Get-rich versus stay-rich investing; The types of shorts in which I was successful... and unsuccessful; Colon cancer

1) I recently had conversations with two friends whose stories got me thinking about the difference between get-rich investing and stay-rich investing...

For privacy reasons, I can't share the details, but both guys started after the global financial crisis with a few million dollars, invested aggressively in areas they knew well – one in tech, the other in obscure small-cap companies – and turned their nest eggs into more than $100 million!

But both of them, having made never-have-to-work-again money, failed to dial back the risk level in their portfolios and have suffered significant losses over the past year (though both are still very wealthy).

Here's what I recently wrote to one of them:

It's a real credit to your stock picking that your portfolio has held up so well over the past 14 months.

My advice to you is that you need to do more of a pivot from get-rich investing to stay-rich investing – most importantly by getting rid of margin. There's no reason for you to have a single dollar of it. You already have a fairly aggressive portfolio in terms of the stocks you own (smaller, less liquid) and the concentration. Piling another layer of risk on top of this doesn't make sense.

It's like what Warren Buffett and Charlie Munger say about marrying for money: it's always a dumb idea, but especially so when you're already rich!

I also suggest that you take, say, $20 million and put it in short-term Treasurys, the world's safest investment. That way, if the world goes to hell in a handbasket, you'll still live happily ever after.

I'm not telling you to stop doing what you're doing. Keep doing what you love and are good at – but dial back the risk...

Best,

Whitney

2) Continuing where I left off in yesterday's e-mail, sharing slides from my presentation on "Lessons From 15 Years of Short Selling," here are the next two slides describing the types of shorts in which I was successful... and unsuccessful:

3) Actress Kirstie Alley's recent death from colon cancer at age 71 reminded me that the e-mail that generated the highest response from my readers this year was the one about my colonoscopy on May 25 (I shared reader feedback in my next two e-mails).

Colon cancer is the fourth-most diagnosed and second-deadliest form of cancer for Americans according to the National Cancer Institute:

If you compare the number of diagnoses versus deaths, you can see that colon cancer has among the highest fatality rates.

This is largely due to the fact that it's often detected late, which in turn is largely due to a lot of people not getting screened, which in turn is largely due to the "ick" factor associated with the primary screening method: a colonoscopy, in which you have diarrhea all night before a procedure in which a scope is put up your butt.

I have three thoughts on this...

• If you're really squeamish about a colonoscopy, you can get a test called Cologuard.
• A colonoscopy isn't so bad (see my May 25 e-mail).
• The alternative – not discovering colon cancer until it's too late – is a lot worse.

If you take one thing away from my e-mails this year, please get tested for colon cancer as soon as you turn 45 (the recommendation was lowered last year from 50 to 45).

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.