Question: What do Warren Buffett and top Venture Capitalists have in common?
It’s sure not the type of companies they invest in:
After all, Buffett invests in big, stable companies operating in mature industries…
While Venture Capitalists, or VCs, invest in companies at their earliest stages, in industries that barely exist.
No. What Buffett and the VCs have in common is a secret...
And it’s the same secret used by the world’s most successful investors.
Today, we’ll share it with you. And we’ll introduce you to a man that’s used it to quickly amass a portfolio worth $40 million.
Read on to learn more – then click the link at the end to hear our exclusive interview with the “40-Million Dollar Man.”
Returns of The World’s Top Investors
At first blush, value investors like Buffett and early-stage VCs might seem like they’re from different planets.
But they have more similarities than you might think:
For starters, they both earn outstanding returns.
Buffett’s averaged 24% per year; the best early-stage VCs have averaged 27%.
But they have something else in common, too…
Lemmings vs. Mavericks
There are two types of investors: Lemmings and Mavericks.
Lemmings follow the crowd, even if it means falling off a cliff.
Why? Because it’s defensible. It’s safer. See, even when they’re wrong, they can say, “Well, everyone else had it wrong too.”
As Buffett often says, “Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press.”
Mavericks, on the other hand, go against the crowd, or go where no one’s looking.
Buffett’s a maverick. He was ridiculed during the dot-com days for sticking to “old economy” stocks like Coke and GEICO while everyone else was getting rich in tech.
We all know how that turned out.
VCs are mavericks, too.
I was reminded of this recently while reading the blog of Andreessen Horowitz, one of the top venture funds.
They wrote about a common mistake unsuccessful VCs make: they look for investments in the same place as everyone else.
Several years ago, for example, when Groupon was the hottest start-up in town, many VCs invested in “copycat” companies that were similar to Groupon.
Today, only a handful of those copycats still exist. None except Groupon went public.
The Andreessen blog illustrates this concept with the following chart:
Their idea here is simple:
Be a maverick. Invest in “non-consensus” companies.
Sometimes that means being contrarian. Sometimes it means getting in early and catching a trend before everyone else.
The Maverick Currency
A great example of a successful “maverick investment” is bitcoin.
In its early days, very few people understood its vision or believed in it.
But the ones who did – the mavericks – ended up making a killing.
One such maverick is Barry Silbert – and he recently agreed to sit down with us for an exclusive interview.
Barry’s the founder of SecondMarket.com, one of the largest secondary markets for private company shares. And he was one of bitcoin’s earliest investors.
Currently, he manages a bitcoin portfolio worth more than $40 million, and he recently launched the Bitcoin Investment Trust, one of the world’s largest bitcoin investment vehicles.
We link to the exclusive interview below. Whether you’re curious about bitcoin, or simply want to know how a maverick thinks, we think you’ll enjoy it.
Matt and I are impressed with Barry, and we’re intrigued about bitcoin – we even wrote a research report on a bitcoin start-up that’s currently raising money.
But more importantly, we’re drawn to maverick investing.
Any time we’ve made real money, life-changing money, it’s because we ditched the crowd and went our own way – whether by founding our own start-ups, or by investing in other people’s “crazy” ideas.
And that’s one of the reasons we’re betting so big on equity crowdfunding.
Equity crowdfunding… early-stage investing… the mainstream press isn’t talking about these things right now. You and I are early to the party.
And to earn real returns, that’s exactly where you want to be.
We hope you enjoy the interview with Barry – and if you’d like a copy of the bitcoin research report I mentioned earlier, just reply to this email and let me know.
You can listen to the interview here: