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THE LITTLE BLACKBOOK OFBILLIONAIRESECRETSHow to turn 20k into 26 million in 12 yearsor 1.2 billion in 30 years By Bryan RichFORBES BILLIONAIRE’S PORTFOLIO
TABLE OF CONTENTSIntroduction . 4Why You’re Not A Billionaire . 5How Billionaires Get Richer . 10What Billionaires Do Differently . 11How to Invest Alongside Billionaires Without HavingA Billion Dollars . 12How to Have a Billionaire on Your Side . 14How To Make 26 Million . 24Seven Secrets of Billionaire Investing . 26Forbes Billionaire’s Portfolio
JoinFORBES BILLIONAIRE’S PORTFOLIOManage Your PortfolioLike A Billionaire Investor Break away from the herd. Invest alongside the world’s best investors. Get the billionaire advantage. Stocks that can double and triple.Forbes Billionaire's Portfolio helps averageinvestors invest alongside Wall Street billionaires,uncovering the best ideas from the bestbillionaire investors and hedge funds.CLICK HERE TO LEARN MORE
INTRODUCTIONHave you ever wondered howbillionaires invest their money? Howthey continue to get RICHER, while therest of the world is struggling?performance in history.For perspective, if you wouldhave invested only 20,000 inthis strategy of following the world’sbest billionaire investors, 12 years lateryou could have had 26 million.We study billionaires for a living. Tobe more specific, we study how theseinvestors generate such huge andconsistent profits in the stock markets–year-in and year-out.That’s 26 millionfor every 20,000 invested.Alternatively, for every 20,000 investedin the S&P 500 for the same period, youwould have had just 20,805.For a 12-year period, we trudgedthrough every single stock that ourfavorite billionaire investors havebought. And what we found istruly amazing.Consider this: If you would havefollowed the lead of these billionaireinvestors, buying the same stocks theybought, you could have made an amazing42% annualized return on yourmoney. Conversely, the long run returnon the S&P 500 is just 8%.But even more incredible: If youfollowed the stock picks of thesebrilliant investors, but waited to buythem only after they dipped 33%BELOW what these billionaires paidfor their shares, you could have made82% a year for the 12-year period.That’s 82% a year, while the broaderstock market experienced the worst4“Billionaireinvestors havegiven us the clearroadmap to followtheir footsteps towealth creation.”Forbes Billionaire’s Portfolio
WHY YOU ARE NOT A BILLIONAIREAverage investors make a number ofmistakes that keep them poor. Much ofit is due to a total lack of education andunderstanding of what investing is allabout.The volatility of stock market returnsis best measured by looking at thedispersion of returns around theaverage return. This gives you a clue asto how much risk you have to endure toachieve your expected return. It’s calledthe standard deviation and is a goodway to measure risk.The Wall Street marketing machinehas led average investors to believethat active trading, hot stocks tipsand predicting market direction isthe golden ticket to wealth. In fact, itproduces the exact opposite.#1MISTAKEThe standard deviation of the S&P 500is 19%.This means roughly 70% of the time,the S&P 500 should trade plus or minus19% around its long-term averagereturn. So if you use standard deviationas a gauge of risk, you’ll find that thebroad stock market pays you only 1unit of return for 2 units of risk taken.THEY THINK THE STOCKMARKET IS A GOODINVESTMENTInexperienced investors think theyshould be able to buy at bottoms, sell attops and make gobs of money. But that’sa highly difficult task.“Billionaires investin things they know. where they have anedge.”The long-run annualized return forthe S&P 500 (including dividends) is8%. And after fees, most professionalmutual fund managers do not beat theS&P 500.Moreover, too many investors do notunderstand the risk they’re asked totake to achieve an 8% return.5Forbes Billionaire’s Portfolio
