Insight From a Financial Crisis Veteran

Written by John Butler
Posted September 21, 2018 at 4:26PM

This past week marked the 10th anniversary of the 2008 financial crisis, also known as the Great Recession.

Some of you experienced it firsthand. Individuals, businesses, and financial institutions were hit hard. And you know what caused it all?

Greed!

What is the American economy built on? Credit. When it's used correctly, the economy thrives. You can use credit to start or grow a business. This, in turn, creates jobs. We can buy houses, cars, and other items, which all further fuels the economy.

But when credit was left unchecked, it caused the 2008 financial crisis.

During a meeting this week, we discussed the crisis. Our publisher, Brian Hicks, asked Charles how nervous he was during this time.

See back then, Charles was managing money in his hedge fund.

And here's what he wrote to his limited partners on October 17, 2008:

Several of our holdings were able to take advantage of the credit crisis by allocating capital at higher rates and by acquiring competitors at very favorable terms. Currently, in this perfect financial storm, we sleep well at night knowing our companies are the equivalent of a Queen Elizabeth II cruise ship and not a rickety rowboat.

We are very confident that our portfolio is well positioned for future gains, and we consider our holdings to be priced like a fifty-cent dollar bill. Some of our holdings are pricing in Armageddon; anything short of this should produce excellent returns for our portfolio over the next several years.

For which they did.

During the 2008 financial crisis, Charles did what he's been doing for over 35 years: he doesn't panic and let his emotions make his investment decisions for him. He looks at companies for their underlying values, not for their shifting stock prices.

Charles noted how palpable the fear was during this time and how it was difficult at times to stay focused on company research.

We then asked Charles if he had any regrets. And his answer was astonishing: "My only regret was that I wasn't aggressively buying more during 4Q 2008."

This only shows how seasoned a veteran Charles Mizrahi is on Wall Street. When people were fearful of another looming financial crisis, he built a $200 million money management firm from the ground to the top.

Here's a sample of Charles' remarkable portfolio track record:

  • 551% on Huntington Ingalls Industries
  • 501% on The TJX Companies
  • 458% on Atrion Corporation
  • 249% on General Dynamics Corporation
  • 243% on Raytheon Company
  • 251% on The Buckle, Inc.
  • 194% on HCC Insurance Holdings
  • 188% on Daktronics
  • 176% on Coach, Inc.
  • 173% on Ross Stores

It was interesting and exciting to listen to Charles' experience in the market a decade ago. I look forward to learning more from him about what the market has in store for us in 2019...

Happy investing,

John Butler Jr.
Contributing Editor, Park Avenue Digest

P.S. Brian has convinced Charles to host the first Insider Fortunes Summit on September 27, 2018. At this event, Charles will reveal his trade secrets and the one stock you should buy now.

He'll also share information on a market that's currently worth $11 billion but will be worth $7 trillion within the next decade — $7 trillion!

You won't want to miss this event. It starts at 7 p.m. (ET) / 4 p.m. (PT). If you haven't signed up for the Insider Fortunes Summit yet, do it now by clicking here.

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