“From one first-time investor to another…Don’t get it twisted; I am not unlike you. I’m 25 years old and I work for an hourly wage. I’m a full-time student studying business and finance. I have a deep desire to do great things, and make money doing what I love for the rest of my life. I feel in love with business, markets, and stocks and made time to read and understand what’s going on around me. I decided to build a website that would serve as a format to deliver my opinions and experiences as a first-time investor, saver, and planner for other who are just like me.”
Bullworthy was first launched as an easy to understand and follow investment tool for beginning traders, first time savers, and generally anyone who wants to learn about money. I publishe engaging content on Bullworthy.com that will satisfy and educate anyone who is interested in the conditions of money, markets, or the economy, but just can’t seem to get started. Financial illiteracy is rampant, while misleading and confusing information is an unintended consequence from the proliferation of the Internet. Maybe there is not enough time in everyone’s day to learn it all. Or maybe people just aren’t self-motivated in ways that encourages them to pick up a book, a magazine, or a website and just start reading. Maybe some people aren’t sure which questions to ask because there are just too many, while other people are confused on how to tell who is a professional and who isn’t, who is right, who is wrong, or who is biased.
Perhaps the financial industry jargon, acronyms, and lingo is just too confusing and complicated. Or maybe when most people pick up a financial publication, they get the feeling that as they read, those articles were written for professional analysts and licensed brokers, not an amateur investor looking to make a little more on their money. Still, others may have a hard time staring at a computer screen for three hours trying to figure out what the difference between “fundamental” and “technical” is, when all they really want to know is which of the hundreds of thousands of publically traded companies stocks are worth buying.
Maybe you’re one of those people, and that’s why you’re reading.
Financially, Bullworthy.com has been supported by meager advertising dollars and almost entirely funded by my savings and cash gains on investments. While serving a purpose as a channel for me to share my knowledge and investment experience with others in a simple blog, the Bullworthy.com format is ultimately unsustainable. After a year and a half of careful thought and consideration, and upon the recommendation of those that I hold dear, I’ve decided to allow Bullworthy to take its natural evolutionary course and thus I’m on the exciting forefront of offering my first fund to participators.
Of course, this will be no ordinary fund. Aside from the my formal shortcomings explained later in this prospectus, there are literally thousands of mutual funds separated into forty-eight different categories managed by professional, licensed managers. They too, have their disadvantages: most require large upfront payments from deep net-worth investors. In addition to these highly-regulated multi-million dollar cash-mill funds that on average underperform broader stock market indices, there are thousands upon thousands of investment clubs – loose coalitions of retail investors – that will offer you exactly what I’m offering you, competing for your attention.
Well, those other clubs can’t offer you exactly what I’m offering you. See, investment clubs are structured in such a way that the managers and founders are very selective about who they choose can participate and join. The reason is contribution – every member of the club is expected to contribute dollars, knowledge, and experience and no decisions are made, from which stocks to buy with the pooled money to whom will bring what refreshments to the next meeting without everyone’s input. Unqualified first-time investors are typically passed up by most established, long-running and successful investment clubs because fundamentally, these are social entities with nonsensical politics.
The Bullworthy Fund is an investment club in the sense that all members participate by learning the fundamentals of investing and money management, different asset classes and their natures, the greater macro-economic influences on capital markets, and will participate in a general understanding of how money works. We will learn, experience, profit, and lose together because the benefits of interactive network investing are plentiful. Think about it: when my stocks are gaining, your stocks are gaining! We can share our experiences and opinions to help increase our gains together. Of course, when I’m losing, you’re losing, but I think that’s still better than going about it alone. Together, we can work to make investment adjustments to help buck the inevitable downtrends with my leadership and practical skills, and you’re commitment to study.
The Bullworthy Fund envision all first-time investors having an equal and opportunistic chance at entering easily reachable publically traded capital markets like U.S. stocks, funds, and derivatives with a reasonably small amount of investable money. The tools are all right at their disposal. Online brokerage accounts are used to buy stocks, and there are hundreds available offering incredibly competitive prices with hundreds of flashy features. And as for information, not much needs to even be said. The ways in which humans seek, gather, and absorb information has undergone a foundational paradigm shift. Where fifty years ago, if we wanted to understand what and how a stock worked, we would need to get in the car, drive to the library, look through endless amounts of shelves and book titles, stand in a line, rent the book, and well, you get the picture. Today if you want to find out what a stock is, you can conduct a web search and have the answer on your computer screen in less time that it has taken you to finish this sentence. The internet has made it all so easy; and yet still so confusing. I’ll explain in a minute why.
