Do you want to know how to make serious money? Silly question: who would ever say no to that offer? Conventional wisdom will teach you how to make good money. This wisdom states that an investor needs to be fully invested continuously in order to obtain optimal results. Along the way there are about 10 critical dates over the past 50 years.
If you did not have money in equities on these dates, your annual returns would have been a puny 3% compared with an overall market gain of 10%. The thing is 10% is the average return for stocks over a long period. There is nothing-wrong will a 10% annual return. But this is not serious money. Here is the secret behind most of those 10 critical dates.
Those 10 dates just happen to correspond to major turning points in stock market prices. These are dates like October 19, 1997, August 1, 2007 or February 1, 2009.
Some of these dates are infamous, others opportunistic, each one critically important both to your investment experience but to your mental health as well. After all, two of the dates just mentioned were horrific days when stocks crashed and real people suffered.
Wouldn’t it be nice if there was someone who understood when stocks are grossly overvalued or when a real opportunity exists. In other words, someone who understands the big picture issues. Someone who communicates a message that is clear and easy to understand.
Enter Paul Mampilly
Paul Mampilly is the person to give others advice about making good investments at critical times. Here is why. Back in 2009 when stocks were selling at post crash lows, Paul called a market inflection point. He was so convinced of his position that he entered a competition hosted by the highly respected Templeton Foundation. During that time he managed to turn $50 million into $88 million winning the competition with a 76% gain.
Paul’s greatest strength comes when his investment focus on the big picture. So let’s take a look at what he is all about and what goes into forming his advice.
Paul Mampilly is a member of Banyan Hill Publishing and serves as a senior editor specializing in helping Main Street Americans find wealth in growth investing, technology, small-cap stocks and special opportunities.
Paul started his career on Wall Street in 1991 as an assistant portfolio manager at Bankers Trust. He quickly advanced to prominent positions at Deutsche Bank and ING, where he managed multimillion-dollar accounts. In 2006, the owners of a $6 billion firm named Kinetics Asset Management recruited him to manage their hedge fund. Under Paul’s leadership, the firm’s assets quickly rose to $25 billion, causing Barron’s to name it one of the “World’s Best” hedge funds for averaging 26% annual returns during Paul’s tenure.
Calls Major Market Turns
In 1999, virtually every investor believed that wealth was the only outcome of an impressive stock market rally. Paul Mampilly remembers that his friend Tess owned technology stock shares that were up more than 1,000 percent. Paul recalls taking a deep breath and telling his friend that her gain was amazing. However, 1999 was the year of a great bubble that Paul warned about. When the day of reckoning finally arrived, fully invested holders were left with life altering losses.
The bubble was composed of major companies with solid reputations. Qualcomm Inc. (Nasdaq: QCOM) was up 2,619 percent. At least a dozen other technology stocks were up 1,000 percent. Another seven stocks were up at least 900 percent. Paul Mampilly reminds investors that these stocks did not represent obscure companies. Instead, the stocks represented major businesses listed in the Nasdaq Composite Index.
Consequently, the fact that Qualcomm and similar stocks rose to such tremendous heights was an obvious indication that the stock market was literally going insane. Paul saw how the huge bubble kept drawing new investors into the market.
Paul is on record for having sold every stock in 1999 before the bubble exploded. He continued to monitor the stock market as stock prices kept going higher. Some of the stocks went up 20, 30 and 50 percent. The incessant stock market greed was becoming part of normal life. At first, Mampilly felt as though he had made a mistake when he sold all his stocks.
Nevertheless, he felt good about his decision when all the stocks tumbled to incredible lows in 2000 and 2001. He was relieved that he did not lose any of his client’s money. Paul Mampilly had warned Tess over and over again that she should sell her shares. She did not listen to his warnings. She kept her shares and bought more shares as the price continued to tumble. Instead of cashing in on her incredible 1,000 percent gain, Tess ended up with a zero balance in her investment account.
Paul’s experience with his friend Tess proved to be an epiphany. After years of providing bespoke investment service to hedge funds and other institutions that catered exclusively to high net worth investors, Paul decided to aim his career toward a dramatic change in direction.
Surveys indicate that only about 8% of Americans own cryptocurrency and when they do Bitcoin represents the overwhelming majority of crypto assets. That tells us there is a huge information void. So before going further let’s cover some basics.
