Business
Lyceum
e-Letter
Practical Instruction in the Arts and Sciences of Making
Money
DECEMBER 2000
Greetings & Salutations:
Here lately I have been asked ... in various ways ...
"How do I go about picking winners in the Small Cap Companies,
Initial Public Offerings, Start-ups and Private Held Companies for
Investment?"
Well ... since my personal win/lose ratio is about 80/20 (more winners than
losers), you might expect me to go into some detail about reading the
Financial Statements; looking at Price to Earnings ratios; using arcane
calculus formulations; or observing mystical patterns in the trading activity
of the stock - but - that ain't how I learned to pick the winners.
In reality, I wasn't much better than most people when it came to picking
winners in the Small Cap, IPO and Private Held arenas, until I learned ...
How To Win at the Horse Races!
Having grown up in Cow Country (Oklahoma & Kansas), one of the first
photographs ever taken of me was astride a big old strawberry roan called
Katie. -- As my Daddy used to say, "Horses are like some children. Just
when you've got them started in the right direction, they up and start trying
to think for themselves."
Anyway ... thinking about horses, I remember with pain and fondness by
younger days "punching cattle" on the Stelbar, Lazy Bar-B, and other ranches.
-- I also remember with affection some of the ardent, avid and obsessed "horse
players" I had known over the years.
Sharing the typical cowboy's love/hate relationship with horses ... "The
only animal dumber than a horse is a cow, but the dumbest animal of all is the
one on the back of the horse." ... I had never been a "horse player" myself --
however -- making money (even by betting the ponies) has always interested me
and I have adapted many of the techniques and methods I have observed in some
of the most obscure money making endeavors to my own chosen fields of
endeavor.
But ... until I attended my first Kentucky Colonels' banquet, I had kinda
chalked-off playing the horses as a lost cause. Although betting the
ponies is a money making endeavor, it had never yielded any techniques or
methods I could adapt to my own endeavors.
All the horse players I had ever known could do was talk about
horses. If I mentioned a racehorse by name, they could tell me who that
horse was by (father; sire) and who it was out of (mother; dam). They,
they would tell me the sire and dam of each of those horses, and so forth ...
sometimes back 10 to 12 generations. -- They bet the horses based upon the
win/lose record of the horse's lineage.
There was simply no way I could adapt that methodology to any of my
business endeavors. After all, if you look at the lineage of most
successful business people, you wouldn't find much to indicate that they had
inherited a proclivity to succeed.
Then ... at my very first Kentucky Colonels' banquet, my wife (DeLores) and
I were seated at a table with Colonel Bill. -- He was a "professional" horse
player.
Colonel Bill had ... for over 30 years ... earned his living (and a sizable
fortune) playing the horses. Nothing else. He didn't work for
anyone; didn't own a business (as such); and didn't gamble on dice or
cards. He just bet the ponies.
To say I was soon intrigued with Colonel Bill would be an
understatement.
Not once in our conversation across that banquet table did he ever tell me
the sire, or dam, of any of the horses I mentioned. Nor did he ever
comment on the physical attributes of the horses; as did all the other horse
players I had known. -- His conversation was more that of another entrepreneur
making money in a rather unique industry.
With my adrenaline flowing ... I always get a rush when I talk with
successful people in any area of life ... I, of course, asked Colonel Bill how
he had made so much money betting the ponies while all the horse players I
knew were hit and miss winners.
His answer was, "Son ..."
(By the may -- mostly for my lady readers -- when an older fella calls a
younger fella "son," the younger fella; if he is wise, or wants to appear
wise, listens intently because he is about to receive what the older fella
considers to be the wisdom of his age or life experience.)
" ... gamblers bet the ponies or play the horses. I don't.
Strong horses with good lineages can lose races. And, weak horses with
poor lineages can win races. So, I don't bet on the horses."
Then, he hit me with his secret ...
"I Bet the Jockeys!"
Colonel Bill went on to explain that if "Shoes" (Willie Shoemaker - who won
over 8,000 races in about 30 years) was riding in a race, the odds were that
he would win the race; no matter what horse he was riding.
The colonel didn't know much about the lineage of the horses running in the
races; not did he care (he commented that they all run about the same speed
anyway). But, he knew everything there was to know about each of the
jockeys ... their wives; kids; family ties; religion; politics; everything. --
He kept informed about new, up and coming young jockeys who were proving their
winning abilities. And, he structured his begging to take into
consideration that, every once in a while, a new, untried jockey would defy
the odds and beat the older, tried and proven jockey.
