-- Published: Monday, 9 November 2015 | Print | Disqus
By Dan Steinhart
Dear Casey Research Reader,
I recently talked to my friend James Altucher about his unique new research service…
If you don’t know James, he’s a multi-millionaire entrepreneur and an extremely successful investor.
He’s friends with billionaires like Peter Thiel…who made $600 million as the first investor in giant social media company Facebook.
Now, for the first time ever James is sharing his most lucrative investing strategy…
As you’ll read, James spent years developing this strategy to identify companies with huge upside…
Executive Editor, Casey Research
Casey Research: Thanks for chatting with me today, James. Could you tell us about your investing background?
James Altucher: Sure. I've been involved in almost every area of investing you could think of. I've worked for hedge funds. I ran a fund of hedge funds where we invested in other hedge funds that were investing in the stock market. I've run a venture capital firm. I'm an angel investor, meaning I personally invest in about 30 different companies that are currently private.
I've been a writer in the financial space for almost 15 years. I wrote for TheStreet.com, The Wall Street Journal, Financial Times, Yahoo Finance, Forbes, and Fortune. You name it, I've written for it.
I've written six different books about finance including Warren Buffett's favorite book about himself, Trade Like Warren Buffett. I also wrote Trade Like a Hedge Fund.
I could keep going…but it's almost embarrassing.
Casey Research: [laughs] So you've tried pretty much every investing strategy there is?
James Altucher: Yes. And I found one idea that's the best. It's so good that I almost worry for my safety…
One time, a bank wanted to hire me to start a fund based on this idea. They wanted to give me $3 million to run this fund. But I would've had to sign a six-year employment agreement…so I said no.
I got a lot of offers like that. And I actually built a website based on this idea…and TheStreet.com bought the website from me.
But this is the first time I'm fully sharing the specifics of the idea.
Casey Research: OK, what's the idea?
James Altucher: Basically, I've identified 20 or so of best investors in the world, and I keep track of what they're buying.
I find out the stocks they like, then I identify the ones I can buy at roughly the same price, or maybe even at a discount.
Casey Research: Could you give us an example?
James Altucher: Imagine I find out that Warren Buffett bought IBM at 100. Then IBM falls to 80. I'll buy IBM at 20% less than Warren Buffett paid.
It’s like I have Warren Buffett, one of the greatest investors ever, as my free intern serving me coffee and giving me his best ideas.
I get to buy the stock at a discount and not pay Buffett a dime…as opposed to all the fees you'd have to pay if a hedge fund did this for you.
I used to pay tens of thousands of dollars to invest in hedge funds. Now I'm picking the very best ideas of the best hedge funds and recommending them.
Casey Research: Sounds simple.
James Altucher: There’s an important rule I use to guide my investing...if you're the smartest person in the room, then you're in the wrong room.
The key is that I've built personal relationships with many of these great investors. In many cases, I can call them up on the phone. Or I know someone who can call them up on the phone. They're all in my network or outer network.
I've had some of the most successful people in the world on my podcast. I'm talking Peter Thiel, co-founder of PayPal and the first investor in Facebook...Mark Cuban from Shark Tank…Arianna Huffington who started The Huffington Post.
These are the types of people in my network. I have access to their best ideas.
And I've had so much experience in the hedge fund world that I know all the hedge funds. I know which are the best. And I know that the best hedge funds have hundreds of people – PhDs, MBAs – researching every stock. So it pays for me to stand next to them and hear what they're talking about.
Casey Research: How long have you been investing with this strategy?
James Altucher: Every investment in my book The Forever Portfolio - which came out at the bottom of the 2008 crash - was based on this idea.
Many of those investments are up big. I've beaten the market almost every single year because of that book. Or maybe I should say the book has beaten the market almost every single year.
Casey Research: So you give the average investor access to the ideas of world-class investors…guys like Mark Cuban and Peter Thiel...whose ideas they'd never have access to otherwise.
James Altucher: Yes, the access part is very important. What are the top minds buying? What are the top hedge funds buying? Can I get in at a discount to where they're buying? Can I get in without paying them fees?
These are all the problems that I solve in my research service. Nobody would normally be able to follow these investors as closely as I do.
So I'm delivering all this to the average investor who would normally never have access to it…unless they paid tens of thousands of dollars in fees.
Casey Research: What big trends are you most excited about right now?
James Altucher: I'm looking at all the trends coming out of Silicon Valley that many people don't necessarily know about. I'm talking trends in drones…robotics…synthetic biology…biotech.
When I was talking to Peter Thiel, he told me that the most interesting area of the market right now is biotech, because the technologies are so new and the companies are so hard to value. A lot of the best investors are looking for big gains in biotech right now.
Casey Research: Could you give us an example or two of stocks you found using your strategy?
James Altucher: Well, I recommended one stock, Trovagene (TROV), on a Stansberry Research podcast about two years ago. It's up huge since then. The company has developed a way to test for cancer using a patient's urine or blood…which is much less invasive than the old method of taking a biopsy.
Another great example is GoPro, the company that makes tiny, high-quality cameras. Before it went public, everybody was excited about GoPro cameras.
I wasn't excited because the stock was too popular. Everybody was already reading about it on The Wall Street Journal.
In this situation, it’s better to go through the back door. I still want to invest in the big trend, but I want to do it in a way that's not so crowded…one I can find out about through my hedge fund contacts.
Not too many people have heard of the company Ambarella (AMBA). It makes the chips for the GoPro and many other cameras. Ambarella's stock has gone up a lot more than GoPro stock. But you'll probably never read about Ambarella on the front page of The Wall Street Journal…
Casey Research: Any other big trends you're following?
James Altucher: I'll eventually teach my readers about 3D printing, robotics, drones, and synthetic biology. And I'll recommend some penny stocks that could rise very quickly.
You know, there are 8,000 public companies out there and we only read about maybe 10 or 20 of them on the front page of The Wall Street Journal. I like to look at the other 8,000. The ones that have been forgotten by the markets, but might be the next big play…
Casey Research: Is there anything else you'd like to tell our readers about your approach?
James Altucher: The key for me as an investor is recognizing that I'm always going to be up against very smart people. So rather than try to fight them, I want to get their information for free or as cheap as possible.
I don't always know the answers. But I know the hedge funds and great investors who do. And I'll know about their trades before just about anybody.
I recognize that I'm not the smartest person in the room. I want to invest in the ideas of the smartest people in the room.
Casey Research: Thanks James.
PS: James Altucher was one of several great speakers at our just-concluded 2015 Casey Research Summit. If you missed the Summit, don’t worry…we recorded the whole thing. The Summit Audio is packed with actionable investment advice, including what multimillionaire speculator and founder of Casey Research Doug Casey is buying today (and what he's shorting)...the one stock four of our top investment analysts would buy today...and the highly-rated talk given by Dr. Mark Faber, one of the most sought-after financial speakers in the world.
Attendees paid as much as $1,695 to go to the Summit. But for just a fraction of that, you can listen in on the entire three-day event. Click here to learn more.
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-- Published: Monday, 9 November 2015 | E-Mail | Print | Source: GoldSeek.com