I'm proud to announce that the 2008 edition of my bestselling Neatest Little Guide to Stock Market Investing will be on sale everywhere books are sold beginning tomorrow!
It's a thorough update that includes:
My Maximum Midcap strategy, an innovative investment program that consistently outperforms the market
Real-life examples of successful investment strategies
Tips from master investors like Warren Buffett, Peter Lynch, and Bill Miller
Meticulously updated resource lists
A ten-year retrospective on the famous IBM Value Line scenario that lets you decide what you'd do based on the information at hand, then check your own performance with current data
Updated examples throughout
Concise summaries of all key points to help you remember
A comprehensive index
About his section, Bill Miller wrote, "Jason Kelly captured my investment methods well, and better than most who have tried to describe what I do."
Beginning tomorrow, I'll provide you with a chance to win a free signed copy mailed to you directly from where I'm spending Christmas with my family. For today, here's an excerpt from the book:
How about clothing? Like me, you might enjoy watching people in public places such as a shopping mall. What are they wearing? One year, I noticed kids wearing Tommy Hilfiger clothes more and more frequently. It didn't take a genius to know the clothing was from Hilfiger because the name was emblazoned across the front of every T-shirt and sweatshirt. I went into the department stores and looked for racks of Hilfiger clothing. Much to my intrigue, I found entire sections of the stores devoted to Hilfiger. In a local Macy's, "Hilfiger" hung in huge gold letters against the wood paneling and throngs of kids stood under the sign holding shirts up to each other for first looks. That's darned interesting to an investor, wouldn't you say? I checked out the company's numbers and recommended Hilfiger to friends in spring 1993. A buddy picked up shares at $10.50 in July. At the end of 1996, he sold them for $48.
I have a more recent clothing story for you. My mother and sister visited me in Japan in May 2006. My mother wore a pair of Crocs sandals that she raved about the entire visit as we walked around Tokyo and flower parks near my home in the countryside. She told me that Crocs were invented in Colorado, where we're from, and that everybody back home had a pair. When my friends in Japan saw the sandals, they asked about them, tried them on, and wondered if I would buy some for them on my next trip back to the States. An actionable tip? You bet. Shares of Crocs were less than $25 that May. In February 2007, they broke $58 for a gain of more than 132 percent in just nine months. I have a feeling Peter Lynch would love this story.
Food, clothing, and other necessities are good places to start looking for companies. Once you've exhausted them, think about where you spend your discretionary dollars, that is, for things you don't absolutely need. Perhaps you love home movies and notice that some companies just won't go away. One might be the place you rent videos, maybe Netflix. You could have bought it split-adjusted for less than $5 in fall 2003 and sold it for almost $40 in January 2004. Another might be the movie company Disney. If you decided back in October 1990 to get more out of Disney than a mouse cartoon and a few rollercoasters, you could have purchased its stock for $8 and sold it in January 2007 for $35. That's a 700 percent gain in a little more than one year with Netflix and a 338 percent gain in a little more than 16 years with Disney, both of which you would have found by just vegging out on home movies. Who says couch potatoes can't get ahead?
