How To Become Rich Investing Like Warren Buffett
And How I Can Help
“If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50 percent a year on $1 million. No, I know I could. I guarantee that.” Warren Buffett
Warren Buffett doesn’t boast. So when arguably the best investor ever – whose current net worth is more than $70 billion – says something like this I take notice.
And while I don’t consider myself to be nearly as great of an investor as Mr. Buffett... Yet. I know that over time I can help you become rich using the same principles that he did to build his fortune.
How do I know this?
Because I’ve already helped my parents double their retirement funds in the last three years.
And now I want to help you do the same.
A Mistake That Cost My Parents Tens of Thousands of Dollars
How You Can Avoid The Same and Become Rich
From: Jason Rivera
Several years ago my parents asked me to figure out why their portfolios weren't going up at all. Even though they put money into the portfolios every paycheck. At that time I was a complete amateur who had only been learning about investing for a few years. But I still knew enough to become infuriated at what I saw.
It turns out that the person who was “managing” their retirement wasn’t managing anything. He was a sales person who off loaded the actual management to another company.
But he still took 6% of their portfolios each year as his “fee...” For doing nothing.
On top of that, the funds that my parents were in were awful. The funds charged them another 2% on average per fund. On top of the other fees they were charged for their money being "managed."
The company managing my parent’s retirement could have put their money into funds that charged only 0.25%. But they chose to put them in funds that had eight times higher fees instead.
Why would the company managing my parent’s retirement portfolios do something so terrible?
And on top of that you need to expect that your money will lose 2% a year due to inflation.
This means that each year my parents were getting charged fees of 10% on their money. This means that just to break even each year my parent’s portfolio had to go up 10%.
Over the long-term the stock market has averaged an annual yearly gain of about 10%.
So it's no wonder why my parent’s retirement portfolios weren't gaining value over time. And why I got so mad when I saw a so-called professional doing this to them.
This is common practice at many money management firms handling retirement money. And I want to make you aware of this if any of your money - or your loved ones money - is "managed" like this.
I've solved this problem for my parents. I want to solve it for you as well. And by using Mr. Buffett's principles. Over time we will do this.
Press On Research
For years I’ve researched smaller companies to invest in for my portfolio. And the portfolios I manage. Since taking over my parent’s portfolios I’ve more than doubled their accounts in less than three years. And now I want to help you do the same for your own portfolios.
After doing this for many years. I got hired to do the same kind of research for a high-profile investment newsletter. And now I want to do the same for you.
The newsletter I wrote and researched for while working focused on safe, undervalued, smaller companies. And it was planned to launch for a price of several thousand dollars a year later this year. Similar products at other investment newsletter companies sold for as much as $5,000 a year. For just this single newsletter.
The price I will offer for this is far lower than several thousand dollars. But not only will you still be getting the same excellent company analysis I've always done. You will also get several other things for free by subscribing today.
Press On Research's guarantee is to save you thousands of dollars a year in investment management fees. And help make you rich over time.
What is Press On Research?
Press On Research is the premium versions of the Value Investing Journey blog. It gets its name from the above quote which talks about the importance of persistence to success in life.
I focus on small, micro, and nano caps. ADR's and OTC's. And special situations types of investments. Because this is where I've found the most opportunity in the past. And it's where I've made the most money.
My number one goal is to preserve capital. And I'm an ultra conservative investor. I focus on the following criteria and situations when considering an investment.
What Are Those Criteria?
- Deep undervaluation based on years of training as a strict value investor.
- Strong management
- High profitability
- Healthy balance sheets
- Companies with competitive advantages
- Companies that pay dividends
- Companies that buy back shares
A company must have at least some of the above traits to pass my rigid tests. And even if it does, I will still only invest in three specific kinds of situations.
What Are Those Strict Situations?
1) Warren Buffett types of investments.
These companies are undervalued or fairly valued. They will have strong management. Healthy balance sheets with little debt and a lot of cash. They will produce a lot of cash with their operations. And in most cases they will pay dividends and buy back shares.
2) Benjamin Graham Net Current Asset Value (NCAV) types of investments.
Net current asset value is the net value of a company’s current assets after subtracting its total liabilities. In most cases finding a company's net current asset value is what the company should be valued at minimum. Also called a company’s "going out of business price."
Companies that sell below this number can be undervalued by a wide margin. They don't produce a lot of cash. In most cases are not good to great businesses. They don't pay dividends or buy back shares. And they also may not have strong management. But because these companies are priced as if they're going out of business. I will sometimes buy into them if the opportunity is great enough.
