Book Reviews, Value Investing

More On 100 To 1 In The Stock Market

100 to 1 in the stock market;: A distinguished security analyst tells how to make more of your investment opportunities by Thomas William Phelps. First an excerpt Seeking Wisdom and then a little something on the book.

One of the best ways to learn any domain deeply is to look at the actions of the experts in that domain and clone it…..

Meet Mr. Paul Garrett

Paul Garret was an accomplished man facing retirement in 1956 at the age of 64. He determined to make his last years his best years rather than sit out the rest of his life as so many pensioners do. He wanted to increase his wealth in order to increase his power to help others. He did not have any children so he was not heir-selfish. He decided to increase his wealth by investing in fast growing companies that met his four criteria.

Excerpt from: 100 to 1 in the stock market

1. It must be small. Sheer size militates against great growth.

2. It must be relatively unknown. Popular growth stocks may keep on growing but too often one has to pay for expected growth too many years in advance. Probably to meet this criterion the stock he wanted would be traded over–the-counter rather than on any stock exchange.

3. It must have a unique product that would do an essential job better, cheaper, and/or faster than before, or provide a new service with prospects of great and long-continued sales increases.

4. It must have a strong, progressive, research-minded management.

He had few friends in the Wall Street and in business. Without asking for any confidential information he asked for the names of smaller companies which they liked but were not sure of. He came up with a list of fifty stocks. Then he did his homework on these companies by studying their financial reports. He shortlisted three of them and did field trips and met their chief executive officers. Finally he chose one, Haloid, now Xerox, and invested $133,000 in its stock between 1955 and 1959. On average each stock costed him $1. In 1971 each stock was selling for around $125. His initial investment grew from $133,000 to $16,625,000. His wealth compounded at 32.85% in 17 years.

Excerpt from: 100 to 1 in the stock market

Sounds easy, but Mr. Garrett first had to find the stock he wanted. Then he had to buy it in the face of recommendations against it by people who either knew nothing about, or had pets they liked better, or believed in diversification no matter what. And finally, he had to hold on, and buy more, against repeated “sell” recommendations he began to receive even before the stock had double in price.

The key takeaway is: To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.” Patience is the rarest of the three.

See full article on 100 to 1 in the stock market by Seeking Wisdom

100 to 1 in the stock market: Book Review

100 to 1 in the stock market;: A distinguished security analyst tells how to make more of your investment opportunities, Hardcover – January 1, 1972 by Thomas William Phelps

100 to 1 in the stock market

100 To 1 In The Stock Market – Description

Of all the books on investing that I’ve read over the years, 100 to 1 in the stock market was at once, the most pleasurable and most challenging to my own beliefs. Mr. Phelps spent over 40 years in and around Wall Street and the world of investing. His activities included being a private investor, columnist, analyst, author and financial advisor. His career spanned from just before the Crash of 1929 to the 70?s. In spite of the the rather glamorous title, the book is actually about Buy and Hold investing. Yes, it is true that you could have made a million dollars by buying any of about 350 stocks he mentions if you had bought $10,000 worth and just sat back and watched it grow over time! Doesn’t sound that exciting, does it?

However, I hope you didn’t miss the point that he mentions AT LEAST 350 opportunities to have done this! Most of the companies’ names will be quite familiar to most readers. With the histories of many of these companies available, Mr. Phelps goes back in time to examine what it was about these companies that made their potential as great as it was. How can one begin to see what it takes for a company to do well? Well enough to drive its stock from $1.00 to $100.00 over a period of time? This is the heart of Mr. Phelps’ book. He comes up with common characteristics that show up in many of the stocks he uses as examples. Now, what about his strategy of stock ownership? He says that the best way to preserve the wealth you accumulate from investing is to NOT SELL your stocks! Uncle Sam always wants a piece of the pie when you decide to cut it! Mr. Phelps says that no matter how long it takes, it’s better to pass on stocks to your heirs than it is to sell them too soon!! Insert taken from Book Reviews for AIM Investing.

100 to 1 in the stock market;: A distinguished security analyst tells how to make more of your investment opportunities – Reviews

Of all the books on investing that I’ve read over the years, 100 to 1 in the stock market one was at once, the most pleasurable and most challenging to my own beliefs. Mr. Phelps spent over 40 years in and around Wall Street and the world of investing. His activities included being a private investor, columnist, analyst, author and financial advisor. His career spanned from just before the Crash of 1929 to the 70?s.

In spite of the the rather glamorous title, 100 to 1 in the stock market is actually about Buy and Hold investing. Yes, it is true that you could have made a million dollars by buying any of about 350 stocks he mentions if you had invested $10,000 and just sat back and watched it grow over time! Doesn’t sound that exciting, does it? However, I hope you didn’t miss the point that he mentions AT LEAST 350 opportunities to have done this! Most of the companies’ names will be quite familiar to most readers.

With the histories of many of these companies available, Mr. Phelps goes back in time to examine what it was about these companies that made their potential as great as it was. How can one begin to see what it takes for a company to do well? Well enough to drive its stock from $1.00 to $100.00 over a period of time? This is the heart of Mr. Phelps’ book. He comes up with common characteristics that show up in many of the stocks he uses as examples.

Now, what about his strategy of stock ownership? He says that the best way to preserve the wealth you accumulate from investing is to NOT SELL your stocks! Uncle Sam always wants a piece of the pie when you decide to cut it! Mr. Phelps says that no matter how long it takes, it’s better to pass on stocks to your heirs than it is to sell them too soon!!

“The reason,” he says, “that more people don’t make 10,000% on their money is that they don’t set their goals high enough!” He says that to sell a stock sooner than that is an admission that you have failed at this goal and haven’t done your homework properly! Move over Mr. Lynch! Who wants a Ten Bagger when we can shoot for a 100 Bagger!

Certainly in these times of trading stocks as frequently as heartbeats, his style seems almost radical. After all, who interviews the guy that just buys stocks? CNBC will just ignore you!

Mr. Phelps shows in one example, an investor could have seen the possibilities of a 10,000% return several times during a 40 year span! This same stock returned $100 for every $1 invested if held for 40 years, 36 years, 28 years, 20 years and also just 12 years! In other words, the stock price bounced around alot over the 40 year period. This offered the investor who was shrewd enough to have perceived the possibilities several chances to have caught that 10,000% ride! The company story just got stronger with each price cycle.

We work hard to find stocks that will give superior returns over time. We are willing to risk our money based upon our perception of the company’s future. Mr. Phelps develops very good selection skills. These same skills will benefit all long term investors.

– 100 Baggers Are Real Possibilities!, By T. Veale

100 to 1 in the stock market takes the perspective of the extremely long term investor focused on finding compounding machines in the public markets. It is geared towards the investor who spends the bulk of the investment time on the diligence process rather than trading and who is focused on buy and hold to an extreme (10+ years). The investor who benefits from this book is a rarity in today’s hyper short term focused “investor” aka speculator. This book is worth its weight in gold if one can effectively implement the concepts described here. Although it is conceptually simple, the ideas in this book are more powerful than the other investment concepts in the market today.

– Classic Buffettesque book, By blueridgemountains83

100 to 1 in the stock market;: A distinguished security analyst tells how to make more of your investment opportunities