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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
America's "Millionaires' Club" now has 10.4 million members - the most ever, according to the latest statistics. And it's a club you can join - much sooner than you might think, says D.R. Barton, Jr., a top trader, television analyst and former hedge fund officer. In his new book, the 10-Minute Millionaire, D.R. has distilled his decades of experience trading the markets into a system so simple that even a new investor can set it up and maintain it in increments of as little as 10 minutes. The 10-Minute Millionaire combines goal-setting, stock-screening and trading strategies whose ultimate objective is to give you membership in that Millionaires' Club. The system is so simple D.R. has taught it to sixth graders, yet so powerful it can transform even a small starting stake into lifelong financial freedom - in a way that utterly destroys "buy-and-hold" investing. Loaded with step-by-step illustrations and personal stories, the 10-Minute Millionaire takes the powerful secrets of Wall Street insiders and breaks them down into an easy-to-understand blueprint for beating the markets, day after day, week after week. Using an easy three-step process, D.R. walks you through a repeatable and reliable way to identify the stock-market extremes that show up virtually every day. He trains you to properly frame each trade to maximize profit and minimize risk. Finally, he neutralizes the natural biases that lead most traders to financial destruction - and shows you how to book big profits from other trader's irrational miscues. This isn't an algorithmic "black box." It's not "robo-trading." The 10-Minute Millionaire system still requires personal involvement. It still requires commitment. But it squeezes out emotion, filters out the noise, slashes the risk, and maximizes your potential for profits - and also for meaningful wealth. Once you learn the 10-Minute Millionaire way, it's a system you can operate and update in tiny 10-minute increments. Before you know it, you'll be trading better than a seasoned pro. And you'll watch as your "assets" turn into true wealth. And you'll learn the most-valuable lesson of all: Becoming a millionaire doesn't have to be an unattainable dream. Make it a goal, and pursue that goal, and before long that dream will be real.
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THE 10-MINUTEMILLIONAIRE
THE ONE SECRET ANYONE CAN USE TO TURN $2,500 INTO $1 MILLION OR MORE
D. R. BARTON, JR.
Cover design: Wiley
Cover image: © blackred/iStockphoto
Copyright © 2017 by D. R. Barton, Jr. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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ISBN 978-1-118-85670-3 (Hardcover)
ISBN 978-1-118-85691-8 (ePDF)
ISBN 978-1-118-85680-2 (ePub)
My life is in the hands of my Lord, Jesus Christ. My heart and my eternal thanks belong to my amazing wife, Cathie. My admiration goes out to Meg and Josh, who continue to deserve it every day. My gratitude belongs to my dad, who has inspired me, believed in me, and shown me how to live.
Along with everything that I do, this book is dedicated to you.
CONTENTS
FOREWORD
ACKNOWLEDGMENTS
PROLOGUE
SECTION I It’s Time to Think Like a Millionaire (aka “The Path to Wealth Is a Lot Shorter Than You Think”)
INTRODUCTION The Huck Stops Here
Flying South
Force 10 from Brattonsville
Ten Minutes Can Change Your World
A Blueprint for Wealth
Notes
CHAPTER 1 The Critical Secret I Learned from the World’s Billionaires
From Castaways to Kings
Learning in Luxury
That Ticking Sound You Hear . . .
The Private Lives of the World’s Elite
The Basic Tenets of Prodigious Wealth
Notes
CHAPTER 2 Investing—The Ultimate Extreme Sport
Anatomy of an Auction Surprise
Those Inefficient “Efficient Markets”
Ghosts in the Machine
A Keynesian Game—Playing the Player, Not the Cards
Bubblicious Profits
Crazy Chickens
Rubber-Band Man
Note
BONUS CHAPTER 2A The Millionaire’s Cheat Sheet
Notes
CHAPTER 3 How the “Potentate of Profits” Will Help You Get an Edge
Picking Your Spots
Great Expectations
Risky Business
A Blueprint for Winning
Stop the Loss/Stop the Pain
Another Step toward Success
Sizing Up Your Opportunity
It’s Better to Weight for an Edge Than to Wait for an Edge
Unconventional Wisdom
Intermission
A Look Back . . . and a Look Ahead
SECTION II Find the Extreme, Frame the Trade, Book the Profit
CHAPTER 4 Running a System
Just Enough to Be Dangerous
The Tragic Tale of “Trader Tom”
The Systematic Investor
Bias Number 1: Loss Aversion Bias
Bias Number 2: Streak Bias
Bias Number 3: Results-Orientation Bias
Note
BONUS CHAPTER 4A The Five Secrets of a Sleek Trading System
A Quintuplet of Benefits
It’s Time to Become “Truly Rich”
CHAPTER 5 Finding Extreme Stocks
Part I: Fast Movers
Navigating Your Way
V Is for Volatility
A Measured Approach
Volume and Price (How Much . . . and How High)
Screening for Fast Movers
Part II: Rubber Band Stocks
The Trend Is Your Friend
Momentum and the RSI
Putting It All Together
Shortcut Tip
CHAPTER 6 Framing the Trade
When You Fail to Plan . . .
A Contingency Plan to Revere
The Agony of Defeat
Separating Winners from Losers
I Wanna Hold Your Hand
Downside Protection
Sizing Up the Opportunity
Ready to Roll
CHAPTER 7 Book the Profits
Catching Your Fair Share
Sell Signal
Trailing Stops
Intermission
What You Can Do with What You Have Learned
SECTION III Putting It All Together
CHAPTER 8 Your First Step . . . Toward Your First Million
Sampling the System
Cleared for Take-off
Drug Enforcement
Game On
EPILOGUE It's “Self-Improvement” . . . Not “Shelf Improvement”
APPENDIX
The 10-Minute Millionaire
’s Trading Worksheet
GLOSSARY
INDEX
EULA
List of Illustrations
Chapter 2
Figure 2.1
Famous Market Manias
Figure 2.2
Psychology of a Stock Market Bubble
Figure 2.3
Recent Stock Market Bubbles
Figure 2.4
Anatomy of an Extreme
Figure 2.5
Pullbacks
Figure 2.6
“Sneak Peek”—Relative Strength Indicator (RSI)
Bonus Chapter 2A
Figure 2A.1
Extreme Reversal Type 1—Overbought
Figure 2A.2
Extreme Reversal Type 2—Oversold
Figure 2A.3
Extreme Continuation—Strong Stock
Figure 2A.4
Extreme Continuation—Weak Stock
Figure 2A.5
Extreme Turnarounds—Pops and Drops
Figure 2A.6
Frequency of Stock Price Extremes
Chapter 3
FIGURE 3.1
Expected Return: Short-Term Variance
FIGURE 3.2
Expected Return: Long-Term Convergence
FIGURE 3.3
Controlling Risk Drives Positive Returns
FIGURE 3.4
Stop-Loss
FIGURE 3.5
The
10-Minute Millionaire’s
Trading Edge
FIGURE 3.6
Stop-Out
Chapter 4
FIGURE 4.1
Loss Aversion Bias
Chapter 5
FIGURE 5.1
Close-to-Close Range
FIGURE 5.2
Inter-Day Range
FIGURE 5.3
Gap Opening
FIGURE 5.4
True Range
FIGURE 5.5
Minimum Volatility Threshold
FIGURE 5.6
Bid-Ask Spread
FIGURE 5.7
Launching StockCharts.com
FIGURE 5.8
Scan Criteria
Figure 5.9
Simple Moving Average (SMA)
Figure 5.10
Classic Rubber-Band Setup
Figure 5.11
Scan Criteria
Chapter 6
Figure 6.1
Proper Stop-Loss Placement
Chapter 7
Figure 7.1
Sell Signal
Figure 7.2
Trailing Stop
Chapter 8
Figure 8.1
Snapback
Figure 8.2
Framing the Trade
Figure 8.3
Booking the Profit
Figure 8.4
Finding the Extreme
Figure 8.5
Framing the Trade
Figure 8.6
Stop-Loss Hit
Figure 8.7
Loss Avoided
Figure 8.8
Finding the Extreme
Figure 8.9
Trailing Stop
Guide
Cover
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FOREWORD
In a recent survey by BlackRock, Inc., the world’s largest money-management firm, 74 percent of respondents said that they expect to feel financially secure in their retirement. However, there’s a $30,000-a-year income gap between what they need and what their savings will earn.
During our educational webinars, when we ask participants what their biggest concerns are, we consistently hear that market volatility creates intense anxiety for traders and investors alike.
When you combine these responses, what you get is a large group of Americans who need to be successful in the stock market to grow their nest egg and fund their retirement, especially in the current environment of historically low interest rates. However, because of concerns over market volatility and a distrust of Wall Street, the average investor has sat out the seven-year bull market that began in 2009. Some pundits have called this the most-unloved bull market in history.
What investors and traders need is a disciplined methodology that gives them the confidence and conviction to be in the stock market, not on the sidelines. D. R. Barton, Jr. has researched and developed just such a plan.
I have known D.R. for more than 20 years. In that time, I have come to respect not just his trading acumen but also his integrity . . . in life and in his trading system research. What he has done in The 10-Minute Millionaire is to bring together three disciplines that are essential to success in the stock market:
A high-probability trading plan with well-defined entries and exits.
A focus on money management and risk management.
A plan that allows traders to take advantage of volatility—and not be spooked by it.
What D.R. has put together is a trading plan that positions you for success. He understands that focus is the key to success in the stock market. Focus leads to conviction and conviction empowers you with the confidence you need to follow the trading plan religiously, like all successful traders do.
I have compared the quest for a consistently reliable trading system to the search for intelligent life in our universe . . . we know it’s probably out there but it’s darn hard to find. D.R. has taken one big step in the right direction with The 10-Minute Millionaire.
—Marc Chaikin
Founder and CEO, Chaikin Analytics LLC
August 2016
[Editor’s Note: Marc Chaikin is a legend in the super-competitive world of technical market analysis. His groundbreaking work includes the development of the Chaikin Money Flow and Chaikin Oscillator indicators—both industry standards found in virtually all the widely used charting-software platforms. Chaikin is now building an even greater legacy through his new venture at Chaikin Analytics LLC. His latest quantitative, fundamental and technical- analysis models are being used in market-beating indexes at the Nasdaq, on institutional trading desks, and by individual investors throughout the world.]
ACKNOWLEDGMENTS
The first money I ever earned was the $5 I got for mowing Mr. Campbell’s yard back when I was 10.
Mr. Campbell was a neighbor of ours, and I remember that he had one of the all-time great nicknames: Soup. (I just called him “Mr. Campbell.”)
That nickname isn’t all that I remember from those childhood days in Virginia. I also remember all the people who helped me get those jobs done . . . as well as the lawn-mowing dollars that followed.
Back then, my dad let me borrow the push lawn mower. Mom would run me down to the Esso station for gas anytime I ran low. And when I was away on vacation, I knew I could count on friends—like close buddy Rob, or Mike, the little brother of another friend—to cover my commitments.
Because I had a great team, by the time I was a senior in high school, I was mowing 14 lawns per week—even when holding down a full-time summer job in the city of Radford electrical department.
Lawns were meticulously mowed (people just love straight lines—that’s how I got all those terrific referrals). I made good money for college. And I always thanked everyone who helped me. I was especially grateful to my dad, who provided mowers and maintenance and eventually the use of our 1968 Ford Torino Squire station wagon so I could expand my territory. And my back-ups were always there when I needed them.
I learned a valuable lesson here . . . and I learned it early. Ever since that very first job, I’ve been getting projects done by working with talented and caring teams.
The projects have run the gamut: at work, at church, volunteering at schools, even starting and coaching sports teams. And in every one of those endeavors, the whole was greater than the sum of the parts.
The 10-Minute Millionaire is another of my team success stories. There are people who I’ve worked with for decades in the trading and investing world and I stand on their shoulders. That background has combined with the talented people who helped to make this book project a reality to produce an end result that is—once again—greater than the sum of its parts. And because of that, it’s certainly much more useful and enjoyable than anything I could have done on my own.
Mike Ward is brilliant. He is the founder and publisher of Money Map Press, and is an amazing idea man and gifted marketer. When it comes to understanding the complex synthesis of people, publishing, and financial markets—Mike is without peer. This book project is his brainchild, right down to the title. Mike, thanks for your support, your guidance, and your leadership. And most of all, thanks for being such a great friend for more than decade.
Bill Patalon is a selfless genius. His vision is what makes this book what it is today.
When it comes to communicating any topic, Bill can find both the key concept and the hidden nuggets of gold scattered about and turn them into a glorious unified whole that trips lightly off the tongue. I had a bunch of ideas. Bill culled them and massaged them and created a continuity of message that will both resonate and be useful for many a reader. I have never had the honor to work so closely with a man who has such tenacity and talent. I’ve made friends in numerous ways before, but jumping directly into the trenches with Bill has been one of the most satisfying befriending experiences I’ve ever had. Bill, from the bottom of my heart, thanks for the many long nights, the even more numerous brilliant insights, and for pouring a large chunk of yourself into this book. I’ll continue to treasure our weekly market-review phone calls for as long as you’re willing to have them.
I met Andrew Greta two full years ago. We hit it off immediately. Andrew has an amazing combination of abilities—he can conceptualize ideas at a high level and dig into the nitty-gritty details. A rare medley of skills. Andrew had the unenviable task of pulling more information out of me than I knew was in there. His creative, editorial, and analytical inputs were indispensable during this project. Andrew, thanks for all your contributions, both large and small (and there were lots of both). I deeply appreciated your calm and accepting demeanor no matter what chaos was going on around you. And I look forward to collaborating on many projects with you in the future.
Every project has unsung heroes. Terry Weiss has shown his leadership in so many ways through this process. A key player in the structuring (and re-structuring) of the book, his guidance has been felt in many ways. Terry, I really appreciate your nonstop encouragement, your positive leadership, and your foresight for all of the possibilities from here.
Stephanie Bills probably didn’t expect to see her name here. But without her steady and skilled hand at the helm of my trading newsletter, I could not have given as much attention to this book. Steph—it’s been a joy watching you develop your skills and talents. Thanks for having my back. And I’m looking forward to bringing all the new projects we have on our plate to fruition.
Truly insightful concepts are hard to find. So when I needed a really big unifying story for this book, I went to the most exceptional mind that I know. Meg Barton is my daughter, but I thank the Good Lord that she got her smarts and her looks from her mom. She has more ability in her pinky than most people have in their whole bodies. Early in the writing process, I was stuck trying to find an example that would tie the book together, a concept that would readily describe the importance of preparation in being able to do things efficiently. I gave the problem to Meg. She is the researcher who found the story of Huck’s Defeat and so elegantly tied it into the importance that 10 minutes can play in our lives. Meg—you make me proud. Thanks for pulling together the key story for the book. You’re amazing and I love you. I can’t wait to see what you do next.
My son, Josh, was helping with this book before he even knew it. In high school and college he taught himself how to code. So when I needed some programming work, I asked if he’d like to learn a new programming language. He quickly agreed. So Josh is the guy who turned all of the trading rules into lines of code for much of the really deep research that I did long before I started using the 10-Minute Millionaire strategy in real time. Josh is not doing much programming now: he’s in the first year of his MD/PhD track at medical school. Josh—I love you and you make me proud. Thanks for your meticulous programming and research work that helped refine and simplify the 10-Minute Millionaire strategy.
I know you’re ready to change the world and I can’t wait to watch you do it.
There are lots of people who can do detailed technical work at a very high level. And there are those who can think strategically and really understand the big picture. But there are precious few who can do both. Fortunately, I married one of the precious few. Cathie Barton has been my best friend, my spiritual lighthouse, and the most fun person to be around since the day we met (the day before college classes started our freshman year). She is the mom to two amazing children (see the preceding). She’s also a PhD civil/environmental engineer and a global leader in issues management. But all of that is easy compared to putting up with me, especially during a project. Yet Cathie has always been the voice of reason and the consultant I most trust to ask about any of the tough questions during the book writing process. Cathie, thanks for sharing insights, problem solving, and helping me stay focused on the right thing. In you, God has blessed me beyond my wildest dreams.
