The Powerful Message Behind the '$100 Challenge'

The powerful message behind the '$100 Challenge'... Chatting with the genius behind this unusual idea... Burning ships and crossing the Rubicon... You're just wasting $100 if you don't do this, too... This challenge isn't for everyone...

Want to get rich? Throw $100 out the window...

That's right.

If you're really committed to getting rich, you need to throw $100 out of the car window. The next time you're driving down the highway, give it a try.

Just so we're clear, though... You didn't get this idea from me. I (Dan Ferris) don't want a horde of angry Digest readers hunting me down to get their Ben Franklins back.

This outside-the-box idea comes from master trader Mark Minervini...

You might recognize Minervini's name... He's one of more than a dozen elite trading geniuses profiled in Jack Schwager's 2001 best-selling book, Stock Market Wizards (an inspiring must-read for traders).

I interviewed Minervini last week for an upcoming episode of the Stansberry Investor Hour podcast. Before the interview, I did my usual homework to prepare for the episode. While doing that, I went to his blog. And that's where I discovered his "$100 Challenge"...

If you are going to be a big success, then in the big picture $100 is meaningless. Tossing it out the window is a declaration to yourself that you've moved beyond scarcity thinking. That $100 is nothing in comparison to the financial success you are going to manifest. Do you believe in yourself?

When you release it out the window, make a wish for the person who finds it. Imagine it going to someone who really needs it – or someone who receives the money as an affirmation of their own worthiness and success around the corner. Do it with the intention of becoming part of something far bigger that connects all of us.

Before I go any further, I have a confession... When I read this, I immediately thought Minervini was nuts. I e-mailed our podcast producer and considered canceling the interview.

But instead, I let myself calm down... and thought about it for an hour or two.

And you know what?

Minervini is a genius.

In fact, there's ample historical precedent for the logic behind Minervini's suggestion to throw $100 out the window...

It's just like when Alexander the Great burned his ships in 334 B.C...

Young Alexander hadn't earned his famous nickname yet. But like Minervini, he was on his way to big success...

In 334 B.C., Alexander set sail with his men on a fleet of Greek and Macedonian ships. They aimed to cross the Hellespont – a narrow waterway in the northwestern part of modern-day Turkey that's known today as the Dardanelles. It's recognized as a piece of the traditional boundary between Europe and Asia.

For an ambitious guy like Alexander, crossing the Hellespont was a big deal...

His empire would eventually stretch all the way to India – more than 3,000 miles east. But before Alexander could get there, he needed to defeat one of his greatest enemies... Persian emperor Darius III.

So Alexander sailed across the Hellespont. And as he came ashore, he took a $100 bill out of his pocket and tossed it out the window... so to speak.

Alexander immediately ordered his men to burn all their ships. He told them, "We will either return home in Persian ships or we will die here." Alexander needed ships... but he needed to conquer the Persians more.

Alexander needed his men to understand one thing... Failure was not an option.

It's also like the famous moment when Julius Caesar crossed the Rubicon in 49 B.C...

Fearful of coups, the Roman Senate had forbidden Imperial Roman Army generals from bringing their armies across the river... therefore, making it impossible for them to reach the capital city of Rome.

But Caesar hungered for power. And he was willing to toss his $100 bill out the car window – or defy the Senate's orders, leading to the Roman Civil War – to get it.

According to the ancient Roman historian Suetonius, Caesar crossed the Rubicon with the 13th legion and uttered the famous phrase, "The die is cast."

The crime of bringing his legion of soldiers into the Italian republic was punishable by death... for both Caesar and any soldier who obeyed his orders. Having crossed the river, he and all his men would either need to win or die trying.

And of course, as history shows... Caesar eventually won.

As Minervini and I spoke, he stressed the symbolism of the $100 bill...

If you don't accompany the act of throwing out the money with a deep emotional commitment to becoming a success, then you're just wasting $100.

You must make that $100 count.

You must burn your emotional ships... cross the emotional Rubicon... and totally commit to winning at trading – or whatever other endeavor you've decided to embark upon.

Without that commitment, throwing the money out the window won't mean a thing.

I know what you're probably thinking...

It's all well and good for a guy with millions to spare to throw $100 out the window. But what about the rest of us... for whom $100 is a lot of money?

Well, this isn't something Minervini came up with after he became rich...

In fact, he took his own advice while driving down the road many years ago... before he became a rich and famous trader. He recounted the story during our interview last week...

Many years ago, Minervini and a friend – another aspiring trader – were driving. The two young men liked to tell each other how successful and wealthy they would become one day.

During the drive, Minervini asked his friend how good of a trader he intended to become. Knowing Minervini's total dedication to learning to trade stocks successfully, the friend said... "Even better than you, Mark. I'm going to be one of the greatest traders in the world."

On this particular day, as they drove down the road, Minervini wanted to up the ante. He wanted to put his money where his mouth was... and he wanted his friend to do the same.

So Minervini took all the cash out of his pocket – about $400, a substantial sum to him at the time – and he threw it out the window.

His friend was shocked.

