Eduardo Saverin was a Harvard bachelor. He wasn't your typical A student; however,
he was an extrovert with the talent to connect with people, so his roommate offered him to join
his startup by investing 15K dollars and becoming his business partner. Eduardo didn't hesitate and
immediately jumped on board. However, the two friends couldn't go along, and Eduardo
was kicked out of the company. But it wasn't all bad news. As the company went to become thriving,
which is today known as Facebook, his 15K dollar investment turned into over 10 billion dollars.
Sometimes it's just about being in the right place, with the right people, and having the
courage to take some risks. However, that's not always the case. In January of 2021,
when hedge funds miscalculated their moves and bet against GameStop,
thousands of retail investors jumped in to grasp the opportunity but were left
with their savings evaporated, as the stock crumpled and retail investors lost everything.
Looking at these two examples, it seems like investing is more like gambling. If you are lucky,
you will make millions, maybe even billions. If you are not, then you are destined to fail.
However, Peter Lynch has proved the absolute opposite. Over the 13 years he has managed
fidelity investments, his average return was 29.2%. That's more than double the sp500 index,
which represents the 500 largest US companies. He turned 18 million to
over 14 billion dollars in just 13 years and became the most successful investor in history.
But how did he do that? What are his investment strategies? can anyone
follow this strategy and turn thousands into millions and millions into billions?
We will answer all of these questions and many more, but before we do that,
give this video a thumbs up, and let's dive in.
Looking at all these graphs, investing seems complicated. When you want to invest, you must
analyze financial statements, read reports, understand strategies, and make an intelligent
investing decision. However, investing is often much easier than many people presume. In fact,
hedge funds often make it difficult to push rich people to invest with hedge funds since hedge
funds charge an extremely high commission even though they barely beat the market.
In fact, you can have a much deeper knowledge of a company than hedge funds.
Hedge funds often look at a wide range of companies, analyze multiple stocks,
and often invest in companies that are proven to be good investments. But you, on the other hand,
can concentrate on a few companies whose products you use. Wall Street will only try the products of
some of the companies they invest in before throwing millions into it. If it's a local
startup that began in your city, you have the upper hand to test their products and find
out the potential of the company before it goes mainstream for wall street to pay attention to it.
The moment you see that the company has hit the news, then wall street is definitely
watching carefully. So your only advantage to competing with companies that have thousands
of professional analysts working for them is to spot companies that have yet to become mainstream.
But how do you discover such companies?
It might sound impossible, but it's real and practical.
You may be interested in something. Be it cars, tech, social media,
artificial intelligence, coding, design, games, whatever. You are probably working
in that industry or following the news out of curiosity. You know a lot more about what's
happening in that industry than most Wall Street analysts. If you are a designer or an editor,
you are constantly trying new tools or software, so you are more likely to
come across a company that will go mainstream than these multi-billion dollar hedge funds.
Tesla is a great example. Back in 2010, when no one was talking about EVs,
Tesla had already launched the roadster. Then in 2012, it launched the model S. But its market
cap was just a few billion dollars, and the stock price was trading at about 2 dollars.
It took wall street years to admit that EVs are on the way to replacing traditional cars.
But anyone who is into cars, especially electric, clearly knows that the future is
electric , and Tesla appears like one of the companies that will dominate this industry.
Fast forward to 2023, the company is worth over 600 billion dollars and even crossed
the trillion-dollar valuation in 2021. Early traditional retail investors earned fortunes.
You are not going to find such companies by reading Bloomberg or yahoo finance. You are
going to discover them by being an expert in one field. Your job should be to find companies
that will increase at least tenfolds. That sounds overly optimistic, but it's possible.
You shouldn't be investing in companies that are trending in the news and that
are oversaturated. If you are spending hundreds of hours analyzing their financial statements,
reading their quarterly reports, and finding out their strategies, then it better be a company that
has the potential to grow that big. If its already there, like Tesla or Facebook today,
then it's a waste of time since investors have already ripped off the rewards. So when you
find undervalued companies that are still too small for wall street to notice, you jump in.
But you have to keep in mind that investing is inherently risky. If you embrace this fact,
you are not going to be impacted by the ups and downs of the stock market. The daily news often
influences the market. Any bad news will pull down the stock price. So you shouldn't be investing any
money that you need in the next 6 to 12 months. The mistake that people often make when they start
investing is they focus on the market and not the company. Mr market, as peter lynch calls it,
has a different mood every single day. Bad news will push it to plummet, while good news
will dramatically raise stock prices. But the underlying value of companies stays the same.
Companies that have strong financials and a solid growth strategy often outperform the
market over the long run. So forget the market; focus on the company.
Look for companies that sound boring since they won't be attracting the unnecessary attention
that would push them to be overvalued, like a waste-management company. The business doesn't
revolutionize the world, but such a business with a solid foundation can grow exponentially.
When looking at what company to invest in, always try to find what makes this particular company
better than its competitors. What is their competitive advantage? What do they have that
their competitors don't or will take years to get? Their technology may be superior; they may be much
more cost-effective. Maybe their product is better. Doesn't matter. When a company has
an advantage over its competitors, that's when you know that they can grow tenfolds at least.
When you look at the stock market, there are different types of stocks.
Some stocks pay dividends others don't pay anything. At first glance,
one sounds better than the other. However, the facts on the ground tell a different
story. A dividend-paying company might have reached its peak and has little room to grow,
while the non-paying dividend company believes that investing that money back into the company
will be a better investment than paying it to the investors since the company will grow much faster.
The only way to really profit from the market is to focus on growth stocks,
on stocks that don't necessarily pay dividends but has the potential to grow exponentially.
Before you start investing, write down all the reasons why you think you should invest in this
company. That way, you can analyze your decision once you have thrown your money in. If you
have ticked all the boxes and your analysis was correct, keep it up. If not, then there is room
to improve. If you want to learn how to analyze companies, read their financial statements,
and find valuable opportunities in the market, then sign up for our updates because I am working
on a course that will teach you all of that. If you want to be the first to find out about it,
go ahead and leave your email. Until then, you can get free stocks if you sign up to Webull.