When I was 23 I got lucky, very lucky. I went fortune hunting and ended up making a lot of money. A $3,000 investment turned into $155,000 in two months.
The stock was VCSY, a Chinese internet company with a homepage consisting of a simple dial pad.
I had no idea what the company did except for the fact that Internet + China in December 1999 sounded like a fantastic idea during one of the greatest bubbles of our times.
VCSY went from around $3 to $6, did an inexplicable 20-for-1 stock split and then went up to around $9. In other words, it went from $3 to $180 pre-split and I had 1,000 shares.
The stock's move was one of the most ridiculous things I've ever seen as everybody I knew on the Street started piling into the name. I eventually got out of the stock at around $155 a share, netting a cool $155,000.
Blowing The Fortune On Stuff
I proceeded to do what every foolish 23-year-old would do and blow it on things! I bought a 600cc racing bike along with a second hand Volvo 850 GLT. At least I didn't go out and buy a pound of cocaine.
The safety of the Volvo was a way to balance out the risk of death during wheely popping attempts on FDR drive at 100mph. With both vehicles came insurance payments and a $300 a month parking bill. Yes, even back in 2000 parking was that expensive in lower Manhattan.
Come to think of it, my biggest regret wasn't actually spending $25,000 on goodies after the financial windfall. My biggest regret was not investing MORE into VCSY! I could have put in up to $20,000 worth in the name because I just received my first stub bonus after starting work in the summer of 1999.
Meanwhile, the ritual of saving more of my after-tax paycheck had begun. Getting into work before 5:30am and regularly leaving after 7:30pm didn't seem sustainable long term.
Regret Of Not Taking More Risk While Young
Unfortunately, I was too chicken shit to dump everything into VCSY. If I did, the $20,000 could have turned into a cool million! Sob. So close, yet so far from being able to make it rain.
Ever since the spring of 2000, I've regretted not taking more risk. I swore to swing for the fences more often with the new found capital. Instead of fulfilling my oath, I decided to cower in the corner like a scared child in the night because the internet bubble began to burst in March 2000.
After a couple $10,000+ down days thanks to reinvestments in B2B stocks like Ariba Technologies I bid the stock market casino sayonara! The one year of confusing brains with a bull market was over.
Goodbye Speculative Stocks, Hello Career
Instead of spending all my time researching the next VCSY, I decided to spend the majority of waking hours on work.
Truth be told, a large part of the reason why I stayed until 7:30pm was for the free dinner buffets! No wonder I gained the freshman 15 all over again.
With friends getting fired left and right between 2001-2003, the best way to cope with a downturn was to keep my head down and be the best employee possible. Even after the markets started recovering, I still largely ignored investing in the markets.
Instead, I maxed out my 401(k) and began the allocation process of investing 35 cents of every post tax dollar into various funds in my after tax brokerage account while praying there would be no more collapse.
The other 30 cents was invested in CDs to ensure capital preservation while the remaining 35 cents just sat in a money market account waiting to be deployed into real estate, my favorite asset class.
It is funny looking back as a 44-year-old in 2021. But I knew that the VCSY money was funny money.
I had gotten lucky and there was this very strong desire to try and convert some of that luck into something lasting. As a result, I proceeded to invest the majority of my income into San Francisco real estate from 2003 onward.
So Many Missed Fortune Hunting Opportunities
Although investing in San Francisco real estate worked out well, I missed out on so many greater stock opportunities. I stopped fortune hunting because my education and career got in the way.
Since 2001 a lot of money making opportunities presented themselves in the markets.
Google went public and became a 10 bagger. Amazon and Priceline came back from the dead to be gorillas in their space. Netflix became one of the best growth stories. Heck, Reed Hastings, the founder and current CEO spoke at my Berkeley MBA commencement ceremony in 2006 when the stock was under $15/share!
Meanwhile, the homebuilders and financials got crushed while gold roared higher. I basically missed out on making outsized gains in everything because I was so concentrated on my career.
Although I received promotions and raises as anybody who works for 11 consecutive years at one firm would, I'm not sure whether I maximized my wealth creation.
I was too scared to take any more concentrated positions because of all the financial casualties that began piling up. Several colleagues admitted to having their entire net worths invested during the 2000-2003 downturn. It was deja vu all over again in 2008-2009.
The last thing I wanted was to get no bonus, get fired, have my deferred stock lose value, and invest more money into a never ending market correction.