The one thing these kinds of companies must have are healthy balance sheets though. Even in this extreme case I will not invest in a company that has a lot of debt when compared to cash and assets. Because I will not make an unsafe investment.
3) Special Situation types of investments.
Special situations involving a company means that the company is about to change how it operates. How it's structured. Or change the industries it's involved in.
This may involve spinning off a smaller subsidiary the company owns that it doesn't want. Or cannot get full value of...
A company may have a lot of land or assets they can sell to generate value. Or a company may change its corporate structure to unlock value for shareholders.
Even if a company meets all my strict criteria above. And meets the three types of investments I invest in. Most of the companies I will recommend will be smaller companies.
Why small caps?
Because by focusing on small caps we can gain a legal informational advantage over others. Including professional investors.
Smaller companies aren’t covered by many analysts. And in some cases they aren’t covered by any.
For example, the company I recommended in October when working wasn't covered by any Wall St. analysts. The below chart shows the percentage of companies analysts cover.
Chart above is from Factset.
As you can see from the above chart smaller companies are covered less by analysts than bigger ones. And this is how we can generate higher returns.
Because when analysts don't cover a company, fewer people know about it. And less information is known about the company. But by doing a bit more work we can gain a legal informational advantage over the general investing public.
But this isn't the only reason I focus on smaller companies...
The chart below - from the Center of Research in Stock Prices - shows how a dollar invested into each class of stocks would have grown from 1926 to 2012. Microcap value stocks beat the S&P 500 Total Return index by 5.4% on a compounded annual basis. Over time this ended up being a difference of $223,806 between the S&P 500.
These are the kinds of advantages Mr. Buffett had when he started his fund. And are some of the reasons he said he would invest in smaller companies if he were starting out today.
But Why Won’t Most People Research These Kinds of Companies?
There are several reasons:
1) It's hard to do.
There are more than 20,000 companies listed JUST on the OTC markets. Vetting these is a massive amount of work. And this doesn't even count ADR's. Special situations. Or all "normal" small companies listed on the regular stock exchanges.
2) It's time-consuming.
I downloaded the entire OTC Markets company list more than six months ago. So far I've gotten rid of all the companies I don't understand. And the list still has more than 7,000 companies that I need to research on an individual basis.
This amount of work isn't worth it to bigger institutional investors. Think bigger firms like Warren Buffett’s Berkshire Hathaway. These giant companies won’t invest in smaller companies. Because the small companies results will have no affect on big companies.
Pensions and educational funds also can't invest in smaller companies. This is because of restrictions on investing in companies below a certain size.
3) Most people assume all smaller companies are terrible.
While it's true there are a lot of terrible small companies. You can find many great ones if you take time to search for them.
This is just an excuse that people use. So that they won’t have to take the time to find the great companies.
4) Smaller companies are more volatile than bigger companies.
This can take a toll on investor emotions. But because we are savvy and more intelligent investors here I will use this to our advantage.
For example when a company’s share price drops for no reason in a short amount of time. It will give us a chance to buy into the company at a better price. And doing this will allow us to get higher returns in the long-term.
5) For all the reasons above, investing in smaller companies need more patience than bigger ones. And most investors aren’t patient.
Even most “professionals” stay away from smaller companies because of the reasons above.
How Have Some of My Picks Done In The Past?
I outline some of my past recommendations below. The percentage gain I expect or have gotten so far. And some of the reasons I recommended each company.
Brazil Fast Foods (BOBS) - I bought and recommended this company in 2013 because it had great margins. Competitive advantages. And it was becoming more and more profitable every year. It's a Warren Buffett type of investment.
I still own this company in the portfolios I manage. But will likely lose ownership of them soon due to a potential merger/buyout of the company.
If the offer gets completed at the offered price of $18.30 per share. I will make 129% on my total investment in less than two full years owning the company.
Dole Foods (DOLE) - I recommended Dole in 2012 after finding it undervalued. That it had $500 million in unused land it could sell. And the company was undergoing a "strategic review" to unlock the value of its shares. When a company is undergoing a strategic review it means its management is trying to find ways to pay down debt. Become a better company. And will possibly sell assets they own to do the earlier things. Special situation/Ben Graham type of investment.
After owning it for only 104 days I sold a part of my Dole stake with a gain of 66%. The stock rose so fast because the company entered an agreement to sell its worldwide businesses to Itochu in Japan.