Here’s why: Your investment’sperformance will largely depend onwhen you enter and when you exit.If you enter or exit at any given pointalong the path of Investment #2, thelikelihood of success is greater than itwould have been with Investment #1.So unless you think you can pick theexact bottom to enter and the exact topto exit, you’re far betteroff finding investmentsthat have a tighterdistribution of returns.Take a look at the two hypotheticalcharts above Both investments have an 8% averageannual return. But Investment #1 has awide range of returns, while Investment#2 has a stream of returns that moretightly hug the average annual return.If each of thepoints onthe chartsrepresentsa monthlyreturnand bothinvestmentsachieve thesame endresult, whichinvestment should you choose?“Billionaires don’tgamble - they bet onsure things.”Stay away.The bottom line is, a buyand hold strategy in thebroader stock marketindex just doesn’tcompensate you for risk.It’s a bad investment.The answer: Investment #2 — the onewith the tighter distribution of returnssince it gives you a higher probability ofachieving a higher return.6Forbes Billionaire’s Portfolio
#2MISTAKESure, 20 years ago when there wasn’tthe Internet or smartphones, you had tocall your broker to get a stock quote ormake a trade.OVERTRADINGI know a lot of very rich people. And Iknow a lot of very successful investors.I can tell you this. None of them gotrich day trading.Today, you can get stock quotes,currency quotesand research,on the Internet.So think twicebefore you hirea broker. Manyinvestors aresavvy enoughto use anonline brokerageIn 2017, Warrenaccount, which 75.7 billion.can cost 5 atrade.In fact, not only can day trading be badfor your bank account, it can be badfor your health. There’s a study by aprestigious Australian University thatsays every hour you spend in front of acomputer increases your risk of an earlydeath by 11%. Think about that! Thesmartest and most successful investorsthink in terms of risk vs. reward, inEVERYTHING they do!A shortened life with less money is abad trade – don’t do it.#3MISTAKEI don’t want to belabor this point,but think about this: the brokerageindustry does not produce investmentminds, it produces salesmen.TRUSTING THEWRONG PEOPLEMy point is this: In many cases (Iwould estimate the majority of thecases) these people you trust withyour money are not experienced oreducated enough to watch over yourmoney. Be aware of that.If you take away one thing from thisbook, remember this: Your financialadvisor-stock broker is not yourfriend.I say this with utmost respect as mydad was a stock broker for 50 years. Butlet’s be honest, stock brokers are not asvaluable as they once were.And keep in mind that brokers get paidregardless of whether your accountgoes up or down.7Forbes Billionaire’s Portfolio
Bottom line: Stay away from them and it willsave you easily 2% to 4% in fees per year.On a 100,000 account,that’s as much as 4,000 morea year in your pocket.“Billionaireinvestors investwhen they cancontrol theirown destiny.they don’tleave things tochance.”8Forbes Billionaire’s Portfolio
BREAK AWAY FROM THE HERDAND STAND ON THE SHOULDERS OFBILLIONAIRES9Forbes Billionaire’s Portfolio
HOW BILLIONAIRES KEEP GETTING RICHERYou see, unlike the average investor, billionaireinvestors don’t stand by and let the globaleconomic turmoil or restrictive policies destroytheir wealth.They pivot. And they capitalize!How?It’s not from focusing on the things they cannotcontrol. But by focusing on the things they cancontrol.Let me explain .Billionaire investors have a unique advantage.Of course, they have a lot of money. But withmoney, comes power and influence.“What’s thedifferencebetween abillionaireinvestor andyou?”Unlike mutual fund managers, financialadvisors and the rest of Wall Street and MainStreet, these billionaires aren’t in the business of guessing about what may or maynot happen with a company and its stock. They are in the business of sure things.They like to control their own destiny. And that’s precisely what drives the waythey invest.They find companies that have a clear need for a shake-up. Then, they buy enoughof the company to take control of the wheel.10Forbes Billionaire’s Portfolio
WHAT BILLIONAIRES DO DIFFERENTLYWhen you buy as much as 15% . 10% . even 5%of a company’s stock, YOU are in the driver’s seat.Management works for you!It’s this philosophy of taking “controlling interest”in companies that has allowed these big-timeinvestors to put up staggering returns, year afteryear . even in the worst economic climate in ourlifetimes.“If someone toldyou that you couldget an insidelook at what is inthese billionaires’portfolios, wouldn’tyou want to take apeek?”To be clear, these are guys that built their wealthby investing in these types of situations.They have track records that are unmatched ininvesting. And their bank accounts prove it.Now, if someone told you that you could getan inside look at what is in these billionaires’portfolios, wouldn’t you want to take a peek?Imagine how valuable it would be to know exactlywhat the richest, most successful investors in theworld have in their portfolios.As a consultant to large hedge funds, that’s exactlywhat I do. I uncover these lucrative investmentsthat allow my clients to piggyback these investinggiants. I do it for my own account.11Forbes Billionaire’s Portfolio
