be one of the most outstanding.

O’Shaughnessy took a variety of metrics – the price/sales ratio (PSR), price/cashflow, price/book and price/earnings – and then collated[...] Click here to continue reading

I’m amazed more people aren’t doing this. But soon, they will be.

Startupfunding
April 11, 2014
En Route to Buenos Aires

Every now and again, the universe presents us with opportunities that are so obvious we have to wonder why everyone else isn't doing it too.

This is how I felt yesterday while attending an invitation-only "Demo Day" for startup companies based in Chile.

As we've discussed before, Chile is a top-20 Startup ecosystem worldwide. Entrepreneurs from all over the planet come to Chile to[...] Click here to continue reading