A Lesson In Making Maximum Wealth
Don't just focus on making active income through your career. Set aside some time every week to think about investment opportunities. These investment opportunities could help accelerate your wealth creation potential. Fortune hunting requires focus.
Fortune hunting also requires liquid courage. The more cash you have on hand, the greater the courage you have to invest in risky assets or invest during downturns.
Most recently, there were plenty of fortunes to be made during the pandemic. It was an incredible time for funny money assets like NFTs and meme stocks that reminded me of the year 2000. But in order to make a fortune, you have to pay attention. Here are some of my wins and regrets of the pandemic.
There's Always A Bull Market Somewhere
I know a lot of you think I'm crazy for whipping around my rollover IRA as if it were play money. But I've got to tell you that I frequently remember back to the years 1999-2000 where I didn't have the courage to go all-in.
Taking on risk gets even harder the older you get. Your 20s and 30s are a time to take aggressive, calculated bets.You've got a lifetime to make up for your mistakes. Who knows? You just might hit it big as well.
In July 2021, my rollover IRA finally hit the $1 million mark thanks to individual bets in names like Apple, Amazon, and Netflix. If I didn't fortune hunt, there's no way my rollover IRA would have gotten tot his level.
And just to note, the Fixed Income percentage below is misleading. Almost the entire $420,359 position is in equity structured notes that is classified as Fixed Income.
Given I no longer have a day job, I've got more hours a day to search for unicorns.
Benefit Of Using A Roth IRA Or IRA To Fortune Hunt
The rollover IRA is the perfect vehicle to trade because it's sheltered from the IRS until withdrawals are made. I don't have to reconcile my trades every year during tax time any more. No longer does an employer see every ticket.
The chances are slim I will ever find another 50 bagger in public equity. However, that doesn't mean I'll stop searching. What I do know is that if I do not put any effort, I will never make anything beyond the average index performance.
A great investor is always trying to connect the dots. There are opportunities to make money every day in the stock market, real estate market, and any market, frankly.
As a result, I'm also investing in private funds managed by experienced investors who fortune hunt for me. I'm happy to pay a fee for these guys to be stewards of my capital.
Never Stop Fortune Hunting
From now on I plan to re-dedicate my fortune hunting efforts. I've invested $953,000 in real estate crowdfunding since 2016 to take advantage of lower valuations and higher net rental yields in the heartland of America and across the country.
It's my way of fortune hunting with a good amount of capital. Now, every year, I'm earning roughly $100,000 a year passively from my real estate crowdfunded investments.
I also believe there will be a multi-decade shift away from expensive coastal city real estate due to technology and remote work. Check out Fundrise, my favorite private real estate platform today with about $ 3 billion in assets under management and over 380,000 investors.
Also check out CrowdStreet, a fantastic real estate investing platform that focuses on opportunities in 18-hour cities. 18-hour cities are growing faster due to positive demographic shifts. Further, valuations are lower and cap rates are higher.
There is an incredible opportunity to buy high-quality commercial real estate at 2008 global financial crisis levels, despite a strong economy and healthy balance sheets. I've personally invested over $300,000 in Fundrise and both platforms are sponsors of Financial Samurai.
Investing In AI Near The Beginning
Finally, I'm also fortune hunting by investing in private AI companies. We are near the beginning of the AI revolution and I don't want my kids asking me 20 years from now why I didn't invest!
Today, everyone can invest in an open-ended fund with a low minimum, lower fees, better liquidity, and greater transparency. Check out Fundrise's venture capital product, where I've invested over $150,000.
It's hard to choose specific AI company winners, as anything can happen to competition. Just look at what China's DeepSeek did the the publicly-traded AI companies like NVIDIA (-17% in one day). Therefore, I think it's best to buy a basket of high-quality AI companies to gain exposure.
A Suggested Percentage Allocated Toward Fortune Hunting
I suggest setting aside between 10% – 20% of your investable assets to fortune hunt as well. Start small and slowly work your way up.
You will definitely lose or underperform on some of your investments. Long term, it is very difficult to outperform an index fund or ETF. But you might also hit it very big as well.
If you keep on fortune hunting, you may eventually find your unicorn. Just make sure to only invest what you can afford to lose.
About The Author
Sam began investing his own money ever since he opened a Charles Schwab brokerage account online in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at Goldman Sachs and Credit Suisse Group. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate.
