Richard Thalheimer is Teaching Investors How to Achieve Astronomical Returns
The following is adapted from The Sharper Investor — The Winning Formula to Boost Your Returns by Richard Thalheimer.
There are thousands of investing books on the market — books that talk about evaluating financial statements, using complicated ratios, assessing performance charts, and predicting market movements. I don’t want to talk about that stuff. Why? Because investing successfully doesn’t require you to know all those things!
All we need to do is pick the right stocks, buy call options, and sell put options. Very simple!
It’s a very basic strategy, but it works. And that is the best part of it! You don’t need to learn a lot of complicated stuff. Those things may be fun to learn about, but they are not used in my approach. If you follow my formula, you will have an excellent opportunity to achieve extraordinary returns.
My goal with this book is to inspire people to use techniques that help you keep your losses to a minimum, maximize your returns, and do it in an intelligent way that makes sense. We are looking for a positive return of 30–50 percent a year on your investment portfolio.
That may seem high, but it is attainable. I have done better than that most years. We’re not just counting on chance or luck to help us. We’re exercising insight, analytical ability, and common sense to make the result come out the way we want.
What’s an idea you share in the book that really excites you?
Buy the right stocks. Yes, it seems like obvious advice, but it’s a key part of my success.
My strategy is to choose companies that I understand and that are doing well in their field, especially those who are first movers or the dominant player. I couldn’t care less what the financials are behind it.
When I choose a stock, I look for one that has a story I understand. This is as simple as realizing that Domino’s makes and delivers pizza, has the best digital app, and offers the best delivery in the business. Understanding the company’s basic mission is good; knowing what makes them special is even better. That is what gives you an edge. One thing to know is that Domino’s makes and delivers pizza, but the edge is that they have been the leader in mobile app sales for pizza. They are much more advanced in digital compared to their competition.
This is the important point: You have to understand the company you are investing in, and you want to understand their advantage. What’s making them stand out compared to their competition?
To figure out the best stocks, I focus on building up my knowledge of different companies and then using intellect, common sense, and talent to analyze that knowledge. To help me with that, I constantly read financial news, look for market dominance, and watch the actions of market leaders. I also keep an eye on CEO interviews, follow current events, and buy companies I know and love.
How will implementing your formula improve your readers’ lives?
I’ve developed my formula over 20 years of studying, investing, trial and error, and learning. I am not exaggerating when I say you can expect to make 30–50 percent per year. Anything more than 20 percent is considered superb, so going for 50 percent is quite a lofty goal. However, you can do it.
With this step-by-step process, you can get better investment returns than the average hedge fund manager, and not just a little better, but a lot better. Most fund managers and money market managers strive to get returns of 12–18 percent a year, or in a rare case, 20 percent a year. Warren Buffett, perhaps the most famous investor of all time, managed to make a 17 percent average annual return for 20 years of investing. That result by Buffet is considered truly stellar.
The best hedge fund managers in the country don’t usually reach 30 percent. I read an article in January 2021 listing ten of the top US hedge fund managers for 2020. The number one fund in the article had earned a return of about 67 percent. Then, it dropped down to a 50 percent gain for the second-best fund, the third position was a 40 percent fund return, and the fourth position was a 37 percent fund return. This shows that if we can make 30–50 percent a year, we’re doing fabulous compared to even the best hedge funds.
And, best of all, there’s nothing fancy here. Everything you will be working with is online, and very affordable. Online trading platforms, like E*TRADE, are free, and stock trading is free. Options trading still has a small commission, so it is not free, but it doesn’t matter since the commission is so low.
By the way, this can all be done on your phone, tablet, or computer. And it is very entertaining. When you think about all the time that people put into their Facebook viewing time, or their Instagram viewing time, when you could be trading on E*TRADE and making money, I think you might agree it’s a better use of time, and just as much fun, to trade and make money on E*TRADE.
For more advice on achieving astronomical returns, you can read The Sharper Investor — The Winning Formula to Boost Your Returns on Amazon.
About Richard Thalheimer
As CEO, Richard Thalheimer led The Sharper Image to its peak with annual revenues of $750 million, 200 stores, catalogs, an online store, and 4,000 employees. The company became a public corporation in 1987 when its stock was listed on NASDAQ. Thalheimer now runs The Sharper Fund, sharing his wisdom at TheSharperInvestor.com. He is a stock guru and investing expert, sought after by journalists and their readers for his trendsetting observations about products, companies, and market movements. His early investment in Tesla, earning him millions in returns, is just one of many case studies in the way he identifies market-leading opportunities.
