Paul Mampilly has put his education to good use within the finance sector, especially his MBA from Fordham University. In 1991, he was an assistant portfolio manager for Bankers Trust. As he continued to gain knowledge and experience with investing, he earned important positions at legal firms, including Deutsche Bank and ING. After seeing what an asset Paul Mampilly could be to a business, billion dollar corporations recruited him. At Kinetics Asset Management, he handled its hedge fund and grew company assets to $25 billion. Barron’s names this one of the “World’s Best” returns.
Eventually, the fast pace of Wall Street started to wear on Paul Mampilly. He became tired of making money for the ultra rich and wanted to spend more time at home with his family. Today, he is still part of the finance world and works as a research and investment analyst. He enjoys helping common people make money. He tries to teach them how to get the most for their money so that they can live better. Much of his newsletters provide sound advice and investment tips that help everyday people get ahead. He is frequently featured on CNBC, Bloomberg TV, and Fox Business News. Learning how Paul Mampilly answers a few questions offers the public a look at his career choices and their impacts on his life.
Since joining Banyan Hill Publishing in 2016, over 90,000 people have signed up for Mampilly’s newsletter Profits Unlimited. This 8-page newsletter details a new investment opportunity each month, including a “model portfolio” that Paul Mampilly tracks himself, listing several different stocks he recommends his readers buy.
In addition to writing Profits Unlimited, Paul Mampilly also manages two elite trading services, Extreme Fortunes and True Momentum, and also writes a weekly column for Winning Investor Daily.
In this interview with Eric Dye for Enterprise Radio, Paul Mampilly discusses his journey from Wall Street to Main Street and how he developed a passion for helping everyday Americans protect and build their wealth. Eric Dye and Paul Mampilly discuss how the stock market has changed over the past few decades, the number one mistake people make when investing in stocks for the first time, recent IPOs worth following and admirable entrepreneurs. Read their chat below …
Eric Dye: This is Eric Dye and once again welcome to Enterprise Radio, a part of EPN, the Entrepreneur pod cast network today. We are speaking with Mr. Paul Mampilly, he’s a senior editor of Profits Unlimited, Extreme Fortunes and True Momentum at Banyan Hill Publishing and Investment Research. Paul Mampilly, a pleasure to have you with us today on Enterprise Radio.
Paul Mampilly: Thanks so much for having me on, real pleasure to be here.
Eric Dye: And a pleasure certainly ours. So, tell us what makes you an authority in the investing and finance industry, if you don’t mind me asking, and tell us about your background to kick things off today.
Paul Mampilly: Sure. What makes me an authority in this industry is a proven track record of helping retail individuals and “do it yourself investors” make money now for seven years. When you look at my background I have a long background on Wall Street – I’ve managed money, I’ve been an analyst, I’ve managed a trading desk, I’ve really gone through all the aspects of Wall Street. And so, I can really bring to bear all of my experience, and really a lot of internal understanding, of what actually happens on Wall Street on a day today basis – which the average day to day investor often doesn’t see it, because they’ve never really worked on Wall Street.
The final thing that I would say that really puts me and separates me, even from my peers, is the amount of work that I do on a day to day basis because Wall Street is something that is a hard business and unless you’re doing the work, and you’re doing the work in the right way, you’re not going to get it right. So on a day to day basis I do something in the range of 12 to 14 hours of reading. I’ve had essentially the same routine for over a decade now where beginning early in the morning till the markets close. I essentially do the same thing, which consists of tracking the stocks that my readers are investing in, tracking on the companies on watch lists that I’m considering, and just generally keeping up with every aspect of the market that can affect the prices of the stocks. I have to keep an eye on anything that can go wrong, so I also look for trends and for things that can go right.
Eric Dye: Thanks for your response in confirming your authority there most helpful now. How has the stock market changed over the last 20 years even a decade ago, even 5 years ago break that down if you would?
Paul Mampilly: You know, some of the biggest changes in the stock market have come because of the introduction of computers – and I saw that from the last time when I was on Wall Street, when I was managing a five billion dollar hedge fund, which is that, the trading that used to be done by human beings increasingly was now being done by computers, using algorithms today and its trading robots, artificial intelligence. And this really does change the way that you would look to go to invest because these advanced computers are now tracking prices, in a way, that understands how other people are trading stocks. So, these computers are almost using the same information that you’re using, against you. That’s the biggest change I’ve witnessed on Wall Street compared to 20 years ago where the use of computers was largely left to the big investment banks.
However today virtually every investor, even mid-size investors, are using these types of tools, so it really changes the game a great deal. And this disadvantages the average individual retailer and “do it yourself investor” in fairly big way. The other major change that came about is the use of ETFs, which stands for “Exchange Traded Funds.” 20 years ago Wall Street was dominated by mutual funds and today it is dominated by these exchange traded funds, which are great, which have very low fees, and are considered “passive investments.” However, this also presents a very different analytical challenge in terms of trying to find the stocks that are going to go up and looking at what stocks can go up. Prior to ETFs, you could essentially track star managers, by studying and analyzing their habits, and you might be able to figure out what they were going to buy and position yourself to buy it before they came in to buy it.
Today with ETFs, an ETF might have a hundred different securities and if you don’t own as much of any single stock, so that makes it much harder for a stock picker to really sort out and get a head of the curb, So in that way its much harder to make money. The other big change that’s come about in the past few decades, is what kinds of companies are valued and the way that they are being valued – the greatest example of this is Amazon.
