An exclusive excerpt from Jordan Kimmel's new book, Invest In The Now.
 

The Magnet® Stock Selection Process operates in the NOW. Magnet ranks companies according to what is going on NOW, not what we hope or expect to happen in the future. Developed by a team including quantitative Ph. Ds, data scientists, and myself, Magnet ranks public companies based on several fundamental factors of financial strength, stability, and growth.

Simple clear and measurable factors, including current revenue growth, profit margins, and cash flow, are measured for all companies. This unbiased process simply but powerfully allows us to determine what is happening NOW. As a money manager, I am aware that my most important asset is not the biggest current position in my portfolio. I do not hold onto beliefs or positions simply because, in the past, those securities ranked highly on our Magnet® model and helped create wealth. Things change, and it is always my focus to ask what is going on in the present. Therefore, I consider my biggest asset to be my mindset —to be in the present moment and hold a portfolio of companies that rank highest in the Magnet model NOW. 

Many investment professionals and journals focus on trying to predict the future and then plan on how to position a portfolio based upon those assumptions. The more experience you have, the more you realize how off base most of the predictions end up being and how poorly the results turn out to be. This is not because most investment professionals are dumb or ill-intended, but because the world is so unpredictable and uncertain. 

Magnet stocks attract other investors because of the revenue growth, profit margin growth, and increasing market share within their industry. The attraction to these growth traits is as natural as nature. I do not invest in the stock market; I invest in the current Magnet® stocks—the ones that rank up the highest on our model—NOW.

I am guessing that as you are reading this, you already have your own way of identifying “superlatives”—or things that are currently better than worse based on your own expertise. Perhaps you have a certain advantage based upon your profession, knowledge base, or even your perception. 

The key is to use your experience of being in the now to be able to identify current winners. Many years ago, one of the greatest mutual fund managers, Peter Lynch of the Fidelity Magellan fund, credited his wife by recognizing Hugs as something that was being worn by women at the time. It was a new product that was taking the country by storm, and he invested in the company that was making Hugs.

Lynch promoted the concept of “being aware” and investing in what you know. More recently, it could have been discovering Lululemon or Ulta Beauty as current Magnets — without using any math or elaborate formulas! Sports are bigger than ever, but usually not a single player from one decade to another is in the major league baseball All-Star game that is played annually. Love stories are enjoyed over the years, but the actors change over time. It is very similar to the stock market. 

In one of my previous books, The Magnet Method of Investing, I shared the theory of the “S curve”. It is well known in the field of biology. Living organisms experience periods of growth followed by eventual decay. This is the simple life cycle—and it holds true with baseball players, actors, Sequoia trees, and public companies. I am keenly aware that fortunes were lost with a focus on the past. Many former stock market darlings created misery for investors that were anchored to a former reality that had passed. 

Ask those who could not stay in the present moment and instead hung on to former glory. This list includes RCA, Eastman Kodak, Bethlehem Steel, Pan AM, AOL, Blockbuster Video, and General Electric. These are just some great high-profile examples to learn from. It is my intention to own a portfolio of the currently highest-rated Magnet® stocks—NOW! 

Change is inevitable and unstoppable. The competition in business and for business allows for new nimble companies to overtake the older and slower-moving companies that once dominated their industry. But the expression “the more things change, the more they remain the same” holds true in this case. The companies that currently have the best fundamentals NOW become the new Magnet Stocks that our model uncovers and invests in. Whether investing in the stock market or living life to the fullest, focusing on the NOW and not the past is the key to success, happiness, and health. 

Overall, whether in life or in investing, being at ease and focused in the NOW is the key. Do not be concerned about what will change. Any investment manager who tells you they know what will happen in the future is kidding you and themselves. Being in the present moment and focusing on what is happening now will allow you to tune out the noise from the phony fortune tellers, and not be haunted by the past. 

It may turn out that you once made an investment in a particular business that did not work out. Maybe the time was not right back then, but it is NOW. Although I have shared my investing approach here, this is not only an “investment book”. It is a book about having the right mindset to invest and enjoy your life.

This book has been a work in progress for almost a decade. Back then, I first met Trisha Bollman. Trisha talked about being in the present moment and not being caught up in the past. We talked about how similar her beliefs and my Magnet model were. By focusing on what was going on NOW, the future would take care of itself. At about the same time, I also met Ritika Hiranandani. Ritika was a business consultant at a financial firm that I was associated with. She spoke about the clarity that her meditation and yoga practice brought out in her. Funny, but Trisha had made a similar comment. We thought about creating a book that was able to share the idea of having the proper mindset that allows people to live better, invest better, and get the most out of life. Once we experienced a global lockdown and realized how much this book was needed, it all just unfolded. We knew how we each loved to collect quotes, and the book seemed to just come together. Despite the busy careers of Trisha and Ritika, I asked them to help write and finalize the book. We hope you find it helpful and inspiring and enjoy it as much as we loved creating it. 

HOW TO INVEST IN THE NOW

Tip #1

Become empowered by realizing that nobody really knows what the future holds.

Tip #2

Understand what is going on NOW and invest in current Magnet stocks. 

Tip #3

Understand that today’s Magnet stocks will not be attracting other investors forever. 

Tip #4

Be accepting that when a Magnet stock loses its attraction you will be able to simply move on to the next Magnet Stock that emerges. 

More By This Author:

Even An Average Return In The Stock Market Is OK…How About Being A Winner…?
Identify The Best “Magnets”- And Just Tune Out The Rest…
Don’t Waste Time Looking For “The Top”- Focus On Owning The Best Companies