When you look at investment billionaires like Warren Buffett, or even super successful traders like Timothy Sykes, they all have one thing in common - huge returns. But how are these guys earning these astronomical returns?
If you look at the history of Berkshire Hathaway (that's Warren Buffett's firm), 10 of the last 20 years have seen double-digit returns, and only six of the last 20 years have seen negative returns, including 2008 during the heart of the Great Recession.
Then you know the story of Timothy Sykes - the penny stock trader that watches the market and advocates small daily wins. He turned $12,415 into $1.65 million in just 4 years. That's almost a 3,300% return per year for those 4 years. And since then, he's continued to grow his wealth, and he's also had several of his students achieve that as well.
So, how can you achieve the same results?
The Trick To Screening For Stocks
What each of these investors has told you, while still being as vague as possible, is that you have to screen for the right stocks to invest in. You know that, right?
Warren Buffett follows a strict value investment strategy, where he looks for companies that are fundamentally undervalued and invests in them for the long term. Timothy Sykes, on the other hand, looks at technical trading patterns of penny stocks to make very short term trades on stocks.
The problem is, to find unbelievable growth, you have to look in the most difficult places. And you can never see into the future - past performance is not a guarantee of future returns.
By choosing the right screen, you can find results like this.
The Stock That's Returned Over 162% Per Year
You'll notice in the title of the article I said 20% per year - because even at that return, you'd be really happy. If I told you the truth early on, you might not have clicked the article because you'd think - B.S. It's probably some scam.
But screening for certain indicators works and gets results. Look at this stock I found using my patented screen:
As you can see, over the last 10 years, this stock has returned 1,622%, versus just 62.7% for the S&P 500 (the red line on the bottom). I didn't get in on this 10 years ago, but I got in on this about 5 years ago, and have been living large with it ever since.
But that's not the best part. What I love about this small company is that they pay me handsomely to be a shareholder. For those of you that know me, you know I enjoy dividends and I like to invest in companies that pay a dividend. While growth is great (and it is with this stock), I also like to be rewarded for owning a company.
This company has paid a huge dividend for the past 5 years that I've owned it:
The Trick To Finding Amazing Investments
If you're curious about how you can find amazing investments like this, I'm not going to lie. It's not easy.
Actually, it is easy - it just takes time. It's easy because all it requires is a little work screening for stocks online - it's just time consuming. You see, there are about 4,000 stocks that are traded on major platforms like the NYSE or NASDAQ. However, there are another 15,000 stocks that are traded over the counter. That's where you find the gold, and it's not easy.
These companies have the most potential for growth because they are young, just starting out. It's like getting in on Apple in 1997 or getting in on Amazon in 1998. Back then, you would have been like, why would I invest in an online bookstore? This Internet thing is random. But look at it now.
Let me know what you think and share your results in the comments below!
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.