How To Never Lose Money With Your Investments

Just Buy Businesses That Are “Inevitable”

This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.

Editor’s note: Last Friday, Porter discussed his personal portfolio’s outstanding performance this year, up 54%. Porter calls this approach to investing a “Birthright Trust.” It uses the non-correlated, low-volatility structure of a “permanent portfolio” and includes substantial leverage to produce market-beating results. He’s sending a video to our Partner Pass members on Friday to show members exactly how to do this, using his own personal portfolio as a template. And, in preparation for this, Porter is discussing the three most important principles of great investing. Below is Part II: Never lose money.

Table of Contents

• Just Buy Businesses That Are “Inevitable”

• Three Things To Know Before We Go…

• Ticker-Reveal For Exposure To Elon’s Next Company

• Mailbag

Mark Twain wasn’t just a great American writer. He was the first, major media powerhouse in American history.

A famed author, Samuel Clemens launched his own publishing company in partnership with his nephew, Charles L. Webster. Their first book was Twain’s great work: Adventures of Huckleberry Finn.

Beyond the literary accomplishment, Charles L. Webster And  Company pioneered a new publishing business model: direct door-to-door sales. Back then (the book was published in 1885) bookstores were rare – almost non-existent. Most books were published as serials in magazines. But Clemens was so-well known as America’s best author, the company was able to employ 10,000 salesmen to sell the book across the country. The hardcover cost $2.75, and buyers were allowed to pay for it via a subscription over time, if they couldn’t afford the single payment.

The result was a huge financial windfall: they sold 150,000 copies over the next decade, generating almost half a million dollars in revenue (~$20 million in today’s dollars). And that success enabled Clemens to win the publishing rights to America’s best-selling book of all time (up to that point) Personal Memoirs of U.S. Grant by Ulysses S. Grant. In 1886 the book sold over 400,000 copies at prices up to $9 a copy. It generated over $1 million (~$40 million in today’s dollars) and launched the company’s successful “general’s series,” which included memoirs by several of the Civil War’s most notable leaders.

The success of the business propelled Clemens into the ranks of America’s wealthiest people, part of the “Rockefeller set,” as he put it. He bought a large estate outside of Hartford, Connecticut,and employed a large staff. Had Clemens made even marginally productive investments (this was an age of tremendous technological advancement), he could have built a substantial fortune with the publishing company’s cash flows.

But that’s not what happened.