It’s better to pick up the pieces left from other peoples failures
My economics professor taught me that supply and demand are never the same. Either too much supply and too little demandor too much demand and not enough supply. Several years later I put that theory to work in the real world and made a small fortune. I took excess supply in several different asset classes. From real estate to computers, athletic footwear, jewelry, coins, furniture, automobiles, you name I bought and sold it for huge profits.
I combed the Wall Street Journal for companies having financial problems, and sometimes on the verge of bankruptcy. There have been hundreds of companies that fell into that category. Some companies needed to clear their warehouses, so I paid pennies on the dollar.
Some of these transactions were so profitable I still find it hard to believe. For example, Eastern Airlines fell into bankruptcy so I contacted them to buy whatever technology they wanted to sell. They had Texas Instrument TI810 printers. I offered $7.00 each for these used printers and ended up buying 2,211 of them. Immediately turned around and resold them to a company that refurbished used printer heads. Bought the printers for $5.00 and sold them for $12.00.
I bought 50,000 pairs of Vans shoes from the Orange California company for $10 and sold them for $12 to Costco netting $100,000, The time on that one was about 7 days.
When people have a supply of something they want to get rid of then that’s when I step in. Help them to remove it from their inventory. They are always happy that I was there to assist them. In their minds, the demand for their product no longer exists. People don’t have the time or patience to get rid of their inventory problems. I call these people “don’t wanters”, People that don’t want what they own.
In the old days, they called me a liquidator or someone that bought things for pennies on the dollar or turned assets into liquid cash. But the name evolved over the years to asset recovery. Turning non producing assets into cash. So cash became very important to me over the years because if I didn’t have the cash then I couldn’t buy the asset.
Business failures come in all shapes and sizes. Steve Jobs the legendary creator of Apple Computer with his sidekick Steve Wozniak created several flubs over the years like the Lisa. I made hundreds of thousands of dollars buying up the Lisa and reselling them for cash to assorted nitch customers that loved them. The problem was that Jobs thought the demand for this machine was far greater and overproduced the computers. Because of this error, I was able to cash in.
The one thing I realized about people’s failures with a product or real estate is they are always reluctant to admit their mistakes. The key is knowing where to look for them. Even liquid markets like the stock market have their shipwrecks. It’s much harder to cash in on those assets because markets like these tend to self-correct faster than illiquid markets.
This year I was able to buy up Ford and GM stock and turn a 70% plus profit over 6 months. I still haven’t cashed in because I think they will go higher.
COVID did give me great returns but the liquid stock market that constantly self corrects based on news rather than value is a very tough game to play. My best profits came from big techs like Apple, Amazon, Facebook, Microsoft, and Alibaba. In excess of 50% return were great when COVID hit everyone ran for the exits.
My success in the stock marketwas the result of picking up the pieces that others assumed were losers. In reality, failure usually happens within a time frame so time is the seller’s enemy. Failure doesn’t always exist except in the minds of people that own the asset. My job over the last 35 years is to pick up the piece’s failures.
The proverbial one mans trash is another man’s gold does apply. My stories on this subject are too many to put in this blog so are illustrated in my book How to Get Rich Making Big Money from home.
Concentrating on other people’s failures as opposed to creating your own failures is the easiest way to make money. Don’t create anything, just look for those assets you can buy, hold, or resell within a short period of time.
Mike Addis, Carlsbad California all rights reserved