A Competition... We'll Consider Anything
by Tom Dyson
February 14, 2006
One reader will win a prize after reading this essay.
The prize is a book that’s been out of print for over thirty years. It’s very rare. Occasionally, copies crop up on eBay - you can expect to pay around $150 for them.
Soon, we’ll be giving a copy of this book to the reader who wins our competition. I’ll provide the competition details at the end of today’s essay. But first, let me tell you about this book...
Victor Niederhoffer – one of the most famous speculators in history - says this about our prize book:
“I consider [it] one of the best books I’ve ever read. I go back to it for a fresh supply of ideas when I get in a rut. And it’s mandatory reading for all new employees in my firm. I can do potential speculators no greater favor than to urge them to read this book.”
The title of the book is Secrets of Professional Turf Betting, by Robert L. Bacon.
It’s a guide to winning money at the horse races. Bacon tells you everything – how to use the percentages, understanding track conditions, how to bet against the public, and the special angles you need to employ during different months of the year.
He explains the specific betting systems used by men with names like Pittsburgh Phil and Colonel Bradley. You’ll find chapters with titles like “Round Robins for Big November Profits” and “Exposing the Secrets of Fractional Time.”
To illustrate how important Bacon’s book could be to investors and speculators, consider how the action at the racetrack translates into the action on Wall Street:
The horses are the companies. The day’s trading session is the race. Different issues maneuver for position.
Growth stocks like Starbucks and Google are the favorites at the track – high p/e ratio horses with great margins and high returns. If they don’t report extraordinary profits at the end of the quarter, their stock gets hammered.
Value companies are the long shots. They have the low profit margins and high capital requirements. No one expects much from these companies. So when they surprise the market with extraordinary profits, their stock soars. There is little downside to these bets.
The trainers at the racetrack are like the corporate executives, receiving prizes for winning and fees for getting their horses in shape. The bookies are the brokers. And the punters in the stands… they’re like us… the guys who pay all the fees and commissions.
There is, however, one item that doesn’t need translating, and this is why Bacon’s book is so valuable…
You can use the exact same principle that professional gamblers use to win money at the horse track to beat the markets. And the principle is this: Bet against the public’s play and ideas at all times.
This is the big theme of Bacon’s book. He shows the reader how to “copper” the public. He emphasizes the difference between amateur psychology and professional insight. He explains the law of ever-changing cycles and why - even if the public did figure out a sound method to beat the races - it would immediately become a losing strategy.
It’s exactly like investing. As soon as the investment public starts loving an investment method, it becomes a losing strategy.
I’ll delve into some of these ideas in my future columns but for now, let me tell you how to win a copy of Robert Bacon’s Secrets of Professional Turf Betting...
To enter this competition, all you have to do is think of the foreign country you’d like to read about - along with a specific investment opportunity that you see unfolding within this country – and send your entry to DailyWealth via email at whereistom@dailywealth.com.
On March 31st, DailyWealth’s managing editor, Brian Hunt, will decide the winner. I will then travel to this county, investigate your idea and write it all up in DailyWealth.
Brian will choose the winner based on the following three criteria, in no particular order:
1) Profit potential
2) Interest as a story
3) The contrarian angle – we only want ideas that no one else is talking about.
As long as I can get a visa to visit the country, there are no boundaries. Africa, Asia, Europe, South America, North America… you decide. Please don’t send me to Baghdad.
Is it beachfront property you’re interested in? A local coal deposit they just discovered? Maybe a country’s stock market has fallen three years in a row and you think a certain stock is a perfect way to play the rebound? We’ll consider anything.
Please include your mailing address with your investment idea, so we can send the book to you if you win.
We look forward to hearing from you…
Good investing,
Tom Dyson
Editor's note: Tom Dyson is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
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