The point is, the first-time investor needs equal rights to investable securities and markets, and the painful truth is they simply don’t. The reason is because no one wants to give you gains in your stock. You buy a stock or investment with the intent to either protect, grow, or greatly multiple your money in either near, medium, or long term intervals of time. You buy it for less than your going to be selling it for. Don’t you realize that other investors are trying to pull the exact same move you?
So now, to be a successful investor it becomes about much more than just buying stocks or other investments and then selling them to someone else for a capital gain. It’s more like you need to outsmart others and get there first. You’ll need to understand valuation and whether or not investing in this particular asset will be worth what you’ll expect it to be worth in the end. Take for example the used car scenario that incorporates what’s in the parenthesis as the correlation. You’re looking at a Honda Civic with a sticker price of eight thousand dollars (a stock and a stock price), a price the car dealership set to make sure they make money on their side of the transaction, because they did their homework and cost-benefit analysis (the seller of the stock or market maker). That salesman isn’t interested in finding you the best car for your money or doing you any favors; he simply just want to sell you anything you’re willing to buy. How do you determine if that car is worth eight grand? You could pull up some background reports on the vehicle’s history (audited public quarterly and yearly financial statements filed with the Securities and Exchange Commission on behalf of the company that underlies a stock) but you may not necessarily know what’s going to be wrong with the car in six months. You could examine the car itself, or maybe bring a mechanic with you (members of an investment club), or even just take it for a test drive (dollar-cost averaging; in other words buying a few shares of the same stock a little bit at a time, limiting your downside risk).
The bottom line is, no one is infallible, and no one out there knows everything, not even Warren Buffet, widely considering as the world’s most successful investor as he lost a billion dollars in the 2008 stock market crash and resulting financial meltdown of the U.S.’s largest banks. You will make investments based on educated and informed decisions and you’ll trust those around you who know what they’re doing, or else you’ll be eaten alive by the car salesman who is willing to sell you anything you’re willing to buy.
Most investors in the stock markets are not you and I. At least, most investors in stocks worth buying are not you or I, they are institutions: large hedge funds, investment banks, insurance companies and mutual funds with millions, billions, even trillions of dollars under management. Ever heard of “high-frequency trading”? Smart Money magazine first did an article about a hedge-fund back in 2007 that had developed this automated trading system that can butt in on the exchange between your money and the shares you’re buying for like 1/15th of a second, and in that time shave a penny or two off the price and stuff it in into their bank accounts. This company was doing that millions of times a day, making tens of millions of dollars every day for years without retail investors like you I not having any clue. Last year, Forbes did a cover story about the “New Masters of Wall Street”, high-frequency traders who were setting themselves up with these complex algorithmic systems that automate these types of transactions. These are brilliant people, by the way – mathematicians, electrical and software engineers, professors, PhD’s – and you can bet they will beat you in their own game. You’ve got the odds stacked against your success right off the bat if you plan on becoming an active investor because you have to beat these guys’ hands out of your own pockets. I’ve read one report that claims high-frequency trading accounts for nearly 70% of the overall volume on the New York Stock Exchange. These people have been in stock markets for far too many more years than you or I, and accumulated too much money, knowledge, skills, and resources that we can’t compete with unless we come together at least try to outsmart them, even if just a few times. Even them, it will never be easy, and it will never be perfect. Want to put your money into a fund that offers absolute and guaranteed returns, year over year without skipping a beat? Those are available; they’re called Ponzi schemes, and they’re probably everywhere.
Access to information is free but dangerous. First of all, information, especially when derived from online investment chat boards, user-generated content video websites and tutorials, and cable television personality’s talk shows can never present exactly accurate or relevant facts and are always subject to the same simple principle that is often miscalculated or disregarded among many of these same “professionals”– that the stock market can be timed. It can’t, and it’s just foolish to think it can be. Manipulation in media and information is everywhere, on every website, on every newsletter, in every magazine, and it’s so easy to understand when you think about it. Anytime you’ve been recommended to make an investment in something, whether it’s a penny-stock you read on someone’s blog or some workout product that promises to create instantaneous abs you see in a four a.m., someone, somewhere has a vested interest in getting you to believe in what they’re saying.
Read on and you’ll soon realize this is an opportunity of a lifetime if you passionate about your money and want to build a small fortune with likeminded first-time investors. Contact me at Tom@bullworthy.com to find out how you can get involved with the Bullworthy Fund.
Tom Copeland
Bullworthy, Inc. founder and chief executive officer
