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 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 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."
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. -- finance.html
-- 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 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 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 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 ...
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 ...
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?
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Copyright - 2000, J.F. (Jim) Straw. All rights reserved.