Michael O’Higgins and his son are about to start working on a new book.
What makes these books so great? They’re “teachers” in the purest sense: easy to understand, simple to follow, and they stand the test of time.
Michael O’Higgins’ new book, I believe, should be one of the most eagerly anticipated finance books ever written.
When he wrote his first book, Beating the Dow, he explained a strategy that the average Joe could follow to trounce the market. He had been doing it himself for years, and by 1978, he took his DOW beating show on the road.
Between 1978 and 1998, the strategy averaged 20.93% annually. Let’s put that in perspective. If you were lucky enough to listen to O’Higgins and follow his strategy back in 1978, you would have turned $10,000 into $541,022 (pre-tax) after just 21 years.
If you had bought a copy of Beating the Dow in 1991, you would have averaged 26.36% for the next eight years.
But in 1998, everyone and his dog was throwing money at the stock market. And why not? Whether it’s stocks in the late 20s, late 50s or late 90s, we love buying what’s expensive. Like American real estate in 2005, and gold today, we’re tickled by rising prices.
And sadly, most of us follow through like lemmings to eventual slaughters, singing the same old song: “This time it’s different”
He didn’t want any part of the rising stock bubble in 1999, and like a great teacher, he wanted to show how to avoid the bursting bubble and keep making money. That’s when he penned Beating the DOW with Bonds.
Devising another simple strategy, he explained how investors should shift into bonds, t-Bills or gold, when certain market conditions existed. And he showed how to do it. I partly followed his philosophy myself, and I owe the man a giant “thank you”. …read more
Following him loyally in 1998 would have seen investors find refuge in bonds paying 7.5%. And as stocks crashed between 2000 and 2003, bond prices rose, furthering profits for bond holders. O’Higgins’ converts would have continued to make bucket loads of money while the world crashed around them.
Then in January 2002, he went into gold at $280/oz. Nobody wanted it. Gold was dirt cheap, and it had trailed inflation (as an average) since 1801. Yeah, you read that right. Inflation beat gold from 1801 to 2002.
And while so many people are now warming up to gold as an investment, despite its overheated run, O’Higgins is about to bail, suggesting that he’ll sell near $1,400 an ounce.
Well… gold’s price is at the guru’s selling point. And the ever-disciplined contrarian is likely unloading after a 400% gain.
He runs his own investment management service for high net worth clients. No doubt they view him as the Messiah.
That said, he’s a generous man: one who published what he was doing in 1991 and 1999. And he explained why.
From what he suggested to me, via email (yeah, it was a bit like chatting with Elvis) this book has some time to go before it’s published.
But when it hits bookstores, drop what you’re reading, devour it, and follow what the man has to say.