In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate over $300,000 a year in passive income. He spends time playing tennis, hanging out with family, fortune hunting, and writing online to help others achieve financial freedom.
For more nuanced content, join 60,000+ others and sign up for his free newsletter. Don't Stop Fortune Hunting is an FS original post. All rights reserved.
There is a huge amount of hindsight in this article. For example, in March 2001, who could see that Amazon would become what it has become today? Based on interviews I have seen, I doubt that even Bezos could see it ! And google? Call me stupid, but I simply did not understand how google made money when it first listed, so I did not invest then. There are thousands upon thousands of stories that are not written on an internet site of people who made a lot of money in a short period of time, who then thought they were the greatest investors of all time, and subsequently went on to loose everything. The best way to become wealthy is to do as Buffet advises – LONG term investing into index funds. Yeah, I have from time to time tried the high risk approach with a small amount. And while I get the occasional winner, the long term return is little better than putting a small amount each week into a lottery ticket – like the lottery winner you have to have incredible luck, and surprise surprise I am not one of those people. I think this article is written from the perspective of a lottery winner who somehow believes there is a way of predicting the numbers…. and we know the end result of this strategy!
Definitely a lot of luck goes into making an outsized return. The point is to keep on setting aside some speculative capital to invest as you never know.
Personally, I’m investing about $250,000 in private artificial intelligence companies as a hedge and a way to play the future. I’m doing so by investing in an open ended venture capital fund that owns investments OpenAI and anthropic, among other companies.
In 10 to 20 years, I don’t want my children asking me why I didn’t work in AI or invest in AI companies near the beginning. I hope they say I am lucky then!
In your recent post Passive Income Update For Financial Freedom 2016 you mention Motif is a new investment you’ve been trying out. Here you say you have been using it for a while. Dates on post would be helpful for understanding the rates you are outlining and general timeliness of investing data points.
Enjoying the site! Trying to work on my investment plans. Thank you.
Interesting stuff. I work as an Economist for a living but do enjoy financial markets. My strategy (if you can call it that) revolves around focusing on a basket of 8-10 highly liquid stocks that are in non resource industries with a strong investment thesis. I monitor the portfolio of stocks and I aim for a 10%-20% return every 2-3 weeks on my capital.
These stocks are all below $1 but are seen as growth tech stories on the TSX venture I essentially take profits when I can but all invested in 20K @ 20% 18 times gives you 550K.
It isn’t super easy but a combination of taking profits when you can, even 2*5% gains in two weeks over a period of years is huge.
That way you are not a bag holder in a risky area but benefit from liquidity and volatility.
Just my views.
[…] over the long run. Sticking with a system of saving and investing will do way more than trying to uncover than unicorn stock for […]
[…] in my 2014 year in review post was missing out on some great investments. I truly believe there are fortunes to be made every single day if we look hard enough. The problem is, we all get busy with our lives and don’t really […]
Wow that’s insane! I pretty weary of aggressive investing too, but I think it’s because I have no experience in it. Eventually I’ll become more knowledgeable, and then I’ll be more comfortable with more aggressive investing.
Oh and what your your thoughts on analysts saying that a correction is coming?
“At least I didn’t go out and buy a pound of coke.”
LOLOLOLOL!!!!!
Sam, what was your career in? Just curious–still a new reader getting to know you.
I am just now familiarizing myself with investing in stocks and looking for that unicorn as well. Since you are now also actively searching, what are you looking for and what would be your criteria for identifying a multi-bagger? What is going to be your investment strategy now that you are actively searching?
As someone just starting out of course I’m coming across several strategies.
How do you feel about buying and selling on the upside of cyclical stocks?
What about those who say its not too late to get in on Tesla, Amazon, Google, Priceline, etc? Do they still have more upside?
What about this 3D printing thing that they are saying is the next big thing?
What about piggybacking off of hedge fund positions?
Thanks!
K
OK I just applied for membership I hope you approve me :)
It feels great to be one the right side of a bubble and terrible when it’s the other way around. My brother tripled his $$ in one day in Mindspring back in the dot com bubble days. My sister tried to get him to invest her money and he put it in Webvan…needless to say that was a rough ride. I’m a fan of more conservative investments- dividend & REIT ETFs, but I do have most of my eggs in one basket right now. It’s a biotech stock called Celldex Therapeutics (CLDX) currently near $15 per share. I’ve owned it for the past three years with a cost average of $4.64- it’s the future of cancer treatment in my opinion, with brain cancer patients living 7 plus years on its lead drug and impressive results in its second drug candidate for triple negative breast cancer. The pipeline is deep with another drug that works similar to Alexion ALXN and a fourth drug candidate similar to Bristol Meyer’s Yervoy. After the company is bought out or brings its drugs to market, I plan on re investing the proceeds back into more conservative investments that I can set and forget
Ahhh, biotech stocks, the great speculative sector of our future. Hope you can add your insights in the forums this week!
Sam, I also had a wonderful return on NFLX, watching it go from $23 to $260+ and then selling. I have learned so much since the days I traded the likes of NFLX, but I have to commend you on going into real estate at literally the perfect time, and it is true there is a bull market somewhere!
Joe
Now that is a good trade. It would have been hard for me to hold on after the stock bombed after the new pricing mechanism they introduced a year ago!
28 is still young mate!
Why not right? If you’re investing money you can afford to lose then why not go for it. It’s not like gambling where if you lose the value instantly goes to zero.
“What I do know is that if I do not put any effort, I will never make anything.”
Why do you say this when your greatest successful investment was made when you barely knew anything but took chances? Which is better: to be lucky, or to know everything?
I think part of investing and making mega returns is taking calculated risks but also using your gut to accept a large amount of risk in order to realize a large return.
It took effort to formalize an investment thesis in VCSY, even though I didn’t know much about the company since it didn’t make any money. It wasn’t throwing darts but coming up with a China + Internet thesis in the Internet bubble and then spending hours screening potential Multi bagger names. Besides VCSY, I was invested in Yahoo and several other names that did well before the bubble burst. Luckily I got out with a majority of profits intact. I left about $35,000 in VCSY money on the table since I didn’t get out at the top.
It is better to be lucky than good IMO. VCSY definitely is my best investment so far. But it is not my biggest absolute dollar investment return.
LOL! That is a pretty cool story, but it should require ‘earmuffs’ for any Little Dragons in your home! I’m in the Laggard Quintile of the ‘longshot odds’ Bell Curve; never had your balls/brains, and my adventures always seemed to end with me flat on my back, staring up at the lights. They aren’t even cool stories like that one, i.e. last week I cut my hand on a chainsaw that was not even on. See what I mean?
I wonder if that $152K profit in two months helped you land your first job? Just read that it is 3x harder to get a Goldman internship than to get accepted into Harvard. Wow. Continued success to you, and your quest for unicorns!
Awesome. Well-played!
Perhaps this is my practical side coming out, but am I wrong to think the riskiest part of your adventure was “wheely popping attempts on FDR drive at 100mph”?
Live fast, die young. Was this not your motto and every young man’a motto out of college? Maybe that’s just Wall Street testosterone speaking! You start feeling invincible until something happens like 911. Then you pontificate on what’s truly important.
Hey Sam, Sort of similar situation but with worse outcome. While I was still in college I started putting a ton of money into this up and coming video game company. Talking legit penny stock on the OTCBB. Well by the time I graduated I was up $50k on it. I was psyched and I shoveled a ton more money into it. Well after some shady business deals and busted games that stock is basically bankrupt and I lost a ton of money which I’m still trying to recover from. I took your approach though, I might as well swing for the fences while I’m young because I’ll have many years to recover if things go south. Currently trying to get in on the bio fuel revolution with SYNM
$50k in college is huge!! Man, I woulda gone nutso in college if I had that money. Is immediately get rid of my old Toyota hatchback, and got a Mustang 5.0 with the top down so my hair can blow.
Did you invest more of your after college income into it which is why you are still recovering from it?
WOW! that was quite an investment Sam! make me wish I’ll have that kind of luck in one of my investments. and, it’s never too late to take risks, though I have to agree we were more aggressive and risk takers when we were younger.
Every day something is ramping higher. Just look at the top gains of the day everyday!
Hey Sam,
You’ve dropped some hints on this story a few times in your posts, but thanks for finally sharing the details. It’s very interesting and inspiring that this sort of thing can happen if you have the guts to do it! I am 24, been working for 3 yrs, and received an inheritance. I’ve put in 50% in real estate and 50% into index funds. I have roughly 80k in an after tax Vanguard account and after reading stories like yours I feel compelled to ‘search for unicorns’ as you say…but I don’t think I can stomach making an unwise/unlucky decision and losing everything!