My dad is featured in several stories throughout this book. That’s because he has always been and continues to be the man I most admire. I need look no further for a model of integrity, of how to be a good dad to your children and of how to have fun, enjoy life, and still keep yourself centered. My dad has provided me with encouragement and inspiration throughout this process. Dad, thanks for showing me the way instead of just telling me the way. If everyone had a dad like you, this world would be a much better place.
My brother, Douglas Barton, has always been there for me throughout the project to help research and conceptualize ideas. Douglas has a great knowledge of the financial markets, which he shares with his banking clients, my dad, and me. Many of the things that he worked on have been saved for later publication, but I am grateful for his contributions and willingness to help.
There is a whole host of people who have taught me invaluable lessons about the financial markets.
I met Dr. Van K. Tharp at one of his seminars two decades ago. He taught me so much about the psychology of trading, risk management, and many other topics directly and indirectly related to the markets. We started a seminar company together, wrote a book together, and taught together. Van and I have kept and grown our friendship through trying times and triumphant times and his work continues to inspire me.
Christopher Castroviejo is one of the most interesting and intelligent people I know. A veteran market insider, Christopher has taught me much about the inner workings of Wall Street and the markets. We’ve given hundreds of financial training sessions together, taught thousands, and worked in the hedge fund world together. Christopher is a true friend and we continue to talk about the markets every day.
I have admired Marc Chaikin’s work for decades. Marc is an incredible thinker and student of the markets. He’s been a good friend for decades. And I still learn from him every single time we talk.
Brad Martin was a floor trader in Chicago for 20 years. He teamed up with me to design and teach trading seminars for half a dozen years. He shared much of what he knows with me about how floor trading works, about short-term trading, and was a naturally gifted teacher for our students.
Dr. Chris Szymanski helped me write through a section of the book that we ending up saving for later publication. Chris is a caring friend who is a fine trader and top-notch thinker.
All of us involved in the project would like to thank Tula Weis at John Wiley & Sons and her team for their wonderful help. Tula has been the steady, guiding hand throughout this project.
Unlike the lawns I mowed as a teen, the process of writing a book doesn’t always play out in straight lines. But there’s still that same great feeling of achievement when the job is done. Especially when you know there was such a wonderful team effort to get here.
—D.R.B., Jr.
PROLOGUE
It was March 27, 1988—Palm Sunday, in fact. I was watching the sun rise from the very top of an 80-foot chemical distillation tower in one of the world’s largest industrial complexes.
And I was unwinding.
You see, I’d been working at the South Carolina site for almost 24 hours—the white-collar version of a college all-nighter. The team I headed had been finalizing the startup of a facility known technically as a “continuous uranium de-nitrator.” The plant, built to prepare spent uranium for long-term storage, would be the first of its type in the United States.
For an engineer like me, it was a fascinating project to get to lead.
And a demanding one, too.
For months, team members and I had been running through a comprehensive startup checklist. The dangers of processing multiple deadly materials had been accounted for and controlled. Every switch, valve, and control loop was tested and retested.
But with a plant startup like this one, there’s a defining moment—a climax, if you will—when the rehearsals must end. Someone must push the button so that the facility’s live performances can begin.
That’s when you find out if all your hard work—and the care you put into the risk-reducing checks and rechecks—has paid off.
When you’re working with radioactive materials, as we were, those efforts, and this final moment, are critically important.
Here’s one example. Before the plant went live, we could actually work on the equipment wearing a minimum of protective gear. But once uranium entered the pipes, the system was “hot”—meaning it was actually radioactive. From that moment on, even simple tweaks to the system required us to don full protective gear . . . and to use a much more elaborate safety plan.
For us, that first live performance had started before dawn on Palm Sunday in 1988.
I was the one who had the responsibility to push the button (hit the “Enter” key on the control system keyboard).
I can still see it all in my memory: circuits closed. Valves opened. Pumps started. The sophisticated chemical plant awoke from its startup slumber, came to life, and ran like the well-oiled machine we’d designed it to be.
Without a single hitch.
