When we first moved to Florida, my daughter flew down to spend the summer with us. We decided to all take a trip down to the Keys through the Everglades.
Now, I'd never driven the entire length of U.S. Highway 41, the Tamiami Trail. I was all about the idea.
Had a blast, too.
Along the way, we took the mandatory airboat ride into the Everglades; it was quite an experience.
Right about now would be a good time for me to confess to an admiration of and fascination with alligators, and although I see them all the time walking the dog here in Windermere, this trip was alligator heaven.
They were everywhere… and they were enormous.
Maybe you don't spend much time watching 'gators, but they're fairly opportunistic creatures. What I mean is, they don't "hunt" so much as wait around for something stupid. That is, stupid enough to come too close to an alligator. Then they pounce.
Naturally, they tend to eat a lot of smaller animals that wander by. But they'll occasionally take down bigger prey, like a deer, that makes a crucial mistake.
Of course, most of the time, if nothing comes close, they are content to float around the lake or take a nice nap in the sun.
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Being a successful investor is a lot like being an alligator.
Big killings are made, of course, but it's not by chasing short-term moves back and forth. The victory goes to the opportunistic individual who waits for the right situation to develop.
When prey is abundant on the ground, during periods like we saw from 2003 to 2005 and 2008 to 2010, I can pounce – become fully invested – in an instant. An extremely opportunistic, patient approach to the markets has built some of the biggest fortunes in the history of the world.
The alligator is pretty much the top of the food chain in the swamp, and those who use a value-centric opportunistic approach to investing their money are pretty much the top of the market food chain.
Take a good look at the Forbes list of the 400 wealthiest people in America.
You find lots of business builders like Bill Gates and Jeff Bezos. Peppered in among them you will find people like Carl Icahn, Warren Buffett, Philip Anschutz, Steven Schwarzman, Henry Kravis – some very patient, very wealthy alligators.
On the other hand, you know what you don't find?
Day traders, option traders who lack a head for math and statistics, or who work without a proven system, gold bugs, penny stock aficionados, and tip takers.
Alligators, they ain't.
They run back and forth looking for something to make them rich right now. And they don't often find it.
These pigeons, running back and forth for the disembodied hands tossing out bread crumbs and trash from on high, are the ones most likely to fall into the "fear and greed" trap, enthusiastically buying new highs and selling in a panic at new lows.
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 "Max Wealth" and Heatseekers.