So ... if you want to Win at the Horse Races ...
Study the Jockeys, Not the Horses!
(But, it won't work at the Dog Races because the dogs don't have
jockeys. They just run their hearts out trying to catch a mechanical
rabbit. -- Maybe you can figure out how to bet on the rabbit; it always beats
the dogs.)
After meeting and listening intently to Colonel Bill, I soon found myself
adapting his "Bet the Jockey" methodology to ...
Investing in Successful Businesses
Not just anybody can crawl up on the back of a horse and call themselves a
jockey ... but ... anybody (and I do mean ANYBODY) can open a store, create a
business plan, or dream-up a business idea.
The "person" who operates (holds the reigns on) a business is the "jockey"
in the business horse race. Therefore, when investing in a business, it
is most important to study the win/lose record of the person who is (or will
be) operating the business; the "business jockey."
As I have said before, a business (any business) is nothing more than a
box; whether it be a Post Office Box or a marble columned edifice. The
"real" business is in the hands and minds of the people who do the business of
business. -- Of course, in order to keep with our current metaphor, the
business is a horse.
By betting on "business jockeys" with the best win/lose records, you can
always pick more winners than losers. Of course, you miss out on some of
the good deals when a new, untried "business jockey" wins big - but - on the
other hand, if you bet too heavily, or too often, on new jockeys, you'll find
yourself with more losers than winners.
NOTE: That's why, when I get any new business plan or
prospectus to read, the first section I turn to is the information about the
backgrounds of the principals. -- If they haven't done business successfully
before (especially if they are past the age of 40), I need an awful lot more
convincing before I'm ready to invest.
This adaptation of "betting the jockeys" has served me well over the years
... that's why my win/lose ratio is 80/20; instead of the other way
around.
Now ... Go Ye and Do Likewise!
Win a few Horse Races. Invest in some winning companies. --
Just, "bet the jockeys."
Now, let's do some ...
Questions & Answers, Comments & Other Good
Stuff!
Donald R. McArdle (dorame@gte.net) asked:
"I'm looking for two good affiliate programs to join, one a mailing list
program that customers pay for a snail mailing list and the affiliate gets a
commission. -- The other affiliate program, one that customer can send them
their sales letter, mailing list, and they Print, fold, stuff, seal,
address, add postage, sort and deliver your entire mail campaign to the post
office, and the affiliate receives a commission."
Don:
I don't know of anything like that ... off the top of my head
- BUT - I will keep my eyes open and if I find them, I will let you know.
If any of you know about any programs like that, contact Don and let him
know about it.
Joe Trevison (JoeTrevis@aol.com) had questions about being a
Financing Broker:
"I am doing something you once did I started a financial broker business
... http://www.moneymoneyishere.bizland.com/
-- Any tips to getting bigger clients for the million dollar deals. -- And
tips for getting the banks to grant the loans and being regular partners
with my business."
Joe:
To get bigger clients, advertise where the bigger deals are. You
might want to subscribe to my
"WorldWide Business Exchange." http://www.businesslyceum.com/wwbx.html
It has "Capital Available" and "Capital Wanted" situations every month ... and
... as a subscriber, you can advertise for FREE. -- Also, advertise in
Publications going to Real Estate people, Shopping Center/Hotel/Motel
developers, Production Equipment manufacturers, etc. Go to your library
and research the Directories of Periodical Publishers.
Reread my article on financing. -- BizFinancing
-- The only way you will be able to get the banks to work with you is by
doing your due diligence on your "borrowers." Never submit a loan
application to a bank unless it is a prime borrower. Don't mess with
marginal borrowers ... they will only make you look bad in the bank's eyes. --
Once you have taken some "very good" loan applications to a bank, they will
invite you to be one of their associates and they will even refer borrowers to
you (so you can help the borrower prepare the needed documentation).
Gr-r-r-r-eat News!
Dan Kennedy's books ... "The Ultimate Sales Letter" and
"The Ultimate Marketing Plan" ... have just been re-released in
up-dated, expanded editions. -- These are two of the bibles of the direct
marketing industry. (If you are into marketing and you haven't heard of
Dan Kennedy, you just think you're into marketing.)
Both of the books should be available at; or through, your local bookstore
- or, you can get them at Amazon.com. -- If all else fails, you can get them
at Dan's website: http://www.dankennedy.com/
Hey ... they're cheap ... only about ten smackers apiece. -- Get your
personal copies, today!!