A cryptocurrency is a digital form of currency or payment that, rather than being controlled by any sort of centralized authoritative organization like a government or bank, exists solely online and is created and managed using complex rules and cryptographic patterns. Bitcoin was the first major cryptocurrency and remains its most popular, created in 2008 by a mysterious figure known as Satoshi Nakamoto. It was initially designed as a peer-to-peer electronic payment and exchange system, before being adopted by a few big names in tech and investment and subsequently experiencing a rapid growth.
Bitcoin’s value is based purely on the demand and supply for it, also like gold.https://t.co/O4osi7KBvh#Bitcoin #Currency #Gold #Economy #AssetProtection #Profitable #Wealth #Commodities #NASDAQ #SP500 #NYSE #OptionPlays #Opportunity #Trading #Stocks #StockMarket #BanyanHill pic.twitter.com/4CRG50OeWs
— Paul Mampilly (@MampillyGuru) June 21, 2018
Cryptocurrency Represents a Huge Bubble
Last year when prices were soaring, Paul Mampilly called cryptocurrencies the next investment bubble. That is a very controversial position so let’s take a moment to understand what he is talking about. What exactly qualifies as a financial bubble and how do Bitcoin and others coins, tokens, etc show the signs of a bubble about to burst?
An economic bubble begins to form when an asset of any kind starts to be priced at a level that far outweighs its actual, functional value. Early identification is the hard part. Bubbles can rarely be definitively identified before they occur. However, there are several warning signs that can lead wary investors and experts to begin withdrawing to protect themselves.
According to Mampilly, the greatest warning sign occurs when there is an enormous public and popular culture interest in an asset, driving it nearly into a frenzy and driving prices sharply up. This kind of sudden, intense growth is often unsustainable, and that’s particularly true when dealing with an asset of such indefinable true value as a cryptocurrency.
Currencies like Bitcoin experienced that sort of sharp, frenzy-like public interest. And of course, these signs proved every bit as effective in identifying the crypto bubble as the 1999 dot.com situation.
Two of the most popular Bitcoin competitors are Ethereum and Litecoin. Vitalik Buterin, a Russian-Canadian programmer who hoped for a fully open-source and crowdsourced cryptocurrency that could take on its own life separate from Bitcoins massive presence, launched Ethereum in 2013.
After the collapse of one of Buterin’s main projects, Ethereum became split into Ethereum and Ethereum classic. While its initial value was small, Ethereum grew an astonishing 13,000% over the course of the year 2017. While this might seem thrilling to investors, particularly those who got in early, it’s just another representation of high-octane interest in an asset of unknowable value eventually leading to a steep cliff.
The story of Litecoin does not inspire much more optimism, either. Like Bitcoin, Litecoin has no central authority figure to manage it. In fact, it is nearly identical to Bitcoin in just about every way, from its inception to the technical details of how it operates. Introduced in 2011 by a former employee of Google named Charlie Lee, Bitcoin experienced a doubling of growth in just 24 hours in late 2013. Sound familiar?
Paul Mampilly has stated that numerous investors have written him emails informing him that his negative emotions regarding Bitcoin are due to the fact that he did not buy any cryptocurrencies when he had the chance.
According to Paul Mampilly, nothing is further from the truth. Like all seasoned investors, Mampilly chooses his investments carefully, usually after a great deal of research and careful understanding of their nature.
Any cryptocurrency, by its very nature is impossible to accurately value. It’s value is entirely based on what the public at large determines it to be. And if public interest wanes or doubt begins to creep in, we’ve seen how that somewhat arbitrary value can drop almost overnight.
Mampilly’s friends expressed the same sentiments about “missing out” to him in 1999 when he said they were going to lose their money. At that time, Tess began to ignore him. She refused to speak with Paul for several months. But ultimately, Mampilly was proven to have astutely predicted the burst and unfortunately had to watch many of his friends and fellow investors lose thousands, sometimes millions of dollars of their own money when the crash came along.
The problem with an investment bubble is that investors become emotionally attached to their stock shares or cryptocurrencies. This often occurs as a direct result of that public excitement that is easy to be caught up in. People frequently miss the chance to sell their investments when the prices peak, and then they begin to feel desperate not to take any losses. They continue to look back at the former high prices and wait until the prices go up a second time.
Unfortunately, a huge bubble does not wait for anyone. The bubble bursts unexpectedly. By the time the price goes down and stays there, investors have lost their fortunes and there’s no recovering for quite some time.
