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Every redneck worth his salt owns "Big Mouth Billy Bass," who flaps his animatronic tail in time to the beat of "Don't Worry, Be Happy."
My fish sings a slightly modified version of the Bobby McFerrin tune called "Don't Panic, Make 20%." Or 50% – or 100% – as the case may be.
I'm about to tell you a story of how I focused on cold, hard numbers, ignored some scary day-to-day price fluctuations, and ended up making double digits instead of losing my shirt.
All thanks to the WAR metric that's generated my undefeated track record – and that can help you start your own.
Last week's two-day market meltdown, which shaved something like 1,100 points from the Dow, may have also sent some of your long-term, "hidden gem" stocks into a bit of a tailspin.
If you track these things obsessively day by day – which I don't.
The path to an undefeated track record does not mean that no stock ever goes down. Some of the stories I could tell you about holding shares during a decline would turn your hair white if you were skittish. But – here's the thing – it always works out in the end…
I Tuned Out the Noise and Held on to Atlas – and Reaped Big Rewards
Take, for example, Atlas Pipeline Partners (then trading under the ticker APL). I heard Leon Cooperman of Omega Partners recommend this stock at a conference in New York back in fall 2008. Atlas was the proud owner of about 9,000 miles of pipeline in the southwest United States and was producing excellent cash flows that provided an attractive dividend yield.
When I got home, I broke out all the SEC filings and put a pencil to paper. The stock was trading in the high teens at the time, and after hours of calculating the value of the company I came up with a value north of $30.
I was pretty pleased with my purchase. I owned a bunch of pipelines that served some of the booming shale fields in the southwest at a bargain price, and I was collecting a fat dividend along the way. Then, of course, the world ended. Lehman went out of business; Bear Stearns was bought for pennies on the dollar, and financial markets went into a free fall. Atlas was not exempt from the damage. The stock fell into the single digits, and had I panicked and sold, I would have had a massive loss.
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.