NMX*Dividend Machine – The Story of Bill Spetrino's Investing Success

Monday, 21 Jul 2014 07:39 PM

By Bill Spetrino

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
My name is Bill Spetrino.

The truth is, I'm not a financial genius. I didn't go to Harvard, work on Wall Street, or start a hedge fund. I did get a degree in accounting, and my first real job was as a professor at a community college.

I taught for a full decade and after years of saving and pinching pennies, my wife and I were finally able to muster $10,000 to invest in the stock market.

However, unlike most people, I didn't hand my cash over to a financial adviser, cross my fingers, and hope for the best.

Instead, I harnessed a simple, forgotten strategy that has allowed investors to amass millions.

Now, I didn't adapt this unique strategy from Warren Buffett, Donald Trump, or the latest investment gimmick promoted on CNBC.

And it's not a strategy that takes a lot of my time.

It is actually the same strategy that I starting implementing when I was in first grade.
Not in stocks, but in baseball cards. And at that age, I didn't know I was investing. I just knew I was making money.

See, my parents bought me a pack of baseball cards for five cents. Inside this pack was a Sam McDowell card, the pitcher for the Cleveland Indians. I lucked out, I guess, because he was the rage of the day. Everyone loved him.

Now, my father was a huge sports fanatic and he had taught me the difference between "value players" and those who were "here today and gone tomorrow."

Sam McDowell fell into that "here today and gone tomorrow" category so I knew the long-term value of the card would eventually diminish.

However, there was a certain kid in my class who just loved Sam McDowell. Would you believe he was willing to pay 35 cents for the card? I sold instantly, and that 35 cents enabled me to buy seven more packs of cards.

And then boom. I landed another "here today and gone tomorrow" player. Again, I sold that card for more than the entire pack cost me.

Read More: Discover How You Can Become “Rich By Friday” with The NMX*Dividend Machine

About a month later, my father came into my room and saw six shoeboxes full of baseball cards. He was livid. "How did you get all these cards?" He thought I blew all my allowance money on them. I told him my strategy and then showed him the $36 I had saved from my little side business.

He was impressed.

And here is the key to my little card business. The entire time, I kept the great players . . . those who had long-term value. In fact, I still have many of those cards today.

Thus began the origins of my strategy that has given me absolute financial security.

If you think about it, how is investing in stocks really any different?

Most investors today buy stocks like my elementary-school friends bought baseball cards. And in doing so, they are making three major mistakes . . .

Mistake #1

People trade with their heart, not their mind.

They let their emotions make their decisions.

And here’s the thing . . . most people watching this video are screaming, "I KNOW THIS ALREADY." And they do! They know this is not what they are supposed to do, but . . . many of you listening are still doing it.

Just like the kids I sold the baseball cards to — they loved the players, they watched "last night's game," and they were excited to buy, so they bought at a premium.

Think about it.

As the market plunged in 2008, did you sell stocks? If so, you missed out on the massive rally back. Sure, it was a scary time. We saw stocks like Coca-Cola drop to $20 per share, but now Coke has rallied back up to above $35. If you sold, you sold because of fear, when in fact, you should have been buying.

And have you ever paid too much for a darling stock? Or perhaps for a house? If you did, you likely did out of emotion. Perhaps greed, or perhaps out of fear that if you didn't get in now, you never would get the chance.

So, before you buy your next stock, make sure you are not doing it because you just love that company, or fear missing out on a huge opportunity, but because the stock has strong fundamentals. And the same with selling; don't sell out of fear.

Mistake #2

They ignore inflation.

I learned this in first grade as well.

You see, certain baseball cards were way overprinted. I paid close attention to this. Some of my classmates didn't. I used that to my advantage.

Clearly, cards would have to be "rare" in order to hold their long-term value. Meaning, there are only a few in print. So I kept those cards. But, I would sell off the cards that were overprinted.

And overprinting is exactly what our federal government is doing with our dollar through QE1, QE2, Operation Twist, QE3, and the host of other technical terms for . . . printing money.

It's simple: The more they print the dollar, the less the value.

And I don't want to get into "why" our government is doing this. Just know that they are doing it because they are convinced it will help our economy, and it is not going to stop.

Don't ignore this simple truth: The dollar is losing intrinsic value. In fact, it has lost 50% of its value since 1985.

Read More: Discover How You Can Become “Rich By Friday” with The NMX*Dividend Machine

Mistake #3

They trust the wrong people.

When I hit middle school, kids started rigging the baseball card system. They would target a buyer for a specific card. They knew he wanted it, and they could sell it, but in order to increase their profits . . . all they would have to do is have some of their friends talk to the potential buyer about the card.

They would juice it up — tell him that it would be worth three times as much a few months down the road. They would create artificial demand by saying if he didn't buy it, they would . . . and so forth.

The same exact thing is happening today in the stock market.

Investors are blindly trusting their stock brokers and so-called experts. Look, not all brokers are bad. But think about it . . . most don't have your best interest at heart.

Henry Blodget was the Merrill Lynch analyst who routinely hyped stocks to investors, despite knowing they were worthless. One famous example: On the day Merrill Lynch gave the company "Excite" the second highest rating, Blodget sent an internal company email saying the stock was "such a piece of crap."

Or take Jack Grubman, an "analyst" for Salomon Smith Barney. In 2002, he upgraded AT&T. Why? Because doing so got his kid into an "Ivy League" preschool. "Played him like a fiddle" is how Grubman described the move.

Think of how many innocent investors lost money as a result of their selfishness!
And these are not isolated incidents. Take Goldman Sachs. Their managing directors famously refer to clients as "Muppets."

Here is something else I think is startling: Independent market studies have found that 94% of stocks have a "buy" or "hold" rating.

Just think about that for a moment: 94% of the companies out there are given either a buy or hold rating . . . so just 6% of stocks are rated "sell."

I don't even give 6% of the companies out there a hold rating. I might give 1% a buy rating.

This extremely selectivity in building my Dividend Machine portfolio has allowed me to achieve superior results compared to the S&P 500. Since the inception in March 2009, the Dividend Machine conservative portfolio has returned 18.2% per year compared to just 14.1% for the S&P 500.

For more information about joining The Dividend Machine, click here.

To contact Newsmax Customer Service regarding The Dividend Machine, click here.

Read More: What Is NMX*Dividend Machine?


Related Content:

NMX*Dividend Machine - Frequently Asked Questions

Why Did NMX*Dividend Machine Appear on My Credit Card Statement?


© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
You May Also Like
Follow Newsmax

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved