Editor’s Note: Palm Beach Research Group has seen a lot of changes in 2016. We’ve streamlined our product offerings… expanded our network of well-connected insiders… and committed to providing you “emergency” financial advice—in an unprecedented, dangerous investment environment.

Today, I’ve asked PBRG founder Tom Dyson to discuss some of these critical changes…


  5 rules to profit from “fringe” ideas

J. Reeves, editor, The Palm Beach Daily: Tom, after all the enhancements to our services this year, I think many subscribers have one important question on their minds: Has the core philosophy of Palm Beach Research Group changed? Have you changed?

Tom Dyson, founder, Palm Beach Research Group: No.

Trends change. Ideas change. The news changes. The path to investment success doesn’t change. It never has and it never will. What is that path?

  1. Be defensive. Always consider your risk first. Risk equals reward is one of the greatest fallacies in finance. The reality is safety pays more and risk loses more.

  2. Have a strategic advantage. Here are some examples: use a long-term holding period (like our Legacy Portfolio), only invest in smaller, exceptional companies (like we do in The Palm Beach Letter), etc.

  3. Eliminate emotion. Emotion is toxic to your portfolio. Use a system of asset allocation, position sizing, and stop losses. (We call this the Palm Beach Three-Legged Stool of Safety.)

  4. Never invest in anything you don’t understand.

  5. Recognize you won’t get rich from investing alone. Cultivate other sources of income.

J.R.: What have you been doing to expand your mind and discover new investment ideas no one else is considering today?

Tom: Read, read, read. I read 50 books a year. I’ve always got at least five books open around my apartment. And I always listen to a book in my car. That’s my raw material.

I never take ideas at face value, though. Instead, I think “Does the market value this idea correctly?”

I gravitate toward fringe ideas. My friends tell me I’m eccentric. It’s a polite way of saying I’m weird.

J.R.: Our newest investment advisory service, Palm Beach Confidential,is not for everyone—intentionally. Why did you decide to go this route?

Tom: Remember I said that I gravitate toward fringe ideas? Palm Beach Letter Editor Teeka Tiwari’s the same way. In investment terms, the “fringes” are often small and illiquid companies or very niche areas. They aren’t appropriate for a large audience.

J.R.: Can you give an example?

Tom: Sure. I just got back from Peru where we found a stock we’re calling the “Peruvian Gold Miracle.”

Changes in Peruvian environmental laws by the country’s new pro-business regime will multiply the company’s current gold output by a factor of five. When the wider public learns about the discovery, the stock could soar up to 500%.

But with a market cap of about $120 million, we just can’t recommend it to our wider subscriber base.

The Palm Beach Letter has over 100,000 readers. There’s no practical way we can recommend these ideas there without moving the market. Until recently, they’d go to waste. Or we’d just invest in them ourselves.

But we wanted a way to publish them. So we came up with Palm Beach Confidential. It’s a very small circulation newsletter for people who want our best—but often illiquid and more advanced—ideas.

Recommended Link

UPDATE: 7 billionaires shift money out of U.S. stocks and U.S. banks
Prominent U.S. billionaires have been taking money out of the common investments most people own. They’ve been moving money to a surprising location in the U.S.—a safe haven few U.S. investors are taking advantage of. When you see this story, you’ll understand why.

J.R.: What is the most important general advice about investing you can leave our audience with today?

Tom: It’s dangerous out there. Average expected investment returns are as low as they’ve been in human history. It’s totally okay to NOT be an investor… to keep your money in the bank… to not bother.

Meanwhile, there’s so much money everywhere. It’s all around you. You want some? All you have to do is bend down and pick it up. Seriously.

Apply your mind and your time to solving other people’s problems… to being useful… and you’ll make money easily.

I guess I’m saying we’re in an epoch where earning passive wealth is really hard and earning active income is really easy. Your choice. 

J.R.: That’s really great insight, Tom. Thanks for your time.

Tom: Thank you.