Forward Guidance: Alexander Green on the Blue-Collar Billionaires of Value Investing
On this week’s episode of Forward Guidance, we’re joined by Alexander Green, the Chief Investment Strategist of The Oxford Club and Investment U. He’s also the Editor of The Oxford Communiqué, The Momentum Alert, The Insider Alert and The True Value Alert.
Alex is discussing the remarkable story of four blue-collar workers who became multibillionaires through the use of simple value investing techniques. He’s giving a special webinar chronicling their successes this Wednesday.
I start by asking Alex who these men are, and how he found them. Alex concedes that it was largely our research department who tracked them down. But he adds that the stories of these blue-collar billionaires mirror an experience he had early in his money management career.
During a minor slump in the performance of his company’s recommendations, Alex read a story in The Wall Street Journal about three men who were consistently beating the market - Warren Buffett, Peter Lynch and John Templeton.
He quickly discovered a commonality amongst these high-powered investors - they ignored conventional market-timing logic, and instead focused on identifying undervalued companies.
According to Alex, the four billionaires who will be profiled in Wednesday’s webinar did exactly the same thing. They all came from humble origins - none were exceptionally educated, and none had extensive backgrounds in finance. But they consistently beat the market with simple value investing techniques.
I then ask Alex whether these four men have any behaviors or characteristics in common - as we discussed in our last conversation about the average American millionaire.
He then reprises one of his points from the “luck vs. skill” podcast - successful people do not believe that economic success is just a matter of luck. They understand that smart choices and habits lead to success, and they change their behavior accordingly.
In the case of these four investors, that meant adhering to disciplined value investing techniques that outperformed the market.
One of these techniques is minimizing downside risk and maximizing margin of safety. Alex explains that it’s far less risky to buy a depressed company than one that is trading at hundreds of times its earnings.
Alex goes on to explain that value investing is a particularly prudent technique in a late-stage bull market like this one. He notes that growth stocks like Netflix (Nasdaq: NFLX) and Amazon (Nasdaq: AMZN) have beaten value stocks by large margins in recent years.
As a result, value stocks and funds have become even more undervalued than usual. This is setting the stage for a major rally in value stocks in the near future.
To learn more about the powerful value investing techniques of Alex’s blue-collar billionaires, sign up for his webinar this Wednesday.
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