All of the startup team’s hard work, all of the systematic checks and rechecks paid off. By every metric, the project was a success.
We even brought it in on time and under budget.
It was quite an achievement . . . and I was understandably proud of what our team had accomplished.
But hours later, as I’d perched atop that distillation tower and watched the light come up, I remember thinking—for the first time ever—that I wanted to be something other than a chemical engineer.
I was physically exhausted and mentally drained (100-hour work weeks will do that to you). I was 600 miles from my lovely and talented wife. And we hadn’t started our family (a biological impossibility when both spouses are in two different places).
With this project now receding in my professional rearview mirror, I realized that I was already thinking about the next phase of my career . . . and my life.
With the benefit of hindsight, I now see that my high vantage point on that March morning gave me more than just a great view of daybreak.
It also allowed me to look into the future . . . my future . . . and the new professional course that ultimately led to this book.
I should tell you that by this point in my life I’d already been actively trading and investing in the financial markets for two years. I’d made some interesting discoveries. And I’d begun to understand the obstacles individual investors faced in their quest to trade effectively, safely, and profitably. (Take the area of information, for one example. I’d seen the paucity of data available to retail investors, and had seen that the little bit of information that was available was tough to understand—or just wrong.)
As an engineer, I’d spent years distilling sophisticated chemical processes into simple systems—with simple instructions—that anyone we hired and trained could follow. And I’d built in risk-management controls that let those same workers operate safely.
As I relaxed at the top of that tower that Sunday morning, I realized I could take that same simplicity, clarity, and safety and apply it to the complex and off-putting world of investing.
In other words, the same “keep-it-simple/keep-it-safe” approach that made it possible for a plant to churn out a stream of badly needed chemicals could also be used to create a system that would churn out a stream of profits, and wealth, for individual investors. And thanks to the easy-to-follow instructions—and attention to risk-minimization—the system in each of the two worlds (chemicals and investments) could be monitored and optimized in very small chunks of time.
The 10-Minute Millionaire is the result of that March 1988 epiphany.
After I climbed down from that distillation column, I spent the next 10 years straddling both worlds. I stayed with DuPont until 1999. I was the team leader and ultimate “push-the-button” guy for yet another startup, a project that also came off without a hitch—even though it posed even greater potential dangers and risks than the project I described earlier.
Having paid my dues on projects out in the field, I moved into a business-development role in a newly created DuPont-owned venture—an idea incubator designed to hatch new products, including cutting-edge fibers and composite materials.
However, even as I worked on these projects, I became more and more immersed in the investing world—learning from and trading alongside some great financial minds as I refined my own systematic approach to the financial markets.
By 1999, I was able to take early retirement from DuPont—and devote my full attention to trading and investing.
When doing something that you’re passionate about, time really does fly.
Since breaking out on my own, I’ve co-founded two different financial-seminar and trader-coaching companies. I co-authored the book Safe Strategies for Financial Freedom—a New York Times and Wall Street Journal best-seller. I served as the risk-management and chief operating officer (COO) for a hedge fund. I also launched and ran three separate investing newsletters.
I’ve also done a fair bit of coaching, an activity that—believe it or not—really aided my quest to design a wealth-building trading system that is simple, fast, and safe.
In addition to those extracurricular pursuits, I’ve spent the better part of the last 16 years preparing lesson plans to help young people understand complex subjects.
For example, I’ve taught investing—stocks, bonds, and the financial markets—to elementary school students. I’ve also taught economics to kids in grades three through six to help them get ready for a statewide competition. (More than a dozen of the teams that I trained across all four of those grade levels have scored first-place finishes.)
Here, yet again, I saw how this ability to transform the most- sophisticated concepts into simple-to-follow systems led to pay dirt. Let’s face it, you can’t fudge “marginal utility,” “opportunity costs,” or “supply/demand equilibrium curves” to third graders. They either get it—and win ribbons—or they don’t.
I’m proud to say that the kids I’ve worked with—all of them wonderful—have managed to get it.