Eric Ruth (ericruth101@yahoo.com) wanted to know:
"Just finished reading your killer November newsletter and decided I want
to try to stump the master with a question. -- I'm a marketing
consultant/copywriter and I have a client for whom I have not been able to
design a consistently effective high quality lead generating program.
This client is a certified personal fitness trainer. He's new in town
and has no personal network. He charges $60/hr to essentially make his
clients uncomfortable, then he tells them they can't eat what they like to
eat. -- He is competing with health clubs with huge advertising budgets,
home-fitness equipment infomercials, omnipresent "quick-fix" weight loss
programs, diets, pills, potions and powders. -- Sure, the weight
loss/health/fitness market is enormous, but most prospects do not understand
that a high level of commitment and sacrifice is necessary to achieve the
results they want. -- We have tried using "consumer alert/warning" type
direct mail postcards to targeted high end communities offering a "free
report" but virtually everyone who requests the free report balks at the
price and honest assessment of how long it takes to safely and permanently
lose weight. they all buy into the "quick fix" solution -- which, of
course, is bogus. -- My question to you, Jim, is how should this personal
fitness trainer position himself to his market? And, how best
can he generate QUALITY leads for his high priced, machiavellian
service?"
Eric:
In order for me to really answer your question, I would need to see the
kind of advertising you have been doing ... plus ... any details about your
client.
For one thing the $60 per hour price scares people because it is for "only"
an hour. Try this ... if the 'training' is once a week, the price is
only $60 per week, twice a week is only $120 per week. (Sounds a lot
smaller; doesn't it?)
"FREE" reports don't always work. Too many tire-kickers; not enough
buyers. -- Can the FREE report be turned into a series of articles. If
so, get those articles published in the local newspapers ... making your
client THE man to see about training & weight loss.
Don't know what size town you live in - but - throwing some kind of
"fitness" event (marathon race, weight lifting competition, whatever) with
FREE entrance into the event can generate a ton of "news" coverage.
Hey ... these ideas are just off the top of my head. I'll try to help
some more if you can give me some of your current ad copy and info about your
client.
Alvin Corbett (alvincorbett@hotmail.com) tried to stump me with:
"I have a new question for you. One of things I have seen since I
have been working to seriously establish my International business is chains
of contacts that lead nowhere. -- The question is this, how does a newcomer
get involved with importing and exporting commodities and get involved with
legitimate buyers and sellers. -- As well as get educated on the does and
don't without getting burned?"
Alvin:
Unfortunately, when you get involved in "commodities," you usually also get
involved in daisy chains. That happens because the beginners and
amateurs involved do not have the expertise in the field to provide or procure
the commodities. Instead of avoiding that field, or gaining the
education they need, those wannabes simply run ads hoping some professional in
the field will help them do the deal. - It NEVER happens but they keep
dreaming, hoping, and daisy chaining.
Unless you want to spend the time researching, studying and learning these
exotic fields, stay away from them. The odds of you ever earning a fee
are slim and none.
By the way, when I say "spend the time researching, studying and learning,î
I mean it. It doesn't mean just poking around the edges of the field,
picking up a little industry jargon, and trying to bluff your way
through. If you do that, one of the real professionals can (and will)
call your bluff and blow you out of the water with just a couple well placed
questions.
Here's how to get started ...
First ... pick a "commodity" that you want to be involved with.
Second ... go to your local library and go through the Directories
of Periodical Publications to find the publications dedicated to the
production and processing of that commodity; and the manufacturing of products
utilizing that commodity.
Third ... "subscribe" to as many of those publications as you can
afford.
Fourth ... read every issue of every one of those publications;
cover to cover, paying close attention to the companies advertising in those
publications ... especially the "classified ads."
Fifth ... Order and review any books, booklets, reports or manuals
offered within that particular industry. Again, read them cover to
cover.
(That's what I did when I needed to learn the banking business.)
Einstein once said that anyone could become a "genius" in any given field
by just studying that single field for only 15 minutes each day. In
time, you can become a "genius" in that field.
Of course, the best way to get involved in an exotic field is to associate
yourself with a 'real' professional in the field - but - that usually doesn't
happen unless you are ready, willing and able to take a "job" and work in that
field until you have earned your stripes.
