How Investing Can Be Stupidly Simple (If We Let It…)
If you spend a lot of time online, you realize that one of the keys to winning an audience is having “hot takes.”
It makes sense… If you’re not shouting something controversial from the rooftops, you’ll get lost in a sea of other voices.
But when it comes to successful investing, it’s often the boring, stupidly simple decisions that can help you win over the long run.
However, I do have one “hot take” when it comes to investing. It won’t win me a lot of popularity contests, though. In fact, when I tell people this in person, they typically ignore it.
But that doesn’t make it any less true.
You see, I’ve been in this business a long time. And in my experience, finding a good stock pick really isn’t that hard.
Why Most Investors Underperform
You want to know what’s hard? The hard part is overcoming your worst urges and simply grabbing the low-hanging fruit when it’s staring you in the face.
Being a good investor often means getting out of your own way. We often make investing more complicated than it needs to be. We worry too much over what we can’t control. We try to time everything just perfectly. We overthink things and want to find that “magic bullet” stock pick that will deliver triple-digit gains overnight.
In other words, we’re our own worst enemy. In fact, in this article, I highlighted a study from Dalbar, which showed that the average individual investor earned 7.13% annually over the last 30 years, compared to 10.65% for the S&P 500.
In other words, the average individual chronically underperforms the S&P 500. That means most people would be better off just parking their cash in an index fund and calling it a day.
I don’t bring this up to discourage you — far from it. Instead, I want to help you stand apart from the crowd and be a better investor. And one of the ways you can do that is by taking the “easy win.”
I’m talking about stocks that will deliver consistently, year after year… They may not be in the sexiest business in the world, but they are efficient profit machines that help you weather the storm — and make you rich in the long run.
And trust me, they’re not as hard to find as you might think. In fact, to show you what I mean, I’ll give you an example…
Making A Triple-Digit Gain Look Easy
Right now, longtime readers of our Capital Wealth premium service are sitting on a 146% gain from one of the most boring, reliable, well-known brands on the planet.
It didn’t take a genius to find this pick, either. All it took was the willingness to pull the trigger on the stock and be patient.
I’m talking about The Hershey Company (NYSE: HSY).
This company’s leading product has been in existence, virtually unchanged, for more than 120 years. Its chocolate bars were distributed to troops before they landed in Europe during WWII.
Founded in 1894 by Milton Hershey, the company sells and distributes products under more than 90 brand names in roughly 60 countries worldwide. The company dominates most of the markets where it operates in terms of market share.
People may be getting a little more conscious about what they eat… But chocolate isn’t going away anytime soon. A Hershey bar is about as iconic as a bottle of Coca-Cola.
It’s paid a dividend for more than 371 consecutive quarters — or more than 92 years. And except for 2009 (when it maintained the dividend), it has raised its payouts every year since 1974.
My colleague Jimmy Butts, Chief Investment Strategist of Capital Wealth Letter, added the stock back in October 2018. And through all kinds of wild market gyrations, it’s delivered steady (and staggering) growth over time.
As a result, this “boring” chocolate maker has crushed the market, delivering a 146% return compared with the S&P 500’s 32%.
Remember, this isn’t an explosive-growth company. And it didn’t take much research (or some particular genius) to find it. All it took was Jimmy and his readers to spot an opportunity with a well-run company that operates with ruthless efficiency.
Hershey doesn’t have to grow sales by double digits year after year to deliver impressive returns to shareholders. Its business model doesn’t require massive investments in research and development, nor does it require any complicated financial engineering.
That leaves more money on the table for sensible acquisitions, stock buybacks, and dividends to put into shareholders’ pockets.
Closing Thoughts
The point is Jimmy and his subscribers knew exactly what they were getting with Hershey. And they’ve been rewarded with a nearly 150% gain.
While most investors were trying to read the market’s tea leaves or find a “sexy” pick that would deliver overnight riches, Jimmy and his followers made the wise choice… They bought one of the easiest businesses in the world to understand then held on. And in a few short years, they blew by the rest of the crowd.
As I said before, finding a good stock pick really isn’t that hard. In fact, it can be incredibly simple.
The point is, instead of spending all your time and energy trying to find a stock that nobody’s ever heard of, you should be looking for investments that look exactly like this.
This is why we constantly preach about how a well-run “Buffett-like” company can produce excellent returns over the long run… Hershey is a perfect example of how investing in a well-run company can produce market-beating returns.
All you have to do is spot the opportunity, pull the trigger, and wait.
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