My one experience with trading is with the stock LNG. I’m in the oil and gas industry and I have strong feelings about the potential of natural gas in the USA. So much so that I put in 8,000 into the stock when it was at $8 and sold at $13 thinking I got lucky. Now it’s at about $30!! This makes me think about the possibilities, but also about how I’d feel if it went the other way.
Yeah, this was the stock trade that provided the catalyst to invest into real estate and improve my knowledge of the fundamentals in stock market investing.
What specific gas ideas do you have? Come share them in the forum starting 6/10.
I understand and perfectly approve of your desire for more wealth. I do, however, disagree with you that real wealth can be gained in a relatively short time span in the stock market. Aside from a few lucky cases like the one you described, there is poor track record for overnight stock market millionaires. Most successful investors do invest in individual stocks, but with long term perspectives.
I think you are much more likely to get a fortune by expanding your business in creative ways.
I agree. But it only takes one or a few to make a year or bet set for life. It’s not blind gambling or buying a lottery ticket.
Just look at Tesla motors. I swear I was going to buy the stock, but that was the next day when they blew out earnings and gained 125%.
There’s no harm in trying. A lot more wealth out there than you realize. Nobody knew about my windfall at that age. But it allowed me to buy my first property by 26 in SF and live a better life.
I’m still awaiting The Great Depression #2. Then, and only then, will I shift back to stocks.
Hmm, might be waiting for awhile. The herd mentality is back. I’m looking for one last bubble to call it time.
Dont you mean Internet + China 1999? You were not 22 in 2009!
You are right! thanks for the catch. Damn time flies.
What did you do with the rest of the $155K? My biggest payday was when I bought Amgen at $9 a share and sold at $45. I wish I would have kept it because it split several times over the years and it reached over $100 per share. My position was large enough that it would have supported my retirement alone.
I decided to buy my first property in San Francisco in 2003 after letting it sit in a money market account for 2 years doing not much of anything. I’ll write a more detailed post about he journey in the future.
So I guess in retrospect, the parlay into real estate from 2003 to now worked out OK.
I recently took 2 positions in stocks I think could be multi-baggers, and I generally think I have more gamble in me than most, but I just don’t have the guts to risk a meaningful portion of my savings on those real volatile type stocks.
Back in 2000 I was in high school & took just about all my savings to that point and threw it into Agilent Technologies right after it spun off from HP. The stock exploded and I tripled my money in just a few months time. Then the bubble burst, and I naively held on for dear life thinking it was only a matter of time before things turned around and the rocketship would take off once again. By the time I came to my senses I actually took a loss on that investment. It’s probably still the reason I don’t bet too big on “growth” stocks.
Please share the two positions!
Wow, talk about a return! That is crazy, especially with the split thrown in their to boot. I am not necessarily searching for a 50 bagger, but I definitely do look for opportunity and am probably have too high of a risk appetite…though I can sleep well at night. I trade in our Rollovers all the time as well. I love not having to reconcile all my trades and it’s sheltered, for now, from the government so why wouldn’t I?
Exactly. Thank goodness for rollovers! The return was sick, and I’ve never had anything come close since. But perhaps a large reason is because I haven’t been looking.
Is life and our finances not one big gamble since we don’t know when we’ll die?
Sam,
I totally agree. Case in point, my wife and I are runners from Santa Barbara county. Two years ago we were in Oakland staying at the Marriott, about an hour from the start of the Half Marathon when my wife, who woke up with a headache, collapsed in the hotel lobby. EMT’s took her to the local hospital, who, thank God, ambulanced her to your CPMC Davies Campus Hospital in SF where she was diagnosed with a burst brain aneurysm. Her life was saved by a wonderful neurosurgeon (Dr. Jeffrey Thomas). The point being, what are the chances this could happen to an athlete and what are the chances that we happened to be in the best place possible if it did happen ? You can plan all you want, but absolutely nothing is guaranteed so why not take a chance now and then while we are here for however long it might be? I apologize to everyone for getting off topic. By the way, she is fine now and back to the running which she loves so much. Thank you San Francisco and thank you Dr. Thomas
Thank goodness your wife is fine now Bill! We never know, so let’s appreciate every moment!