I am 56 years old. I've lived through some of the most challenging market conditions of all time: two crashes, a recession, a recession so bad it might as well have been a depression, two open-ended wars, and almost a decade of the "cheapest" monetary policy in recorded history.
So, to be blunt, I don't have 30 years to wait around for the indexes to catch up after a period of underperformance.
It's just not an option. I refuse to "go quietly into that good night" of lower returns and diminished expectations.
I have no choice but to find ways to earn high returns - no matter what the S&P 500 does over the next several years.
And I mention this... because you're probably in the same boat as me. We have to go out and grab unreasonably high returns to get the retirements we want and deserve.
I'm going to show you one of my favorite ways to do that, and Wall Street will never see us coming...
This Made "Larry the Liquidator" and Gordon Gekko a Ton of Money - and It Works in Real Life
Last week, I showed you a strategy I love to use to earn average annual returns of 13.7%... against the 0.18% you'd get from an indexing strategy.
Now I'm going to show you a way to grab even bigger "unreasonably good" average returns... using something I call the "Larry the Liquidator" approach to making money.
We probably all remember Oliver Stone's classic "Wall Street," with Michael Douglas' star turn as Gordon Gekko - a classic, fabulously wealthy "corporate raider"-type who tries to swoop in and break up "Bluestar Airlines."
"Wall Street" was great, but I liked the 1991 movie "Other People's Money," starring Danny DeVito as corporate raider Lawrence "Larry the Liquidator" Garfield, even better.
I'll tell you why...
There's a scene where Larry stands in front of a chalkboard and shows the value of a company he's about to take over and rip apart, the fictional "New England Wire & Cable."
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The upshot of DeVito's scene here is that the value of "New England Wire & Cable" is higher if you broke up and sold off parts of the business and pocketed the cash. In the movie, Larry stands to just about double his money taking that approach to his target.
We can do the exact same thing, using a variation of Larry the Liquidator's own equation that I call "Rational Liquidation Value."
About the Author
Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of Peak Yield Investor.
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