The Big Money by P-SimonSchuster


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									The Big Money
The Big Money
Author: Frederick R. Kobrick
Table of Contents

Contents1 Anyone Can Become RichOne Stock, BASM, and the Seven Steps2 Know What You
OwnKnowledge3 Holding On to Become RichPatience and the Other Steps4 Buy and Sell
DisciplinesUnderstanding Two Key Steps5 Stock PickingPutting It All Together6 ManagementThe Best
Management Means the Best Stocks7 Bear Markets, Bubbles, and Market TimingHow to Invest in
Different Environments8 Tech InvestingFrom Microsoft and Dell to eBay and Google9 Snake Oil: How to
Protect Your Money from Liars and DummiesFraud, Liars, and FoolsEpilogue: Down the Path to the Big

In The Big Money veteran stock picker and mutual fund manager Fred Kobrick draws on his decades of
success to explain his Seven Steps to financial security in any investing climate. Kobrick shows
investors how to find the high-quality stocks that will make them wealthy. A stock portfolio needs only a
few stocks that appreciate in value ten or twenty times, or one or two stocks that appreciate in value a
hundred times or more. Kobrick describes how he found some of his most successful stocks simply by
looking carefully at the products and services that customers and investors love, and recognizing the
great business models that create repeatability, the ability to keep producing success. This is a timeless
approach, so what works with Microsoft, Dell, or Home Depot will work with Google and even newer
companies. Kobrick explains that the average investor should not try to emulate a stock analyst or a
technician to find great stocks that will generate great wealth. Instead investors must recognize great
companies early -- by understanding their business model, identifying their assumptions, recognizing
their business strategy, and evaluating their management. Kobrick calls those four factors BASM, and
they are the cornerstone of his investing philosophy. Great managements grow companies and earnings,
driving stock prices higher. Kobrick also offers some tried-and-tested ways to know when you have a
winner you should hold, and when you should sell. Throughout the book Kobrick describes some of his
biggest successes -- as well as a few stocks he missed. His stories about these companies are
insightful and frequently entertaining. In bull and bear markets, from retail to high tech, Kobrick has
prospered. His stories and his Seven Steps to financial success will show investors what they need to
know to do the same thing -- prosper in any investing climate. No serious investor can afford to be without
this book.

CHAPTER ONEANYONE CANBECOME RICHOne Stock, BASM, and the Seven StepsAmerica won the
Revolutionary War. Although the reasons are complicated and involved strategy, perseverance, supplies,
and more, we know from our school days that the British relied on an outmoded way of fighting. They
were very well organized, marched in a straight line, and stood tall in their bright red coats when they
fired.In contrast, the Colonials were more free-form, hid behind trees, and fired when ready. Comedian Bill
Cosby had a routine in which he played the captains of two teams, the Red Coats and the Settlers.
When the captain of the Settlers won the coin toss, Cosby then asked him what he wanted.The Settlers'
captain said that the enemy team had to wear those bright red coats, approach the Settlers in a straight
line, and fire only when commanded to, while the Settlers could hide behind rocks and trees and fire at
will. We have always laughed at this, and put a lot of faith in that part of what we learned in school. The
regimentation of the British undermined their ability to fight this type of war. The Colonials' flexibility and
new ways of fighting were instrumental in helping them win a war against a much larger and better-
equipped army.America won its independence.What if I told you that most investors today are practicing
a form of "Red Coat Investing" that undermines their ability to become truly wealthy?I would add that
there is a way to win your own independence from inflexible, counterproductive investing. It is through very
easy yet solid techniques that I and many other investors with top records have used for decades to
capitalize on great stocks. It is not magic, nor does it work while you sleep. You have to actually learn
the key techniques of how to recognize a great company and a future winner and then know how to hold
on so you can create wealth.First you have to free yourself from old ways of thinking. Next, you need a
"compass," so that you can direct your attention to some critical but simple things. Haven't you always
wanted to recognize, buy, and hold one of the companies that have made stock investors 100X (100
times) their money? (Throughout the book I use X to denote multiples -- thus here it means "one hundred
times the value of the original investment.")This book is about the compass, and about Seven Steps that
are the simple but highly effective procedure you use, so you can stop beating yourself. It is not a manual
with complex instructions, but in contrast, it uses entertaining true stories from my decades as a stock
picker, with lessons. This is the way most of us learn most quickly and effectively.Over time, you'll be
able to work with more confidence and less frustration, and have a far better chance of making the big
money. While this can be triples and quadruples, I think of the "big money" as more like making 10X, 25X
-- even 100X or 200X -- your investment by owning the greatest companies, and owning them with true
insights and patience over the long term. This will reward you with a second form of independence: being
independently wealthy.Since computers arrived on desktops in the early to mid-1980s, investing has not
improved, nor has it improved with the arrival of the information age. For most people, information overload
has simply made it much tougher to pick stocks in order to become wealthy. People look for almost
everything, lacking focus and the secrets of what to look for. Those secrets of how and what to focus on
are revealed herein. By simplifying and focusing,...
Author Bio
Frederick R. Kobrick
Frederick R. Kobrick has managed money for more than thirty years. He spent fourteen years as an
investment analyst at Wellington Management Company, then joined State Street Research &
Management in 1985. He managed the State Street Research Capital Fund, which was one of the five
best-performing funds in the country for fifteen years, according to USA Today. Kobrick's Capital
Appreciation Fund was included in Money magazine's "Six Funds of the Decade" in 1996, and cited in
USA Today as among the five best funds for the entire bull market. Kobrick left State Street in 1997 to
start his own firm, managing three public mutual funds as well as Kobrick Capital, a hedge fund for
wealthy individuals and institutions. He was cited by The Boston Globe as one of the top three investors
of the 1990s. Kobrick Capital was named USA Today's All-Star Fund of the Year in 1998 and 1999, the
only mutual fund ever to win twice. A frequent guest on financial programs on television, Kobrick currently
advises institutions on a pro bono basis and also lectures. He teaches investment management part-time
at Boston University, where he has served as a trustee.<br/>

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