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Like I told you before the break, we live in a time where picking stocks is stigmatized. The most respected experts in the industry are always telling you about index fund producers of individual stocks often most speculative stocks in existence. Insanely highrisisk stuff that often blows up your face.
Tonight I'm coming out here to advocate something very different. Good oldfashioned growth stock investing. Today, this is widely considered heretical, but for most of my lifetime, it was the most orthodox on investing, and it did well. I'm just trying to teach you what generations of investors knew to be self-evident.
Unfortunately, these days, the sophisticated operators love to tell you that people are too stupid to manage their own money. I find it insulting, but I've got to tell you, when you look at the history, it's not that hard as long as you know how to stick to your guns. This is my thesis, by the way, and how to make money in any market.
In every market, are leaders. These are what I call hero players. We must strive to find and man, sometimes they're incredibly obvious to find. Of course, I've had plenty of congress my day, but with the power of observation, some curiosity, those are the two things you need. You can absolutely identify some of these phenomenal winners.
And when you find a hero player, even if it's just one stock in your five stock portfolio, that's enough to produce some tremendous lifechanging returns and maybe far outpac. Let me give you a little history. from February 2013 when this co I introduced the term fang that was Facebook, Amazon, Netflix and Google and I urged people to invest in four fang stocks right then and there and I really pushed it so hard and I pushed it many many days many many years the acronym was the culmination of my DI developer the trader and analyst Bob Lang worked with the speed.com we were searching for a way to shine a spotlight on the best grow stocks of the time we wanted everyone to buy decade later when bank of America strategist Michael Hartnett coined the term magnificent for the slightly expanded and adjusted group of Alphabet which is the old Google, Amazon, Apple, Meta Platforms, that's the old Facebook, Microsoft, Nvidia, Tesla.
I went all in. I chusted or own six of the seven same Tesla. So, it seemed only sensible. You can now follow the trust by joining the CBC investing club. So, you have to ask how did I spot fang or fang which was how I integrated Apple and why was I so quick to embrace six of the magnificent years before the term was coated.
Simple. My eyes were open. I'm always hunting not just for Amazon, but for the next Amazon or the next Netflix, next video. Once the magnificent seven lose their magnificence, then there are another seven out there who beat me. They're just waiting to be found. And they too could be very obvious. But as long as I think these proven winners can stay strong and deliver, I'll stick with them.
That said, look, I'm confident there are many, many more amazing growth companies with incredible stock sprout. I hear about I hear about it right now. I hear them from you with a white. Here's the thing about Bang and Magnificent 7. They were obvious. They were in your face. You could see them moving higher day after day for years.
Your kids could tell you all about them. In some cases, these went up for more than a decade. You didn't have to be a genius to make money in these things. In fact, being genius might have heard you. A lot of people in this business are too clever by half. They see a good thing and then they overthink it, scaring themselves away from phenomenal winners.
Let's say that on the day I introduce Fang acronym. Remember this is when these companies were already established already. The big ones you knew about. No incredible discovery required. You decide to put $1,000 into each of the four. This is let's do the math here. And then you put an equal amount $4,000, right?
Because there's four into an S&P 500 index fund. Now, from that day in early 2013 through the end of 2024, your $4,000 S&P would have been terrific. It would have turned in $19,400. That's a 14.2% 2% return. Not bad. Let me ask you, what if you invested $1,000 each of the four fang stocks like I suggested?
Adding a lot f would have given you your 4 grand $82,655 from 2013 to the end. You would have had which would you prefer 82,000 in those four euro stocks or less than 20 grand the S&P 500 index went. It is a choice. It's your choice. It really is. Oh, and Apple, which hadn't been added to Fang at that point, would have turned in your turn $1,000 into $17,994.
So, double A Fang was also a winner. Does this prove anything? I'm sure that some people say, "Hey, listen. It was back gated." Others be saying it's cherry picking because they survive the greatest talks of all time. Yet, here's the deal why that's not true. I was coming on air practically every night and recommending the hang.
They were hiding in plain sight like Edgar Alone. They were companies that you probably interacted with every day. Why can't you find them? They were there for you. You knew them. They were available and obvious to anyone who cared to pay attention. In fact, before I aired this segment on Fang Way back in 2013, do you know what I did?
I wondered if it was a waste of time because these four stocks were so obvious, everyone knew them. Was I really bringing anything new to the table by highlighting it? In retrospect, it was good to pay attention still is. But let me uh let's put my personal examples aside for a minute. A couple years ago, an economist from Arizona State University, a fellow by the name of Hendrickk Bessenbinder, published a paper on the difficulty of picking individual stocks.
Now, he's another possible index funds because he found that only a small number of individual stocks produce the best of the Marcus gains. I look at the same numbers and come to a very different conclusion. Looking at data from December 31, 1925 until December 31, 2023, best in Bender sought to examine how well you could do with stocks, provided you reinvested dividends and did so.
His first finding historically, the majority of the 29,78 stocks he looked at did not make money. Now, it shouldn't shock you. I'm not telling you to invest in just any old stock. Most stocks have zero pedigree and the gains are often the product of an overenthusiastic public and greedy investment bankers trying to feed the law.
The second finding, there were thousands of stocks that would have absolutely made you money, but perhaps not enough to justify investing in them instead of an index fund. Now, a decent return, but an average return for average investors who want to see average gains. Index funds, they're fine, but they're not the heroes we're looking for.
And remember, I still advocate them. His third finding, 17 stocks delivered cumulative returns of more than 5 million% or $50,000 per dollar invested. That means a thousand investment yielded upward of $50 million. All right. Now, these were all relatively well-known companies. Boeing, IBM, Coca-Cola, Dear Johnson is Johnson.
They could have made a fortune. Best of thinks that that's like buying a needle in hack. Do you think that? Do you really? The bottom line, it's only hard to find these hero stocks if you're picking random. For anyone with eyes to see, we're talking about obvious winners that tend to keep winning. Those are the stocks I'm always looking for. And when I find them, I'll never going to shut up.
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