Helping investors get it is what The 10-Minute Millionaire is all about. The “it” here is our system—one designed to be a reliable and repeatable way to identify and profit from the stock market extremes that show up virtually every day. By using this system, you’ll have the opportunity to take a small, underperforming part of your portfolio and grow your trading account to a million dollars or more. And you’ll be able to do this with consistently small commitments of time.
I’ve broken this book into three sections, each with a specific goal—a format designed to help you learn the 10-Minute Millionaire system in the most efficient way possible.
Section I instills the 10-Minute Millionaire mindset. It shows you the importance of time, and how to transform it from an enemy into an ally. It presents the most useful and simple way to understand the stock market—as a big auction in which lots of items (individual stocks) are up for bid each day. And it shows you that the best markets to exploit are those experiencing out-of-whack extremes.
Section II takes you from the mindset of the millionaire-to-be to the system that will get you there. Here we learn the benefits of a systematic approach and how the system helps us overcome the biases that can trip up traders. That’s followed by the nuts and bolts of how to Find the Extreme, Frame the Trade, and Book the Profit.
And, finally, Section III reinforces the lessons we’ve learned by presenting sample trades that show the system at work and reiterating key terms you’ll need to keep in mind. We bolster the importance of being systematic by presenting a customized worksheet that will let you record the key elements of your trades, and we complete your training by highlighting the key points one final time.
I believe you’ll enjoy the simplicity, time efficiency, and comprehensive nature of the 10-Minute Millionaire method. In fact, I hope this book serves as the life-changer I’ve intended it to be . . . that it allows you to look down from a higher vantage point . . . and picture a future that’s financed by wealth and marked by great personal fulfillment.
After all, you deserve it.
My personal goal here is as powerful as it is simple. I want the work we do here together to give you the money and free time you need to do the things you love and help those who need you the most.
If today serves as the starting point for that new journey, that new direction in your life . . . then I’ll know I succeeded.
Because you’ll have succeeded, too.
—D. R. Barton, Jr.
Newark, Delaware
Fall 2016
SECTION IIt’s Time to Think Like a Millionaire (aka “The Path to Wealth Is a Lot Shorter Than You Think”)
INTRODUCTIONThe Huck Stops Here
Study the past if you would define the future.
—Confucius
One of the most powerful lessons I learned during my career as an entrepreneur, chemical engineer, futures trader, hedge fund risk management officer, best-selling author, and TV stock analyst is also one of the simplest.
The lesson: there’s nothing better than a good story to get your audience engaged.
And I’ve got a great tale to share with you.
The story is about the American Revolution.
And 10 minutes that changed the world.
As anecdotes go, this one’s a stunner.
The lesson we learn will serve as the cornerstone for this book . . . and will end up being your ticket to a much wealthier, more fulfilling life.
So let’s get started . . .
Flying South
It was 1780, and the War of Independence was in its fifth year.
Great Britain’s inability to bring the rebel colonists to heel—coupled with the Redcoat defeat at Saratoga and worries that the French would throw in with the colonists—caused the Crown to shift its strategy.
To the south.
When British strategists looked at those southern colonies, they saw Loyalist strongholds and envisioned a postwar future in which agricultural products like tobacco, rice, and indigo would let them line their pockets.
At first, the southern strategy went well for the Crown.
Indeed, it went very well.
The British captured Savannah, giving them the Georgia coast. On May 12, 1780—after laying siege to Charleston, South Carolina, for about six weeks—that port city fell. And 5,000 Continental Army troops under the command of Major General Benjamin Lincoln had to surrender. It was a humiliating defeat—indeed, the worst loss the Americans would suffer during the whole war.
Further defeats followed: damaging losses at the Waxhaws, Camden, and Fishing Creek obliterated most of the Continental Army—leaving Great Britain with almost total control of both Georgia and South Carolina.
But instead of just holding and policing this territory, these victories emboldened the Redcoats: certain regiments of the British Army decided to inflict as much suffering as possible. Colonial morale was about as low as could be, so these particular Redcoats figured they’d rub out any remaining Patriot dissent—and maybe even get the colonists to switch sides to the soon-to-be victorious Crown.
Raids, murders, and reprisals became standard fare. Plantations were leveled, crops destroyed, and businesses wiped away. If you ever saw the Mel Gibson movie The Patriot, you can picture the very kind of brutality I’m talking about here.
