Here's another example... About 10 years ago, I had a phone conversation with my older brother. He'd been a successful homebuilder in central Florida for over 25 years, winning numerous awards, including the annual "Parade of Homes." But he told me he was retiring. "Why?" I said. "You've been killing it." "I can't anymore," he said, "thanks to D.R. Horton." He said the nation's largest homebuilder had too many competitive advantages, including access to lower cost financing and huge economies of scale that allowed it to buy lots, building materials and appliances at far lower prices. "For years, I've offered my buyers the best custom homes for the money," he said. "But that isn't possible anymore with D.R. Horton in the game. That's why I'm throwing in the towel." I didn't feel bad for my brother. His business had already made him a millionaire many times over. Plus, I knew he had plenty of interests to keep him busy in retirement. But the importance of our chat was not lost on me. As soon as we hung up, I logged in to my brokerage account and picked up $100,000 worth of D.R. Horton (NYSE: DHI) in my IRA. My brother knew the homebuilding industry inside and out. If D.R. Horton was steamrolling him, it was flattening the rest of the competition too. When my shares of D.R. Horton doubled, I sold them. After all, it never hurts to take a $100,000 gain tax-free, right? Wrong. As I write, D.R. Horton is now worth 10 times as much as it was a decade ago. It would have been smarter to hold on. (I only left $900,000 on the table... so far.) But here's the main point... If someone wants to tell you what the economy will do next... or what the Fed's future interest rate policies will be... or how next year's election results will upend the stock market, do yourself a favor and tell them to "talk to the hand." But if someone wants to share well-informed insights on the prospects for their company... or how a new competitor in their industry is forcing them into submission... Trust me, you should be all ears. That's why I urge you to tune in to my recent presentation. I reveal what I call the most powerful investment secret in stock market history... And I even discuss the top three stocks this secret is pointing to right now. Go here for all the details. Good investing, Alex |
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