HOW TO INVEST ALONGSIDE BILLIONAIRE INVESTORSWITHOUT HAVING A BILLION DOLLARSYou get ALL of the returns, but pay none of the fees. We let thesebrilliant billionaire investors do all the work and we reap the benefits.In short, through my extensive network of contacts in the hedge fundindustry and among the ultra-rich, I find out. WHO the smartest and historically bestperforming hedge funds are I find out WHAT they are buying I tell YOU WHAT and WHEN they are buying, YOU BUY WHAT THEY BUY!It’s that simple.Consider this: These funds can often end up owning asmuch as 60% of the company’s total outstanding stock.They can’t afford to be wrong!CLICK HERE TO LEARN MORE
HOW THE BILLIONAIRE’SSECRET CAN WORK FOR YOU
WOULDN’T YOU LIKE TO HAVE A BILLIONAIRE ON YOUR SIDE?Let’s start with GGP.demonstrates the appeal of buying lowpriced stocks, which many of theseguys like to do.This one is of the “home run” variety.They certainly don’t all come like this,but when they do it’s a lot of fun.You get more bang for your buck.Next, Dollar Thrifty My guy was buying these shares, as theworld was falling apart, between 25cents and 50 cents. (Editor’s note: theblue box in the charts represent wherethe funds were found acquiring thestock).This chart really exemplifies why youneed to follow billionaire investors.Dollar Thrifty, a car rental company,was very near bankruptcy. Let merestate that this company wasteetering on the edge of collapse.So the world is imploding, and he’spouring hundreds of millions of dollarsinto a penny stock – THAT GETS MYATTENTION!The investor I followed stepped inand bought millions of shares of DTGaround 35 to 45 cents a share. Thatgave him controlling interest in thecompany.This stock went up 46-fold!For those that might be slow doing themath, I understand. That’s 460k forevery 10k invested.Once he had control, he knew that hecould impose his will on the companyand turn it around. Believe it or not,this was one of those “sure thing”investments for him.That’s a huge winner. And it also14Forbes Billionaire’s Portfolio
WOULDN’T YOU LIKE TO HAVE A BILLIONAIRE ON YOUR SIDE?A year later, two different car rentalcompanies tried to buy DTG.This investment ended up returningover 8,000%.That would turn a 10,000 investmentinto more than three-quarters of amillion dollars!The interesting thing about theseopportunities is that you don’t have tobe a sophisticated investor to investlike one. They do all of the work. Theypay all of the experts. And the averageguy can get all of the benefits just byfollowing along.“8,000% winner!Stock picks thatcan make youa millionaire.overnight!”15Forbes Billionaire’s Portfolio
DOUBLES, TRIPLES, AND BEYONDTake a look at Pulte Homes. 4.25. The stock went up 200% in lessthan a year.This isanotherexample ofthe way thesebillionairestrade. Theywant lowpriced stocks,Carl Ichan is one ofbecausethe great billionaireit givesinvestors.them theopportunityto makemultiples of their money.PULTE HOMESThe guy that was involved in this stockhas one of the greatest long-term-trackrecords of any hedge fund manager inthe business. He’s averaged over 35% ayear for the past 20 years. And he’s nowworth about 16 billion.And you can see, in many of thesecases, it doesn’t take long after they’vebuilt their stakes, for these stocks tostart running higher.In this case, he became bullish onhomebuilding stocks around mid-2011.His approach: To bet on a rebound inhousing, he wanted to find the cheapeststock in the sector. He bought the onewith the lowest book value, the lowestshare price and (this is key) the mostliquidity. He chose Pulte.Another? How about this stock,Western Refining Pulte is a member of the S&P 500, andwas one of the few stocks in the S&P500 index that sold below book valueand under 5 a share. So he dove in. Hepurchased millions of shares aroundWESTERN REFINING16Forbes Billionaire’s Portfolio