Then, Minervini asked his friend how much money he had on him. "About $200."

"Well, throw it out the window." Minervini said. "If you're so committed to being such a great trader – better than me, one of the best in the world – $200 is nothing to you. If you can't throw $200 out the window, maybe you're not that committed."

The $100 Challenge obviously worked for Minervini...

He dropped out of junior high school, enjoyed a brief career as a musician, and then devoted a decade of his life to developing a successful trading system. And it paid off...

During one five-year period in his career, Minervini generated a total return of more than 33,000% – 220% per year, compounded – with only a single down month. That kind of success would turn $100,000 into more than $30 million!

And his friend? He didn't throw his $200 out the window that day. Nor did he ever become a wealthy, successful trader.

Decades later, he met up with Minervini. And he told him, "Mark, I'm so proud of you. You really did it. Congratulations... and I wish I'd thrown the money out the window."

As I spoke with Minervini last week, he said the $100 Challenge has 'gone viral'...

People have sent him videos of themselves – or their friends or family members – throwing $100 bills out of all kinds of vehicles in all kinds of places all around the world.

According to Minervini, some folks have even thrown their money off of rickshaws in Asian backwaters.

My chat with Minervini was one of the most enjoyable interviews I've done on the Stansberry Investor Hour podcast over the past two years. And to think, I briefly considered canceling on him after hearing about the $100 Challenge.

I'm sure glad I didn't do that.

Talking with Minervini made me think about a book I read recently...

It's called Range: Why Generalists Triumph in a Specialized World. In the book, author David Epstein discusses the difference between "kind" and "wicked" learning domains...

In kind learning domains, Epstein writes, "Patterns repeat over and over, and feedback is extremely accurate and usually very rapid." He uses playing a musical instrument or just about any sport as examples. Just keep doing them... and you'll likely make progress.

But in wicked domains, Epstein writes, "The rules of the game are often unclear or incomplete, there may or may not be repetitive patterns and they may not be obvious, and feedback is often delayed, inaccurate, or both."

For most investors, the financial markets constitute one giant, devilishly wicked domain.

But for a guy like Minervini, the stock market seems more kind than wicked... His trading approach combines fundamentals like revenue and earnings with technical indicators.

(I asked Minervini if he had read Epstein's book. He hadn't, but he ordered it from Amazon as we spoke. He's a voracious reader... with a library of more than 4,000 books.)

And one item in Minervini's Stock Market Wizards interview sticks out in my mind...

Schwager asked, "How do you know when you are wrong in a position?" Minervini's answer was crystal-clear... "The stock goes down. That's all you need to know."

In other words, though the fundamentals play a part, the rubber meets the road at the stock's price action. Once the position is open, the fundamentals no longer matter.

If the stock goes down, he's out... For him, the stock price is an accurate, readily available source of feedback. If it's not doing what he wants, he either exits the trade or avoids it.

Minervini's years (decades, really) of learning to interpret the market's price signals have transformed price from an unreliable source of feedback – like it is for many casual investors – into an extremely accurate one for his highly skilled mind. You could say that Minervini has tamed the market... and turned a wicked learning domain into a kind one.

Even for many seasoned professionals, price action isn't always reliable...

At least not in the way it is for Minervini.

John Burbank, the macro trader behind San Francisco-based global investment firm Passport Capital, likes to say, "Price is a liar." He obviously takes a totally different approach to the markets than Minervini... one that has worked well for him over the long term, too.

But for Minervini and other master traders like him, price is not a liar. For them, it's the gospel truth. Of course, these trading experts have spent decades focused entirely on learning to read and interpret prices with insight that most folks never achieve.

Now, I'm only human...

When an insanely successful, wealthy guy makes a case for throwing $100 out the window, it gets under my skin. And every day that passes seems like one more in which I still have this $100 bill in my pocket, itching to be set free.

But in reality, I doubt I'll ever take Minervini's $100 Challenge. I made my own lifelong commitment years ago, while recuperating from my first back surgery at my parents' house.

Before my injury, I led a bohemian lifestyle...

I played music in restaurants, coffeehouses, and the occasional music theater orchestra throughout Baltimore, Washington, D.C., and Philadelphia. I also played a bigger gig at the Kennedy Center, back when Placido Domingo was the artistic director of the Washington National Opera. (Talk about intimidating... When he looks at you, you'd better get your act together, pronto!)

One day, as I recovered on the bed at my folks' place, I realized that I needed to get serious. I needed to start making a stable income. That decision eventually led me to the markets... and then to Stansberry Research. I'm already all-in and have been for years.

But if I weren't, I would be driving down the highway right now... chucking $100 bills out the window... and swearing up and down to become a roaring success or die trying.

It's not something I would recommend for everyone...

The idea of throwing $100 away to seal a commitment to excellence is personal. You must decide for yourself to do it or not. But on his blog, Mark explicitly recommends it...

Liberate yourself from attachment. Toss that $100 bill into the wind and the unknown. Let go of labels of this act being wasteful or crazy. This is how you learn to control your own perception and the meaning you assign to life's events.

