Teri Horton may be the greatest living investor.
You wouldn't think so to look at her. Horton, a retired truck driver, lives in a trailer furnished and decorated with items she found dumpster diving. She doesn't own any stocks. She doesn't even know what a junk bond is. And if you asked her to forecast the Dow, she'd probably tell you to get lost. You see, Horton deals in the most illiquid asset class in the world: fine art. And she got into it by complete accident.
In the mid-90s, Horton was browsing through a thrift store in her hometown of Costa Mesa, California, looking for a gift to cheer up a depressed friend. She came across a massive "ugly" painting. She asked the clerk how much the painting cost. When the clerk responded "$8", Teri said, "I love my friend, but I don't love her that much. Couldn't we do better?" Teri ended up paying $5.
She loaded the painting into her truck and drove to her friend's trailer to deliver it as a practical joke. The friend was amused, but didn't want the gift, saying, "This is really pretty ugly." Anyway, they couldn't fit in through her trailer door. So Teri tried to sell it in a garage sale. A local art teacher saw the painting at the sale and told Teri, "you might have a genuine Jackson Pollock there." Teri responded, "who the $^% is Jackson Pollock?"
Once she discovered that the painting could be worth $50 million, Teri set about trying to prove its authenticity to the art world. However, the market refused to agree with her. The painting had no signature. Teri's background and lack of education didn't help, either.
However, there were a few factors in her favor.
The painting had a fingerprint on its back... a fingerprint that perfectly matches another on one of Jackson Pollock's old paint can. And then there's the fact that the paint on Teri's painting is the same paint found on Pollock's studio floor. And close-ups of Teri's painting and other Pollock's reveal nearly identical lines, layers, and colors.
In spite of this, the art world never took Teri seriously. Experts and dealers-including a former director at the New York Museum of Modern Art- laughed at her saying, "the art world and the justice system are two different worlds." Teri spent over 10 years trying to prove her case. During that time, she turned down offers of $2 million and $9 million for the painting.
My claims as to Teri's investing acumen are not whimsy. The greatest investors in the world all made their fortunes by ignoring the market, standing by their own research, and holding until their investments traded at a value they perceived as fair.
Joel Greenblatt, arguably the greatest stock picker of the 20th century- he averaged 40% a year over 20 years- has stated numerous times that one of the deciding factors in his success was his ability to wait three years to make money on a company. "Nobody wants to wait three years," he says, "Those who do, have a tremendous advantage."
Teri's got Greenblatt beat more than three fold: she's waited more than 10 years to make money on her painting. And she's turned down offers of $2 million and $9 million- representing gains of 400,000% and 1,700,000%, respectively- while she waits for the market to agree with her fair value of $50 million.
Had Teri Horton gotten into the stock market instead of trucking, she would undoubtedly have been a billionaire. Her ability to ignore the "experts" and endure endless criticism and even mockery would have placed her amongst a small handful of investors- Buffett, Greenblatt, Soros- capable of making billions by investing.
If you are looking to make money in this market, you, like Teri Horton, will have to stand by your fundamental arguments. You will have to ignore the Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson, CNBC talking heads like Maria Bartiromo, and more.
In fact, you will pretty much have to avoid TV and most mainstream financial publications in general. It is the only way to make money, especially with the degree of manipulation and the wacky economic data -inflation, employment, retail, etc- that the Bureau of Labor Statistics and other "authorities" are publishing.
Stick with common sense and fundamental analysis. Ignore the mainstream pundits. And for god's sake move some money into cash.
Best Regards,
Graham Summers
http://www.globalstockmonitor.com
You wouldn't think so to look at her. Horton, a retired truck driver, lives in a trailer furnished and decorated with items she found dumpster diving. She doesn't own any stocks. She doesn't even know what a junk bond is. And if you asked her to forecast the Dow, she'd probably tell you to get lost. You see, Horton deals in the most illiquid asset class in the world: fine art. And she got into it by complete accident.
In the mid-90s, Horton was browsing through a thrift store in her hometown of Costa Mesa, California, looking for a gift to cheer up a depressed friend. She came across a massive "ugly" painting. She asked the clerk how much the painting cost. When the clerk responded "$8", Teri said, "I love my friend, but I don't love her that much. Couldn't we do better?" Teri ended up paying $5.
She loaded the painting into her truck and drove to her friend's trailer to deliver it as a practical joke. The friend was amused, but didn't want the gift, saying, "This is really pretty ugly." Anyway, they couldn't fit in through her trailer door. So Teri tried to sell it in a garage sale. A local art teacher saw the painting at the sale and told Teri, "you might have a genuine Jackson Pollock there." Teri responded, "who the $^% is Jackson Pollock?"
Once she discovered that the painting could be worth $50 million, Teri set about trying to prove its authenticity to the art world. However, the market refused to agree with her. The painting had no signature. Teri's background and lack of education didn't help, either.
However, there were a few factors in her favor.
The painting had a fingerprint on its back... a fingerprint that perfectly matches another on one of Jackson Pollock's old paint can. And then there's the fact that the paint on Teri's painting is the same paint found on Pollock's studio floor. And close-ups of Teri's painting and other Pollock's reveal nearly identical lines, layers, and colors.
In spite of this, the art world never took Teri seriously. Experts and dealers-including a former director at the New York Museum of Modern Art- laughed at her saying, "the art world and the justice system are two different worlds." Teri spent over 10 years trying to prove her case. During that time, she turned down offers of $2 million and $9 million for the painting.
My claims as to Teri's investing acumen are not whimsy. The greatest investors in the world all made their fortunes by ignoring the market, standing by their own research, and holding until their investments traded at a value they perceived as fair.
Joel Greenblatt, arguably the greatest stock picker of the 20th century- he averaged 40% a year over 20 years- has stated numerous times that one of the deciding factors in his success was his ability to wait three years to make money on a company. "Nobody wants to wait three years," he says, "Those who do, have a tremendous advantage."
Teri's got Greenblatt beat more than three fold: she's waited more than 10 years to make money on her painting. And she's turned down offers of $2 million and $9 million- representing gains of 400,000% and 1,700,000%, respectively- while she waits for the market to agree with her fair value of $50 million.
Had Teri Horton gotten into the stock market instead of trucking, she would undoubtedly have been a billionaire. Her ability to ignore the "experts" and endure endless criticism and even mockery would have placed her amongst a small handful of investors- Buffett, Greenblatt, Soros- capable of making billions by investing.
If you are looking to make money in this market, you, like Teri Horton, will have to stand by your fundamental arguments. You will have to ignore the Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson, CNBC talking heads like Maria Bartiromo, and more.
In fact, you will pretty much have to avoid TV and most mainstream financial publications in general. It is the only way to make money, especially with the degree of manipulation and the wacky economic data -inflation, employment, retail, etc- that the Bureau of Labor Statistics and other "authorities" are publishing.
Stick with common sense and fundamental analysis. Ignore the mainstream pundits. And for god's sake move some money into cash.
Best Regards,
Graham Summers
http://www.globalstockmonitor.com
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