DOUBLES, TRIPLES, AND BEYONDHere is another example of one of thesebig-time billionaire investors buying astock below book value.their patents to Microsoft, for morethan the company’s market cap! Theresult I found him buying millions of sharesin this gasoline refiner at around 4.A DOUBLE in about eight months.This AOL example shows you that thistype of investing can be done with evenwell known, large-cap stocks.He knew that if gasoline pricesrecovered, this stock would generate ahuge return. Less than a year later, theprice of gasoline jumped. And the stockmore than tripled!Now, I can assure you, the aboveexamples are just a very small sample.This is what this type of investing is allabout. It’s about consistent big winners.Finally, let’s take a look at AOL.It’s about getting a partner on yourside that is hell-bent on making money– big money and that’s what thesehedge funds that I follow represent.They have to be right. They get paidwhen they are right.AOL“It’s like car-pooling witha billionaire. They driveand we get a free ride.”The guys involved in this play arebulldogs. They buy a controllinginterest in a company, and then theylike to force management to sell assets.In turn, they manufacture a return ontheir investment.And these plays all have to work outwithin their time frame –which isinsideAnd that’s exactly what they did withAOL. They forced the company to sell17Forbes Billionaire’s Portfolio
DOUBLES, TRIPLES, AND BEYONDof a year, in most cases. After all, thesefunds are competing for assets, butmostly for pride . and annual returns areeverything!So they can’t sit and wait five years for aninvestment to work out, like a mutual fundor endowment might.They buy stocks that they know they cantake control of to unlock value, toimpose their will.I’ve narrowed down myinvesting strategy tothree simple steps:And their will is very clear: To makemoney . a lot of it.1I find out whothe best areIn all of my years of experience workingthis industry, I’ve narrowed down myinvesting strategy to three simple steps:2I find out whatthey’re buying3I buy what theybuyStep #1: I find out who the best areStep #2: I find out what they’re buyingStep #3: I buy what they buyJust follow the bestand the rest is easy.Just follow the best and the rest is easy.These guys are rich because they controltheir own destiny. They do all the workfor you. They put their own money on theline. Brokers, mutual funds don’t.18Forbes Billionaire’s Portfolio
JoinFORBES BILLIONAIRE’S PORTFOLIOManage Your PortfolioLike A Billionaire Investor Break away from the herd. Invest alongside the world’s best investors. Get the billionaire advantage. Stocks that can double and triple.Forbes Billionaire's Portfolio helps averageinvestors invest alongside Wall Street billionaires,uncovering the best ideas from the bestbillionaire investors and hedge funds.CLICK HERE TO LEARN MORE
FOLLOW THE BEST!regardless of what the market does. Justone of these stocks could let you retirerich.companies that you and I can click abutton and buy.In these cases, you are buying a stockwith a huge potential return, butMost importantly, this type of investinglets you enjoy your life. Instead ofstaring at screens all day, take a walk,For example, take Hertz (HTZ), adeeply undervalued market leadingcar rental company. Here, we have astock that possesses ”asymmetricalrid of those computer screens that arekilling you.Put simply, following the worldsgreatest billionaire investors can putyou on the same path to becoming rich.Keep in mind, those S&P 500 long runreturns I mentioned earlier, a measly8% per year, also come with loads ofrisk. Now, look at these returns fromsome of the great billionaire investorsof our time.LOVE to see.WARNING:A lot of people want to offeryou advice on how to manageyour money. The BEST investorsONLY surround themselveswith proven winners who havepersonally demonstratedsuccess!Carl Icahn has put up 53% per yearover the past 20 years.John Burbank has returned 50% peryear since 2000.David Tepper has made 41% per yearsince 1993.these great investors is that they madethese incredible returns simply buying20Forbes Billionaire’s Portfolio
FOLLOW THE BEST!Here’s what I mean The key success factors in thebillionaire investor campaigns I followare: 1) high conviction, 2) spinoffsand 3) CEO change.“Great investorsLOVE asymmetricrisk”In the case of Hertz, we have thetrifecta. Billionaire Carl Icahn owns35% of Hertz. High conviction: check!Add to this, Icahn walked into Hertzand pushed the company to spin offits equipment rental. That’s now done!Spinoff: check! In Hertz Global, Icahnnow has a pure play on the rental carebusiness. What about CEO change?Icahn recently forced out the CEOand replaced him with his hand selectedhired gun. CEO change: check!Now, with the above in mind, consider this: HTZ is a left-for-dead stock,without a doubt. But Uber is currently valued at 37 TIMES the value of Hertz.Icahn is betting that the ride-sharing business hasn’t killed Hertz. If he’s right,this stock is a multi-bagger. The most you can lose in any stock is 100%. Thisis precisely what the best investors LOVE stocks that have thisASYMMETRICAL RISK TO REWARD opportunity. Remember, he’s notjust taking a bet, he’s in control at Hertz.21Forbes Billionaire’s Portfolio