Declare your life of abundance. If you do, your thinking may change, and what you thought was a burden will become powerful and motivating.

However, he spends a lot more time telling his story and explaining the meaning behind the gesture. It's a powerful message... The guy obviously made a huge impression on me.

My Stansberry Research colleagues often impress me just like Minervini did...

Just when I think I know how good they all are, one of them blows me away with new insights or information he has been working on. And it happened again recently...

On the January 30 episode of the Stansberry Investor Hour podcast, I spoke with Stansberry Venture Value editor Bryan Beach.

Bryan's extensive background in accounting and knack for finding small-cap jewels has helped him generate an incredible track record in Venture Value. As our publisher Brett Aitken explained in the first part of the 2019 Report Card last Thursday...

Since inception – which coincides with the three-year period chosen for this year's Report Card – Bryan has achieved a win rate of 61%. His average annualized gain of 13.4% thrashed the 8.9% annualized return of his benchmark – the Vanguard Small-Cap Index Fund (VSMAX).

Perhaps more outstanding, Bryan has identified five "doubles" over the past two years. In 2018 and 2019, his win rates were an incredible 80% and 64%, respectively. The average gains of his recommendations in those years were 36.6% and 20.8%, respectively. On an annualized basis, that's 33% for the 2018 recommendations and 48% for the 2019 ones.

That's a phenomenal performance. Needless to say, I'm thrilled with the results Bryan is producing for his Venture Value subscribers. And I expect these results to continue.

During the podcast interview, Bryan delivered a tour de force of analysis and investor education...

At one point in our talk, he spent several minutes laying out the story of how he bought a heavily shorted stock and delivered an excellent return. (The position is still open.)

I've been fortunate in recent weeks... Like my chat with Minervini, it's one of the most intense, rewarding interviews I've done since I took over as podcast host in 2018. It's a must-listen for any investor who wants to hear how the mind of a great investor works.

Again, you can check it out right here. (Bryan's interview begins around the 17:27 mark.)

By the way, I'd be remiss not to mention the absurd deal we're offering on Bryan's Venture Value service...

Right now, you can get instant access to all of Bryan's research in Venture Value – including his brand-new report detailing three little-known stocks with 1,000% to 3,000% upside potential – for more than 65% off the regular cost.

This is the biggest discount we've ever offered on Venture Value. It's even better than the special introductory price we offered when we launched this service back in 2017.

And frankly, I doubt we'll ever offer anything close to it again. So if you've ever considered becoming a Venture Value subscriber, this is your chance... Get all the details right here.

One last thing before we wrap up today's Digest...

If you take Minervini's $100 Challenge, don't hide your light under a bushel.

We'd love to hear your story. You get extra points if you send a video to prove it. Or if you think it's crazy and would rather keep every last penny you make, tell us that, too...

As always, send your comments to feedback@stansberryresearch.com.

New 52-week highs (as of 2/5/20): AllianceBernstein (AB), Automatic Data Processing (ADP), American Financial (AFG), Becton Dickinson (BDX), Blackstone Mortgage Trust (BXMT), CBRE Group (CBRE), Cerner (CERN), Corteva (CTVA), Dolby Laboratories (DLB), Ingersoll Rand (IR), iShares U.S. Aerospace and Defense Fund (ITA), Johnson & Johnson (JNJ), Lennar (LEN), Masco (MAS), Novo Nordisk (NVO), PepsiCo (PEP), Procter & Gamble (PG), Parker-Hannifin (PH), ResMed (RMD), ProShares Ultra Technology Fund (ROM), ProShares Ultra S&P 500 Fund (SSO), ProShares Ultra Financials Fund (UYG), Vanguard S&P 500 Fund (VOO), and W.R. Berkley (WRB).

In today's mailbag, paid-up subscribers share their thoughts about a psychology tidbit in yesterday's Digest... True Wealth analyst Brian Tycangco... and a question about Steve Sjuggerud's "Melt Up" thesis. Tell us what's on your mind at feedback@stansberryresearch.com.

"Double 'ironic mental process'... Doctors saying 'stress worsens its effects,' doubles the stress and its effect." – Paid-up subscriber Gary S.

"[I] am pleased to note that Brian Tycangco is on the True Wealth team. I benefited greatly from Brian's advice decades ago. As I recall, several of his suggestions became '10 baggers' i.e. BYD battery and a Chinese auto company, the symbol of which I cannot recall, at present." – Paid-up subscriber Peter B.

"Now the Melt Up is going higher... How long will that last? When is a good time to sell stocks before the crash?" – Paid-up subscriber Sharon F.

Corey McLaughlin comment: For those answers and more details about the Melt Up, the best thing to do in the short term is to check out Steve's event next Wednesday, February 12, at 8 p.m. Eastern time.

He'll give everyone who tunes in a full update on his thesis... share his No. 1 stock to own during the Melt Up... and much more. The event is 100% free. You can sign up right here.

Good investing,

Dan Ferris
Vancouver, Washington
February 6, 2020