The Billion-Dollar Decision: From Working Class to Billionaire

From the Baltimore Clubhouse – He was an unassuming boy from Blue Point, New York.

No one suspected that one day… he’d be worth billions.

Thomas Knapp was born in 1921. At the time, Blue Point was a quaint, working-class neighborhood on Long Island.

He was a self-proclaimed beach bum. But he was an ambitious one. He earned a chemistry degree from Princeton University before serving as a lieutenant in the U.S. Navy during World War II.

Then, Knapp made a billion-dollar decision…

He took several Columbia University classes taught by famous value investors David Dodd and Benjamin Graham.

Knapp was so inspired by what he learned that he enrolled in the MBA program at Columbia Business School.

From 1954 to 1956, Knapp – along with Warren Buffett, Walter Schloss and Bill Ruane – worked at Graham’s investment firm, Graham-Newman Corp.

Shortly after Graham retired in 1956, Knapp joined money management firm Tweedy, Browne Company. He later formed Tweedy, Browne Partners with three other Graham disciples.

But Knapp stayed close to his friends and mentors…

Graham-Newman Corp. was one of Tweedy’s primary brokerage clients.

The firm also maintained close brokerage relationships with Schloss and Buffett.

According to its website, Tweedy, Browne Company’s mission is simple:

We do not attempt to be all things to all people, but instead pursue a value-oriented approach to investment management first pioneered by Benjamin Graham. We invest in undervalued common stocks in the United States and outside the United States.

Short and sweet.

And based on the firm’s performance, Graham would have been proud…

In less than 16 years, Knapp helped the firm accomplish a 1,661.2% total return…

With an annual compounded rate of 20.0%.

It was Knapp’s disciplined approach to stock picking that made Tweedy, Browne Co. so successful. He and his successors focused on investments with one or more of the following characteristics:

1. Low price in relation to asset value
2. Low price in relation to earnings
3. Significant insider trading
4. Significant decline in stock price
5. Small market cap

If you’ve been tracking the moves of our Chief Investment Strategist Alexander Green, this may look familiar. Alex makes no secret of the fact that he too subscribes to the strategies used by Graham and Dodd and later refined by Knapp and Buffett.

In a recent conversation, Alex said…

Warren Buffett took Benjamin Graham’s value discipline and turned it into the most successful investment strategy of all time. He is one of the wealthiest men in the world now since Berkshire Hathaway shares have appreciated so much.

So it shouldn’t be any great surprise that we are disciples in turn of both Benjamin Graham and Warren Buffett. We use a value methodology based on their work to select value stocks for ourselves.

So what makes a company a value?

Alex argues that a company is a “value because of its relationship… the price’s relationship to the company’s sales, earnings, book value, cash flow and dividend yield.”

Here are the characteristics Alex looks for in his trading service The True Value Alert. You’ll notice they’re quite similar to those used at Tweedy, Browne:

1. Low price in relation to earnings
2. Low price in relation to sales
3. Low price in relation to book value
4. Rising dividend yields
5. Positive future prospects of the business.

And like Knapp, Alex has led his subscribers to impressive gains over the years – 51.7% on VMware (NYSE: VMW), 39.3% on Harman International (NYSE: HAR) and 37.4% on First Solar (Nasdaq: FSLR).

So far this year, Alex’s True Value Alert portfolio is up 23.1%. And in an exclusive online broadcast on Wednesday, August 23, Alex will show you precisely how he does it.

We’re calling the event “Blue-Collar Billionaires” in honor of men like Knapp.

During the presentation, Alex will reveal how four ordinary wealth seekers went on to capture a combined 51,243% gain. It’s the ultimate rags-to-riches story.

To claim your spot for this free live event and to learn how you could become the next blue-collar billionaire, click here now.

Good investing,

Rachel