BUILDING YOUR OWN BILLIONAIRE’S PORTFOLIOWe’ve talked about the value offollowing the best. What about the bestOF the best?Buffett’s growth rate over that lengthof time is indeed amazing too. Butdue to the power of compounding,the wealth creation of Buffett, frompure investment returns, pales incomparison to that of Icahn.I’ve studied the track records ofhundreds of billionaire investors andbillion-dollar hedge funds. And oneman stands above the rest, as the bestinvestor alive. I’m sure most wouldconsider it to be Warren Buffett. Butthe numbers tell a different story. Infact, the greatest investor of all-time isbillionaire activist Carl Icahn.Icahn’s investment skill has created 65 to every 1 created by Buffett.So how has Icahn been able tooutperform Warren Buffett (and thebroad stock market) by so much andfor so long?Incredibly, bothIcahn and Buffetthave been buildingtheir respectiveinvestment empiresfor over fivedecades. And moreIn 2015, Carl Icahn’sincredibly, theynet worth is 21.3 billion.remain at the topof their profession.But Icahn has, unequivocally, shownsuperior skill as an investor.Of course, Icahn is a doggedshareholder activist and often anagitator of corporate management. Keyto his playbook is using power andinfluence to control his own destinyon stocks he invests in. In a studyhe published last year, Icahn calledattention to the power of the boardseat. Looking back on a recent five-yearperiod, Icahn showed that when hesecured a board seat on a company inhis portfolio, he was able to create valuefor shareholders to the tune of a 27%gain, on average. That’s controlling yourConsider this: Icahn has returned31% annualized since 1968. Thatwould turn every 1,000 invested withIcahn into 325 million today – anincredible number. Buffett, on the otherhand, returned 19.5% annualizedduring virtually the same time period.“Icahn’s investment skill hascreated 65 for every 1created by Buffett.”22Forbes Billionaire’s Portfolio
BUILDING YOUR OWN BILLIONAIRE’S PORTFOLIOown destiny.TRAIT#2Additionally, when we look strictlyacross the stocks in his portfolio, wecan see some common traits that havemade Carl Icahn the world’s greatestinvestor.“you only need one or two great ideas agarnered a 463% return in just 12months, between 2012 and 2013.Patience is king. You don’thave to go to Harvard orhave a Goldman Sachsinvesting pedigree to havepatience. And many times, that can bea high win rate is paramount to goodTRAIT#3important thing is being right. Likemany widely accepted adages, ithappens to be dead wrong. Billionaireiconic hedge fund investor GeorgeSoros says, “it’s not whether you’re rightor wrong, but how much money youmake when you’re right and how muchmoney you lose when you’re wrong.”and losing money in investing. Icahnhas an average holding period of overtwo years.When you hunt forbig returns, you mustbe willing to acceptdrawdowns and losers.Icahn has multiple stocks over thepast 20 years that have been full losers(i.e. they went to zero). But when youhave a portfolio full of stocks with bigpotential, and a change agent at work,in the end the big winners can morethan pay for the losers.TRAIT#4Over the past 20 years, the stocks inIcahn’s portfolio have a win rate onlya tad bit better than a coin toss. But heputs himself in position, so that whenhe wins, he has the chance to win big!TRAIT#1Icahn became rich bytaking concentrated betsthroughout his career. Asopportunities withlimited risk and hugepotential return.Among Icahn’s stocks, his winners werealmost twice that of his losers.Want to invest like the greatest investorof all-time?23Forbes Billionaire’s Portfolio