If you look at Amazon when it first came public, it didn’t have much of a business. It developed its business over time, and for most of its time on the stock market many people have wanted to bet against Amazon – saying they didn’t make money, that yes they had various businesses, but you know, nobody could really tell is that a real business or not because they didn’t make money and that’s largely been pushed off.
Today, we recognize a new kind of business model which says that “we can pursue growth and profits can come second” and that’s one of that largest shifts from 20 years ago where if you didn’t make money largely you were not valued on the stock market. Companies like Amazon, and today, Tesla and others, have really shifted the idea of what is valued and what investors value. Now we are willing to put a number on innovation, they are willing to put a number on opportunity and growth particularly through sales. So, those are some of the biggest shifts that Wall Street has experienced compared to a few decades back.
Eric Dye: Great information there thanks for that. Now, tell us about a recent IPO that you’ve followed.
Paul Mampilly: Sure. One of the most interesting IPOs that’s come out, actually came out very recently, and its for the music streaming service called Spotify.
Spotify started out as a private company out of Sweden and it’s an interesting company for a number of reasons. First being for the way that they became public, which they kind of skirted around paying those big Wall Street fees by doing something called a “public listing.” In other words, the company wasn’t actually raising money when they listed their stock. They simply provided a liquidity moment, which means that early investors that wanted to get out they could sell their stocks. Perhaps, say you were an employee and you got stock options, you convert your stock and sell. But Spotify didn’t actually raise capital, and because of that, they didn’t have to pay the potentially hundred million dollars, or even more, that they might have to on Wall Street. That’s interesting because if lots of companies do that then Wall Street’s powers are going to be greatly diminished and this offers an alternative to many companies as a way to reduce the amount of money that they have to pay to go public.
The second aspect of Spotify’s recent IPO that was interesting to me is its business model. Its a business model that really is coming more and more into play – which is the subscription business model – where they take in small amounts of money every month from a group of people and a different very steady cash flow that comes in at the end of the month and they simply pay their expenses at the end of the month and so its very very predictable as a business, so that’s another reason why it’s super interesting.
The last thing is that, because Spotify has a learning mechanism and it learns the way that you like music, what groups you like, what kinds of music you like, its an artificial intelligence play and the IPO to be interesting from that perspective as well.
Eric Dye: Really interesting information there as well today we’re joined by Mr. Paul Mampilly, he is a senior editor of Profits Unlimited Extreme Fortunes and True Momentum at Banyan Hill Publishing and Investment Research firm here on Enterprise Radio a part of EPN the entrepreneur pod cast network now, Mr. Mampilly what is the number one mistake people make when investing in stocks for the first time?
Paul Mampilly: That’s such a great question. The number one mistake that I believe that most people make is that they make all in bets in other words they pick one stock and they go all in – they take all of their money in their entire account and make a bet on it – and its obvious why this is a bad idea, because if you’re wrong you’re going to end up losing a large amount of money.
The other mistake that most people make is that they bet too big. In other words, even if they’ve got 5 or 10 stocks, you know, they’ll put 60%, 70% of their money into one single stock and once again the problems are the same. And often times as well, most people tend to buy when they feel really good, which is often the worst time to buy, in other words they don’t pay attention to the market and when its high or when its low because it’s always difficult to buy when things are tough, which is when prices are low. So those are the 3 biggest mistakes that I find that people make when deciding to invest in stocks for the first time.
Eric Dye: Lastly what entrepreneurs do you admire and why? Looking at entrepreneurship a lot of those folks tuning in from all over the world.
Paul Mampilly: So, my favorite entrepreneur right now is Elon Musk. And the reason why I follow Elon Musk, and I admire him greatly, is simply because he has the guts to start the kind of companies that he has started. Whether it be Tesla, where there was really no market for electric cars when he began Tesla, and the fact that he was willing to initially make that market out of scratch and to continue to push despite so many people being negative and against it. I also admire his willingness to go through moments like 2008 when Tesla was almost bankrupt and put more money in on his own and get other people to commit to it as well, solely based on his vision. And lastly, of course, is just his extraordinary array of businesses he’s begun – from SpaceX to the Boring Company. There are always a number of companies that he is pursuing, which go into adventure, which go into space, Mars, the Hyper Loop. So, just in terms of the array of businesses he’s creating and and the kinds of things that Elon Musk is pursuing, he’s my favorite entrepreneur by far.
Eric Dye: Well Mr. Mampilly it certainly has been great to have had you with us and thanks for sharing your knowledge here on the program as well. Where can listeners get information on your firm and how can listeners also be in touch?
Paul Mampilly: You can go to paulmampillyguru.com and that web page has all of my free articles and a listing of all the paid services and you can find out about that on paulmampillyguru.com.
Eric Dye: Again it’s been our pleasure to have had you, continued success, all the best and thanks for joining us here today on Enterprise radio, much appreciated.
Paul Mampilly: Thank you so much for having me on, I really appreciate it, it’s been great.
Eric Dye: And you’re more than welcome, we’ve been speaking with Mr. Paul Mampilly he is a senior editor of Profits Unlimited Extreme Fortunes and True Momentum at Banyan Hill Publishing and Investment Research firm. And for further details simply visit paulmampillyguru.com and this is Eric Dye and you’ve been listening to Enterprise Radio a part of EPN the entrepreneur pod cast network. Tune in to our live location as we are streaming live 24/7 around the world at any epodcastnetwork.com/live. You can find our live stream on iTunes radio and tune in radio as well as the tune in radio app for your listening convenience and as always we thank you for your support and for tuning in.
Thanks again for listening to Enterprise radio here on the entrepreneur pod cast network. To subscribe for future programming, simply visit epodcastnetwork.com.