Vivendi (VIVHY) - I recommended Vivendi in 2012 because it produced a lot of cash. It did have a lot of debt which I don't like in most cases. But its management was doing a "strategic review" to help unlock the value of the company’s shares. And to also get rid of a big part of its debt. Special situation type of investment.
My investment thesis played out on this one as well. It sold several of its subsidiaries. Paid down debt. The stock went up a lot. And I sold Vivendi in the portfolios I manage up 50% in less than two years.
Company I recommended while working and cannot release name of. It has the potential to rise 225% within three months if it does a special situation type transaction its proposed. But… It is a safe company that's undervalued even if this doesn't happen. And safety comes from the value of its properties.
The CEO estimates its properties are worth $90 - $100 million. And the company was only worth about $110 million total in the stock market when I recommended it. Meaning that the stock market valued this company’s profitable operations and cash at nothing.
It also has excellent management. High profitability. Great margins. Is buying back stock. And it was selling at a 40% discount to what I thought it was worth after subtracting all debt. Warren Buffett/Special situation type of investment.
Since recommending this company in October 2014 the company has continued to improve its business. Operations. Sales. And the company has "been buying back shares aggressively below $12 a share." Right now it's selling at $10.54 per share.
Its stock price has not risen since I recommended it because the special situation event did not take place as fast as it was supposed to. But it is still on track to happen. And this company could skyrocket once that happens. But like I said above, even if it doesn't happen the company is excellent and undervalued now.
Another company I recommended while working and cannot release name of. My pick in January 2015 was a $250 million market cap company. And it has some of the best margins I've ever seen at a company.
Its FCF/Sales margin in the TTM period is 22.3%. This means for every dollar of sales it has it produces 22 cents of free cash. Anything over 5% is great. When companies produce a lot of cash it means that the company can pay dividends. Buy back shares. And support its business without taking on debt.
It is selling at only 6.2 times owners earnings. And its unlevered return on net tangible equity is 100%. Anything over 20% is excellent and its percentage is five times higher.
It is conservatively undervalued by 30% now. It has $72 million in cash against no debt. 29% of its market cap is in cash. It is paying a 1.2% dividend. Has plans to buy back $15 million worth of stock. And it will benefit from the coming $140+ billion fiber optic network build out. Warren Buffett type of investment.
Since recommending this company in January its margins and operations have continued to improve. And due to this it's stock has already risen 20% since mid January.
What Are The Target Returns For Press On Research?
My goal is for the Press On Research Portfolio to outperform the market every year by as wide of a margin as possible.
What Is My Typical Holding Period?
I will continue to hold a company until either my thesis of the company changes for the worse. Or I made a mistake in my original analysis after further information comes available.
What Is The Risk Management Strategy For Press On Research?
The risk management strategy for Press On Research is three fold:
1) Safety – I will abide by the strict value investing principles and criteria outlined above. And only bring you the best ideas I find.
2) Position Sizing - I will recommend strict position sizing rules to lower the amount of money you can lose in any one investment.
3) Circle of Competence - I will stay within my circle of competence and only invest in companies that I understand. If I can understand the company and its business. I can spot potential risks easier to avoid them. And I can spot upside potential easier as well.
What Will Happen To The Portfolio When The Market Crashes?
Micro caps will take a hit like the rest of the market when this happens. I hope by less. But no companies are immune from a market crash.
The chart below – from Morningstar – shows that microcaps outperformed larger companies in the decade from 2003 to 2012. This is important because small cap companies outperformed all other investments. Except gold. Even when considering the Great Recession.
When the market crashes we will have more opportunity because of the lack of coverage by professionals in this area. I expect huge returns during a recovery. Because this is what has happened with these kinds of companies in the past.
What Do I Think About Liquidity?
Low liquidity does not bother me. And it shouldn't bother you because it will allow us to get higher returns over time.
Press On Research is a long-term oriented portfolio. As long as I can get you into a company’s stock in a reasonable amount of time I will have no problem recommending it to you.
If a company does have low liquidity I will outline this in the issue. And will state about how long you should expect to wait to buy shares in said company.
What Companies Won’t I Invest In?
I will not invest in companies that I don't understand. If I can't understand how a company, its industry, and its business work, I won't recommend it no matter what.
If I can’t understand how a company operates there's a greater chance of making mistakes. I abide by Warren Buffett’s principle of staying within my circle of competence. And knowing my recommendations intimately.
Why Should You Trust Me to Pick Stocks?
Here is a testimonial from a former coworker who used to help manage billions of dollars about my analysis abilities.