HOW TO MAKE 26 MILLIONBefore I go on, I want to emphasize the extreme valueof these types of returns I just mentioned.The difference between 50% per year and 8% per year,when you account for the compounding effect overyears of time is extraordinary. It’s the compoundingeffect of those types of returns that builds wealth.And that’s exactly why these guys are billionaires.This is exactly why I’ve chosen to align my financialfuture and my career with these proven investors.In fact, I’ve done, to my knowledge, the mostthorough research on the investing performance ofbillionaire investors and activist investors.I have a huge database of investors and I havethe good fortune of having access to the mostsophisticated and expensive technology that WallStreet has to offer. Plus, I have a very lucrativenetwork of contacts, among them, some of thesebillionaire investors themselves.In short, over the years I’ve tested portfolios of thesetop managers through millions of iterations, andI’ve narrowed down my top guys – my team. And Iwent back through every single stock pick these guysmade over the past 25 years. What I found was trulyamazing.“Thedifferencebetween 50%per year and8% per year,when youaccount for thecompoundingeffect overyears of time isextraordinary.It’s thecompoundingeffect ofthose types ofreturns thatbuilds wealth.And that’sexactly whythese guys arebillionaires.”The Research Big ResultsIf you would have followed every single stock pick24Forbes Billionaire’s Portfolio
these investors made over the past 25 years,you would have returned an amazing 42% peryear on your money.But this is even more impressive If youbought the dip on these investors, the past12 years would have returned you 82% ayear.That’s buying the stocks they own a thirdcheaper than what they paid for them. Theresults are huge!That can turn 20k into 26 million intwelve years or 20k into 1.2 billion in30 years.“You onlyneed a fewideas to befabulouslywealthy.”And don’t forget, this is during the worstsingle period ever in the history of the stockmarket.Those are big numbers. And guess what. It can be done. There is living proof rightin front of us, with every one of these self-made billionaire investors.SECRETS OF BILLIONAIRE INVESTINGDisclaimerThe Little Black Book of Billionaire Secrets is strictly an informational publication and does notprovide individual, customized investment or trading advice to its subscribers. Although many ofour analytical approaches are unique, they are based on publicly available data.Any opinions, news, research, analyses, prices, or other information contained on this ebookare provided as general market commentary, and do not constitute investment advice nor asolicitation. We are not liable for any loss or damage, including without limitation, any loss ofprofit, which may arise directly or indirectly from use of or reliance on such information. We havetaken reasonable measures to ensure the accuracy of the information on the ebook. The content onthis ebook is subject to change at any time without notice.25Forbes Billionaire’s Portfolio
7 SECRETS OF BILLIONAIRE INVESTING1Billionaire investors bet on sure things.They invest in things they know verywell.3They want to be in situations where theycan control their own destiny.Only buy stocks that the world’s bestbillionaire investors own.54When possible, buy these same stocksat a discount to what these billionaireinvestors paid, and get an extra kicker.Hold stocks until they return 300% to500% - and sell them (or do what I do,sell when the billionaire investors sell).72Sit back and enjoy the power ofcompound interest.6
ABOUT THE AUTHORBRYAN RICH, FOUNDER Bryan is the founder of Logic FundManagement, a macro-economic and global investment research,consulting and advisory business. At Logic, he has advised hundredsof thousands of investors from over 80 countries on global macroinvesting issues.Prior to founding Logic, Mr. Rich was a senior traderwith Integra Investment Management, a 2005 nominee for GlobalMacro Hedge Fund of the year. He started his career with Traval, afamily office macro hedge fund that managed assets for a wealthyEuropean family. He has worked in London and on Wall Street.Healso consults as an expert in global currency strategy, and has runequity and economic research groups for a leading independentresearch company. He holds an MBA from Rollins College.27
JoinFORBES BILLIONAIRE’S PORTFOLIOManage Your PortfolioLike A Billionaire Investor Break away from the herd. Invest alongside the world’s best investors. Get the billionaire advantage. Stocks that can double and triple.Forbes Billionaire's Portfolio helps averageinvestors invest alongside Wall Street billionaires,uncovering the best ideas from the bestbillionaire investors and hedge funds.CLICK HERE TO LEARN MORE
Like A Billionaire Investor Join FORBES BILLIONAIRE'S PORTFOLIO Break away from the herd. Invest alongside the world's best investors. Get the billionaire advantage. Stocks that can double and triple. Forbes Billionaire's Portfolio helps average investors invest alongside Wall Street billionaires,