Then ... Alvin said:
"I am writing this to maybe share a little something with my fellow
readers of the Business Lyceum. -- I first discovered the "WorldWide
Business Exchange" some years ago. I knew then, as I know now,
it is one of the best ways to find and do business but, like any
resource, it can be misused. I also discovered that one of the most
under used ways to build your business is to ask questions and the only
stupid question is the one you don't ask ... and the only stupid plan is the
one you don't follow and have the flexibility to change if the necessity
comes up. -- Finally, one of the unspoken ways to kill a business is to
allow people, or things, to sap your motivation where many times these self
same people are merely venting their negativity on you because they lack the
courage to do and be more than just a 9-to-5er. --Anyway, keep up the good
work and I'll still keep asking you questions ... mostly because I don't
know and maybe I will stump the old man; then again, maybe
not."
Thank you, Alvin. What can I say ... you just inflated my ego.
Then, Freda Douglas (fredab@strato.net) wrote:
"I am trying to learn all I can about publishing my own ezine. All I know
for sure it's going to be called 'picture of life' not internet related but
rather an accumulation of my own writings over the years. Any help you can
give me will be most appreciated."
Freda:
Don't know how much I'll be able to help ... since my e-Letter isn't really
Internet related either - but - some of my readers are heavy into ezine
publishing, so I will ask them to give you some help and advice.
So ... if any of you can give Freda a helping-hand with her ezine, tell her
about it.
In closing ...
Here's an Observation and a
Solution!
Lately, I have seen a number of TeeVee commercials ... and received a
number of emails ... offering "Debt Consolidation" services. -- The
last time those kind of ads were running; heavily, like they are now, was back
in the mid'80s. At that time, I wrote the report ...
How To Do Your Own DEBT
CONSOLIDATION
And ... Reduce Your
Monthly Payments, too!
So ... before you buy into one of the Debt Consolidation services, you need
to read that report. -- You can do it yourself cheaper; and better - and -
using the info in my report, you can also reduce your monthly payments, too.
-- To find out all about it, go to ...
Debt Consolidation
By the by ... this method also works well for Small Businesses,
too!
Well ... that's it for this month. -- In order to make every issue
responsive to YOUR needs, please send me your questions; or tell me what
sources or resources you need to build your business; or give me any thoughts
you want to share with your fellow members.
Believe it or don't ... I ain't a mind-reader. -- If'n you doesn't tell me
what you need, I may never touch upon the information, sources or resources
you need.
This is your publication for you to use to your benefit ... I am just your
moderator.
Until next month, keep well ...
J.F. (Jim) STRAW
Ex-Cowboy
Thoughts For The Month!
"A great many people think they are thinking when they
are merely rearranging their prejudices." -- William
James
"The wisest person is not the one who has the fewest
failures, but the one who turns failures to best account." -- Robert R
Grant
Can you stump the old master? -- Betcha
can't!
Over the past 40 years (man and boy), I have made bundles of money in
direct selling, service contracting, wholesale merchandising, entertainment (I
was a professional Trumpet player, vocalist & Radio Announcer), freight
forwarding, import/export, retail merchandising, warehousing, real estate,
electronics manufacturing, finder's fees, closeout merchandising, financial
brokerage, business consulting, steel fabrication, gold and coal mining,
offshore banking, mailorder, writing, and publishing. -- That being the case
...
No matter what business you're in ... whether you're just starting, well on
your way, or at the top of the heap ... I've probably been where you are, done
what you are doing. -- So ...
Anytime you have a question about 'how' to do something in your business -
or - if you have any comments about anything I've said in issues of this
e-Letter; or if you want to add your 2 cents worth ... just "ask" me or "tell"
me.
Send your Questions, Comments or 2 Cents Worth to ...
eletter@businesslyceum.com
with "Question" - "Comment" - or, "2 Cents Worth" in the
SUBJECT.
If I, personally, don't have an answer to any question you may ask, I will
contact some of the professionals in your field of endeavor (I will probably
know one or more personally) to get the real 'skinny' for you.
No Paid
Advertising!
We DO NOT accept 'paid advertising' in the
"Business Lyceum e-Letter." -- Why? -- Because,
when you offer 'paid advertising,' you are obligated to run the ad, or have a
valid excuse for not running it. (An excuse that will hold-up in court
because all too many people like to sue for any seeming slight.)
Therefore ...
Any time you see something offered in the "e-Letter,"
you can bet your bippy I am telling you about it because it is something I,
personally, would recommend to my friends and family. -- It's here
because I like it; not because I am being paid to tell you about it -- BUT --
that does not mean that I don't accept payment in the form of commissions
(never in advance) from some of the offers I tell you about.
'Nuff said?
Making Money is FUN & EASY when you know how! Learning "how" is Fun & Easy too -- when you use the
... FREE Reports ... FREE Resources ... FREE Newsletter ... available from the "Business Lyceum."
Jim Straw's Business Lyceum