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Thomas Phelps

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58

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2023-06-02

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2023-06-02

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1

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1. “Better, faster, or cheaper than their competitors, or provide a new service with prospects of great and long continued sales increases in the future. And then finally, fourth is that it must have a strong, progressive, research-minded management team, which is something we talk a lot about here on the show. The interesting one I wanted to highlight here is look for a business that's relatively unknown. It can be easy for us to look for companies that a lot of other people have invested in.”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT

2. “Then Phelps goes on to tell the story of a regular everyday person that built a massive investment portfolio over his life by buying right and holding on, and he shared four of the things the individual looked for when investing his money. He figured that the fastest way to increase his wealth was to invest in a company that could sustainably grow their earnings at a fast pace for a really long time. So the first thing he wanted was for the company to be small because large companies by nature tend to not really have long growth runways ahead. The second thing he wanted was for the business to be relatively unknown. Phelps writes, quote, popular gross stocks may keep on growing, but too often one has to pay for expected growth too many years in advance. So first the company must be small. Second has to be relatively unknown so it isn't trading at a too expensive of a price. Then third, it must have a unique product that can do a job.”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT

3. “When I look 10 or 20 years out, what the stock market does in 2023 really, in my mind, is largely irrelevant. And Phillips makes the case that since over 360 companies have increased by over 100 fold, finding winners in the stock market is anything but impossible. It's most definitely difficult, but not impossible. It reminds me of the saying that the best investors are those that turn over the most rocks. He argues that one could have invested $10,000 in just one of these 100 baggers and then eventually become a millionaire. And say if you had invested in 10 different companies, having just one of those being a big long-term winner should more than make up for all the ones that don't do nearly as well. One amazing attribute of the stock market is that when you buy a stock, your upside is unlimited, but your downside is limited to what you invest, assuming you don't use any leverage at all.”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT

4. “right and holding on end quote and this quote is just the recurring theme you'll find throughout this book fortunes are made by buying right and holding on especially with how short term most investors think today investors that apply this strategy is just so rare and despite evidence of the past showing how well investors can do by buying right and holding on it seems that people still today think way too short term When I talk with individual investors, one of the most common questions I get is what I think the stock market is going to do over the next year or so. I frankly have no idea what stocks will do in the near term and to think that I do have any idea says more about what I don't know than what I do know. And I almost never have someone ask me what stock I believe is a high quality long-term compounder. To me, that's a much more interesting question than what do I think the stock market's going to do over the next year or so.”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT

5. “Who end up with little. And those who ask much in life receive much, and then those who ask too much get nothing. Most people in life ask very little and oftentimes don't make much out of themselves and very few people are asking too much. And Phelps relates this idea to investing, saying that most people are content with making a quick profit on their holdings, or they're content with making a small percentage of interest on their savings in a bank, for example. The takeaway is that most people don't think big enough as investors. Most people don't believe that they truly have a chance at owning a big winner in the stock market and making a ton of money off of picking individual stocks. Those who realize that it is actually possible, you know, see other people doing well with it, or they have seen others in the past do well and they want to learn how it's actually done. Then Phelps says this line that I believe he's quite well known for, quote, fortunes are made by buying”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT

6. “How they increase their share price by 100 times. Phelps starts out the book with a parable of five Arabs where each Arab is given one wish. The first Arab wishes for one donkey, the second Arab called him a fool and asked for ten donkeys, then the third Arab wished for a bunch of different things he wished for camels, donkeys, tents, food, wine, and a bunch of other stuff, and everyone had their wish fulfilled and come to reality. And then the fourth Arab then wished to become a king and then a crown appeared on his head, so his wish came true, and then Phelps writes, having seen his companions in misery asking too little, the fifth Arab resolved to make no such mistake, and he wished to become Allah. Then, quote, in a flash, he found himself naked on the sand, covered with leprous sores. In the moral of this story is that those who ask of little in life are those”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT

7. “All right, so to give some background on this book, the book was published back in 1972. Every once in a while, I enjoy reading books that are a bit older. I get this feeling that people just think and write differently during these time periods. And I like how it sort of mixes up the type of content I'm consuming. Thomas Phelps lived from 1902 through 1992, so he was around 70 years old when this book was published. He spent over 40 years in the investing world working as a private investor, a columnist, analyst, and a financial advisor. So he held a number of different jobs and obviously was deeply fascinated with investing overall. Phelps studied 365 different companies in his book that had the price of their stock increased by over 100 times, and he started from the year 1932 and then ended the study in 1971. That's a time period of 40 years, and then throughout the book, he shares many of his takeaways from studying these companies.”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT

8. “Stick around until the end to hear more about that. Without further delay, I hope you enjoy today's episode covering Thomas Phelps book 101 in the stock market.”

   2023-06-02 · We Study Billionaires · TIP556: 100 to 1 in the Stock Market by Thomas Phelps · IDENTIFIED FROM THE TRANSCRIPT