Beat Wall Street at its Own Game

When I started on Wall Street back in the early 1980s, I couldn’t believe how little most brokers and advisors knew about investing.

I remember like it was yesterday: A good friend brought me along with him to lunch with a Wall Street “insider” — he was a big power-broker at one of Wall Street’s top investment banks, and he was pretty well known.

You see, my friend’s dad was a floor broker on the New York Stock Exchange and did business with this guy. His dad let us come on the condition we keep our heads down and mouths shut.

So there I was at 12:15 p.m. at Smith & Wollensky on Third Avenue in New York City, one of the top-rated steakhouses in the country. My friend, his dad, and Mr. Wall Street were already at the bar having drinks.

I was immediately blown away…

Mr. Wall Street was every bit what you would think a Wall Street power-broker would be in the 1980s. Think Gordon Gekko, but this guy was no actor — he was the real deal!

He was wearing a custom-made cashmere silk suit, a yellow Hermes power tie, and, of course, a solid-gold Rolex President Day-Date watch that stuck out of the monogrammed sleeve of his custom-made shirt.

He also seemed to know everyone in the restaurant, with most of the diners stopping by throughout the meal to shake his hand and pay respects.

What I heard at lunch blew my mind and changed my perception of Wall Street — forever.

I thought I would be hearing about an amazing investment opportunity he was researching or a recent investment of his that turned into a ten-bagger.

Boy, was I wrong…

The Truth Behind Wall Street “Insiders”

Rather than boasting about his strong stock market performance, he was talking about how a slick presentation netted him $1 million from this client, or the $500,000 from another client on a phone conference, and, of course, the whopping $5 million from a pension fund in Texas.

Mr. Wall Street was a power-broker, all right… not for his investing acumen — but for his money-raising skills! 

When I heard rumors that he made his firm $10 million in the past quarter, it never occurred to me that he wasn’t raking it in from commissions.

I was shocked, given the fact that there was story upon story about how much commission he made on this deal or that deal, and how his firm just built him a corner office to his precise specifications — right down to the wood to be used for his desk.

Great deals were based on how much cash lined his pocket, NOT how much his clients made.

After lunch, I felt like a kid that just learned there was no Santa Claus, and my perception of what Wall Street truly valued had forever changed.

Beat Wall Street at Its Own Game

I learned early on that Wall Street’s goals and your goals are not the same — they’re miles apart. Wall Street pumps out products that need to be sold and pays a ridiculous commission to the professionals that sell them.

And if you think they have your interests in mind, you might want to think again.

You see, most of these Wall Street insiders would never be caught dead putting their “hard-earned” money in any of their own deals.

Far from it, actually… they know how crappy they really are, and, more importantly, they know their exorbitant fees and commissions make it nearly impossible for clients to turn a profit.

You see, Wall Street insiders invest in a “situation,” not stocks. 

Since they have their ear to the ground, they hear about deals that the average investor would never hear about. They also invest in as close to a sure thing as possible.

You gotta be nuts to think they would risk their money on an IPO or a penny stock.

Believe me; I should know — I was a Wall Street insider for 30 years!

You can only take so much before you reach your breaking point… soon, I found myself playing for the other team — YOU.

For more than a decade, I’ve been giving my subscribers recommendations that you won’t find in the media or read about in other advisory services. I know where to look and who to listen to.

I know what type of “situations” to invest in and which ones to stay away from. I also keep a close ear to the ground with my network of Wall Street insiders that I’ve build relationships with for the past three decades.

Invest Like an Insider

Let me give you a recent example that my readers cleaned up on…

In March 2011, defense contractor Northrop Grumman spun off its shipbuilding division. Northrop wanted to focus on its more profitable business and had no use for a money-losing division.

Right after the spin-off, I started to read company documents on this shipbuilder — and what I saw blew me away. This company was the sole supplier of nuclear-powered subs and aircraft carriers to the U.S. Navy. 

Granted, it did have its challenges, but there was no way this company was going to fail. It was essential to national security, and I noticed that other Wall Street insiders were buying shares hand over fist and building big stock positions.

I advised my subscribers to buy Huntington Ingalls (NYSE: HII) in September 2012 at $38 per share. I told them about the company’s $16 billion backlog of orders and how over the next year the company was going to shed a number of low-margin contracts — at double the profit margin!

Huntington is now +325% since I recommended it… and I never advised selling one share of it.

That’s the kind of “special” situation Wall Street insiders invest in, and the kind I tip off my readers about regularly

In fact, I’m on the verge of recommending another special situation — and just like Huntington, it is a vital provider to a U.S. agency. The company just spun off a money-losing division and is about to soar higher.

And right now it is also the sole provider of a vaccine that is stockpiled by the Centers for Disease Control.

But I don’t want you to take this kind of powerful growth potential on faith. I want you to see the full details behind these incredible opportunities yourself.

And this is your first step.

All my best,

Charles Mizrahi

Twitter: @IWPeditor

Charles cut his chops on the trading floor of the New York Futures Exchange before moving on to become a wildly successful money manager on Wall Street.

And with more than 35 years of recommending stocks under his belt, Charles has knocked the cover off the ball, compiling an amazing record of success and posting gain after gain for his loyal readers. He is the editor of Park Avenue Investment Club and the Insider Alert newsletters.

Charles is also the author of the highly acclaimed book, Getting Started in Value Investing.