The "Rainwater Approach" Can Show You the Best Time to Buy Stocks

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One of the smartest things you can ever do to make money is this: Pay the most attention to those who have actually gotten rich from investing, not those who made their stack by selling systems to the public.

That's how I went from being a high school dropout to a successful investor.

And that's how countless others have done it.

But here's trick – you have to read a lot and study a lot.

To paraphrase a quote from Warren Buffett's partner, Charlie Munger, I do not know any successful people – high school dropout or not – who do not read a lot.

I have read countless books and millions of pages of articles, academic papers, and research reports about investing.

I have read all the information on the usual suspects. I have read and studied folks like Warren Buffett, Peter Lynch, Seth Klarman, and Carl Icahn. That research has helped me develop my approach to investing.

I have also learned an awful lot from some of those behind-the-scenes billionaires who were not in the public eye all that much.

One of those backstage billionaires, in particular, really helped me go from the little league to the big time.

The "Witch of Wall Street" Celebrated Market Downturns – and So Should We

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We are having one of the worst Octobers in the past decade.

Prices took some huge hits this month, and many folks under 35 have learned, for the first time in their lives, that stocks can actually go down.

It's a little scary if you have never seen this type of price action, but I've seen it so many times that, so far, I have not paid much attention.

The market has not offered a bunch of bargains yet, so there is not much to do at the moment. But personally, I am hoping that changes soon.

At my house, we don't celebrate new highs.

We expect new highs to happen, as we know that human nature itself means we are all going to want to strive to build a better life for ourselves and our families. That striving leads to innovation and growth that provides an upward drift in the equity markets over extended periods of time. It happens all over the world, but nowhere is it more evident than here in the United States.

Instead, we celebrate these occasional violent down moves.

These down moves cover Wall Street in blood and vomit, while Main Street huddles under the kitchen table in fear, cuddling a bottle of cheap gin.

But that's when fortunes are made.

And that's exactly how one lone, miserly woman, known as the "Witch of Wall Street," made her fortune.

Stocks Can Make You Rich – but Could REITs Make You Richer?

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I love real estate.

And I love it for one good reason.

Outside of owning a successful business, the top way to get rich is investing in real estate.

Most of us will never be real estate developers, but thanks to the miracle of REITs, we can own all sorts of sod real estate investments. We can own skyscrapers, warehouses, cell towers, apartment buildings, and just about any type of property we wish.

And here's the best part about it: We never even need to speak to a real estate agent.

With the click of a mouse, we can become an owner of farms, senior living facilities, and even medical cannabis facilities.

So today, I want to take a deep dive into how you can make a ton of money investing in REITs as opposed to stocks.

And I'll even reveal how you could have made $385,000 more if you had invested in them over a long period of time.

How to Get Your Piece of the $69 Billion Pet Industry

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You know how you can tell you live in a pretty wealthy country?

When you spend a cumulative $69 billion on your pets as a nation.

According to the American Pet Products Association, that's what Americans spent on Fido and Fluffy last year.

Bob Vetere, president and CEO of the Association, told the Global Pet Expo earlier this year that it's incredible not only to see growth for the pet industry in general, but to experience growth across all categories of the pet industry – with the exception of "live animal purchases," which remained the same.

Talk to any pet owner, and they'll tell you how difficult it is to put a dollar limit on what they'd spend to give their loyal companion a happy life, and it's this outlook that continues to drive growth.

When I first heard that $69 billion number, I was skeptical. But when I mentioned it to my wife, she showed me how much we spent on our cat and dog. And let me tell you! It was a healthy number, and that doesn't even include the occasional cheeseburger I buy the dog.

When I thought about it, I realized my son has a hefty investment in his two pythons, considering the specialized cages and lighting required. And my daughter has a dog with some health issues, and she is constantly complaining about the costs associated with doggie healthcare.

So it turns out that it's not just crazy cat ladies spending all this money! It's regular people too.

Given all this money spent on pets, there's bound to be a few profit opportunities.

Get off the Stock Market Hamster Wheel – and onto the Ferris Wheel Instead

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Last week was fun, wasn't it? For the first time in many months, we saw some big down days as investors got a little panicky over the potential for higher interest rates, midterm elections, and anything else there was to get worked up about. Of course, this immediately started all the chatter about what happens next.

re we going to have a bear market now? Will prices collapse? Should I sell? Should I buy more? What is the stock market going to do next?

If you think you actually know the answer to those questions, you may be a hamster.

Hamsters can run around in a circle like nobody's business. They may think they're going somewhere, but let's face it – they're not.

You won't get any insight at the top of a hamster wheel that you couldn't get at the bottom.

Anyone who confidently predicts the next move in the market is either fooling themselves or trying to fool you.

I have been doing this a long time, and the stock market never does what we all think it should. I have seen markets rally on bad news and sell off on good news. While stock prices will reflect the value of the companies in the long term, in the short run it's more of a psychological soup that often responds irrationally.

Making drastic moves based on your, or anyone's, forecast of market direction is usually a fool's errand. You will end up running in place like our furry friend and not getting much of anywhere.

If you really want to see what's going on, you need a much bigger wheel (like a Ferris wheel) that will give you a much better view.

Use This Proven "BOGO" Method to Get Free Stocks

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Everybody loves a good "Buy one, get one" deal.

And my family is no exception.

We do most of our grocery shopping here in central Florida at Publix, and they are the Kings of BOGO. They even BOGO wine, and I'm a BIG fan of this practice!

Really, anytime you find your favorite stuff at bargain prices, it is like a little mini Christmas right in the grocery aisle!

But BOGO isn't restricted to retail. We can sometimes find BOGO situations in the stock market as well.

To Profit from Market Downturns, Be Like Billy Bass and "Don't Worry"

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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.

Use My "Granddaughter Portfolio" Model and Stop Worrying About Your Financial Future

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In December 2017, the world's most perfect granddaughter was born in Chicago, thereby making me (if we go by the age my wife usually accuses me of acting) the youngest grandfather in the history of the world.

It was probably the only time I was happy about flying from Florida to the snow and ice along Lake Michigan, but it was hard not to burst into song as the plane came in over the frozen city that day. Thankfully I resisted that urge, as my voice is so bad it could easily be labeled as a threat to public health and result in me being in jail instead of holding my first grandchild.

Recently, someone asked me how I thought I would position the investment portfolio that would help pay for her college and start in life 20 years or so from now. Naturally, her parents and I have already had this discussion, and we have begun to position the "granddaughter portfolio" to help not only with college but her entire lifetime.

You may have a kid or grandkid, or you may just want to know how to be comfortably situated 18 years down the road.

Buy "Stuff," Not Ideas, and Make Piles of Money

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I don't know about you, but I like to buy and own stuff. Real tangible things that I can touch and see as I make my way through the world.

Think about your average week. You probably go to the bank, either in person or online, a time or two. You gas up the car, stop at the grocery store, drive on the freeway, work in a commercial building or office of some sort, and maybe go to the doctor or dentist. You use electricity, perhaps some natural gas to heat your home, water, gasoline, and most likely relax by watching cable or satellite TV. All of this fits my definition of "stuff."

Once stuff is in place, it generates gobs of cash for years and often even decades. Toll roads, office buildings, power plants, cable systems, retail and medical real estate, and even the things needed to finance, build, and maintain stuff are examples of my favorite type of investments.

Let me say that again: Stuff.

Not ideas.

This puts me at odds with most of Wall Street, since they love to push you to buy big ideas – big, abstract ideas that may or may not work out so well in the long run.