Today is Labor Day, a market holiday. In lieu of our usual analysis, I thought I’d do something a little different.
I hope you’ve come to enjoy and trust the research my team and I are publishing here at Brownstone Research. But more than just trusting the research, I hope you’ve come to trust me a little more each day.
The basis of any service like this is trust between the reader and the editor. And with that in mind, I thought I’d share a little more of my own story. That includes how I started investing, the mistakes I made, and how they led me down the path of publishing investment research.
My hope is that it will help you better understand what motivates me, and why I’m so driven to provide world-class analysis for all investors.
Reading the Quotes
Before the internet and smartphones, there were these things called newspapers. And in these newspapers, there would be quotes for the latest prices for stocks. This was the mid-90s, and every morning I would sit at the kitchen table with my dad, and we’d look at the latest quotes.
Back then, there were mutual funds geared towards young investors. At the time, I had saved about $1,000 from working odd jobs. So, I sent it in to see what might happen. This was right as the dot-com boom was getting underway. And you can imagine my joy when – a year later – I learned that my investment was now worth about $2,000.
I remember thinking, “Wow, I’m the next Warren Buffett. This is going to be easy.” But it was around this time that I learned another lesson. Stocks go up… But they also come back down. A year later, I checked my statement to see that I was back to $1,000.
But I knew then that the stock market was always going to be a part of my life.
I ended up going to business school. I studied economics. I studied finance. I studied accounting. My last year in college, I opened up a clothing store.
I thought I was going to be a small business owner. Maybe I’d open up a chain of these stores and invest my money on the side.
Closing the Doors
This all happened in 2006. I’m located in the Central Valley of California. Back then, this was one of the hottest real estate markets. And for a while, things were going great. Business was doing well. And once again, I thought, “I’m the next Sam Zell. This is going to be easy.”
But once again, it wasn’t meant to be…
By 2007, the business was struggling. By 2008, weeks would go by, and not a single customer would come into the shop. Finally, I closed the doors for good in August of that year.
I can’t begin to describe how bad it felt to walk back to my little apartment that night. I opened the door and saw boxes of unsold apparel crowding my tiny living room. I’ll admit that I was depressed. My business had failed. And I was blaming myself.
But looking back on it, that was one of the most important moments of my life…
The Investment That Changed My Life
Two months later, in October, Lehman collapsed. Everybody was panicking. It really did feel like the sky was falling.
But I knew enough about market history to remember that some of the greatest investing fortunes were made in the middle of a panic. As the market continued to crash through March of 2009, I was buying stocks as quickly as I possibly could.
By this time, I had started a business building and designing websites for customers. We take that for granted today. But back in 2008/2009, people were still unfamiliar with web design. And as a result, the business was taking off.
During the entire period, I was reinvesting almost all the money I made into the market. For a time, I didn’t even own a car. I was living very frugally.
And it was around this time that I made one investment that would change the course of my life forever.
I zeroed in on a company called XPO Inc (XPO). The company specializes in freight and all the networking that goes along with moving freight.
Keep in mind, we were deep in a recession. The economy was sputtering. Hardly anybody was shipping freight in any real volume. As a result, XPO was trading around $5, close to an all-time low.
But I knew the company. I knew its potential. And I had faith in its CEO, Brad Jacobs. And so, I started buying shares in XPO. And I kept buying… and buying… and buying.
That turned out to be one of the greatest investments of my life. By 2018, XPO was trading around $100, a roughly 20x gain over 10 years.
I didn’t capture that full return. I sold out a little early. But that’s okay. Because I used the funds from that investment to buy the house that I’m writing to you from today.
Moving out of that tiny, grungy apartment and into my own home with my wife was one of the happiest moments of my life.
Was it a mansion? No. Did it need some fixing up? Sure. But it was mine. And it’s hard to put a price tag on that feeling.
It’s Never Easy, but It Can Be Done
Why do I tell you this story?
When I was much younger, I thought that investing would be easy. I thought running a business would be easy. I assumed that riches were virtually assured. They weren’t, of course.
But identifying great companies with great management, trading at reasonable prices, can transform your life for the better. It did for me. It can for you.
It’s never easy, but it can be done.
Over the years, I’ve been an investor, a business owner, and the host of a YouTube channel with more than 100,000 subscribers. Now, I’m thrilled to be your editor to share the same research that has made such an impact on my life.
I hope all readers have an enjoyable holiday. I look forward to a great future together.
Editor, The Bleeding Edge