"If I were to go to anyone else in the entire company to get a second opinion valuing and analyzing an investment... I would go to you first."
What a former colleague told me upon leaving my job. The company had around 50 employees. And every other analyst had an MBA. Decades of experience investing. And ran or helped run billions of dollars at various hedge funds and firms before joining the company.
In the last two years when searching for investments full-time the cumulative two-year gain for the portfolios I manage was 61.87% (not compounded). And the cumulative two-year gain for the stock picks that I've bought is 98.13% (not compounded). Any year over 15% is great.
But great stock recommendations to make you rich over the long-term aren't the only benefits you will get subscribing to Press On Research. You will also get the following gifts free.
Instant Bonus 1:
Free PDF Copy of How To Value Invest
Whether you're a seasoned business owner or complete investing newbie. You need to know the ins and outs of analyzing companies. Because if you don't you're bound to make mistakes when analyzing things.
The premise of this book is simple. You no longer need to go to an expensive Ivy League level school to learn how to become an excellent value investor. In the book I show you the steps I took to learn about investing. And show you how you can also become an excellent value investor without going to college.
If you want to become an excellent value investor faster. While also saving yourself tens of thousands of dollars in the process. Then continue on and learn from my value investing journey.
- The book is meant for beginner and intermediate level value investors. To help reduce the main problem and frustration I had when starting to learn; wasted time. A small part of what you will learn in the book is below:
- How to use valuation techniques. How to adjust them. How to incorporate them into your own analysis. And I will tell you what they mean for the investment thesis.
- I will show you how I make sell decisions now. This includes sharing how I missed out on a 66% gain because I didn’t have the proper sell decision processes in place at that time.
- If you learn and put into practice what you learn in the book. Work hard. Continue to learn and develop your own proper thought, investment processes, and mind-set. I guarantee you will be better at evaluating companies for investment than most MBA’s and professional investors when you're finished with the book.
All this for less than 1/3 the price of ONE college textbook. For a fraction of the cost of going to a university. And you will also save yourself YEARS of time from having to find all this information by yourself like I had to.
Here is just a bit of the praise How To Value Invest has received:
"Excellent book that taught exactly what I needed to know!"
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Instant Bonus 2:
Free 20-Page Guide of Terms
In this 100% free report you'll discover the exact terms and techniques I use when evaluating companies. These terms and techniques will help you evaluate companies faster. Will help you learn faster. And save you a lot of time.
Instant Bonus 3:
Priority Access To How To Value Invest The Course
This will be a full educational course based on my book. With the goal at the end of the course you becoming an excellent value investor. For a fraction of the cost of a college degree. And for a fraction of the time it takes you to get a bachelor's and master's degrees.
Each week you will learn from one chapter in the book. The techniques, terms and lessons, in that chapter. And then at the end of the week we will all sit down via Google Hangouts - or a similar technology - to talk about what you learned. And what you need help with.
You will do real life analysis on companies during the course. That you will get feedback on so you can improve your investment analysis skills fast.
We will do this every week for ~20 weeks - I'm still ironing out the exact details - to learn from each other. And help each other improve.
By the end of the course everyone who signs up for the twice a year course will become excellent value investors.
But course spacing is limited so that we have an intimate and close environment. And everyone who signs up to Press On Research will have priority access when the How To Value Invest course opens each time.
Instant Bonus 4:
My Preliminary Valuation Checklist
When I started investing I used a ton of stock screens. And evaluated companies at random as I came across them.
This helped me gain a ton of knowledge about a range of industries and companies. But I didn't have a process for evaluating companies at the preliminary level fast.
It used to take me hours just to evaluate one company to see if I wanted to continue to research it or not. This frustrated me because I felt like I was wasting a ton of time on crap companies. And I was.
This is why I came up with a strict process that enables me to evaluate companies faster. Instead of spending hours on one company at the early stage. With this process I can now evaluate five to 10 companies in only one hour.
Not only does this save me a ton of time by eliminating terrible companies fast. But it also enables me to find good companies quicker too.
After coming up with this process I tested it out on my list of more than 7,000 OTC companies. And was able to search through more than 200 companies in one week with this new process.
I was able to find 20 companies within this time to put on my watchlist. And so far I've found three companies to write articles about. And maybe invest in.
I did this in only one week.
Before I developed this process it would have taken me a few months to go through more than 200 companies.
And by signing up for Press On Research you will also get this free.
