Windfall Profits in World Dominators

Aug 24, 2013 | Securities

Windfall Profits in World Dominators

Hedge fund billionaire Carl Icahn, who has an estimated net worth of US$20 billion knows it.

The father of value investing Benjamin Graham knows it.

Gun value investor Peter Lynch knows it.

Heck the world’s best investor of all time, Warren Buffett knows it and still uses it today to make tones of money.

It’s the simply strategy they all use to make themselves, their stakeholders and investors huge amounts of money and trounce the average return of the stock market. Yet as individual investors, apparently we all know better? And if we don’t know better, why do investors continue to ignore this strategy?

Right now people are scared. They worry about the slow down of the China boom and the effect this will have on our resources sector. They worry about the federal election and what crazy scheme our politicians will come up with next. And they worry about the latest headline coming out of the Reserve Bank of Australia and Federal Reserve. Throw in the fact that the 2008/09 Global Financial Crisis is still a fresh memory and there is plenty of reason to worry.

But don’t worry, there is a safe way to invest in stocks and you can do it now.

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I’m talking about investing in World Dominators. The sorts of companies that are not just number one in their local industry, sector or country, but the sorts of businesses that are number one in their field in the WORLD. The sorts of businesses that crush their competition in generating returns on capital, that produce thick profit margins, have fortress balance sheets, that sell goods or services that are desired above all other forms of goods and services they compete with, that have pricing power, that stand up and excel during times of economic weakness and have the ability to take over their competitors and expand market share when others are just trying to survive. The types of companies that consistently return capital to shareholders through increasing dividends and share buybacks.

In a note to clients on Monday 19 August 2013 title “How to Make a Huge Amount of Money Safely – In Stocks” gun value investor and Stansberry & Associates analyst Dan Ferries explains “These companies are different.” “They are cash gushing businesses, and competing with them is insanely difficult.”

Ferris goes on to explain…

“Consider Buffett’s largest stock holding, Coca-Cola. If you add up Coca-Cola’s debt and tangible equity, you get about $37 billion (About 1/3 Commonwealth Banks market cap). Do you really think if you had $37 billion, you could create a business that could dethrone Coca-Cola not only as the world’s No. 1 beverage brand, but also (according to global brand consultant InterBrand) as the world’s single most valuable brand of any kind for the last 10 years? I doubt it.”

As long as the price is right, Coke is a stock you can buy, no matter what’s happening in the world.”

“With Coke, you don’t care if the share price dips. You know it’s going to do really well over the long term, thanks to its growing dividend.

Aside from the opportunity to make a lot of money over the next several years… think about the safety of a stock like Coca-Cola. It’s got the biggest beverage-distribution capability in the world. No matter what type of new nonalcoholic beverage comes into existence, the best way to get it to the maximum number of new customers as quickly as possible is for Coke to take it over and distribute it.

Every now and then, you might hear someone say that Pepsi is a better business than Coke. And after all, Pepsi is always right on Coke’s heels, isn’t it?

Well… not really… not from an investor’s point of view.

Check this out… Since 2009, for every $1 of earnings it retained and reinvested in the business, Pepsi added $2.85 of market value. For every $1 Coke retained during the same period, Coke added $3.20 of market value.

There’s a reason for that. Coke is a better business. It’s No. 1. Being the biggest is much more valuable than most investors realize. By definition, it means this business is the most successful in its industry. Odds are excellent it’ll continue to be No. 1.”

There are quite a few of these businesses in the world today. Companies like Johnson and Johnson, Microsoft, Intel, McDonald’s to name a few.

But there is one catch. While these companies are some of the best companies to have ever existed, you can’t buy them on the Australian Stock Exchange.

Australia is a great place to live and an awesome place to invest. That’s why we ensure our clients invest here. But we have just 3% of the equity investment opportunities the world has to offer and none of the types of businesses we would consider world dominators.

Right now there are several that are trading at a price that offer the potential for excellent long term market beating returns.

If you want to learn how you can take your wealth to the next level and sleep at night, contact United Global Capital today and speak with one of our financial strategists for a No Cost, No Obligation consultation on 03 8657 7640 or email info@ugc.net.au.

Here’s to your long term health and wealth.

The information contained in this report is General in nature and has been prepared without taking into account your objectives, financial situation and needs.

 

 

 

 

<a href="https://ugc.net.au/author/joel/" target="_self">Joel Hewish</a>

Joel Hewish

Joel is the founder and CEO of UGC. He is a licensed financial advisor with 15 years experience assisting clients grow, manage and protect their wealth.

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