Obviously, Paul Mampilly’s warning to avoid purchasing Bitcoin was spot on. It proved to contradicted the most optimistic initial expectations. Mampilly points out that the price of Bitcoin simply continued to rise because news reports state that Bitcoin is rising, feeding into the frenzied rush of buyers—many of whom are not experienced investors and simply don’t want to miss out on this thrilling new investment all of their friends are making. Once everyone owns part of the huge bubble, the bubble can no longer contain itself and bursts into tiny fragments. Unhappy investors have been forced to accept the fact that their former impressive gains no longer exist.
So between the dot.com bubble, his 2009 Templeton Fund results and now his bubble bursting conviction, Paul Mampilly has his bona fides when it comes to seeing the forest, the trees and all other things needed to understand what makes and breaks bubbles.
Paul’s innate feel is part of his fascinating background. Here is a person who truly worked his way up by his bootstraps. Join me while we get a closer look at why Paul ticks the way he does. It starts with a rock solid education followed by years of front line experience.
Montclair State University in 1991 was the spot where Paul earned his BBA in Finance and Accounting. In 1997, he graduated from Fordham Gabelli School of Business with a Master of Business Administration.
In 1993, highly regarded Bankers Trust Company gave Paul his first break hiring him as Assistant Portfolio Manager. His job was to work directly with high net worth clients. In 1995, he received a promotion and became a Senior Portfolio Manager.
In 1998, Paul went to Deutsche Asset Management where he recommended stocks to four portfolio managers. He became a Senior Research Analyst with ING Funds in 2001 where he was the manager of two analysts who covered healthcare stocks. The team made recommendations to three different portfolio managers.
In September of 2006, Paul became the Senior Portfolio Manager for Kinetics Asset Management. He was part of a team that raised more than $5 billion for Kinetics investment funds. He’s also responsible for managing investment accounts worth $25 billion.
After leaving Kinetics Asset Management, Paul became an author and an analyst for Common Sense Publishing in 2011. In this position, he had the opportunity to make investment recommendations for four different newsletters.
A Life Changing Epiphany Takes Place
After building a super resume that could have landed a seven figure income, Paul Mampilly decided that he didn’t want to be a part of Wall Street any longer. The reason is because he thought that Wall Street does not do enough to help a majority of the people. He wanted to assist people in investing their money, and he thought that the best way for him to do this was to start a newsletter. Now, he is in a position to help people from all walks of life.
In January of 2013, Paul Mampilly opened Capuchin Consulting that is helping people earn profits through their investments. Paul Mampilly is proud that the research he does now is something that is within the reach of most people. This is in contrast to what happens on Wall Street because managers tend to focus on people with a lot more money to spend.
Recently Paul was interviewed by the online publication IdeaMensch looking to tap into his current thinking. Here is how Paul states how he organizes his thoughts turning them into action recommendations.
“I bring my recommendations to life through hours of extensive research between myself and my team. Any stock pick that I issue has gone through a good 30 to 40 hours of research total, with an additional 20 to 30 hours of writing time added when I actually go to write the recommendation. So a lot of time and effort goes into forming a write-up on a stock that I believe will do well and be a winning portfolio pick”.
“And every issue that I release has example scenarios for readers to follow so that it makes it easy to understand how that particular stock could work for them. I provide many charts and a lot of data for readers to sift through, but I always try to put myself in their shoes and make the information easy to follow so that they can actually use it”.
“You can’t assume that the people you write to have the same financial knowledge that you do, or that they have the time to sit down and spend a couple of hours doing their own research on a stock that you recommend, because people are busy and they have their own lives to tend to. So I always make sure that I’m doing that work for them, and that’s how these ideas are brought to life”.
What’s one trend that really excites you?
“There are actually two trends that I love. In fact, I believe in both of these trends so completely that they are the driving force behind my recommendations for all three of my services. And those are the Internet of Things megatrends and the millennial mega trend”.
“I believe that the Internet of Things is going to irrevocably alter the course of countless industries, including energy, manufacturing, health care, food, aerospace, marine, banking and automotive. And that’s because all of these industries can be improved by the sophisticated machines that are interconnected with one another — aka the Internet of Things — that fill in where “normal” employees can’t”.
“I also like to track millennials because I believe that they are about to take over the U.S. economy. This generation is estimated to be 92 million strong, so it’s very large. And by sheer numbers alone, the choices and preferences of millennials are going to alter the direction of the U.S. economy. So it’s very important to pay attention to companies that millennials like, and that they use, because common sense tells me that these companies will soar higher as more people in the millennial generation buy their products”
When you build your approach on a solid long term trends it enables you to understand the big picture and make some investment gold in the process.