INTRODUCTION
Wouldn't it be great to wake up each morning knowing that you're vested in a viable, safe and sound, realistic investment strategy that will allow you to sleep well at night and to enter your retirement years able to live a very comfortable lifestyle? Start reading now because that is exactly what is in store for you. Entrepreneurial CEO Investing is at the heart of a system we call "finding the mega-stocks", that is, stocks that appreciate to 10-20-100-1,000 times your investment. If you are patient, a small investment could turn into a sizable fortune, as illustrated by the examples we include of Entrepreneurial CEO Investing and the mega-gains that occurred in each case.
We have also selected ten entrepreneurs across
ten industries, all of whom would
meet the criteria described in this book. Part
II of Finding Midas contains a case study of each of the CEOs,
and the book's conclusion includes an investment grid and the
companies annual
growth rates. You will probably
agree, the numbers are staggering and beat all
the various stock indexes by miles.
How the Entrepreneurial CEO Investing approach works, and why
Why most traditional investors fail over the long term
Why the entrepreneurial CEO’s significant ownership is so critical
What to look for when researching the entrepreneurial CEO
What to pay as a reasonable stock price
How to determine when to stay with winners and when to dump the losers
Why investors lost money during the recent corporate scandals
How to avoid investing in the wrong entrepreneurial CEOs
How to spot the best entrepreneurial CEOs
How to apply the Entrepreneurial CEO Investing principles
You will not want to wait to start applying this system to
your own investment strategy because you will clearly see that the returns are incredible.
To take a new twist on an old, yet appropriate slogan, the famous Fidelity fund
portfolio manager and author, Peter Lynch, had a good quote "It's not the stock
market, stupid, it's the company," in explaining results. I believe another appropriate
slogan is, "It's not the stock market, stupid, it's the CEO."
As you read through the case studies in particular, you will
see that incredible financial success came to the investors of these companies not
because of the industry itself, but because of each company's CEO.
About Entrepreneurship
Because this book concentrates on investing with Entrepreneurial
CEOs, it would be good to define exactly what we mean when we use the term entrepreneurial.
First, what is the difference between between entrepreneurial management and professional
management?
We believe entrepreneurial management concentrates on seeking
new opportunities and trying to fulfill the needs of others. Entrepreneurialism
is moving ahead with a clear vision, often with limited assets. An entrepreneur
is an owner. Professional management is mostly about making assets more effective
and efficient. Both types of management are important, but in our economy and the
world economy, it is the entrepreneurs who create most of the economic growth and
the wealth for everyone else.
This has been true over the past two hundred years. A small
group of entrepreneurs in England began the industrial revolution by automating
and mass-producing textiles. This continued in the United States through the efforts
of such familiar names as Carnegie, Rockefeller, Edison, Ford, and Watson, to name
a few. Entrepreneurs continue to drive the economic success of the United States
today.
The new economic miracle of China is not the result of the government but the rising up of individual Chinese entrepreneurs. These people are creating great wealth for themselves, but they are also lifting up the entire Chinese economy. One of the best stories about this era is Dong Ying Hong, a poor teacher who was living in Datong, in northeast China, and making just $9 per month. She owned a sewing machine and began making socks—mainly because they wear out so fast. This turned out to be a good business to be in. Without any government help or direction, this provincial woman and her company now produce nearly 10 billion socks a year, about one-third of the world production. Her enterprise employs thousands of people and has made Dong Ying Hong a very wealthy woman.
Johan Norberg, author of In Defense of Global Capitalism, wrote
an article in the October 2, 2006, edition of the Wall Street Journal in which he
stated that entrepreneurs are "humanity's greatest achievement". He went on to speak
about how little credit is given to the few who do so much for the many. In the
United States, for example, 5 percent of the population pays 55 percent of the taxes!
Almost all the new jobs in America are created by smaller, growing companies headed
by entrepreneurs. As Norberg advised, "Thank entrepreneurs, not government, for
prosperity".
Worldwide you can easily see those countries where entrepreneurs are succeeding
and creating the highest growth rates. China is in the lead, with India and certain
Asian countries like Korea, Malaysia, Taiwan, and Japan also participating. Russia,
Africa, Latin America, and even Europe are not experiencing rapid economic growth,
due to a lack of entrepreneurs. For investors, the entrepreneurial economic climate
in a country is the most important factor to consider. Entrepreneurial rich or poor
determines whether a country is prosperous or not.
CASE STUDY 2
Now Compute This: Michael Dell
One of the greatest entrepreneurial CEOs of the past twenty
years is Michael Dell. Like many other successful entrepreneurs, Dell got his start
early. In his case, he sold computer parts from his college dorm room. But being
a trend in the industry wasn't the thrust of his success. Over the past decade,
the computer equipment industry has been a complex "minefield" with few competitors
having the tenacity or business savvy to continue to exist. Dell, however, has prospered,
making multimillions for many.
Dell has become one of the wealthiest men in America; yet,
as a young man, he still has much in front of him left to accomplish.
Dell, Inc. (NASDAQ: DELL), went public in June 1988 at an adjusted
price of $0.09 per share. A $10,000 investment at that time would now equal 111,111
shares. At the current price of $26.25 per share, that would equate to $2,917,000.
Each dollar invested would have multiplied 291 times. Now that's something to compute!
If Michael Dell had not followed his natural talents and interests,
instead of reading about him as the founder of one of Fortune magazine's
most admired companies, you may never have heard of him. Unless, that is, you needed
medical services. Yes, when Michael Dell entered college he intended to become a
doctor. But his true love was working with computers—a love that won out.
Not unlike his role model, Sam Walton, Dell was not about to
let lack of money deter his quest for venturing into a dream he believed in. With
little money at all, Dell began conducting business out of his University of Texas
dorm room in 1983. According to him, being an entrepreneur wasn't something he consciously
set out to do. Instead, it was vision, innovation, tenacity, and a willingness to
take a risk that was compelling to Dell.
At a time when other computer makers were marketing to the
general consumer through traditional retail outlets, Dell had an idea to sell computers
to consumers directly and to design these computers based upon the customers' own
specifications, not what Dell thought they needed. So, one year after he started
selling custom-made PCs and components from his dorm room, Dell officially set up
his business with a mere $1,000 in capital. The rest, as they say, is history.
It is Dell's innovative thinking, strong work ethic, and willingness
to take risks that have enabled his company to enjoy phenomenal growth and profitability.
The importance of having a clear strategy continues to be one of Dell's greatest
strengths. Dell has been quoted as recognizing that within a company of more than
forty thousand employees, his ability to impact anything but strategy is "pretty
small". Dell admits, "Strategy is the biggest point of impact I can have". It is
that strategy—that innovative thinking that enabled Dell to launch his unique concept
more than twenty years ago—that serves him so well in continuing to create tremendous
value for Dell's customers, employees, and shareholders. In 2007, Dell, after relinquishing
the CEO job in 2004, has returned to his original position after unfavorable results.
The entrepreneur is back!
Finding Midas is available at your
local bookstore and Amazon.com
copyright @ 2007 finding midas cleveland. all rights reserved.