Instant Bonus 5:
Priority Access To Get One on One Value Investment Coaching
Run a business and want to learn how to evaluate your own business faster. And don't have time to go to college? Or are you a student who is learning but would like to learn faster with help from someone? Then this service is for you.
I've been working on implementing this since leaving my job almost two months ago. And this will release soon. But one out of the ten spots is already taken. The descriptions of the one on one value investment coaching program are below.
1) One year of one on one value investment coaching.
A one year total immersion coaching service. I will have weekly personal sit downs with whoever subscribes to this service. In these sit downs - likely through Skype - I will answer any and all questions that I can. You will get assignments that I will evaluate and give you feedback on so that you can improve faster. And help you improve in any way I can. As fast as possible.
You will also have full access to me through email. And you will have priority over ALL other subscribers and blog viewers.
This will last for one year. And I will work as hard as I can to help you become the best investor possible. I'm sure we will both learn a ton with this. And I hope to help change people's lives for the better with this.
2) The same option as above but instead of a one year full length course it would be for three or six months - still deciding on this. Everything will remain the same as above though with full priority access. And weekly sit downs.
3) The same option as above. But instead of three-month. Six month. Or one year coaching programs. This will be a month by month trial version. Everything will remain the same as above though with full priority access. And weekly sit downs.
One on one value investment coaching will only be open to 10 people or businesses at any one time. This is so we have an intimate and close learning environment. As soon as 10 people sign up at one time this service will close until someone decides to stop the service.
By subscribing to any of the above programs I will work my hardest to help you become a great investor in as short of a time as possible. And will teach you everything I know about how to evaluate businesses.
Members who sign up for the one on one value investment coaching program will have priority over all other subscribers. And will receive one on one constant attention as long as you're subscribed to this program. The goal at the end of the year-long program is that you'll be great at evaluating businesses for investment by yourself.
Everyone who signs up to Press On Research will have priority access when this one on one coaching program launches soon.
As I said above, one business has already signed up for this program. So only nine spots remain open now. If you would like to make sure you or your business can sign up for this course please email me at firstname.lastname@example.org
If you're ready to stop wasting money paying huge fees to "investment experts" to manage your money every year...
If you're ready to start building your portfolio. And make money investing like Mr. Buffett would when he started...
And if you're ready to avoid losing money on your investments every year. Then pay attention because I'm ready to help you get what you want.
You won't need to pay a high-priced "investment expert..."
You won't need to take a lot of time to learn how to invest for yourself...
And you won't even need to leave your house.
When you buy your subscription to Press On Research...
Here's Everything You'll Get Instantly,
As Soon As You Join Press On Research
- Press On Research. Normal retail value up to $5,000 per year. One issue will be released each month for your 12 month subscription.
- 20-Page glossary of terms I use every time I evaluate companies. Estimated retail value of $9.97
- Priority access to How To Value Invest The Course. Estimated retail value $1,997.
- My preliminary research procedure doc. Estimated retail value of $9.97.
- Priority access to one on one value investment education coaching for you and/or your business. Estimated retail value $100's to $1000's depending on how long you sign up for.
- Estimated full retail value for all items is $8,016.94
And you can get all the above for just $97.
But That's Not All...
Your Price Today:
Just $97 For One Year
As you can see above, the normal price for the one year subscription will be $97. And you will still get all the above bonuses with your purchase. A $8,016.94 value. For only $97 if you buy today.
And All This Comes with A 90-Day
Money Back Guarantee!
If you don't think the Press On Research is offering enough value within the first 90 days, I demand you fire me. And I will give you a full refund.
I'm so confident you'll find value with your subscription. That even if you want to refund within the first 90 days after your order. You'll still keep your free gifts.
Priority Press On Research
YES! I want to become rich.
- I understand I will be billed $97 today to receive immediate access to the "Press On Research membership site for one year.
- I will receive instant access to all archived issues once they become available. And gain access to all future issues as long as you stay a subscriber.
- I will receive instant access to all bonus items mentioned above.
- I can refund for any reason or no reason whatsoever within the next 90 days.
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P.S. Each issue will be released through Adobe's PDF Reader. If you don't have it yet you can download it here.
P.P.S. After signing up, your account will be instantly activated. You will have access to all archived issues. And you will receive all bonus items mentioned above.
P.P.P.S. 5% of all proceeds from this blog will go towards feeding and educating kids and adults in the Philippines where my wife is from. And to charities in my local area as well. So not only are you doing yourself a favor. But by subscribing you will also be helping people around the world as well.