In a rural area just outside of what’s now York County, South Carolina, a man named William Hill experienced this onslaught in a very personal way.
Today, we’d refer to Hill as an entrepreneur or a self-made man. Back then, however, Hill was a pioneering “iron master.” He and his partner, Isaac Hayne, constructed a massive metal works along Allison’s Creek in York County. The venture made farm implements, blacksmith tools, kitchenware, cannons, and cannonballs.
In fact, most of the cannonballs used in the siege of Charleston came from Hill’s furnaces—which the colonists, not surprisingly, tried very hard to protect.
Unsuccessfully.
In June 1780, the British burned the ironworks. Hill lost his house, grain mills, saw mills, tenant houses, and 90 tenants.
Hill also lost his partner. Not long after, the British decreed that Hayne had “broken parole”—and hanged him.1
Force 10 from Brattonsville
The perpetrators of much of this mayhem were a troop of British light cavalry commanded by Captain Christian Huck. Huck was a Pennsylvania Loyalist and Philadelphia lawyer whose property had been confiscated after the British evacuation of that city. He was actually banished from the Keystone State, and made his way to New York, where he joined the British Army.2
Now Huck was operating in South Carolina. And historians like biographer Michael C. Scoggins say he had a particular hatred for the Scotch-Irish Presbyterians who made up a lot of the populace in that region’s backcountry.3 Most of those colonists were Whigs—what the British contemptuously referred to as “rebels”—and Captain Huck took great pleasure in the abuse, destruction, and death his troops engaged in. Indeed, it was his group that leveled Hill’s ironworks—and burned his home.
On the night of July 11, 1780, near what is now the town of Brattonsville, South Carolina, the same William Hill we’ve been talking about found himself spending the night out in the open . . . under the stars.
It was hot. And muggy. And Hill was worried—scared even—wondering what the morning would bring.
At least, he thought, his family was safe. After losing his home, Hill stashed his family in the nearby log hut of a friendly neighbor.
And waited for dawn.
Just before first light, Captain William Hill and his ragtag band of local militia heard the first rustlings of Christian Huck’s New York Volunteers stirring from their overnight encampment. Surrounding the enemy with the stealth of practiced deer stalkers, Hill and his band of guerrilla warriors waited patiently. When the sun finally appeared over a nearby plantation, the Patriots opened fire.
And unleashed havoc.
The Redcoats—trained to fight in regimented, disciplined formations and to shoot in massed volleys—fell into chaos. Their clumsy smoothbore muskets were no match for the colonists’ frontier rifles. Firing with pinpoint accuracy from behind fence cover, these Colonial farmers and woodsmen rejected the order of eighteenth-century warfare and chopped their well-trained adversaries to pieces.
For the Revolutionaries, the gains were enormous and losses slight. Dozens of enemy soldiers lay dead on the field. That included their sadistic leader, Captain Huck, who’d been felled by a headshot as he was mounting his horse to rally his troops. The Redcoats who weren’t killed or wounded either surrendered or tried to flee.
Of Huck’s troopers—roughly 35 dragoons, 20 New York Volunteers, and 60 Loyalist militiamen—only 24 escaped.
The Americans—150 strong at the outset—lost just one man.
But here’s the best part of all.
The total time of the battle—from first shot to decisive victory—was a mere 10 minutes.4
Ten minutes.
And that 10-minute span changed the world.
That’s not hyperbole.
Historians now refer to this 10-minute skirmish as “The Battle of Huck’s Defeat.” South Carolina historian Walter Edgar wrote that Huck’s Defeat was “a major turning point in the American Revolution in South Carolina.”5 It was the first of more than 35 key battles in that state that took place in late 1780 and early 1781—all but five of which were Patriot victories.
This streak of victories in smaller battles ended up being a critical contributor to later American successes at King’s Mountain and Cowpens.
Edgar said that “the entire backcountry seemed to take heart. Frontier militia had defeated soldiers of the feared British Legion.” One key result: the militia brigade of American General Thomas Sumter enjoyed a stream of badly needed volunteers.
